The role of user firms in the innovation of machine tools: The Japanese case

This paper explores the role that user firms have played in shaping the innovation dynamics of machine tools. It develops the hypothesis that the users (i) create a basis for the specialised suppliers of machine tools to embark on a dynamic path to innovation through investment activities; (ii) become involved directly in the development and commercialisation of machine tools. The empirical findings from the Japanese case are as follows: (a) capital investment of user sectors has had a significant long-term impact on the innovation performance of the Japanese machine tool sector; (b) there have been continuous user entries into machine tools from the beginning of industrial development, prominently by car producers from the middle of the 1950s, and by electronics firms from the 1970s; (c) user firms have also participated vigourously in the innovation of machine tools.