IMITATION VERSUS INNOVATION - LESSONS TO BE LEARNED FROM THE JAPANESE

Recent changes in the technological and competitive environment of a variety of industries suggest that imitation, and not just innovation, may be an increasingly astute competitive strategy. While U.S. companies often overstate the importance of in-house innovation and ''learning-by-doing,'' Japanese companies train their managers to ''learn-by-watching'' and import critical new technology and know-how from sources outside the firm. The author argues that imitation involves far more than simple copying. Astute imitation demands substantial investment, creativity, and expertise in its own right. Five industrial conditions exist in which an imitation strategy may yield returns that are equivalent with (if not superior to) innovation: (1) industries with weak intellectual property protection; (2) technologically interdependent industries; (3) industries with high market and technical uncertainty; (4) industries with rapid technological change; and (5) industries with rapid information flow.