Firms With Adaptability Lead A Way To Innovative Development

It goes without saying that the majority of the results of R&D have not necessarily commercialized. It's also pointed that R&D activities need to be diversified to produce high-added value products and services. However, firms face a dilemma about the simultaneous solution in efficiency and diversification of R&D because of the trade-off between them. In order to find the optimal solution to these questions, firms must choose their R&D subjects carefully. This will involve adoption of new and emerging R&D subjects and suspension of existing or irrelevant ones, derived from continually changing market needs and technology trends. This paper discusses the R&D activities of Japanese firms, based on the hypothesis that firms need to be adaptable when selecting R&D subjects to produce products and services effectively and continuously. R&D adaptability is defined as the capability to adapt businesses to the environment by responding to technological opportunities flexibly and by selecting R&D subjects correctly with self-assessment. Comparative empirical analyses are conducted focusing on the co-evolution between such adaptability and the institutions in selected countries. In addition, analyses are also conducted to identify the institutional factors governing the competitiveness of these countries.