No.1   April 1, 2000   Encouraging the Emergent Evolution of New Industries   Teruyasu MURAKAMI        For the Japanese economy the 1990s were a "lost decade." Ballooning budget deficits and record unemployment have been the only things achieved by government attempts to use macroeconomic demand-management policies and microeconomic supply-side policies to close the gap between the oversupply created during the asset boom of the late 1980s and the sharp contraction in demand that occurred when boom turned to bust in the early 1990s.    What the Japanese economy needs is a semi-macroeconomic approach that encourages entrepreneurs to enter new areas of business and leads to the emergent evolution of new industries--much as happened just after the Second World War and in the 1960s.    There are two ways in which this can come about. The first is through "knowledge-creating companies" (i.e., companies capable of creating new knowledge that in itself can create new industries), and the second is through "knowledge-integrating companies" (i.e., companies capable of refining and integrating in-house and external knowledge and putting it to an entirely novel use). The creation of knowledge-creating industries by knowledge-creating companies may be either science-driven (i.e., the result of research and development as in the case of the biotechnology industry), or the result of the development of new business models as a wide range of information is made available in digital form (as in the case of e-commerce).    Knowledge-integrating companies, on the other hand, aim to integrate companies from diverse fields into networks based around disk-shaped markets (rather than the traditional cylinder-shaped markets) in promising tertiary industries producing social goods. We have called such industries "cluster industries" or "petaloid industries."    Hampered by a mismatch between markets and industries, the Japanese economy needs decisive policies and business strategies if new industries are to be created. Contents I "The Lost 1990s" and the Emergent Evolution of New Industries 1 The New Millennium (Century) and "the Lost 1990s" 2 The Need to Create New Industries 3 The Emergent Evolution of New Industries: Two Approaches II Knowledge-Creating Companies 1 Knowledge-Creating Companies and Knowledge Creation 2 Fostering the Growth of Knowledge-Creating Industries III Creating Petaloid Industries and Knowledge-Integrating Companies 1 Petaloid Industries 2 Creating Knowledge-Integrating Companies GO to PDF