manufacturing productivity has in- 

 creased more rapidly (at an average 

 annual rate of about 4 percent from 

 1980 to 1986) than in the late 1970's; 

 this still has not been as fast as Ja- 

 pan's (which increased at an aver- 

 age annual rate of about 6 percent 

 from 1980 to 1986). Although Japan 

 started from a lower absolute pro- 

 ductivity base in the fifties and six- 

 ties, a recent Japanese study indicates 

 that Japanese levels of actual value- 

 added per worker equaled or sur- 

 passed the U.S. level in several key 

 industries — including autos and 

 steel — by 1980, primarily because of 

 the rapid productivity gains made 

 during the seventies.*^ 



royalties and fees 



National trends in technology 

 transfer. Data on international 

 transactions in royalties and fees are 

 often used as indicators of technol- 

 ogy transfer and demand for com- 

 mercially attractive technology. 

 Royalties and license fees are pay- 

 ments for the use of intellectual 

 property, including patents, inven- 

 tions or processes, copyrights, etc. 

 Although data on royalties and fees 

 are only partial measures of tech- 

 nology transfer, they do provide in- 

 formation on the direction of 

 technology flows. 



Data on international receipts and 

 payments for technical know-how 

 for Japan and the United States 

 demonstrate the major differences 

 between these two countries. The 

 United States is a net exporter of 

 technology whereas Japan is a net 

 importer, and Japan purchases far 

 more technical know-how from the 

 United States than the United States 

 does from Japan. Although Japan's 

 technological balance of payments 



worsened in dollar terms from a def- 

 icit of constant $1.2 billion in 1970 to 

 constant $1.7 billion in 1985, receipts 

 as a share of payments improved, 

 rising from 14 percent to 30 percent. 

 This indicates a possible shift in Ja- 

 pan's dependence on imported 

 technology, an increase in the sala- 

 bility of Japanese technology, and/ 

 or a greater willingness by the Jap- 

 anese to sell their technology. In 1970, 

 Japan received constant $194 million 

 in payments for its technology; this 

 increased to constant $721 miUion by 

 1985 (chart 31). Most Japanese tech- 

 nical know-how sales are to newly 

 industrializing countries; most pur- 

 chases are from industrialized na- 

 tions. In 1985, 42 percent of Japan's 

 sales and 99 percent of its purchases 



were with the United States and Eu- 

 rope (table 9). East Asian countries 

 also purchase a significant share of 

 Japanese technology — nearly 40 

 percent in 1975 and 1985. Sales to 

 the United States increased from 10 

 percent in 1975 to 22 percent in 1985; 

 payments also increased, rising from 

 63 percent to 71 percent. 



Manufacturing technology trans- 

 fer. A review of national patterns 

 indicates that Japan invests heavily 

 in foreign technology. Over the past 

 decade, however, Japan's industrial 

 expenditures on foreign technology 

 relative to other indicators have de- 

 creased, as Japan's performance on 

 two technical dependency indica- 

 tors shows. First, payments for tech- 

 nical know-how as a percentage of 



^■'Kazukiyo Kurosawa, International Comparison of 

 Productivit}!, Paper presented to the International 

 Productivity Symposium, May 11, 1983 (Tokyo, Ja- 

 pan). 



35 



