Americans and Europeans are always saying "We're getting ripped off by Japan. They take the ideas we have invented, make products, and then the onslaught comes. We are being damaged, they're disgraceful." Japan has certainly done better more recently, but the U.S. and Europe are very much advanced in basic research.
Last year, I was invited to speak to about 100 researchers who worked at the Bell Laboratories at ATT.
The Bell Laboratories have about 7 people who have won the Nobel Prize. To me, it seemed that I would be speaking before some of the greatest men of our time. Prior to the speech, I was shown around the Bell Laboratories, where a number of wonderful research projects were underway.
As you must know, the transistor and the semiconductor, which are at the root of the current revolution in industry were invented at the Bell Laboratories. It really brought home to me how wonderful America was.
The basic message I brought that day was that this type of research was extremely significant academically in terms of both science and culture, but to be significant from the standpoint of business and industry, two other types of creativity, in addition to the creativity required to make the original invention, were absolutely necessary.
Industry requires three types of creativity. The first, of course, is the basic creativity necessary to make technological inventions and discoveries. This alone, however, does not make for good business or good industry.
The second type of creativity that is necessary is that involving how to use this new technology, and how to use it in large quantities and in a manner that is appropriate. In English, this would be called "product planning and production creativity."
The third type of creativity is in marketing. That is, selling the things you have produced. Even if you succeed in manufacturing something, it takes marketing to put that article into actual use before you have a business.
The strength in Japanese industry is in finding many ways to turn basic technology into products and using basic technology. In basic technology, it is true that Japan has relied on a number of foreign sources. Turning technology into products is where Japan is number 1 in the world.
Sony was the first company in Japan to license the transistor patent from Bell Laboratories, back in 1953. At that time, the transistor was only being used in hearing aids. We were repeatedly told to take this transistor and manufacture hearing aids.
When we brought this new transistor back to Japan, however, Mr. Ibuka of Sony said, "There is not much potential in hearing aids, let's make a new transistor and build radios." At that point, we put all of our energies each day in developing radios which used transistors. One of our researchers during this development effort, Mr. Esaki, subsequently went to work for IBM where he earned a Nobel Prize, but it was at our company where he did work worthy of the Prize. There are a number of Japanese who have received Nobel Prizes, but Esaki was the only one who worked for a research laboratory of a company. We poured money into development of new transistors, and developed small radios for the market, an effort that was worthy of the Nobel Prize.
It was an American company, however, who made the first transistor radio. I became a salesman, and took my product with full confidence to the United States to sell it. Prior to this sales effort, the newest invention was a vacuum tube type of amplifier which required a lot of space. When the American company, which was a famous radio manufacturer, was initially rebuffed by people telling him "since we have this great sound and large speakers, who would want to buy your little radio?", that company just quit trying to manufacture transistor radios.
We, however, had something else in mind as a way to sell these radios. "Currently in New York, there are 20 radio stations broadcasting 20 different programs during the same time frame. If everyone had their own radio, then each person could tune in to the program he or she wanted to listen to. Don't be satisfied with one radio for the whole family, get your own radio. The next step was to do the same for televisions." This was a new marketing concept. One radio for one person became a kind of catch phrase in this campaign and the result was that Sony transistor radios became famous throughout the world.
While it was true that Sony was second in developing the transistor radio, the company who did it first lacked the marketing creativity, so without much thought, they simply quit and pulled out of the market.
America has stopped manufacturing things, but this does not mean that they do not have the technology. The reason why the link between this technology and business has not been firmly connected is because they lack the second and third types of creativity, turning products made with the new technology into a business. I feel that this is a big problem for them. This exact area happens to be Japan's stronghold for the moment.
When I went to speak at the Bell Laboratories, I got the chance to look at a lot of their research on advanced technology. I felt that they may well come up with something new that was even more important than the transistor, but since Bell Labs is a part of ATT, they are not thinking of anything except telecommunications applications. There is not one person there who is thinking about how to use the new technology they are developing as a business. I think that this is one area where the U.S. comes up wanting. It is my feeling that even though times are good in American now and employment is up, the time will never again come when America will regain its strength in industry.
There is a television network in the U.S. called CBS. CBS has a weekly program which airs every Sunday evening called "60 Minutes," which has a very high viewership rating. This is a news program which devotes segments just under 20 minutes to various stories and opinion from around the whole world. More than 10 years ago, I was on the program. This is a program that takes a lot of money to produce. A crew followed me around Europe for about 6 months to prepare the segment.
Now they want me to do another one. A cameraman followed me to London, and when I went to Singapore, they followed me there too. the other day, a famous and beautiful interviewer in the U.S., Diane Sawyer, came to Japan to interview me for the program. We spent a long time in front of the TV cameras, and the questions grew sharper. This made me mad and at the end, it was like we were in a fight.
She asked me what I thought of Lee Iacocca. Since this is a program he would be sure to see, I was frank in my statements. I said he was a disgrace, and that he was unfair. Iacocca comes to Japan and says Japanese are unfair. Very recently, he headed his sentence with, "Let me make myself very clear," and then he went on to slander Japan. I know he wrote that book which labeled Japan as "unfair" but I think it is Iacocca who is unfair, and that is what I said.
When I was asked why he was unfair, I answered clearly, in front of the camera.
The president of a Chrysler company came to Japan. I had met this person before. I knew he was involved in selling Chrysler automobiles, so I asked him how sales were going. He turned to me and said quite plainly that he had not come to Japan to sell cars, but he had come to purchase Japanese parts and engines. He said he had come to Japan to buy Japanese products so they could sell them in the U.S.
At the present time, the three big automobile manufacturers have purchased 250,000 automobiles from Japan in 1987. How many have they sold to Japan? Only 4,000. They make no effort at all to sell their cars in Japan, and then call Japan unfair because Japan sells too much in the U.S. and Japan will not buy their products.
One of the reasons why U.S.-Japan relations are in such a mess is that Japan has not told the U.S. the things that need to be said.