anthe government nudges an exterging industry forward was its establishment of Nihon Aeroplane Manufacturing Co., a special corporation. Government and private.firms invested in NAMCO, but the government bore the main financial risk. NAMCO.developed the 64-seat YS11 civilian plane, not a great success, but the work helped companies acquire experience..

Subsequently, Japan set up the Civil Transport Development Corp., a consortium of three large aircraft companies established to coordinate Japan's work in building part of Boeing's new 767 jetliner. However, at that point direct government financial support was reduced because the companies were deemed strong enough to shoulder more of the financial risk.

Meanwhile, Japan's Ministry of International Trade and Industry (MITI) has sponsored another consortium to enable the nation, to be a 60-50 partner with Britain's Rolls-Royce in construction of a new turbo engine for the next generation of international airliner, the 150-seater.

Several experts warn against placing too much importance on the government role in Japan's success. The U.S. government pumps far more money into the American scientific and industrial community for research «and development than does Japan. The Tokyo government supplies only 30 percent of the total of such funds in Japan, while Washington supplies more than 50 percent in this country.

Japan's success also clearly owes much to the ingenuity, determination and flexibility of private industry.

William J. Abernathy and Richard S. Rosenbloom of the Harvard Business School, who studied the way Japan captured the U.S. video recorder market, cited "the element of persistence" in Japanese companies.

Betamax, they noted, was the fourth generation of video recorder developed by Sony and the first that succeeded with U.S. consumers. With no assurance of success, Matsushita established an entire department of 1,200 employes to develop a video recorder for the commercial marketplace.

Little things, rather than big, often make a crucial difference, according to Americans who have studied Japanese industry.

Toyota and other auto makers save warehouse space and cash by using a "just-in-time delivery system for components. Parts arrive only when they are ready to be installed, sometimes with less than an hour to spare.

Working with tiny inventories, the auto makers can adjust quickly to ups and downs of demand.

In at least one key technological area, auto design methods, the United States is superior to Japan, according to a detailed comparison published last August by Japan's Society of Science, Technology and Economics.

While Congress' Office, of Technology Assessment does not discount the importance of Japan's lower wage rates in the auto makers' success, it said recently that another key element was the Japanese refusal to quit the American market when their first offerings proved unappealing; they persisted and steadily improved their sales."

U.S. businessmen speak almost with awe of the speed with which Ja anese companies master new technologies and make high-quality prod

"Every time they do something, they do it better than the last time),” bald former Boeing vice president William Beeby, who worked on development of the Boeing 767, parts of which are manufactured in Japan. "The quality coming back (from Japan] is better. We saw that.”

"The Japanese have been organized to tap the pool of science in the country," said Dan Burg of Carnegie-Mellon University. "They send teens here, and it's done in an organized fashion. They'll send post-doctoral students to spend time at our locations, but it's rare for U.S. students to go to a Japanese university."

Whether the United States should, or could, respond to the Japa challenge by adopting some of Japan's methods is

among politicians, industrialists and economic experts.

"The Office of Technology Assessment has described the fragment U.S. industrial policy as a "potential strength."

"Our pluralistic system, which is responsible for so much of the ad học character of U.S. policies toward industry, creates an environment where flexible and innovative responses are sometimes possible," the OTA said.

Nevertheless, there is a growing sense in industry and academia that government needs to provide more consistent direction.

Washington Minders With Stop-and-Go Policies

An example of Washington's stop-and-go tendencies are Reagan administration proposals to curtail energy research just as it has made progress after the 1973-74 oil-price scare.

"Science isn't run on a six-month basis," Brookings' Roy said. “You have to wait 10 years for results."

While the Japanese ministry has announced a seven-year, $140 million research effort involving 10 private companies to develop “intelligent" robots capable of assembling dozens of different products, including an entire automobile, the U.S. government's main robotics research program, at Wright-Patterson Air Force Base in Dayton, is geared primarily to making defense contractors more efficient.

"U.S. industrial policy is a mess," a congressional aide said. “It doesn't add up. It's little bits and pieces. The political element is always dominant here. The kind of political system we have just isn't conducive to coherent policies."

There are, however, some signs of change. The Reagan administration has given other indications of its readiness to consider new approaches.

In a highly significant move, the Justice Department's Antitrust Division has allowed 10 competing U.S. computer companies to establish a joint research company, Microelectronics and Computer Technology Corp. No Japanese companies are members, and Japanese firms seeking access to MCC's technologies must deal with the consortium, not a single company.

Some have described this project as "America Inc."

In 1981, Congress passed the research and development tax credit, enabling companies to accelerate their depreciation on R&D equipment. It is credited with spurring a dramatic increase in the amount invested in new, "high-tech" ventures, from $58 million in 1978 to $1.7 billion in 1982. And California, under then-Gov. Edmund G. (Jerry) Brown Jr., established the first Commission on Industrial Innovation to recommend state policies that would help "high-tech" industries.

These steps have the advantage of not requiring a political confrontation with Japan. For, in the heat of the present, it is easy to forget that Japan is actually a great American success story.

It has reached its position of near technological parity through American aid, open market and technical prowess. Now, Japan is forcing the United States to take stock of its own economic performance and is becoming a teacher to its own postwar teacher.

But, as Undersecretary of Commerce Lionel H. Olmer has said, "Japan is not yet a technological giant."

The United States is still bigger and richer. Japan's labor productivity, the measure of the man-hours required to turn out products of a certain value and indirectly a measure of technological prowess, still lags behind that of the United States, although the difference is narrowing and Japan is an equal or ahead in some key industries such as automobiles.

The $15 billion spent by Japan annually on civilian research and development is only half the amount spent by the United States. The Japanese government's annual spending for research on supercomputers is less than that of IBM.

Japan's vaunted system of national planning is not infallible. It has made serious miscalculations, such as promoting growth of an aluminum industry now on the brink of bankruptcy.

Some even think that Japan's success in international trade may be exposing its companies to forces that will weaken its society's traditional discipline and unity of purpose that has characterized Japanese industry.

"The rapid evolution of Japan's economy toward the creation of a 'knowledge intensive' society carries with it enormous potential opportunities," Olmer said. "... The technological race does not need to be a zero sum game. Both sides can win, and the results will be of enormous benefit to all."

Staff writers Tracy Dahlby in Tokyo and Hobart Rowen in Washington conducted interviews for this series. Staff researcher Carin Pratt contributed to the report.

I have read with interest the article by Neal Orkin in the January-February 1984 issue of the Harvard Business Review entitled "Rewarding Employee Invention: Time for Change." I'm afraid I must disagree with its basic recommendation that the U.S. enact a German-type inventors' compensation statute, similar to that embodied in H.R. 3285.

I am a strong believer in the importance of incentives to stimulate risk-taking, investment, and innovation. No doubt incentives such as equity ownership have played an important role in the creation of many new enterprises in electronics and biotechnology in the United States. In fact, I would urge that the preeminent success of U.S. companies in these fields is testimony both to the vitality of U.S. enterprise and to the adequacy of our incentive systems, in contrast to the author's impression that the nationals of other countries, particularly in Germany and Japan, are outdoing us.

The scheme that Mr. Orkin advocates, however, and the German system it is based on, principally affect employees of larger companies rather than entrepreneurs of smaller and newer companies. And for this type of employee, I believe this system would be unfair, useless, and bureaucratic.

It would be unfair because it focuses solely on inventorship, which is a rather precise, limited, legal concept. In a large company, many people play important and critical roles in the creation and development of a product, not just those who, according to the U.S. rules of inventorship, are designated inventors. Moreover, much of the success of a new invention arises from effective teamwork in the testing, development, and marketing of an invention, and a system that provides significant royalty or other added compensation to only the limited group legally entitled to be considered inventors would be disruptive, not stimulative of new invention.