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The author would like to thank David Hodges, Patrick Fridenson, and three anonymous referees for their insightful comments on previous versions of this article. His thanks also go to the Science History Institute for its support for this project.
The United States experienced a manufacturing crisis in the 1970s and during much of the 1980s. The competitiveness of American plants declined significantly vis-à-vis factories located in Japan. The crisis was so acute that, in many sectors, U.S. corporations were forced to close a significant fraction of their production facilities. Losing market share to Japanese competitors, integrated steel manufacturers shut down more than half of their mills and laid off 250,000 workers in the 1970s and early 1980s. Massive plant closures occurred in the automotive industry. Entire industries disappeared, notably machine tools and consumer electronics. The troubles of U.S. industrial firms were partially self-inflicted. Convinced of their technological superiority, many corporations had disregarded signs of growing overseas competitiveness. They had underinvested in production capacity and had thereby created an opening for foreign competitors in domestic and international markets. They had emphasized product innovation, giving low priority to the development and management of manufacturing processes. In several industries, they had also given away their technology, including production technology, by licensing it to foreign corporations.1
But the manufacturing crisis can also be explained by the superior performance of Japanese industry. Japanese factories were in the main more productive and yielded higher-quality products than their American counterparts. In fact, the firms and industries that survived the Japanese onslaught were those that adopted Japanese manufacturing practices. For example, steelmakers introduced Japanese manufacturing technologies and quality control techniques in their plants. Automotive manufacturers dispatched study teams and set up joint ventures with Japanese corporations in order to learn Japanese production methods. In the process, they adopted many innovations made at Toyota and Nissan: quality circles, just-in-time techniques, and lean production. This pattern can also be found in high-tech industries, where Japan emerged as a major competitor in the second half of the 1970s and the first half of the 1980s. For instance, in order to compete with Canon and Minolta in the office copier business, Xerox followed the Japanese model. It improved the reliability and quality of its products. It...