apparent in the United States and top American companies such as AT&T and GE started to move away from it. One of the primary reasons they made the switch was because after the end of World War II, the Japanese were not in a position to spend big dollars on fundamental research. They instead concentrated on improving their manufacturing processes and making their product lines, better and easier to use. This was done by using the applied research model and talking to the actual customers to improve the products. This is the main reason IBMs technical entourage led by Gomory was surprised when it found that the Japanese manufacturing processes were vastly superior to those used in American plants even though the technology was lagging behind the United States. These superior processes gave the Japanese firms a price and quality advantage over their competitors. In addition, because of the close relationship between the manufacturing and the research division, technology transfer between the two was much faster. This led to a decrease in product development time. Hence, new products were introduced to the market faster. They also tend to locate their research plants near their manufacturing centers for a more market oriented development. This is one of the main reasons for their faster development time while maintaining the quality of the finished products.This approach was suited on improving products using technology that was already available. However, this model is not very helpful in coming up with innovative product ideas. To get around this problem, Japanese companies looked American research institutions and universities. They established home-base augmenting research laboratories on American shores near these regional clusters of technology to transfer technology to their central research organizations. They also established various agreements with American firms for technology transfer, which would let them use American technol...
