Abstract
This paper focuses on how “Japanese technology” was formed in the Japanese machine tool industry, and presents how Japanese machine tool builders competed in R&D and the innovation process in the domestic and international markets. During the competition for the innovation of computerised numerically-controlled (CNC) tools, drastic changes occurred in the ranking of individual firms. Prior to the transformation, the traditional “Big 5” companies occupied the largest market share. After the innovation, however, the “Big 3” firms which had not been big in size at their origins increased their market share. This paper explains how this change stemmed from different attitudes towards R&D and innovation