The Role and the Cultivation of CTO's in the Japanese Manufacturing Industry

ABSTRACT

Since the latter half of the 1990's, the position of the CTO has been the center of much attention in the Japanese manufacturing industry. Perceived in a variety of ways throughout the years, the definition and role of the CTO has been changing. Before the 1990s, the CTO was someone with expertise in evaluating technology and one whose primary duty was to lead the way for the company's R&D activities. But more recently, amidst the trend toward more spin-offs and subsidiaries, the role of the CTO has broadened to include the function of integrating the various technologies and technology experts that are scattered throughout the company and has even come to include the responsibility of raising corporate revenue. This type of CTO was established in nearly half of the 119 companies surveyed for this research report.

There are three main issues pertaining to the status of CTOs in Japan. First of all, the role of the CTO is large in Japan's major manufacturing companies where the operations are extensive and various. Thus, though it would be fitting for the CTO to have the position of executive directors, about half of the CTOs from the total pool were in positions below that of managing director. A second issue is the distribution of authority between the CTO and the president, and whether or not the CTO can gain the trust of the president. Third, while there are many reason why a CTO is necessary, there are many companies that do not have CTO's either because they do not recognize their need for one, their operations department is too independent, or no personnel has been properly trained for the job. One of the questions considered in this report is how such companies should establish a CTO.

Amongst these issues, the most important is that of CTO cultivation. Though few companies currently offer CTO as a career path, the position is essential inasmuch as it provides the critical function of connecting R&D to corporate revenue. Thus, while CTOs up until now have been raised within the company, it will be necessary going forward to actively train CTOs through cooperation with universities and other outside institutions.