The role of techno-countervailing power in inducing the development and dissemination of new functionality - An analysis of Canon printers and Japan's personal computers

Industrial economics suggests that a competitive environment induces firms to undertake vigorous R&D,while a monopoly enables firms to efficiently acquire R&D resources. Therefore, optimal co-evolution between competition and monopol is indispensable for significant technological innovation. This paper attempts to demonstrate this postulate by analysing the interactng dynamism between technological development and production in the printers market as well as subsequent demand for the xpansion of the personal computer market driven by new functionality development of printers. On the basis of an empirical anaysis of Canon printers and Japan's personal computers, the significant role of techno-countervailing power between supply and demand in nducing and disseminating new functionality is demonstrated.

KEYWORDS: functionality development; Canon printers; Japanese PCs; personal computers; price elasticity; Jpan; techno-countervailing power; technology elasticity; technological innovation; competition; monopoly; R&; D; research and deveopment.

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