From Production Systems to Learning Systems: Lessons from Japan

The need to advance the conventional understanding of production systems as fixed flows of goods and services to dynamic systems based on learning is discussed. The theory advanced is based on research on the Japanese robot industry. The paper opens with a discussion of the meaning of flexibility in a dynamic economy to expose the social division of labour as the foundation of the creation and evolution of production systems. Production systems are established to obtain the scale and scope economies offered by the independent firms of the social division of labour. The necessity to organize production requires the creation of some type of an internal or external governance structure. The Japanese have developed a social technology that resolves the transaction cost trade-offs confronting North American industry between internal and external governance structures. Asanuma's relation-specific skill is discussed as the crux for comprehending the shift from production systems to learning systems.