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To outside observers, the Japanese information and communication technology (ICT) industries seem fraught with ambiguity and paradox. On the one hand, Japanese computer and telecommunications firms are among the world's market leaders. On the other hand, domestic and industrial deployment of ICT in Japan is often seen to lag behind the United States and the larger European economies. Analysts are also puzzled by "gaps" in the Japanese portfolio of exported technology. And at a time when most actors in the ICT sector worldwide are acquiring more specialised technology portfolios, the Japanese industry remains centred in giant technological polymaths like NEC, Fujitsu and Hitachi.

Martin Fransman's intriguing book opens a new window on these and many other Japanese ICT puzzles. Fransman is concerned to explain Japanese failures in ICT industries as well as successes. The book is especially timely. Several fresh initiatives are afoot in Japan to promote the intensification of ICT use, and the eventual shape of the Japanese response to the "information superhighway" initiatives that have achieved such prominence in Europe and America is a subject of intense speculation.

The scope of Fransman's book is broad but three objectives stand out. The first is empirical - to trace the historical antecedents of Japanese strengths and weaknesses in the ICT sector. The second is analytical - to assess Japanese technological competencies and international competitiveness in this sector. The third is theoretical - to draw inferences from the Japanese experience that explain the "real-time" process of strategic decision-making in the innovating firm.

The book is structured around six substantial case histories, and these are a major strength of the work. The wealth of information gleaned from hundreds of interviews with Japanese industrialists and policymakers is enough in itself to make the book a "must-read". Three of these studies relate to individual industries - telecommunications switching, computers and fibre optics. The rest relate to companies - NEC (the largest Japanese ICT supplier), NTT (the largest telecommunications operator) and DDI (NTT's most significant domestic competitor).

This selection is slightly unbalanced in that it favours the environment of the public telecommunications network over that of the private network, and it concentrates on "fixed" (wired) technologies over "mobile" (wireless) technologies. The "fixed" public network focus limits Fransman's scope to comment on the significance of private data networking and mobile communications in Japanese ICT industries. In the last ten years these have been the two highest growth areas in ICT worldwide and many readers will find this is a significant omission. The future integration of public/private, fixed/mobile and voice/data networks is now probably the major debate in ICT circles.

Nevertheless, Fransman's case histories contribute to our understanding of technological "convergence" between computing and telecommunications. His industry studies outline developments in Japan relative to contemporary developments in other countries. These "time lines" yield fresh perspectives on the important debate about how technological convergence is best managed - whether in a highly integrated corporate structure (the Japanese model to date), or in a more diversified structure involving specialist actors. Too many studies of the ICT industries tend to place Japan in a peripheral position analytically, and Fransman succeeds in his argument that this is a mistake.

To a large extent, the convergence debate frames Fransman's own analysis of Japanese successes, failures and future prospects. Considering the impressive depth of the research, however, much of this analysis seems rather predictable. The Japanese system of "controlled competition", for example, although certainly used to effect by NTT to spur innovation by avoiding dependency on single suppliers, is not that different from approaches used by other national public network operators (a point Fransman recognises). Likewise the concentration by Japanese firms on domestic ICT markets is hardly unusual in this sector.

The conclusions regarding the future competitiveness of Japan's ICT companies seem very tentative. Fransman leaves one with the impression that he is not altogether sure if the Japanese approach yields a decisive competitive advantage or not. He is certainly correct, nevertheless, in sounding a clear warning that if competitors underestimate the ability of Japanese ICT firms to respond technologically to new export market opportunities, they do so at their peril.

As regards Fransman's theory of the firm, much reference is made to a forthcoming "companion volume" in which this theory is expounded more completely. In this volume, however, the theoretical framework is somewhat thinly defined and applied - tantalising rather than satisfying. Fransman is concerned to develop a theory of the firm based on concepts of "knowledge, belief, and information". Much of the analysis he presents in this book revolves around his concept of "interpretive ambiguity." This refers to decision-making under conditions where there is "insufficient information to generate unambiguous belief", opening up the probability that different individuals will derive different beliefs from the same information.

Although a similarity with Herbert Simon's "bounded rationality" is acknowledged, the difference is not always clear. The intriguing aspect of "interpretive ambiguity" in this book is that Fransman applies it not just to Japanese firms, but to their competitors and collaborators as well, thus opening up rather a new comparative perspective on the role of cultural factors in the innovation process.

Criticisms aside, Fransman is to be commended on a significant piece of work, one that will both spur debate, and serve as a useful first point of reference on the Japanese ICT industries for some time to come.

Richard Hawkins is a fellow,Centre for Information and Communication Technologies, Science Policy Research Unit, University of Sussex.