A unique aspect of agricultural production as a biological process is that it is basically conditioned by natural environments. Agricultural technology is so developed as to be efficient in the given environmental conditions in addition to being consistent with relative factor and product prices. In consequence, there is a tendency for agricultural technology to become location-specific, and its direct transfer is limited within a small area of similar environmental conditions.

Fifteen or so years ago and for many decades before that, popularly speaking, it was not uncommon to think of the Japanese as slavish imitators of foreign technology. As research workers in economic history, we recognize that slavish imitation of foreign technology is no easy matter. Foreign technical practice is hardly uniform. Choice among a number of competing technologies is hardly child's play. Young Japanese students of a century ago were enjoined to go overseas, discover what was best and make it Japanese. Such injunctions by a semi-feudal oligarchy and its intellectual supporters while progressive in spirit were naive. One process rarely dominates international industry. What was useful for the world's leader might not be appropriate for the human and nonhuman resource endowment of late nineteenth-century Japan. Initially, Japan's worldwide search led it to adopt a French-style army, an American-style banking system, and a British-style cotton textile industry. In time each of these models were either discarded in favor of other national models or otherwise modified to meet the imperatives of assimilation.

Clearly, private business is but one agent for the diffusion of technology. Yet it is an important one. In the normal pursuit of business, technological knowledge and skills pass over political boundaries and private enterprise takes part in the international diffusion of technology. In this paper I want to try to delineate the means by which private companies have shared in the international diffusion of technology in the nineteenth and twentieth centuries. I will note briefly the “imitation lag” and then what I want to call the “absorption gap.” From generalizations, I will turn to some explicit examples and analysis. Finally, in conclusion, I want to return to my concept of the absorption gap and the role of private enterprise in bridging that gap.