LAUSANNE, Switzerland -- A former Japanese student of mine, now a member of the economics faculty of one of Tokyo's leading universities, remarked on an occasion when we were having lunch together that, "Larry Summers would not have been appointed professor in a Japanese university." Summers is quite an exceptional fellow by any standard. Now 47 and president of Harvard University, he was made a full tenured professor of economics at Harvard at the age of 28. In the early '90s he was chief economist to the World Bank and then served as secretary of the Treasury in the second Clinton administration.

My former student's comment arose in the context of a discussion we were having on Japanese universities. As with virtually all institutions in Japan, promotion in Japanese universities is based not on merit, i.e., academic output, but on seniority. The Japanese university system is designed to foster consensus, a common denominator and hierarchy. Postgraduate and doctoral students exist to "serve their masters," including in the most menial tasks. Japanese universities do produce innovation, but mainly of the incremental kind that is best developed by well-disciplined teams. Out-of-the-box, radical breakthroughs are pretty much excluded.

Susumu Tonegawa, the 1987 Nobel Prize in Medicine, obtained his Ph.D at the University of California, spent 10 years doing research at a medical institute in Basel, Switzerland, then returned to the United States to a chair at the Massachusetts Institute of Technology, where he has remained since. He observed that had he stayed in Japan, it is highly unlikely that he would have won the Nobel Prize.