The Future Of Innovation ... The Future Of Corporate Strength

Dr Takeshi Shimada

 

From the standpoint of architecture, products can be classified into two categories: those with modular architecture and those with integral architecture. The majority of successful Japanese manufacturing companies have been nurturing organizational capabilities for integrated production that matches products with integral architecture because these companies have been growing through a process of capabilities-building competition in the postwar period with poor resources.  A product with integral architecture requires delicate mutual adjustment of respective components dedicated for the product to demonstrate its real performance as a total system.  Therefore, strong organizational capabilities nurtured through the development and production processes of this type of product have served as the competitiveness of Japanese manufacturing companies.

The competitiveness of companies consists of "invisible competitiveness" and "visible competitiveness."  "Invisible competitiveness" is assessed by indicators such as productivity, production lead time, development lead time, product quality/yield, and in-process defect rate, which is hardly to be seen from the outside, while "visible competitiveness" is assessed by market factors such as prices, designs, brand images, delivery policies, and services. The strong organizational capabilities for production are directly reflected in the "invisible competitiveness" of the company, but "visible competitiveness" can be cancelled out by extrinsic factors such as exchange rate fluctuations.

Japanese manufacturing companies are weak in "visible competitiveness" in spite of their strong "invisible competitiveness."  As a result, their profits generally remain low.  Therefore, to turn technologies to profits by utilizing the strong organizational capabilities and "invisible competitiveness" of Japanese companies, innovations in "visible competitiveness," the weak point, such as marketing, branding, and strategy making, is necessary.

Pursuit of new technologies is not enough to create competitive products.  It is the market that utilizes technologies.  High-level technologies do not necessarily lead to competitive products; it is necessary to design the manner of approaching the market as well as to predict what added values can finally be created for the product as commercial goods, from the planning and development phases.  Furthermore, innovations should not be limited to those in "goods"; total innovation processes involving products, manufacturing processes, business models, supply chains and others, should be promoted based on the market-led vision.

The future source of innovation lies in the field of technological fusion or combination.  A new value can be created by combining various technology elements, such as technologies of one's own company with those of other companies.  Combining various elements may lead to a breakthrough that brings total changes to society, far beyond the scientific or technological innovations.  No innovation occurs without varied technologies.  As technologies vary more, we can apply our ingenuity to solving wider-ranging issues.

 

Article © 2009 Dr Takeshi Shimada. All rights reserved.

about the author...

Dr Takeshi Shimada

Dr Takeshi Shimada

affiliation:   Shima Knowledge Laboratory

position:  The Head of Laboratory

country:  Japan

area of interest:  Tokyo

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