The 27th Installment
Complementary Technologies and Open Standards

by Masahiko Narita,
Professor, Master Program of Information Systems Architecture

Before taking flights, I buy business books at the airport and then read them on the plane. On a trip last year I read Monotsukuri Haisen (The Defeat of Manufacturing) (Nikkei Premium Series) by Hidenori Kimura. The title is sensational, but it's a book I've taken an interest in lately.

For more than 20 years now I have worked in software product planning and standardizing, and this book made me once again consider the importance of software in manufacturing. Here I would like to talk about the "defeat of manufacturing" concept, trends towards complementary technologies and standardization, and then the importance of system software.

1. "Defeat of manufacturing" concept

With the first Industrial Revolution, spinning technologies and the generation and control of motive power were key themes, and the objective was to figure out how to compete with India and solve labor force shortages. The second Industrial Revolution sought to use scientific knowledge to advance industry, transition from tools to machines, and eliminate experienced laborers. In the third Industrial Revolution, one of the goals was to (1) use information to control complexity and uncertainty in order to bring about mass production and mass consumption. This brought about production management, standardization, quality control, project management, and control technologies. At the same time, a further goal sought to (2) universalize workers' expertise and transition away from labor-intensive industry by universalizing people's skills, a movement represented by the saying "anyone can become capable if they study."

One of the reasons that Japan lost the Pacific War was Japan's industrial capabilities were lacking, having had no experience with mass production or mass consumption. For example, guns and bullets were made in different factories and thus difficult to bring together, and building airplanes took too long because part processing was poorly done.

While Japan did catch up in the postwar recovery period, gaining experience with mass production and mass consumption, the country has since focused too much on the second Industrial Revolution and remains weak in the areas of theories, systems, and software.

Japan always pushes for a "return to manufacturing" whenever beset by hardship, but the "defeat of manufacturing" is creeping close as control technologies get faster, the country struggles to catch up software-wise, and fewer reasons remain for experienced laborers to stay. To solve this, Japan's educational model needs to be changed into a strategy focused on theories, systems, and software.

2. Trend towards Complementary Technology and Standardization

As most people know, Japan's DVD and CD-ROM-related industries have struggled to stay ahead of developing countries as they catch up in the age of mass production and amid a trend towards the universalization and standardization of technologies and production. This has been thoroughly analyzed from the perspective of complementary technologies and open standards in the context of international competition and global standards. However, Japan has arguably struggled to keep pace with the aforementioned third Industrial Revolution and to achieve universalization through single-chip microcomputers and technology standardization. On the other hand, the Japanese government, mainly through the Ministry of Economy, Trade and Industry, is promoting standardization in light of the heightened importance of de jure standards laid out in the WTO's TBT Agreement. As part of this, a greater emphasis is being placed on the importance of adopting complementary technologies effective for launching technologies aimed at consistently acquiring advanced solutions.

Yet according to Mr. Kimura's analysis in Monotsukuri Haisen, the trend away from complementary technologies and towards computerization is unavoidable, and it is not enough to think about mass production as achievable simply through a strategy centered on a return to complementary technologies. This is because there is no guarantee of being able to find enough time to return to complementary technologies given the universal nature of software and the accelerating pace of control technologies.

3. The Importance of System Software

Industries in Japan involved in DVD and CD-ROM technologies and production have struggled to stay ahead of developing countries. In the beginning, when production volume was relatively low, products were assembled through a process that involved putting together media, optical pickups, drive units, and other such parts and carefully tending to their individual quirks. The struggle began when component-to-component specifications became standardized, mass production became common, and semiconductor manufacturers began providing chipsets containing microcomputers with embedded programs that reflected an expertise in putting systems and parts together. These programs were input into machines and integrated into systems, allowing developing countries to produce DVDs and CD-ROMs by simply purchasing chipsets and using cheap labor. However, the economic benefits these countries enjoyed did not come back around to Japan as a chipset supplier. This therefore suggests a clear a need for Japan's manufacturing industry to prioritize a strategy focused on theories, systems, and software.

The theories, systems, and software of focus here need to be of a sufficient scale, level of performance, complexity, and quality to satisfy the needs of embedded systems. These will be things achieved from technologies through the building of giant systems and through packaged software and operating systems sold in mass quantities, along with Internet services and related platforms. In Internet services as an example, such technologies are being used by a growing number of users, ranging from 1 million for smaller services to between 10 and 100 million for larger ones. Although this is an order of magnitude larger than technologies used by corporate systems, having technologies for developing, building, and using services and platforms widely used across the Internet is likely to be a necessity for strengthening industrial competitiveness throughout Japan.