System innovation

About system innovation

（1）System innovation and the fourth industrial revolution

Recently, new businesses based on IT, such as Google, Apple, Facebook, Amazon (GAFA), and Uber, have been very successful and have a great impact on society. Many people view the cause of these successes as a new “business model”, but if we go one step further and think about the substance of this business, the existence of a superior innovative “system” that carries the business comes up to the stage . The innovations created by these companies are realized through the construction of new “systems”. In that sense, the innovation realized by GAFA et al. can be called system innovation. The fourth industrial revolution is expanding this innovation beyond the boundaries of individual business sectors to a wide range of production activities, including manufacturing and service.

In fact, the history of system innovation is much older than the IT world, and has been challenged since the era of heavy industry. Perhaps the first notable example is the construction of the transmission and distribution network of electric power constructed by Edison at the end of the 19th century, and the production of cars by the flow of conveyors by Ford at the beginning of the 20th century. The former allowed everyone to use as much energy as they like whenever they liked, and the latter reduced the price of cars by more than half and caused a wave of motorization across the country. In both cases, we grasped the goal as a systemization as a whole (system thinking), overcame various issues and designed and implemented (system construction), and managed it smoothly and effectively (system operation).

Although the word “system innovation” has not been used since then, there have been many innovations realized by system construction as key technologies, such as computers, quality control, automation, space development, the Internet, and GPS. Systematization is a necessary step in linking technology and society, and it can be said that the progress of systematization has become an indicator of technology maturity. As a result, “system” is frequently used in the world of science and technology, and now we can see the word “system” everywhere, including company names, product names, work methods, and project names. Became. the “system” is a common everyday language that can be used for anything, the technical and social impact it originally had tends to be forgotten.

→　System Innovation.pdf

(2) Systemization against increasing complexity and uncertainty

However, at the beginning of this century, the time has come to reconsider the significance of the system. The remarkable development of IT such as sensors, computers, and communications, and breakthroughs in bio, nano, and AI have dramatically enhanced the possibility of solving social problems by technology. It can be said that it is time to accelerate the promotion of systemization, which has not been able to depicted so far. In that sense, it is the arrival of “the age of systems.” In order to bring technology to society, we have to find proper systems that should be carefully designed d under human, social and technical restrictions, Also, the complexities of diverse societies and the changing uncertainty of the environment must be deliberately taken into account. We think that we are facing a new era of systemization.

You need superior weapons and attitudes to combat the dramatically increasing complexity and uncertainty. Without it, research and development, business and national measures are expected to br only a limited success..

There is a need for a systemization that is not a system of everyday language but a powerful weapon against complexity and uncertainty. Systematization is a generic term for system thinking, system construction and system operation mentioned at the beginning.

【Supplement】

(1) The system thinking is a norm of thinking about the task, keeping the eyes, as high as possible taking a position where the whole can be viewed, trying to objectively analyze and grasp the essence of the complex interrelationship between elements and factors that compose the task. It releases the person from the narrow mindset of individuals that confines the person unconsciously and enables the person to consider the task from various different viewpoints.

(2) System construction sets the purpose while paying full attention to coordination among stakeholders, finds necessary elements to achieve this purpose, and links these together rationally, and avoiding local partial optimization of each element to achieve overall optimization.

(3) The system operation interacts closely with the users of the system while responding promptly to changes in the system’s operating environment such as emerging competing systems and changes in laws, and ensuring system sustainability through system evolution.

Necessity of system innovation

Turning to Japan, Japan has made a significant contribution to innovation in production technology as a manufacturing powerhouse. There are not a few innovations that Japan has taken the leadership. As for systems innovation Japan has made some remarkable results in the high growth period of 1960’s and 70’s, but has not been very successful recently. In particular, we have been behind in achieving system innovation with IT like GAFA etc. mentioned at the beginning and realization of extensive systemization in Industry 4.0, Systemization of management, logistics, services etc. are important source of value. Even in the field where systemization is indispensable, but Japan is still in an immature state.

There are many reasons, A main reason is that because Japanese industrial products succeeded in differentiating the performance of final products and dominated the world in the 1980s,  This success experience of this era in which the power of superior element technology directly linked to the profit, remains in the main memory of Japanese people and the inertia still dominates Japan’s manufacturing industry.  It is connected to the deep culture of respecting element technology.

The other is that in Japan society, vertically-oriented thinking and behaviors are in full detail through industry, government, and academia, and closed “partial optimization” is pursued in each function, organization, company, and industry. In order to create and operate an orchestra-like system in which many different values ​​are integrated, various technical skills and element technologies are smoothly connected, and overall coordination and harmony are vital, so that the culture sticking to partial optimization is a major obstacle.

At the request of the Ministry of Economy, Trade and Industry from 2017 to 2018, we investigated the cause of the delay in systemization in Japan. The survey results support the above. reasoning. Although the details will be omitted here, in short, the direction of value realization aimed by modern technology gradually changes, and as a result, not only the strengths accumulated by Japanese technology can be no longer fully advantageous. but the strengths rather turned to be disadvantageous. Digging down deeply various factors that may have contributed to the weakening of Japan’s technology competitiveness in a wide range of fields from manufacturing to services, management, distribution, etc. will ultimately come out to the result that the delay in systemization in a broad sense is responsible for that. We shared a strong sense of crisis that the decline in the international competitiveness of Japanese technology would continue to progress as this time. For details, refer to the document [1]. In particular, Industry 4.0, which is in progress in Germany, is an ambitious attempt to reconstruct manufacturing industry and manufacturing technology based on a new systemization method, and it is necessary to establish a counter strategy in light of the trend.