Symposiums to Introduce Creation of Science and Technology Knowledge Platform - Part 3 -

By Hajime Yamada (GLOCOM)

After the presentations that I introduced in the last two reports, Nonaka, Nakahara and Aoki had a discussion with Rensei Baba presiding. Baba is a journalist specializing in Science and Technology, who used to be an editorial writer for Yomiuri Shimbun.

The panelists exchanged opinions on Electronics Manufacturing Services (EMSs), a recent movement aiming at separation and eventual independence of the manufacturing function from other departments of a company, such as product design and sales. The panelists came to a conclusion on the relationship between Electronics Manufacturing Services and information encapsulation as follows:

Information encapsulation does not simply mean organizations hiding information from rivals and competing against each other. Its significance is that each task can make its own improvements within the range of its responsibility. Each task can concentrate on its own improvements without bothering to ask others for modification. As far as the interface among tasks is standardized, tasks progress by themselves. Or they can create better systems by adding more tasks. It is the information encapsulation that makes the phenomenon of 'modularization of products' possible. EMSs, on the other hand, mean self-supporting manufacturing divisions independent from companies, and function as tasks or modules. We can say that movement towards EMSs in Japan now accelerates the shift towards Silicon Valley-type organizations.

Roles of venture capital were discussed next. In Japan, a venture capital is regarded as merely a function to supply funds. However, venture capitalists of good quality are those who have road maps of prospects regarding how technology will develop in the future. Such knowledge of venture capitalists is also Tacit Knowledge, which cannot be easily formalized. Japanese people need to realize that venture capitalists are performing a creative job of developing new businesses based on such Tacit Knowledge.

It also was pointed out that "judgment of persons" is an important talent for succeeding as a venture capitalist. This is the ability to judge the technological capacity of a person who is planning to start a new business. One might hear that second chances are given in Silicon Valley. But not everybody gets a second chance. Only the promising are given more chances even after their attempts end in failure.

The role of government was discussed around two issues. One was construction of an IT nation. The government is promoting IT strategies and constructing infrastructure such as a network of fiber-optic cables, but this is not useful by itself. Rather, it is important for the Japanese people to exchange various kinds of information and to empower the nation with knowledge through utilization of the infrastructure, Professor Nonaka pointed out.

Dr. Aoki expressed his opinions on the other issue, the vertical divided administration, as follows: For the future, it would be of no use for Ministry of Public Management, Home Affairs, Posts and Telecommunications, Ministry of Health, Labor and Welfare, Ministry of Finance, or Ministry of Economy, Trade and Industry to separately plan policies within their own frameworks. Also, each industry's connection with a specific government agency, such as banks with the Ministry of Finance, and the oil industry with METI, will lose meaning from now on. Effective policies can be established only by linking these industries and government agencies systematically. From this point of view, it is important to enhance initiating, exchanging and sharing information beyond the framework of government agencies as well as the limits of private sectors, administration, and academic circles. Once such an arena is formed, industry can be more independent from government agencies and can keep a healthy distance from them.

Dr. Nakahara then mentioned Japan's employment customs. It is said that, until now, once you are employed in a company you will not be able to quit it for the rest of your life. However, when establishing plants overseas, Japanese companies hire employees away from the other companies there, because Japanese companies have no other means of recruiting. Considering international mutuality, we need to accept foreign companies hiring Japanese employees away from Japanese companies when foreign companies find their way into this country. In short, as the result of internationalization, Japanese companies are forced to change their rigid employment systems not only abroad but also in Japan.

In summary, panelists had a lively discussion concerning how the Creation of Science and Technology Knowledge Platform would trigger Japan to change for the future.