Converging Manufacturing and Service - EU

International Symposium “The Future of Industries”
Converging Manufacturing and Service:
In the Era of Transformation
27th November, 2014
Junko Okayama, Expert/Fellow
Center for R&D Strategy (CRDS)
Japan Science &TechnologyK.SAgency (JST)
H.T
H.N
I .S
J.C
H.T
J.O
R.T
Center for Research and Development Strategy – Japan Science and Technology Agency
独立行政法人科学技術振興機構
研究開発戦略センター
Current Situation of Manufacturing in Japan

Shrinkage of the surplus in trade balance. Especially in
the electrical equipment industry.

Offshore, losing competitiveness in product innovation, etc…
Import/Export Trend of Manufacturing in Japan
1
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
Source: METI, MOF
Why are Japanese Manufacturers Deteriorating their
Position in Global Competition?

Catch-up of developing countries.

Rise of China as a manufacturing base.

High-spec high quality goods are not necessarily major
market needs.

Struggling to define “What to make?”

Diversification in Global Market
 Shrinkage of Local Market

Rapid technological changes in ICT.
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
2
Technology development: A driving force for promoting
diversity in the function of “things”
Current Status;


Digital technology: Diversification of function of “things (manufactured products)” by
embedding software. (Fig. 2)
Network technology: A big potential to provide services to users through “things” by
embedding connectivity via network. (Fig.3)
Challenges for Japanese Manufacturers;


Japanese manufacturers are good at producing “high-spec”, “high-quality” products
(Fig. 1, 2). However, the function of “things” has been widely spreading. (Fig.3)
Service industry in the field of ICT Platform Business is entering into the market.
Fig.1 “Things”,
in original means
Hardware
E.G.: analog clock,
material, drug and etc.
Digital
Technology
Fig.2 “Things”,
software embedded
Hardware
Software
Network
Technology
E.G.: digital clock, consumer
electronic, car and etc.
Fig.3 Connectivity
DB
Machine
Service
Network
Human
Hardware
Hardware
Software
Software
Note:
E.G.: smartphone, automatic driving car and etc.
- Hardware: “Things”, whose function is described by characteristics of physical matters
- Software: “Things”, whose function is described by artificial logic (program)
3
What is the Key to Win the Game in the Era of
“Connectivity”?


Manufacturing is fiercely competitive market. How can
they generate the bargaining power?
Prospective directions

“Core Technology” with strategic IP management.
 Dominant “Platform Business” as a result of network externality.
Core Technology
Platform Business
Value Add
Manufacturing
(Fiercely Competitive
Market)
R&D Design
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
Manufacturing
MRO
4
What do we need besides “Process Innovation”?


Japan used to have global competiveness in “Process
Innovation”.
What kind of transformation in the value chain do we
need?
Research
Planning
Design
Developme
nt
Produce
Sales
General Value Chain of Manufacturing Industries
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
5
A System to Converge Manufacturing and Service


Platform interacting with consumers is needed in next
generation manufacturing system.
Strategic use of ICT may lead to create new value add.
Value Co-design/ Co-creation
Buy
Evaluation
Consumer
Use
Iteration,
Rapid Prototyping
Evaluation
Evaluation
Maintenance
Maintenance
Service Platform
Design
Large
Scale
products
Operation
Producer
Sales
Produce
Fig. Eco-System for Next Generation Manufacturing 6
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
What is the Shape of Future Industry?


Would “Platform Business” become the “Umbrella” of
Future Industry?
How should we strategically use ICT in the future
industry?
Smart City
System
Energy
System
Smart House
System
Monodzukuri
(Manufacturing)
Healthcare
System
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
Food Production
System
Mobility
System
Infrastructure &
Hazard Mitigation
System
7
Major R&D Programs in Japan
Program
Outline
SIP*1
 Promote ST&I through R&D overlooking from basic research to
(Cabinet Office)
application and commercialization by cross-ministerial
cooperation.
 Agenda and PD are decided by CSTI*2.
 10 projects including “Innovative Design/Manufacturing
Technologies” are running. Approx. 50B JPY/year is supported
(in total).
Center of
Innovation
Program
(MEXT*3)
 Support for large-scale IAG*4 cooperative research &
innovation to meet potential societal needs.
 Three visions; Smart life care, Smart Japan, Active
sustainability
 100M to 1B JPY/year is supported to each centers.
TIA*5-nano
 Global open innovation hub set up by integrally utilizing the
world class nanotech research resources. (AIST, NIMS,
University of Tsukuba, KEK)
 Focusing on nanoelectronics, power electronics and etc.
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
*1 SIP: Cross-ministerial Strategic Innovation Promotion Program
*2 CSTI: Council for Science, Technology and Innovation
*3 MEXT: Ministry of Education, Culture, Sports, Science and Technology
8
*4 IAG: Industry Academia and Government
*5 TIA: Tsukuba Innovation Arena
Discussions

What would the shape of future industry be?

What would be the role of future manufacturers?

What kind of re-design is needed in the innovation ecosystem and what would be the role of government in this
transformation?
Center for Research and Development Strategy - JST
独立行政法人科学技術振興機構研究開発戦略センター
9

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