An article takes you to an in-depth look at the Japanese software industry.
Editor’s note: This article is from WeChat public account “Knowledge Automation” (ID :zhishipai), author Cole and Professor Nakata, translators of Nanshan Industrial College, Zhao Tangbiao, Lin Xueping; authorized to release. The original title “Myths of the Japanese Software Industry (below)”
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The Japanese Software Industry Mystery | Missing the Inside Story of IT (on)
Japanese Software Mystery (middle): What limits the development of Japanese software
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This is an analysis of the two professors in 2014, “The software innovation of Japanese IT departments is increasingly behind the US counterparts”, pointing out the weakening of the competitiveness of the Japanese software industry and the development track of the software industry. This reflection is of great benefit to the current development of industrial software in China. Nanshan Industrial College is compiled here and published in three separate sessions for domestic software decision makers and practitioners to think about. This article is the next article. Thanks to the American cost simulation software company Apriori Chai Simin for the great help.
It’s hard to imagine that twenty years ago, someone would warn the United States that after the success of manufacturing, Japan is becoming an important pole in the world’s software industry. It is believed that the small Silicon Valley companies that are well-known in the financial resources are difficult to match the large Japanese high-tech integrated manufacturers. In addition, it is believed that the “factory approach” software development method favored by Japanese companies is superior to the US-led “craft approach” software development method. However, in the past 20 years, nothing has happened. Japan has not produced a world-class third-party independent brand software predator.
This is a puzzle: the hardware-centric success history of manufacturing and their impact on the path of embedded software development. What is important is that Japanese business, government, and education leaders lack awareness of the growing importance of software. How should this phenomenon be explained?
01 Although the electronics company evolved into an IT company, the electronics engineer’s mind still dominates the job.
We were inspired by Arthur Stinchcombe’s groundbreaking contributions. He pointed out that organizations established at specific times and locations must make use ofExisting social resources build their own social systems. Of course, it includes the human capital necessary to achieve organizational development and survival. In particular, he pointed out that once an organization is established, it tends to retain the characteristics that it formed at the beginning of its establishment. Once the key characteristics of the organization are branded, the nature of organizational performance incentives and initial human resource characteristics are often maintained.
Stinchcombe emphasizes that it is important to understand what supports this long-term existence of the founding features. The answer lies in what researchers call “path dependence for organizational and technological learning.” The company’s earlier organizational practices, norms, corporate culture and its history often reappear over a long period of time and may limit the company’s future behavior. Part of the reason is that learning opportunities and incentives will come within the scope of capabilities.
The more frequently a company uses a technology, the more human and material sunk costs accumulate on the technology. Over time, if a company continues to succeed with a technology, the dynamic increase in returns will continue to strengthen the position of the technology. This idea can be used to understand the origin of the “hardware center” and the continued adherence of Japanese electronic high-tech companies to the existing technical routes.
Their success has reinforced these capabilities for a long time. As far as electronics companies are concerned, electronic engineers dominate the creation of these companies. These positions and related professions still dominate when electronic companies evolve into IT companies. It is easy to understand that such a history would constrain the efforts of these companies to develop software.
As mentioned above, skilled talent remains the most critical element of software innovation. The quantity, quality and deployment of these skilled talents are decisive. Sony (SONY) has always been a typical example of a Japanese company’s “hardware center.” Walkman embodies the technical capabilities of SONY, which is a victory for electronic engineering. Since then, the main part of SONY’s innovation has been to make products smaller, thinner and lighter through creative hardware design. However, they have been weak in developing innovative applications.
The former president of SONY, Howard Stringer, revealed the main source of this weakness in an interview in 2006. The following references specifically address human resource deployment issues: “We did not initially bring software engineers Into product development. Hardware engineers define and initiate the development of new products, software engineers only participate after the product definition is completed. Because the company is employed for life, the old employees are in the high position, and the young software engineers are mostly at the grassroots level. Try to climb up. So there is some form of generation gap.”
Stringer explained that Japanese software engineers were lately involved in the product development system due to the promotion system sorted by age and seniority. However, it is not only because older hardware engineers have higher qualifications. Further exploration of Stringer’s analysis can reveal other elements. NowSenior leaders are on the rise to the present when hardware capabilities are critical to individual career success and company success. In this case, high-level tends to bind success to hardware innovation, and unconsciously dilutes the contribution of software and service orientation to growth.
Long-term research has shown that managers tend to promote people who are most like themselves to their ranks. They think that such people are easy to communicate, easy to understand, and trustworthy. Lauren Rivera recently pointed out in a recruitment study by a professional services company that evaluators often use their own experience as a performance model. Since the assessors’ careers are usually quite successful, they usually think that candidates with similar work experience will have a higher probability of achieving professional success.
So, if senior managers are born to hardware engineers, they will be more inclined to promote hardware engineers. They can understand what hardware engineers have done and what they are related to, and correspondingly, they have difficulty understanding the “intangible” products produced by software engineers. These factors are lagging behind the inevitable transition to the software age.
The lag of the leadership on current realities is not unique to Japan, but it may be more common. This is due to the delay in the seniority system of young employees with innovative capabilities, the extraordinary achievements of the company based on hardware manufacturing in the past, and the Japanese management ideology closely related to hardware manufacturing. With the gradual withdrawal of the older generation of management, things are changing. However, it is doubtful whether the speed of this change can adapt to the global competition.
02 Japan’s obsession with making “things”, Monozukuri’s spirit of creation has become an obstacle.
In the late 1990s, Japanese IT companies faced the dilemma of hollowing out manufacturing capacity and global market share, as well as the rise of modular production models and the challenges of Asian competitors. It is in such an environment full of uncertainty and challenges that the Japanese traditional pursuit of the perfect “Monozukuri” concept has been revived. In their classic study, Barry Staw and colleagues concluded that when people or organizations are threatened, they often show a lack of adaptability. They tend to become rigid in thought and behavior and return to previously known behaviors rather than innovation.
Monozukuri is a term commonly used in Japan to indicate the unique spirit of Japanese workers in the production of goods. Japanese critics often refer to Japan as a “creation” country. The word was awakened and polished to reflect Japan’s core manufacturing capabilities after the war. It describes Japan’s expertise and practice in manufacturing high-quality, continuous improvement, and perfect precision hardware products. In some people’sIn recognition, Monozukuri was upgraded to management discipline and national strategy.
In 1999, the “Creation Fundamental Technology Revitalization Basic Act” was officially promulgated. The core technology of “creation” is defined as the technology related to the design, manufacture and maintenance of industrial products, which is further specified by the Cabinet List as a common technology supporting the development of the manufacturing industry. Among the areas supported by the core technology of “Creation”, the most worth mentioning is to improve the supply and quality of manufacturing technicians. It is these mechanics who are the main supporters of the “creation” technology. The areas supported by the bill include research and development, industrial agglomeration, start-ups, SME development, and “creation” learning.
After the introduction of the new law, various government agencies have been more active in promoting the activities related to “creation” and are striving to revitalize the enterprise and return the economy to prosperity. Every year, Japan publishes a “Creation” white paper, which is usually translated into “Manufacturing White Paper”, which specifically reports on the status quo, challenges and government response of the manufacturing industry. Most importantly, as Japanese manufacturing managers understand, “creation” is to maintain and upgrade Japan’s hardware capabilities.
The discussion about “creation” contains almost no software. Even when software is mentioned, software is seen as a functional point of hardware capability, an auxiliary device and controller, and is not seen as a driver of user value. The 2012 White Paper acknowledges the potential of software to create value, but in the 307-page white paper it only uses four pages to describe it. This is still the case in 2013, which is very abnormal.
Related to this is the trend of Japanese established big companies entering new areas by creating new departments and branches. Employees in new departments and branches come from the parent company and they are likely to continue existing work management and management practices. This limits the innovation of the new department. What’s more, with its strong purchasing power, these corporate entities that seem to be new entities but still old companies tend to stifle truly innovative start-ups. In terms of sales, these so-called new entities have never been among the top electronics manufacturers for more than 50 years.
In the United States, mature electronics companies will gradually disappear and be replaced by new, more dynamic companies. These new companies have neither the feelings nor the benefits of old technology, work practices and management practices. Of the top 21 electronics manufacturing companies in the United States in 2010, 8 did not exist in 1970, and 6 were too small to enter Fortune 500 companies. With all the same conditions, Japanese companies are more likely to bring their cultures to the newly established institutions and adapt more slowly to current practices and practices.
Consistent with this model, it is not difficult to understand that Japanese companies are slow to identify and accept the importance and value of cutting-edge software. In contrast, in the United States, the carrier of the importance of delivering software is often an independent startup. These commercial companies embody state-of-the-art practices, disciplines and management, and their commercial success highlights products and management.The power of practice has inspired other companies to learn from them.
03 Hard and soft: Hardware engineers are faster.
Mitsuhiro Fukuzawa traces the long painful journey that Ricoh experienced when it released its first hardware (and copy)-centric digital multi-purpose printer in 1987. The software is largely considered insignificant. of. After six generations of product architecture and 150 new models, they finally launched the cutting-edge digital MFP in 2001.
This is the first product to have a software project leader and a software-defined architecture. The process of product design is based on the close collaboration of software engineers and hardware engineers, and is also based on close collaboration between the copy department and other departments. On the basis of. If you only rely on hardware capabilities, such products will not be available until the early 1990s. It can be said that the learning process has been at least 8 years.
Products produced in 2001 using the GW software-defined architecture have achieved great commercial success in Japan. In fact, since 2001, many digital MFP products, including Ricoh’s main products (such as mid-range MFPs), have successfully used the GW platform. This shows that Ricoh’s Japanese competitors, such as Canon, are no faster or more successful than Ricoh in getting high-performance digital MFP solutions.
Fortunately, competitors have not done ahead of time, otherwise Ricoh products will face a huge market share loss. However, from an external perspective, it is difficult to understand that a large, sophisticated hardware manufacturing company will take eight years to recognize the decisive role and action of software in the overall product design. It takes so long to bring together all the necessary organizational units and capacity structures?
The reason is very simple. In Japanese companies such as Canon, Ricoh, and Toshiba, their organizational structure is often at the top decision-making position of mechanical engineers and chemical engineers, while electronic engineers and software engineers are at the bottom. Despite this, software engineers account for most of the software development costs of embedded software that is widespread in manufacturing industries. In the 2010 METI embedded product annual statistics, software development costs accounted for 61% of the total project development costs, while hardware development costs accounted for 24% of the total project development costs.
Even in this case, although software engineers have dominated the majority of product developers, strong political drivers are still working to isolate software engineers from major decision-making roles while maintaining existing power structures. . Therefore, the hardware-centric route will continue, and the role of the software is still seen as a function of the auxiliary and controller.
Until the market’s convincing proof that traditional solutions no longer work, peopleThe thinking of the software is likely to change, and the power of the software engineer is likely to start to rise. The reason why Ricoh’s learning process is long is because a large number of graduates with the latest software capabilities in computer science and related fields have entered companies that are willing to let them play their talents early. Similarly, compared to the United States, the younger generation in Japan did not have ready-made management practices to guide them when they started a company.
This makes it easier for Japanese startups to integrate software into the new product development process and then use it as a basic model for the company’s operations. If a company introduces software personnel until the later stages of the product development process, it will create a false sense of arbitrarily, that is, software can only play a role at the tool level, and there is no greater value.
Recently, a survey of Japanese automotive products also found that the status and voice of embedded software engineers is quite low even in the field of car and electricity that requires close cooperation between electromechanical software. When embedded software engineers receive tasks, the entire product development process has often been postponed for a long time, which has caused tremendous work pressure on embedded software engineers. In short, the price of hardware priority is at the expense of the optimization that software pioneers may bring.
External people often comment on the high quality of Japanese embedded software, and believe that Japanese manufacturing companies can demonstrate great innovation capabilities in embedded software. Here they confuse quality with innovation. Japanese companies do give priority to the quality of hardware and software products. They used the strict control of hardware quality in terms of software quality. This allows them to focus on eliminating software defects, even in non-mission-critical systems.
However, these practices may not be appropriate for software, and they may not necessarily motivate innovation, and sometimes even hinder innovation. This will also delay the time it takes to bring the product to market. Embedded software engineers are likely to present more innovative and innovative solutions that should be involved in the early stages of product development, working in an equal and close relationship with hardware engineers, and getting the resources and time necessary to leverage their capabilities. In many Japanese companies, these issues have corresponding cases.
04 Reflection and Development of the Japanese Software Industry
1Software factory and software staff blue-collar, hinder innovation
In reviewing the development of the Japanese software industry, it is valuable to identify some inflection points. At the time and region represented by these inflection points, different management decisions, government decisions, and educational decisions are likely to have a more positive impact on the development trajectory of the industry. Policy makers in other countries may benefit from such an analysis.
The following is a possible positive development of the Japanese software industry.Suggested scenario. Some of these alternatives may be more relevant to Japanese policy makers. Even scenes that are unlikely to be realized, such as the general improvement of English skills, are not suitable for use in Japan, but may be a more realistic option for other countries.
The Japanese software industry has created “blue-collar” positions for employees with moderate software skills working in “software factories” in the IT services sector, which has largely hindered innovation. As mentioned above, the driving force in a software factory environment is delivery time, quality, and cost goals, which are achieved through standardized processes, tools, and module reuse.
This result brings important benefits, but it is rooted in the failure of Japanese companies to successfully treat hardware and software. Can Japanese companies recognize the limitations of this approach and its limitations on the potential for software innovation? The current dominant software factory model reflects the superposition of two factors. The first is over-overlaying, followed by over-customization.
21990 is the turning point of Japanese customized software
Besides Germany, most countries that are pursuing a strong software industry are not as strong as Japan. Therefore, the pressure to avoid “hardware centers” and “customized software” is small, but there is still the challenge of optimizing the outsourcing share. We can identify an inflection point that may have occurred in the early 1990s, perhaps rewriting the large-scale domestic and international packages that followed, and the historical fact that large companies are shrinking their IT capabilities. At the time, many large companies were abolishing IT departments and turned their business to integrators. The motivation for this behavior was to reduce labor costs.
At that time, if you could hold back the pressure of reducing expenses and regard IT as a potential source of value-added, then IT capabilities could develop into one of the core capabilities of today’s big companies. If the big companies at that time decided to maintain their internal capabilities, then there would be more opportunities to discover new IT, and thus develop more self-use or commercial software.
Even today, the Japanese IT industry generally believes that the top management of Japanese companies still do not understand the value creation potential of IT and its possible competitive advantage. With stronger internal IT capabilities, the company will have a stronger internal voice, providing information, education and lobbying executives for IT policy.
Japan could have benefited from software transformation-related courses set up by elite educational institutions with high-level executive participation. At the very least, when engineering schools no longer need to teach liberal arts courses in the first two years, these schools can and should choose to build lean courses on emerging global science and technology trends. This will certainly enhance the understanding of the importance and broad impact of young IT professionals on the IT revolution.
In the current global environment, all conditions are the sameIn the case of a company with strong internal IT capabilities, the entire economy will benefit. Therefore, for policy makers seeking to develop in the IT industry, the lesson here is that it is important to educate top-level institutional leaders in all fields to recognize IT value creation capabilities.
Even if they don’t plan to develop their own software, their companies need to be able to monitor and evaluate the rapidly evolving global IT environment. Similarly, all department heads need the ability to communicate fully with IT experts to better develop strategic IT procurement and deployment decisions.
3Software startups and startup software departments are too weak
We have documented the weakness of Japan’s independent software industry, especially the weakness of start-ups, which is a manifestation of the overall weakness of Japanese start-ups. In the past 15 years, the Japanese government has been trying to stimulate entrepreneurship through various measures, including providing better tax treatment for start-ups, knowledge services, streamlining procedures, and promoting technology transfer from universities to private companies. Most of these policies have not achieved the desired results. In contrast, it is difficult to identify and eliminate institutional barriers.
Related to this is the practice of a large number of Japanese companies that have been discussed to enter new areas by creating new departments or branches. This new bottle of old wine is not conducive to innovation, and the new company is unlikely to touch the interests of the parent company.
In this context, there is also a vertical relationship between the parent company and its suppliers. Scholars in Japan and the United States have written many articles about these relationships, embodying the so-called “relationship contract.” These relationships involve long-term market communication with product and service providers and are based on mutual trust, inter-company learning and reciprocity.
If a new company proposes an innovative solution (product or service) and attempts to promote it to a mature company, mature companies are likely to turn to their existing suppliers and encourage or even support them to find comparable s solution. They will wait for such a solution to appear instead of moving to a new business. These practices are particularly prevalent in the enterprise software market.
Working with new businesses is often a high-risk business. Their management has not been tested, they may not be able to provide reliable delivery, and they are not able to deliver the promises they promised, and they may not have been compliant. In this environment, corporate customers are often reluctant to conduct due diligence on potential new partners. Another related issue is that the domestic M&A market is weak and investors lack opportunities to exit. In addition, there are obstacles in laws and regulations.
A considerable number of arguments can support this view: Japan does not have enough products to focus on software, and there are not enough software professionals to focus on the product. This has led to a lack of demand for good software architects and designers. And the independent software department that is very popular among startups, andDid not play the role of its American counterparts in the transformation of the Japanese economy.
These meaningful corporate culture characteristics will eventually form a deep gap in the past 20 years, completely separating the software industry between the United States and Japan.