Special Contribution Business Innovation in IoT Era: Rebuilding Business Model for Monozukuri

FUJITSU Sci. Tech. J., Vol. 53, No. 4, pp. 3–9 (July 2017) 1. Industrial structure of global market has changed Global industry has entered a historic, once-in-ahundred-year period of dramatic change. The impact was initially limited to the digital and software-rich electronics industry during the 1990s, while from the 2010s on, dramatic changes began to appear in nondigital industries as well, reflecting a transformation of the global industrial structure. More recently, signs of this upheaval have begun to appear even in the automobile industry, marking an extension of this period into the Internet of Things (IoT) era. One reason digital technology and software are changing the industrial structure is that product architecture is evolving towards a combination of technology modules. Another is that the interfaces and protocols interconnecting those modules are being defined by open standards, which enables an enterprise to enter a market by simply procuring and combining modules without knowing the technologies used in those components (that is, without having to accumulate technologies through basic research). A third reason is the accelerating speed at which technologies can cross borders and combine with other technologies. The transformation of the industrial structure on the basis of personal computers, smartphones, and LCD televisions was reflected in the sudden appearance of an open business ecosystem across national borders, which enabled broad range collaboration. As a result, the traditional vertical integration model, which used to be extremely stable, has lost its economic rationality, and the traditional business concept of capturing all added value within a single company is no longer valid. In the 2000s, the Japanese electronics industry encountered considerable hardships, which could be traced to this breakdown of the traditional business model. Fujitsu was no exception to this problem. This inability to adapt to a large-scale transformation of the industrial structure and subsequent changes in rules governing competition was not limited to Japanese companies. It also befell IBM, which continued to embrace traditional business concepts into the latter half of the 1980s, as well as Siemens and Phillips in the mid-1990s. IBM, which had been unrivaled in brand power, technical competence, human resources, and selling power, was forced to lay off about 150,000 employees in the early 1990s. The IoT will expand on a large scale in the 2020s, and at that time, we can expect the transformation of the industrial structure to take place in many other industries. The initial stage of IoT has been discussed on the premise that digital-type things will simply be connected over the network. However, the 2020s will see further innovation in LSI chip and sensor technologies, enabling LSI chips and sensors to be affixed, for example, to sporting goods, beverages, and food items and enabling services and people to be connected in a relatively easy manner. As services and things become interconnected, the IoT era will begin to manifest itself before our very eyes. It is said that chips costing from 10 to 30 US cents apiece are now being distributed in the Chinese market. The transformation of the industrial structure that began in the electronics industry in the 1990s is set to expand throughout the global market in the IoT era of the 2020s. This transformation of the industrial structure will Special Contribution Business Innovation in IoT Era: Rebuilding Business Model for Monozukuri