Last week I went to a talk given at ITEC in Kyoto by Bob Cole from UC Berkeley on the topic of Japanese software. This triggered a number of thoughts relating to my last blog post on the topic of the role of manufacturing in innovative regions. Two key points relating to Bob Cole's talk were:
- Japan's ICT and consumer electronics industries were built predominantly on innovative hardware solutions, supported by bespoke software. This hardware focus plays to, and helped build upon, Japanese strengths in designing and manufacturing precision goods (the term often used to describe this is monozukiri - the art of making physical things).
- The world of ICT has moved to being much more software intensive. The recent activities of HP and IBM provide ample support for that point. Japanese companies have been losing competitiveness, and do not seem able to make the transition to a more software intensive approach (but caution is needed in terms of causality and correlation there).
During the talk, the question was asked of the Japanese technology managers in the room 'In your development activities, do you start with hardware then bring in software, or is it the other way round, or do you do both together?'. The response was ~80% for hardware first, software second. A lively discussion ensued, part of which focused on Japanese management structures where seniority rules. The older employees are more likely to be hardware specialists, and software will larger be the domain of younger - and hence more junior - engineers. As a result, hardware dominates. If this is the situation (and there are many other factors to consider before leaping too quickly to conclusions) then for Japan’s ICT firms to transform themselves, different approaches are needed. One idea put forward was for Japanese ICT firms to partner with (or buy) innovative start-ups and use these external organisations to stimulate internal change. This is possible, but research shows that getting very large, old, complex firms to partner with small, new, agile start-ups is very challenging. Also, partnering for collaboration is one thing; expecting culture change within the larger firm as a result of the partnership is a much bigger issue.
So, what's all this got to do with Cambridge? Cambridge has developed strong local strengths in software (Autonomy, RedGate, etc.) on the back of historical strengths in hardware (Acorn, Sinclair, etc). Cambridge firms have not lost their integration with the hardware side (see ARM, CSR, etc.) and this has been built in part upon collaborations with Japanese hardware firms). Going forward, it is interesting to see how new initiatives are seeking to build on some of these long standing Japanese connections. ideaSpace is building links with a business incubator in Japan (Innovation Jungle, based at the Advanced Scientific Technology Management (ASTeM) Institute in Kyoto). It will be interesting to see how this nacent partnership can help play to the strengths of both Cambridge and Kyoto (which is, by the way, the home of Nintendo – a pretty good example of an integrated and very successful hardware and software company).