tailieunhanh - Capitalizing On Innovation: The Case of Japan

Moreover, the question of whether and over what time frame negative (positive) externalities might be eliminated (rewarded), or how these externalities are an element of the company’s business model, is up for debate. For example, companies that actively invest in technologies to reduce their greenhouse gas (GHG) emissions or to develop products to help their customers reduce their GHG emissions, make a bet on regulators imposing a tax on GHG emissions. Similarly, firms that invest in technologies that will allow them to develop solutions to reduce water consumption make a bet on water. | HARVARD BUSINESS SCHOOL Capitalizing On Innovation The Case of Japan Robert Dujarric Andrei Hagiu Working Paper 09-114 Copyright 2009 by Robert Dujarric and Andrei Hagiu Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Capitalizing On Innovation The Case of Japan1 By Robert Dujarric2 and Andrei Hagiu3 Abstract Japan s industrial landscape is characterized by hierarchical forms of industry organization which are increasingly inadequate in modern sectors where innovation relies on platforms and horizontal ecosystems of firms producing complementary products. Using three case studies - software animation and mobile telephony - we illustrate two key sources of inefficiencies that this mismatch can create all the while recognizing that hierarchical ecosystems have played a major role in Japan s success in manufacturing-driven industries . Toyota in automobiles and Nintendo with videogames . First hierarchical industry organizations can lock out certain types of innovation indefinitely by perpetuating established business practices. For example the strong hardware and manufacturing bias and hierarchical structures of Japan s computer and electronics firms is largely responsible for the virtual non-existence of a standalone software sector. Second even when the vertical hierarchies produce highly innovative sectors in the domestic market the exclusively domestic orientation of the hierarchical industry leaders can entail large missed opportunities for other members of the ecosystem who are unable to fully exploit their potential in global markets. For example Japan s advanced mobile telecommunications systems services as well as handsets suffer from a Galapagos effect like the unique fauna of these remote islands they are only found in the Japanese archipelago. Similarly while .