innovation - key to the future _kenichi ohmae

8/11/2019 Innovation - Key to the Future _Kenichi Ohmae

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Kenichi OhmaeWednesday, 26th April, 2006Taipei International Convention Center Taipei, Taiwan

@copyright: no quotes without written consent of the speaker

Text is developed to assist the speech, and not meant to stand on its own

INNOVATION

Key to the Future

~ the concern of the current situationand challenge of Taiwan ~


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Necessity is the mother of

invention---Thomas Edison


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Japan could survive only through

innovation

Trade War with the US for over 20 yearsPatent law suits

ITC anti-dumping suits

Yen appreciation:36084 yen/$

Cut-throat domestic competition

Wage hikes ( now highest in the world)

Lower cost imports


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Luckily, I have been involved in

assisting clients to transform

From copy cats toinnovative companies

From OEM/ODM to

own global brands Business

process/system

Blue Ocean, orpioneer into a newterritory


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Camera

DPE

lens

film

shutter

filmfilm


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2.Arbitrage

Take advantage of information gapBypass existing business system and

protocol

Offer better/cheaper products and services


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Arbitrage:examples

Business system:Ciscos Connection online SPAs such as Uniqlo and Inditex(Zara)

X-BPO/offshoring

Taylor-made commodities

Taylor-made housing in Australia using Adobe

CAD/CAM

Professional advice online

VoIP language lessons direct from the naives


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sappearance o e

s A call centre operator sells

A customer orders direct

A wholesaler designs

A customer designs e-bank,e-brokerage

e-travel agent

Dell=(CRM+SCM) onERPsudden death of IBM PC

Bypass,

Jump & Skip


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Cisco is a Virtual Single Company(VSC)

Customer

Order

Ciscos

Procurement/Delivery

Direct Fulfillment

from Supplier

Sub Assembly

Component Procurement

D

i

s

t

r

i

b

u

t

i

o

n

h

a

n

n

e

l

Plan Purchase

New product

ImprovementDevelopment/Design

Product Information

BOM Information

Design Change

Order

Demand Forecast

Test/Quality Data

Customer

Marketing

Demand

/Forecast

information

ERP SystemManufacturing Control System

Autotest

Direct Fulfillment

Cisco Connection

Online

New Product

Introduction

Dyna

mic

Replen

ishm

ent

S in

g le

En

te

rp

r is

e


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3.New Combination3.New Combination

Schumpeter: die neue combination Most new things are combination of old things

Clock,camera, and credit card on cell phone

Microwave oven in traditional oven Built-in dishwasher under kitchen counter

Remove redundancy in a living room:component

AV system Shampoo and linse

Mobile auction ( Ms.Tomoko Namba)

Online dictionary:WikiPedia and Keijiro (by Alc)


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3Cs:

What is a mobile phone? Portable telephone

Internet device(mail,

search, address book,etc) GPS

Tickets

Electronic wallet Railway season tickets

Automobile key

Personal ID (voice)

Camera

i-Pod

TV(FOMA)

Game player


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4.Contribution to the fixed cost4.Contribution to the fixed cost

Maximize the marginal contribution to the fixed cost Marginal contribution=price-variable cost=profit +fixed

cost

Variable pricing/real-time pricing

Hotel

Amusement parks

Theaters

Narrow-casting and point-casting Supermarket

reataurants

Lastminute.com Industrial machineries;communal utilization as in Mishima


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5.Digital Continent5.Digital Continent

Digital islands are now coalescing into a giganticcontinent

Mobile phones/Pucket network

PC TV

Car/GPS/ETC

Internet/BB

Non-contact IC ships


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Digital continent examples,,,

Use mobile phones as the key to a carCombine with GPS

Public assessment

Remove toll gates, and pay later

Alzheimer/pets/kids

M2MSecurity alarms using image sensor and

pucket network


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Innovations in IT are creating

sudden death of old industries

Down loading music by iPODsCD in trouble

VTR DVDHDD or Blue rayBlock Buster

Payment with non-contact ICEDY prepaid card

Collaboration with mobile phone (e-wallet, e-tickets)-chips to revolutionarize logistics

Integrated communication platform(VOIP,FAX, mail

and DB, etc. are to be integrated on browser)


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How to cope with the rapid

structural change?Directionally, always forecasted that the days

of IT will come, but speed was not clearThere will be clear winners and losers within a

few years

Excellent companies, in the old world, facemore difficulties to transform themselves

Few, if any, will be able to excel in the newera:Kodak, Fuji, ATT,,,

Self-denial seems the key---but corporate

chemistry makes it difficult to change


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Can not define even a product---

What is a PC?

MOBILE

WEARABLE Cellular phone

i-MODE

PDA e-WALLET

X-BOX STB

TiVo


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Movies and video contents

A major battle ground for key media/platform BB-casting (VOD) DVD R/W (4.7G)

Blue Ray(23G)---Majority:Sony, Samsung

HD DVD(20G)---Standard:NEC and Toshiba

SD---Matsushita

TPO( time , place , and occasion) needs to be

defined Perhaps, two survivors

Home HD server (240-300 giga bites)

Portable player( DVD or SD)


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Tube TV & flat screen TV shipments in Japan

(million)

0

2

4

6

8

10

12

80 85 90 95 '00

Tube TV

Flat screen TV

(LCDPDP)

BBT Research Institute All Rights Reserved.

Source: Data on household electronic appliances 2003 Japan Electronics and Information Technology Industries Association (JEITA)


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Camera Industry

No longer an industrycomponent, as inmobile phone

Sudden death of Film industry

Mini-labos

Emergence of micro-labos at home ( i.e. printer)

Camera is an input device to PC and printer is anoutput device to PC

Profitability of camera manufactures is declining,while that of lens manufacturers( like Tamron)

and ink-jet printer makers (like Epson) soaring


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What is a camera?

Component of mobilephone

I/O device of PC

Paper is reusable

Mini-lab is a printer athome

Pictures are electronicallytransmitted

Copies are almost free

So, the industrys fate???


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World shipments of Digital cameras & film cameras

(million)

BBT Research Institute All Rights Reserved.

0

10

20

30

40

50

60

70

'00 '01 '02 '03 '04

Source: Camera & Imaging Products Association

(est.)

Digital cameras

Film cameras


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BBT Research Institute All Rights Reserved.Source:Japanese Camera Industry Association

4.48

3.703.25

2.822.66

4.23

99 '00 '01 '02 '03 '04

Average Price of Digital Cameras

ten thousand yen)

41

1-6


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Digital Camera Shipment10,000 units

BBT Research Institute All Rights Reserved.Source Tokyo Shinbun 04/4/9

860

1000

740

550

630

280

310

1500

1500

1100

860

850

450

310

Canon

Sony

Olympus

Nikon

Fuji Photo

Casio

Konica-Minolta

0304(plan)


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Telephony

VOIP Ubiquitous---i.e., integration of mobile, GPS, PHS,

fixed line,BB and wi-fi

Seamless with business environment Decline of ATT

No clear winner as of now

Mobile phone as an integrating device for internet,GPS, ticketing and settlement( electronic wallet)

Telephone to emulate mobile phone, or FMC

PC to replace, or merge with, telephone


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Phone subscribers in Japan

(million)

0

20

40

60

80

100

92 94 96 98 '00 '02 '04 '06

Fixed phones

Mobile phones

IP phones

ISDN included

ISDN excluded

Est.

BBT Research Institute All Rights Reserved.Source:Ministry of Public Management, Home Affairs, Posts and Telecommunications


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Chips/displays

Felica/EDY(Sony) IC tags---Chip(Hitachi):@\5

TRON chip---@\1

Organic EL(organic electro luminescence

display---Canon)

SED(Surface-conduction Electron-emitterDisplay)


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6.Fast-Forward6.Fast-Forward

All new things have buds and seeds

You have to look around and see what iscoming

Early indications are somewhere in theworld

Get some hints from, e.g.

Fast growing companies in key countries List of companies growing over 10,000% pa

Aging in Europe:sure to come here some day

Yamahas music schools


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Exercise:5years out

Mobile phoneLiving room electronics

Indias west coast

Your own company

Your own Family

Your price tag


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Where are we going from here?

Home server 240 G and over

Family members to share the capacity

Movies, music, pictures and important

family records

Data Center to keep the back up

Access from PC or mobile


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7.Utilize the underutilized7.Utilize the underutilized

PDC of a bull dozer iModedata communication using

underutilized pucket network by NTT

DoCoMo

School teachers and bulidings

Fishing harbors:convert them into pleasureboat marinas


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8.RTOCS (How to get out of gutter)8.RTOCS (How to get out of gutter)

Real time online case studyWhat if you were XXX ?

50 times a year of hypothetical role playing

Kenichi Ohmae Graduate School of

Business in Business Breakthrough

UniversityJapans first accredited MBAAirCampus:cyber university


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9.What does this all mean?9.What does this all mean?

Integrate fragmented phenomena and observations and ask

What does this all mean?

Then you can see a much bigger picture, e.g.

Radio stations and TV stations are becoming iputs to a portal in a

digital broadcasting era Convergence of telecom and broadcasting is actually the

absorption of broadcasting by telecom/network

Always ask, So what?


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...migrating toward a Web-shaped corporation

The 20th Century Company

Overseas operations

Corporate functions

A 21st Century Corporation

-Rigid Business Systemwith equity-links

Marke-ting Sales

Manu-

fac-turing

ServiceR&D $billcollection

R&D

Engi-neering

inBangalore,

Hyderabad,

Pune

in Silicon

valley Telco

Sales Service

in Vietnam(Outsourced)

Marke-ting

Cus-tomers

Internet

Out-sourceMajor markets

$

-Networked functions outsourcedwith key levers at hand

"TheCompany"

Manu-fac-

turing


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10.(Kousou)10.(Kousou)

is level of thinking aboveConcept and vision

Strategy

Business plan

Always comes up in one individuals mind

Triad PowerThe Invisible Continent

M lti di S C id A t i th t


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Multimedia Super Corridor-A country in the country Cyber Law of 1998

PETALING JAYAKLCC

KLANG

PELABUHAN

KLANG

KLIA

Selat Melaka

SEREMBAN

20Km

IT CITY

HIGH

WAY

COASTAL

HIGHWAY

SHAH

ALAM

EXP

RESSW

AY

KL-

KLANG FEDERA

L HIGHWA

Y

SOUTHKLANG

VALLEY EXPR

ESSWAY

KL-SER

EMBAN

HIGHW

AY

NOR

TH-SOUTH

LINK

PULAU CAREY

KAJANG

SEMENYIH

SEPANG

SALAK

BANTINGTELOK DATOK

TELOKPANGLIMAGARANG

DENGKIL

BERANANG

PORTDICKSON

AIRPORT CITY

SHAH ALAM

BANDAR BARUBANGI

COUNTRYHEIGHTS

BANDAR BARUNILAI

BANDAR BARUSALAK TINGGI

DEDICATED

PUTRAJAYAPULAU INDAH

20Km

MSC boundary*KL Tower

* Includes KLCC and KL Tower

T h i d


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Ten approaches to innovate and to

breakthrough the wall

1.The strategic degrees of freedom (SDF)

2.Arbitrage

3.The new combination

4.Maximize the marginal contribution to fixed cost

5.Expand the digital continent

6.Fast forward

7.Utilize the underutilized

8.Real-time online case study, or What if?

9.What does this all mean?

10. (kousou ryoku

Th d l d t i


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The developed countries,

including Taiwan, must excel in

The Fourth Wave First wave:Argentine and Australia

Second wave:China

Third wave:India

Conceptual thinking, a la Daniel Pink High touch/high concept

Right brain

Sense as opposed to functions and cost

Individuals, above nations and companies, tocreate wealth

Innovate, innovate, innovate to keep good life!


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Thank you for your attention!To continue the tour of the worldContact the premium tour guide:

Kenichi Ohmae

Fax:81-3-3239-0339

[email protected]

HP:http://www.bbt757.com

HP:http://www.kohmae.com


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innovation - key to the future _kenichi ohmae

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