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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 ~
8/11/2019 Innovation - Key to the Future _Kenichi Ohmae
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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
HP:http://www.bbt757.com
HP:http://www.kohmae.com
8/11/2019 Innovation - Key to the Future _Kenichi Ohmae
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MP3
http://www.cw.com.tw/ohmae.htm