Impact of Digitization and Human Capital

Part 4: Declining Power of the "Go and See for Yourself" Approach

CHUMA Hiroyuki
Faculty Fellow, RIETI

Digitization is to encode, infomate, and automate everything. Before 2000, "everything" meant "everything within the scope of expectation." As for dealing with things beyond that scope, it was believed that knowledge and know-how accumulated through the practical experience of production and/or implementation (i.e., "learning-by-using") would become more important with the growing complexity of products, services, and various systems that contain both of them as components. The idea was that the "go and see for yourself in the field" principle, which calls for focusing on the field of actual action and the actual objects (i.e., three actuals), would lead to the development of self-evolvability for dealing with change-causing and unusual situations. Many researchers pointed to this principle or frame of mind as the main contributing factor for the remarkable success of Japanese companies in the 1980s.

However, the advent of the full-fledged era of digitization has changed the game, leading to a relative decline in the power of the three actuals. This is because digitization has increased the extent to which people can share and learn from each other's experiences and the power of informating or the ability of making their activity—even the very process of doing so—visible to other people has increased. With more measures for dealing with thinkable things automated and the pattern of such automation reused in all corners of our society, the scope of informated processes expanded significantly.

Furthermore, mechanisms for autonomously learning and replicating the patterns of automation applicable even to things beyond the scope of expectation are beginning to emerge, albeit to a limited extent. This marks the emergence of a pattern of automation with self-evolvability. The development of automated pattern recognition and self-evolution will gain momentum in the coming years, as big data-based artificial intelligence (AI) comes into full play or brain-like AI capable of generating hypotheses becomes reality.

Meanwhile, companies are beginning to benefit significantly from cross-sharing experiences. For instance, there is a semiconductor device called field-programmable gate array (FPGA) that is reconfigurable by software as many times as necessary. Such highly flexible, self-reconfigurable devices enable us to virtually design and produce prototypes that are almost identical to the "real thing" in both hardware and software.

When a system maker as an end-product producer and its supporting companies—i.e., designers, manufacturers, materials and equipment makers—collaborate and bring together their respective virtual prototypes and data, they can determine the specifications of a new product or material across organizational boundaries. It also enables them to explore the appropriateness of launching the product or material on the market more quickly and accurately. Furthermore, being able to change future forecasts instantaneously and as many time as necessary means that they can wait until a later stage to make decisions than they used to.

>> Original text in Japanese

* Translated by RIETI.

May 22, 2017 Nihon Keizai Shimbun

March 2, 2018

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