January /2016
Next Generation Manufacturing: Towards Creation of New Platform for High Value-Added Manufacturing /CRDS-FY2015-SP-01
Executive Summary

Manufacturing industry accounts for 18.5% of Japan's GDP and 15.4% of Japan’s employment. This clearly indicates the importance of manufacturing industry in terms of economy and securing employment. However, the business environment of manufacturing industry is rapidly changing in recent years and this seems to be causing difficult situation for Japanese manufacturers. The aim of this proposal is to make policy-relevant recommendations to correspond to this transformation.

Manufacturing industry in Japan had captured the competitive advantage by providing high-performance and high-quality products. However, in some areas including digital consumer electronics, the situation is changing. Affected by the rise of manufacturing companies in emerging countries, the rapid growth of global information networks and wave of globalization are transforming the added-value source of manufacturing from the development of product itself to the development of the entire value-chain including services aiming to create social value with customers. In this proposal, we define "Next Generation Manufacturing" as manufacturing which helps perform this type of new value creation. Therefore, the key of “Next Generation Manufacturing” is to create new value including services in cooperation with users, not just to make products such as cars or aircrafts. Under such circumstances, a new type of players so-called “Platform Businesses”, such as Google or Amazon who provides differentiated service targeting on a certain basic function in the value chain with quantitative capacity utilizing internets, are arising as a new competitor or important alliance partner of manufacturing industry. This proposal aims to establish competitive advantage for manufacturing industry in the “value chain creation competition” by integrating them with “Platform Businesses.” In this regard, we propose R&D issues and policies needed to be conducted under cooperation of industry, academia and government from the standpoint of science, technology and innovation policy .

R&D issues which are needed to be tackled consist of (1) Research on requirement definition of platform and (2) development of common fundamental technology. .

On the subject of (1) Research on requirement definition of platform, new type of R&D is needed to be conducted. The R&D topics are, to define what will become a platform business, and to define which technology or system which will support the platform business, and to design legal system in accordance with the strategy to form new markets, and to design social systems concerning the evaluation of social acceptance. These issues are needed to be conducted in cooperation with the scientists in various fields including engineering, humanities and social sciences. .

On the subject of (2) development of common fundamental technology, we focused on common fundamental technologies which have potential to support various industrial domains. We recommend to promote technologies to support understanding each users which leads to the value co-creation, technologies to support rapid and efficient manufacturing and other fundamental technologies which are common to provide service and manufacturing.

In order to promote R&D on above mentioned agenda, it is necessary to integrate the existing activities which are vertically segmented by ministry, industry, research field or by policy tool. For this purpose, first, we need a “place” where stakeholders in industry, academia and government can discuss, or promote demonstration projects cooperatively. Second, we need to foster human resources, who can freely design management, cyber technology and physical technology and implement them into business strategically in order to integrate platform business and manufacturing. To activate venture creation is also needed. Finally, we need to establish a foundation to create human resources, business ideas and ventures which are needed to capture industrial competitiveness in the era of ”Next Generation Manufacturing”. Academia, especially the college of engineering is expected as the key player.