1 chihiro watanabe jyu ict forum 9 december 2010, jyu, finland resonance between innovation and...

1

Chihiro Watanabe

JYU ICT Forum

9 December 2010, JYU, Finland

Resonance between Innovation and Consumption Triggers

Supra-functionality - Lessons from Japan’s Mobile Phones Development

Professor, Department of Industrial Management, Tokyo Seitoku UniversityProfessor Emeritus, Tokyo Institute of Technology

Visiting Professor, National University of SingaporeVisiting Professor, University of Jyvaskyla

Guest Scholar, International Institute for Applied Systems Analysis (IIASA)

2

Resonance between Innovation and Consumption Triggers Supra-functionality - Lessons from Japan’s Mobile Phones Development

Hybrid management of technology fusing strength in manufacturing technology and the effects of learning from the digital economy enabled Japanese firms to accomplish a co-evolutionary domestication of the self-propagating function of IT in the market-place.

However, simultaneous global stagnation and a subsequent post-excessive consumption society necessitate a new co-evolutionary domestication between innovation and consumption which is expected to expand supra-functionality beyond economic value.

This investigation, on the basis of an empirical analysis of Japan’s mobile phones development trajectory, attempts to identify a trigger inducing such dynamism.

Co-emergence of innovation and consumption triggered by resonance between them induced by learning was identified the key mechanism which was demonstrated by optimal theory.

1. Introduction

2. Diffusion theory

3. Resonance theory

4. Learning theory

5. Optimal theory

6. Conclusion

1.

2.

3.

4.

1. Introduction　 1.1 Historical Significance

　 2. Diffusion theory 　 (Velhulst, 1845; Rogers, 1962) Representing consumers’ preference based on

FD

　 2-1 Integr. of Prod. and Diffus. Functions （ Innofusion) → Co-evolutionary

domestication 　

2-2 Lim. of Innof. → Integr. of Cons. Func. (Innofumption ) → Co-emergence of Tech. and

Cons.

　 3. Resonance theory (Polanyi, 1969; Gibson, 1977) Resonance between tech. and cons. signals → Spirally developing co-emergence by absorbing learning both of tech. and cons.

4. Learning theory (Arrow, 1962) Learning inducement which leverages resonance

5. Optimal theory (Pontryagin, 1962) FD emergence trajectory (i) reflecting above mechanism and (ii) without any constraints

→ Supra-functionality beyond economic value

1. Sources of Japan’s Competitiveness: Production oriented model in an ind. society

2. Shift of innovation emergence spot: Self-propagation during diffusion (identity of IT)

3. Fusing “East” (MT) and “West” (IT learning): Hybrid MOT 　　　 Co-evolutionary

domestication

4. Co-emergence of tech. and consumpt. → 　1.2 New Approach

Bipolarization. IT stagnation Consumption-haters

Supra-functionality beyond economic value

3

Vicious cycle

4

2. Diffusion Theory

1980s 1990sParadigm Industrial society Information society

Core technology Manufacturing technology (MT)

IT

1. Optimization Within firms/Organizations In the market 2. Key features formation process Provided by suppliers Formed through the interacting with institutions 3. Fundamental nature As given Self-propagating 4. Actors forming features Individual firms/organizations Institutions as a whole 5. Objectives Productivity Functionality 6. Development trajectory Growth oriented trajectory Functionality development initiated trajectory

Table 1 Comparison of Features between Manufacturing Technology and IT

Message exchange

Communication

e-mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone

x イメージを表示できません。メモリ不足のためにイメージを開くことができないか、イメージが破損している可能性があります。コンピュータを再起動して再度ファイルを開いてください。それでも赤いが表示される場合は、イメージを削除して挿入してください。Network externality

x イメージを表示できません。メモリ不足のためにイメージを開くことができないか、イメージが破損している可能性があります。コンピュータを再起動して再度ファイルを開いてください。それでも赤いが表示される場合は、イメージを削除して挿入してください。Diffusion

One-seg

Message exchange

Communication

e-mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone

Network externality

Interaction

Diffusion

Functionalitydevelopment

One-seg

Network　externality

Self-propagating mechanismDiffusion　of　IT

Interaction　withinstitutional　system


Functionality development

Enhancement　of　carrying　capacity)

Acceleration　and　advancement　

of　IT　diffusion

Talk See See & talk Take a picture Pay Watch

2003

2.1 Integration of Production and Diffusion Functions (Innofusion) 1. Place where innovation takes place: from Prod, site to Diffusion site.

2. Diffusion continues as far as innov. incorporates attractiveness (FD).

3. Diff. func. demonstrates trajectory of FD and consumers satisfaction.

4. FD plays decisive role which can be emerged through interaction with consumers

1. Innovation during the course of diffusion (Innofusion) 2. Trajectory of FD (functional development) and consumers satisfaction

Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

),( TXFY

)1

1()1(FD

aYN

YaY

T

Y

Production. increase

Diffusion

TFP growth rate Nature of FD

Efforts to prolong higher level of FD Earlier emergence of FD Sustainable FD

atbe 1

1. Diffusion trajectory can be depicted by an epidemic function

2. Functionality development (FD)

3. Measurement of FD

4. Firms FD strategy for survival: Sustainable FD

where Y: Production of innovative goods; N: Carrying capacity; and a: Velocity of diffusion.

Y continues to diffuse as far as it incorporates

“Ability to improve performance of production processes, goods and services by means of innovation” = FD

Y terminates to diffuse when it reaches N

(i) Y N (obsolescent stage of FD)

0dt

dY

(ii) FD can be defined as “Potential capacity before reaching obsolescent stage”

(iii) Degree of FD = N/Y

Functionality development can be depicted by the following diffusion trajectory

Declining nature

atbe

NY

1)

N

Y(aY

dt

dY 1

2.2 Nature of Functionality Development(1) Functionality Development Concept

5 Earlier emergence of FD leads to sustainable FD Timing of FD emergence

6Fig. 1. Level and Timing of Inflection in Diffusion Trajectory.

(2) Timing of Functionality Development Emergence by Logistic Growth Function

atbe

NY

1Diffusion model ,

0 t1t# tt2

Increase in diffusion velocity Decrease in diffusion velocity

accelerate decelerate accelerate decelerate

t1: inflection point of diffusion velocity in its increasing period;

t# : inflection point of diffusion; t2: inflection point of diffusion velocity in its decreasing period.

Timing of FD emergence

]1

1

33

32[]

1[][ 11

1

000 bN

be

NYdS

dt

dYS t

attt

Given the initial level of diffusion 1/(1+b) = 0.05,

16.0N

S

CHASM

1. Following Rogers, Mahajan and Moore, timing of FD emergence can be identified as follows:

atbeY

NFD 1

2. This time corresponds to CHASM.

2t#t0

a

b32ln a

bln

dt

dY

2

2

dt

Yd

a

b32ln

t

t

Y

)33/( N

2/N

N

)1/(1 b

S

Emergence of FD

t １

Timing of FD emergence

)33/( N

FD

332

33

t

Emergence of FD

t

16% 16%34%34%

Timing of FD emergence corresponds to the timing that maximizes the secondary derivative of the diffusion trajectory, and its level is (Rogers, Mahajan, Moore)33

1. Full-fledged dif.2. Inflection of dif.3. Stagnation of dif.

2.3 Sustainable Functionality Development by Learning

– Theoretical evidence

Elucidate the mechanism enabling earlier emergence of FD leading to sustainable FD

2.3 Sustainable FD by Learning – Theoretical evidence2.4 Co-evolutionary Domestication – Firm level evidence2.5 Diffusion Trajectory of Japan’s Mobile Phones – Micro evidence

8

where ; ; , and . 　

(1) Governing Factor of Functionality Development

(i) Functionality Development

n

j

n

j 11 jj

j Pb

aba

jj Pnbb )]1([ 11

n

jjP )1(1)( TabTFD jjj

si zTTT where z: assimilation capacity; and Ts: technology spillover pool.

(ii) Gross Technology Stock T

Indigenous technology Assimilated spillover technology

Level of gross technology stock (T) increasesin a cascading way depending on z

T1

T2

T3

si TzTT 11 si TzTT 22 TszTiT 33 T

Ti

Y (T1)

Y (T2)

Y (T3)

T3 > T2 > T1

Y

N/2

33N

N

Level of diffusion when FD emerges

tt1t2t3

Timing of FD emergence is accelerated as T increases

Fig. 2. Acceleration of FD Emergence Depending on Assimilation Capacity.

FD = N / Y = 1+ be-aT 1+ b (1- aT)

[1+bj(1-ajT)]

FDj (T)

z

　FD function can be developed as follows leading to multi-logistic growth model as a function of gross technology stock level.

Given that technology stock T increases proportional to t, T and FD can be depicted as follows:

,1 aTbe

NY aTbeFD 1

2.3 Sustainable Functionality Development by Learning: Theoretical evidence

123 ZZZ

SFDFDtTZ Assim. cap. Gross tech FD emergence. Higher Sustainable incr. incr. accelerates FD FD

How to increase assimilation capacity

9

Fig. 2-2. Virtuous Cycle between Assimilation Capacity Increase and Acceleration of the Emergence of FD.

(2) Virtuous Cycle between Assimilation Capacity and Acceleration of FD Emergence

Increase in indigenous technology　

Increase in marginal productivity of technology

Y

FDZ

Acceleration of Y

Stimulateassimilation

T

Y

Ti

Emergence of new functionality development

0idT

dz Sustainable FD requirement

)1

1()1(),(),1(FD

aYN

YaY

T

Y

dT

dYtTzTTT

N

YaY

dt

dYsi

.0,,0.0,0, dZ

dYthen

dTi

dZifTherfore

dt

dY

dt

dTand

dt

dY

dT

dt

dZ

dT

dZ

dY i

i

i

0,0,0

TY

d

dT

T

Y

dFD

d

dY

dFD i

Ts Ti

si zTTT

s

i

ii

ss T

T

TTTT

Z

//

1

1

1. Learning from Ts

2. Ti inducement by Ts

Co-evolutionarydomestication

SustainableFD

Learning

Sustainable FD

isi TYT

YFDYzTTTZ

danticipatebecanFDesustainablZTthatGiven i , SFDfortrequiremenisT

Z

i

0

Critical bridge

10

Gross technology stocksi zTTT

Indigenous Assimilated spillover technology

z = 0 (Simple logistic growth) z 0 (Multi-logistic growth)

FD

1t 2tt

FD

t t

t

Y

a

b)32ln(

33N

Fig. 2-3. Comparison of Growth Trajectory between Simple and Multi Logistic Growth.

Y

FDFD

Decreasing FD Constant FD Sustainable FD

dz/dTi = 0 dz/dTi > 0

33

t

Y

1

1)32ln(

a

b

2Y

1Y

Y

2

2)32ln(

a

b

FD

1tt

FD

2FD1FD

2t

t

Y

1

1)32ln(

a

b

2Y

1Y

Y

2

2)32ln(

a

b

z

/2t

Level of FD can be classified as (i) decreasing FD, (ii) constant FD, and (iii) sustainable FD depending on assimilation capacity which depends on learning from preceding innovation.

331

N

332

N

331

N

332

N

33 33

(3) Sustainable Functionality Development

10Earlier emergence of FD

tg

ii

ieTT0

= (1)

(2)

(3)

(4)

(5)

From equations (3) and (4),

Necessary condition for sustainable FD can be identified as inequalities (7) and given that gi > 0and gs >0 and , it can be identified as follows:

(6)

(7)

(8)

(9)

(4) Necessary Condition for Sustainable FD

11

Given the average growth rate of Ti and Ts, gi and gs, and their ratio w,

, and tg0ss

seTT wg

g

s

i =

where and : initial level of and , respectively, and t: time trend. can be developed as follows:

0iT 0sT iTsT

z

t1wg

0s

0itg

0s

tg0i

s

i

i

ss

i

ii

ss

s

s

i

eT

T

w1

w

eT

eT

w1

w

T

T

gg

1

1

T

T

T/TT/T

1

1z

iidT

dt

dt

dz

dT

dz

From equation (2)

twg

s

i

s

twg

s

s

i ss eT

Tg

w

wwewg

T

T

w

w

dt

dz 1

0

01

0

0

1

11

1

when 0dt

dz

0g

w1

1wws

Since , when tg

ii

i iegTdt

dT0

0i

dT

dt0

ig

0i

dT

dz (necessary condition for sustainable FD)

0g

w1

1wws

and 0i

g

0

1

1

w

ww

Since

0s

i

g

gw 01w si

gg then , therefore,

This implies

0

s

s

i

i

T

T

T

T

when

Ts Ti

Learning from preceding innovation

Learning from preceding innovation → Earlier emergence of FD → Sustainable FD

Technology spillover pool

Indigenous tech. stock

0/ idTdz

2.4 Co-evolutionary Domestication – Firm level evidence

13

Taming into the whole institutional systems consist of three dimensions

Flow of TSO

Capacity to distinguish

Identification of the available TSO AssessmentSelection

Reject Accept

InternalizeAbsorption

Embody to production system

Maximize theeffects of TSO on SED

Assimilation

Treat homogeneous to own TS Extract STSO’s potential comparative advantage

Learning exerciseInstitution (esp. Organizational culture)

DiffusionCommercialization

Domesticative

Nat

iona

l str

ateg

y an

dso

cio

-eco

nom

ic s

yste

m

Entrepreneurialorganization and culture

TSO: technology spillover

SED: socio-economic development

Taming into the whole institutional systems consist of three dimensions

Flow of TSO


Identification of the available TSO AssessmentSelection

Reject Accept

InternalizeAbsorption

Embody to production system

Maximize theeffects of TSO on SED

Assimilation

Treat homogeneous to own TS Extract STSO’s potential comparative advantage

Learning exerciseInstitution (esp. Organizational culture)

DiffusionCommercialization

Domesticative

Nat

iona

l str

ateg

y an

dso

cio

-eco

nom

ic s

yste

m

Entrepreneurialorganization and culture

TSO: technology spillover

SED: socio-economic development

Fig. 3. The Concept of Co-evolutionary Domestication.

Cumulative learning

Absorption

Assimilation

Domestication

Treat homogeneous to owntechnology stock

Flow ofTechnology Spillover


Accept

Internalize

Taming into the whole institutional systemsby convince and empower

Historical perspectives

National strategy and socio-economic system

Entrepreneurial organization and culture

in Production, Diffusion and Consumption (Inno-fumption system)

Embody to whole system

Identification of the available spillover technologyAssessment and selection

(should learn, should not learn, cannot learn)

1. Cumulative learning cultivate the capacity

of distinguishing technology spillover flows

by assessing and selecting them into (i) Should learn, (ii) Should not learn, and (iii) Can not learn

leading to absorptive capacity to be able to treat accepted spillover technologies homogeneous to own technology stock.

2. Through co-evolutionary exercise of absorption assimilation capacity can be developed thereby to be able to embody absorbed technology to whole system in (i) Production, (ii) Diffusion, and (iii) Commercialization.

3. This ability then develop to domestication thereby taming assimilated spillover technology into the whole institutional system by activating it through convincing and empowering.

4. Domesticated technology/knowledge in turn further improve distinguishing capacity, absorption, assimilation and domestication ability in a co-evolutionary way

2.4 Co-evolutionary Domestication – Firm level evidence

(1) Concept of Co-evolutionary Domestication

14Fig. 4. The Concept of Co-evolutionary Domestication.

(2) Institutional Sources Leveraging Co-evolutionary Domestication

Flow of technology spillover

Cumulative learning

Distinguish

Accept

Absorption

Internalize

Assimilation

Embody to whole system

Domestication

Taming into the whole institutional system by activating through convincing and empowering

Xenophobia and uncertainty avoidance

Abundant curiosity,

assimilation proficiency,

and thoroughness

in learning and

absorption

Japan’s institutional strength

Key strategy in

overcomingglobal

stagnation

Missing strength

15

(3) Domestication

Process whereby a population of animals or plants, through a process of artificial selection, becomes accustomed to human provision and control.

1. Artificial selection based on humans experiences,2. Multi-functionalities (economic, social, cultural, aspirational, emotional, and spiritual),3. Instills in humans an exciting story with their own initiative as heroes and thrills them with

gratification, and4. Depending on disability of humans (group of disability is more demanding while more

sensitive in selection)

16

VendorsProposal b ased on operators ’ needs

OperatorsAnnouncement to the vendors

Discussion and adjustment

Products agreed by vendors and operators

Huge testing items than other country vendors

Double testing b y operators and feedback to vendors

Marketing dominated b y operators

Invisible efforts such as bugs solving

Operators b ear the complaints/ praise of consumers

Feedback to the vendors

IVF(In Vitro

Fertilizat ion)

Institutional technology spillover

Inter-firm

techn

olog

y sp

illover

M essage exchange

C o m m unica tion

e-m ail

IP

G P S

M usic d istr ibution

1968 1980 1999 2001 2005

C a m era

T V phone

N etw ork externa lity

In teraction

D iffusion

N ew functionality

O ne-seg

M essage exchange

C o m m unica tion

e-m ail

IP

G P S


1968 1980 1999 2001 2005

C a m era

T V phone


In teraction

D iffusion

N ew functionality

O ne-seg

Panasonic

NEC

Toshiba

Fujitsu

Mitsubishi

Sharp

Sanyo

Sony

Casio

Kyocera

9. Optics

10. Acoustic

11. Micro Devices

12. High Density

13. Application

14. Plat form

15. Security

16. Compression

1. Semi conductor

2. Electronics

3. Sensor

4. Materials

5. Battery

6. Wireless Communication

7. IC-card

8. Liquid Crystal

9. Optics

10. Acoustic

11. Micro Devices

12. High Density

13. Application

14. Plat form

15. Security

16. Compression

1. Semi conductor

2. Electronics

3. Sensor

4. Materials

5. Battery


7. IC-card

8. Liquid Crystal

Suspended technologies

Commercialized technologies

B JB J

FacsimileFacsimile

Camera

Copying machineNext gen. TVNext gen. TV

ScannerScanner

Computer peripherals

Copyingmachine

FacsimileFacsimileFacsimile

Ferroelectric liquid

cristaldisplay


cristaldisplay

Still video

camcorder

Digital camera

Microfilm system

Electronic

filing systemMicrofilm systemMicrofilm system

Electronic

filing system

Magnetic headsMagnetic headsMagnetic heads

Camera

LensLens

Video camcorder

8 mm Cinecamera

Video camcorderVideo camcorder

8 mm Cinecamera

Compact cameraCompact cameraCompact camera

Optical products

TV broadcasting lensTV broadcasting lensTV broadcasting lens

Optical fiberOptical fiber

Semiconductor

manufacturing

Semiconductor

manufacturing

Optical cardOptical card

X-ray cameraX-ray camera

Ophthalmic

equipment

Ophthalmic

equipment

X-ray digital cameraX-ray digital camera

TypewriterTypewriter

Business systemsPV cellPV cellPV cell

Handy terminalHandy terminalHandy terminal

Synchroreader

PCsBilling machine

CalculatorCalculator

Electronic

printing system

Japanese-language

word processor

Electronic

printing system

Japanese-language

word processor

Japanese-language

word processor

LBPLBP

Intra-firm technology spillover

Coopetition

Printer

PC

Cannon

Ricoh..

Canon(LBP, BJ)

NECFujitsuSony

Toshiba・・・

DELLIBM

・・・

→ HP →

OEM PCsCanon(LBP, BJ)

NECFujitsuSony

Toshiba・・・

DELLIBM

・・・

→ →

OEM PCs

Market stimulation

VendorsProposal b ased on operators ’ needs









Feedback to the vendorsVendors

Proposal b ased on operators ’ needs









Feedback to the vendors

IVF(In Vitro

Fertilizat ion)

Institutional technology spillover

Inter-firm

techn

olog

y sp

illover

M essage exchange

C o m m unica tion

e-m ail

IP

G P S


1968 1980 1999 2001 2005

C a m era

T V phone


In teraction

D iffusion

N ew functionality

O ne-seg

M essage exchange

C o m m unica tion

e-m ail

IP

G P S


1968 1980 1999 2001 2005

C a m era

T V phone


In teraction

D iffusion

N ew functionality

O ne-seg

Panasonic

NEC

Toshiba

Fujitsu

Mitsubishi

Sharp

Sanyo

Sony

Casio

Kyocera

9. Optics

10. Acoustic

11. Micro Devices

12. High Density

13. Application

14. Plat form

15. Security

16. Compression

1. Semi conductor

2. Electronics

3. Sensor

4. Materials

5. Battery


7. IC-card

8. Liquid Crystal

9. Optics

10. Acoustic

11. Micro Devices

12. High Density

13. Application

14. Plat form

15. Security

16. Compression

1. Semi conductor

2. Electronics

3. Sensor

4. Materials

5. Battery


7. IC-card

8. Liquid Crystal

Suspended technologies

Commercialized technologies

B JB J

FacsimileFacsimile

Camera

Copying machineNext gen. TVNext gen. TV

ScannerScanner

Computer peripherals

Copyingmachine

FacsimileFacsimileFacsimile


cristaldisplay


cristaldisplay

Still video

camcorder

Digital camera

Microfilm system

Electronic

filing systemMicrofilm systemMicrofilm system

Electronic

filing system

Magnetic headsMagnetic headsMagnetic heads

Camera

LensLens

Video camcorder

8 mm Cinecamera

Video camcorderVideo camcorder

8 mm Cinecamera

Compact cameraCompact cameraCompact camera

Optical products

TV broadcasting lensTV broadcasting lensTV broadcasting lens

Optical fiberOptical fiber

Semiconductor

manufacturing

Semiconductor

manufacturing

Optical cardOptical card

X-ray cameraX-ray camera

Ophthalmic

equipment

Ophthalmic

equipment

X-ray digital cameraX-ray digital camera

TypewriterTypewriter

Business systemsPV cellPV cellPV cell

Handy terminalHandy terminalHandy terminal

Synchroreader

PCsBilling machine

CalculatorCalculator

Electronic

printing system

Japanese-language

word processor

Electronic

printing system

Japanese-language

word processor

Japanese-language

word processor

LBPLBP

Intra-firm technology spillover

Coopetition

Printer

PC

Cannon

Ricoh..

Canon(LBP, BJ)

NECFujitsuSony

Toshiba・・・

DELLIBM

・・・

→ HP →


NECFujitsuSony

Toshiba・・・

DELLIBM

・・・

→ →


NECFujitsuSony

Toshiba・・・

DELLIBM

・・・

→ HP →


NECFujitsuSony

Toshiba・・・

DELLIBM

・・・

→ →

OEM PCs

Market stimulation

　Fig. 5. Scheme of Canon’s Co-evolutionary Domestication.

(4) Co-evolutionary Domestication through Hybrid Management: Canon

Canon’s hybrid management consists of (i) Market stimulation, (ii) Institutional technology spillover, (iii) In vitro fertilization, (iv) Domestication through coopetition, and (v) intra-firm technology spillover.

Digital economy

Global co-evolution with US institutional systems through coopetion with HP

2.5 Diffusion Trajectory of Japan’s Mobile Phones – Micro evidence

2.5 Diffusion Trajectory of Japan’s Mobile Phones – Micro evidence

(1) Bi-logistic Growth1. Monthly diffusion trajectory of Japan’s mobile phones (MP) over the last decade can be traced by the bi-logistic growth model.

2. This suggests that Japan’s MP diffusion in the last decade was initiated by two waves Y1 and Y2 .

Table 2 Estimation of Japan’s Mobile Phones Diffusion by the Bi-logistic Growth Model (Jan.1996-Dec. 2006)

N1 a1 b1 N2 a2 b2 adj. R2

Parameter 35.147 0.074 5.198 65.418 0.036 14.028 0.999

t-value 2.25 4.59 3.26 3.81 6.74 1.33

tata eb

N

eb

NYYY

212

2

1

121 11

Y(t): cumulative number of MP diffusion at time t; N1, N2: carrying capacities; a1, a2: velocity of diffusion;

b1, b2: initial stage of diffusion; and t: time trend by

month (Dec. 95 =0, Jan. 96 =1).

IP: Internet Protocol Service

18

Fig. 6. Diffusion Trends in Japanese Mobile Phones (Jan. 1996-Dec. 2006).

.

Fig. 7. Diffusion Dynamism of Japan’s Mobile Phones (Jan. 1996 – Dec. 2006).

(2) Diffusion Dynamism of Japan’s Mobile Phones

96/7 Full-fldged fiffusion of th the 1st MP(MP subscription exceeded that of message exchange)

97/10 Emergence of the MP e-mail transmission (Sky walker)

99/2 Emergence of the 2nd MP(i-mode by NTT DoCoMo)

99/4 Stagnation of the 1st MPFull-fldged Diffusion of the 2nd MP(EZweb by IDO)

02/5 i-shot by NTT DoCoMo, au-shot by au

05/1 MP subscribers have reached 80 million

1t 2t#t0

a

b32ln a

bln

dt

dY

2

2

dt

Yd

a

b32ln

t

t

Y

33 N

2

N

33N

N

1t 2t#t0

a

b32ln a

bln

dt

dY

2

2

dt

Yd

a

b32ln

t

t

Y

33 N

2

N

33N

NY

d2Yi

dt2d2Yi

dt2

0

10

20

30

40

50

60

70

80

90

100

Jan-

96Ap

r-96

Jul-9

6O

ct-9

6Ja

n-97

Apr-

97Ju

l-97

Oct

-97

Jan-

98Ap

r-98

Jul-9

8O

ct-9

8Ja

n-99

Apr-

99Ju

l-99

Oct

-99

Jan-

00Ap

r-00

Jul-0

0O

ct-0

0Ja

n-01

Apr-

01Ju

l-01

Oct

-01

Jan-

02Ap

r-02

Jul-0

2O

ct-0

2Ja

n-03

Apr-

03Ju

l-03

Oct

-03

Jan-

04Ap

r-04

Jul-0

4O

ct-0

4Ja

n-05

Apr-

05Ju

l-05

Oct

-05

Jan-

06Ap

r-06

Jul-0

6O

ct-0

6

Estimate Second Wave First Wave

-0.025

-0.02

-0.015

-0.01

-0.005

0

0.005

0.01

0.015

0.02

0.025

Jan-

96

Apr-

96

Jul-9

6

Oct

-96

Jan-

97

Apr-

97

Jul-9

7

Oct

-97

Jan-

98

Apr-

98

Jul-9

8

Oct

-98

Jan-

99

Apr-

99

Jul-9

9

Oct

-99

Jan-

00

Apr-

00

Jul-0

0

Oct

-00

Jan-

01

Apr-

01

Jul-0

1

Oct

-01

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Jul-0

6

Oct

-06

Second-order derivative

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Jan-

96Ap

r-96

Jul-9

6O

ct-9

6Ja

n-97

Apr-

97Ju

l-97

Oct

-97

Jan-

98Ap

r-98

Jul-9

8O

ct-9

8Ja

n-99

Apr-

99Ju

l-99

Oct

-99

Jan-

00Ap

r-00

Jul-0

0O

ct-0

0Ja

n-01

Apr-

01Ju

l-01

Oct

-01

Jan-

02Ap

r-02

Jul-0

2O

ct-0

2Ja

n-03

Apr-

03Ju

l-03

Oct

-03

Jan-

04Ap

r-04

Jul-0

4O

ct-0

4Ja

n-05

Apr-

05Ju

l-05

Oct

-05

Jan-

06Ap

r-06

Jul-0

6O

ct-0

6

First-order derivative

96/7

97/10

02/5

99/4

05/1

99/2

dYi

dtdYi

dt

d2Yi

dt2d2Yi

dt2

Y

Full-fledged diffusion of the 2nd MP ((1)) corresponds to stagnation of the 1st MP (3)

t1 t2 t2-t1

Y1 96/7 - 99/4 33 0.030 0.074

Y2 99/4 - 05/1 69 0.015 0.036

)1

(12 tt

t1: Full-fledged diffusiont2: Stagnation: Rate of obsolescencea: Velocity of diffusion

96/7

97/10

99/2 99/4

02/5

05/1

1

1

1

1

1

1

2

2

2

2

2

2

3

3

3

3

3

3

(1)

(1)

(1)

(2)

(2)

(2)

(3)

(3)

(3)Y2

Y1

Y2

Y1

Y2

Y1

19

Diffusion of

Emergence of the MP e-mail transmission(Sky Walker)

Emergence of FD

a

idt

dYi

Sky Walker

i-mode

Source: Watanabe, Moriyama and Shin, 2009.

1

2

(1’)

3(1)

(2)

(3)

1 Full-fledged dif.2 Inflection of dif.3 Stagnation of dif.

.

Fig. 7. Diffusion Dynamism of Japan’s MP.

(3) Mutual Inducement and Learning

96/7 Full-fldged fiffusion of the the 1st MP(MP subscription exceeded that of message exchange)

97/10 Emergence of the MP e-mail transmission (Sky walker)

99/2 Emergence of the 2nd MP(i-mode by NTT DoCoMo)

99/4 Stagnation of the 1st MPFull-fldged Diffusion of the 2nd MP(EZweb by IDO)

02/5 i-shot by NTT DoCoMo, au-shot by au

05/1 MP subscribers have reached 80 million

1t 2t#t0

a

b32ln a

bln

dt

dY

2

2

dt

Yd

a

b32ln

t

t

Y

33 N

2

N

33N

N

1t 2t#t0

a

b32ln a

bln

dt

dY

2

2

dt

Yd

a

b32ln

t

t

Y

33 N

2

N

33N

NY

d2Yi

dt2d2Yi

dt2

0

10

20

30

40

50

60

70

80

90

100

Jan-

96Ap

r-96

Jul-9

6O

ct-9

6Ja

n-97

Apr-

97Ju

l-97

Oct

-97

Jan-

98Ap

r-98

Jul-9

8O

ct-9

8Ja

n-99

Apr-

99Ju

l-99

Oct

-99

Jan-

00Ap

r-00

Jul-0

0O

ct-0

0Ja

n-01

Apr-

01Ju

l-01

Oct

-01

Jan-

02Ap

r-02

Jul-0

2O

ct-0

2Ja

n-03

Apr-

03Ju

l-03

Oct

-03

Jan-

04Ap

r-04

Jul-0

4O

ct-0

4Ja

n-05

Apr-

05Ju

l-05

Oct

-05

Jan-

06Ap

r-06

Jul-0

6O

ct-0

6

Estimate Second Wave First Wave

-0.025

-0.02

-0.015

-0.01

-0.005

0

0.005

0.01

0.015

0.02

0.025

Jan-

96

Apr-

96

Jul-9

6

Oct

-96

Jan-

97

Apr-

97

Jul-9

7

Oct

-97

Jan-

98

Apr-

98

Jul-9

8

Oct

-98

Jan-

99

Apr-

99

Jul-9

9

Oct

-99

Jan-

00

Apr-

00

Jul-0

0

Oct

-00

Jan-

01

Apr-

01

Jul-0

1

Oct

-01

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Jul-0

6

Oct

-06

Second-order derivative

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Jan-

96Ap

r-96

Jul-9

6O

ct-9

6Ja

n-97

Apr-

97Ju

l-97

Oct

-97

Jan-

98Ap

r-98

Jul-9

8O

ct-9

8Ja

n-99

Apr-

99Ju

l-99

Oct

-99

Jan-

00Ap

r-00

Jul-0

0O

ct-0

0Ja

n-01

Apr-

01Ju

l-01

Oct

-01

Jan-

02Ap

r-02

Jul-0

2O

ct-0

2Ja

n-03

Apr-

03Ju

l-03

Oct

-03

Jan-

04Ap

r-04

Jul-0

4O

ct-0

4Ja

n-05

Apr-

05Ju

l-05

Oct

-05

Jan-

06Ap

r-06

Jul-0

6O

ct-0

6

First-order derivative

96/7

97/10

02/5

99/4

05/1

99/2

dYi

dtdYi

dt

d2Yi

dt2d2Yi

dt2

Y

Full-fledged diffusion of the 2nd MP ((1)) corresponds to stagnation of the 1st MP (3)

)1

(12 tt

t1: Full-fledged diffusiont2: Stagnation: Rate of obsolescencea: Velocity of diffusion

96/7

97/10

99/2 99/4

02/5

05/1

1

1

1

1

1

1

2

2

2

2

2

2

3

3

3

3

3

3

(1)

(1)

(1)

(2)

(2)

(2)

(3)

(3)

(3)Y2

Y1

Y2

Y1

Y2

Y1

20

Diffusion of

Emergence of the MP e-mail transmission(Sky Walker)

Emergence of FD

idt

dYi

Sky Walker

i-mode

1st MP (non-IP)

1. 96/7 1st MP

2. 97/10 MP e-mail (Sky Walker)

2nd MP (IP) (1’) 99/2 i-mode

3. 99/4 Stag. (1) 99/4 MP with IP

(2) 02/5 MP with camera

(3) 05/1 Stagnation

Transfer Learning

Induce

Accelerate

1. Core func. of MP e-mail in Sky Walker transferred to NTT DoCoMo/IDO.

2. Stagnation of 1st MP induced 2nd MP.

3. Learning from prec. innov. accelerated i-mode emergence.

4. Earlier emergence of FD led to sustain -able FD.

(4) Resonance Triggering Co-emergence

21

i

1st MP (non-IP)

1. 96/7 1st MP

2. 97/10 MP e-mail (Sky Walker)

2nd MP (IP) (1’) 99/2 i-mode

3. 99/4 Stag. (1) 99/4 MP with IP

(2) 02/5 MP with camera

(3) 05/1 Stagnation

Transfer Learning

Induce

Accelerate

1. Core function of MP e-mail in Sky Walker transferred to NTT DoCoMo/IDO.

2. Stagnation of 1st MP induced 2nd MP.

3. Learning from prec. innov. accelerated i-mode.

4. Earlier emergence of FD led to sustainable FD.

Signals tempering consumption ResonanceSignals anticipating new innov.

Co-emergence of innov. and cons.

Induce

Trigger

Message exchange

Communication

e-mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone



One-seg

Message exchange

Communication

e-mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone

Network externality

Interaction

Diffusion


One-seg








of　IT　diffusion


2003

2.6 Co-emergence of Technology and Consumption by Innofumption

1) Limit of co-evolutionary domestication by firm level

　(i) Bi-polarization

(ii) Stagnation of IT

(iii) Consumption haters

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　2) Innofumption

3) Co-emergence of Tech. and Cons. 　→ Spirally developing virtuous cycle → Supra-functionality beyond economic value

4)Tech. and Cons. Co-emergence can be triggered by Resonance between signals emitted by Tech. and Cons. : Affordance　(Gibson, 1977)

→ Resonance theory

5) Resonance is induced by Learning of Tech. and Cons. → Learning theory

2.6 Co-emergence of Technology and Consumption by Innofumption

(1) From Innofusion to Innofumption

Vicious cycle

Limit of co-evolutionary domestication by firm level

Integration of Consumption Function

23

Construct this dynamism between Tech. and Cons.

Fig. 8. Integration of Production, Diffusion and Utilization Functions: Innofumption.24

(2) Integration of Production, Diffusion and Utility Functions: Innofumption

(iii) Production Diffusion Integration － Innofusion

(i) Production Function (ii) Diffusion Function (Cumulative Y diffuses as a function of T)

),( TXFY Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

Traditional production factors TFP


Growth rate

Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

FD

T

YaY (1 )

1

increase rate

YNFD

Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

FDaY

N

YaY

T

Y 111

(iv) Production, Diffusion and Utility Integration －Innofumption

Utility function

FDNTRYCFDU )(

In order to maintain sustainable FD, self-propagating FD cycle should be constructed by means of integration of utility function

TY

XY

cXTTX

lnln

/ln

1. FD enhances utility which induces C (consumption) leading to Y increase.

2. Increased Y induces R (R&D) leading to T (technology stock) increase.

3. Increased T enhances N (carrying capacity) leading to FD (= N/Y) increase.

4. Increased FD increases MPT which induces higher ETS.

5. Higher ETS induces X productivity increase ( )

6. Increased productivity increases Y leading to self-propagating FDX

Y

X

T

T

Y

Technology substitution for constrained production factors

: Elasticity of technology substitution (ETS) for X, and c: coefficient.

TX

Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

FD

T

YaY (1 )

1

MPT R&D intensity Functionality development

ETS

MPT

atbe 1

Declining nature

Co-emergence of T and C

Tech-nology Co-emergence

Consu-mption

Inducement of innovation

Advancement of institutions

Institutional innovation

Service system modeling Affordance

Fig. 9. Dynamism Co-emerging Supra-functionality beyond Economic Value.

Hybrid management Systems science Ecological psychology

Supra-functionality beyond economic value

Triggered by resonance between signals emitted by both technology and consumer

25

Co-evolution between innovation and institutions

New value could be created through interactions among variety of stakeholders

Signals inducing consumers and anticipating technology resonate

Correspondence of consumers’ demand and innovative technology emerges new value which in turn enhances demand and innovation, and leverages learning leading to spirally developing virtuous cycle.

(3) Co-emergence of Technology and Consumption

26

3. Resonance Theory 3.1 Co-emergence of Technology and Consumers Triggered by their Resonance

Technology incorporatingsupra-functionality

Consumers anticipating an exciting function.

Emitting tempering signals

Resonance

Triggers co-emergence of technology and

consumers

“Spreading pollen” thereby attracting customers consumption

“The pollinator” incorporate custom to visit innovative technology regularly

Fig. 10. Resonance of Signals Emitted by Technology and Consumers.

Correspondence of consumers’ demand and innovative technology emerges new value which in turn enhances demand and innovation, and leverages learning leading to a virtuous cycle.

Resonance of signals emitted by technology and consumers triggers this co-emergence.

Emittinganticipating signals

27

1. Many plants depend on animals to spread their pollen. 2. This is a co-emergent relationship where the plant and the pollinator benefit each other. 3. The plant expends less energy on pollen production and instead produces showy flowers, nectar, and/or odors (signals). 4. Similarly, animals emit signals to particular plant to notify the pollinator’s existence, thereby resonance between the plant and the pollinator emerges.

Regular part of the life activities: Mutual learning

1. For pollination to work, to be effective, the pollinator should visit particular plant regularly.

2. These regular visits develop learning exercises both in the plant and the pollinator.

3. These learning exercises induce resonance.

Resonance between plants (technology) and animals (consumers)

Trajectory　of　carrying　capacity

Market　condition　Initial　target　setting,　cumulative　

learning,　various　participants,　etc.

Institutional　spiral　trajectory

IT　driven　self-propagating　trajectory

Phase　of　interactions

Time t

Time t

Trajectory　of　carrying　capacity

Market　condition　Initial　target　setting,　cumulative　

learning,　various　participants,　etc.

Institutional　spiral　trajectory

IT　driven　self-propagating　trajectory

Phase　of　interactions

Time t

Time t

Periodogram

0.00E+00

5.00E+11

1.00E+12

1.50E+12

2.00E+12

2.50E+12

3.00E+12

3.50E+12

0 5 10 15 20 25 30 35

Fig. 11. Resonant Double Spiral Trajectory.

Fig. 12. Comparison of Periodograms on the Development Trajectory of MP with and without IP Services.

Mobile phones with IP services (Feb. 1999 – May 2002)

Mobile phones without IP services (Jun. 1996 – Apr. 1999)

Power spectral density

Cycle period (months)

IT Driven self-propagating trajectory

Institutional spiral trajectory

3.2 Resonance between Technology and Consumption in Mobile Phones

28

Market condition

Trajectory of carrying capacity

Phase of interactionsResonant double spiral trajectory

Higher functionality

Res

onan

ceTechnology

Consumers

(1) T and C Resonance

(2) Trigger Co-emergence

Spectrum Analysis of the Diffusion Trajectory of Japan’s Mobile Phones

Source: Kondo, Watanabe and Moriyama, 2007.

Number of subscribers N(t)

Difference: New purchase )(tN

)()()( tFtGtN Trend in new purchase eliminating time trend

Spectrum analysis using F(t): Periodogram

tT

nbt

T

na

ctf n

nn

2sin

2cos

2)(

1

0

without IP services with IP services

Resonance can be anticipated

Time trend

Fourier Transform

30

0.4

0.8

1.8

3.4

1.6

0

0.5

1

1.5

2

2.5

3

3.5

4

Years　for　IPO Age　of　CEO Stockholder　intensity　(SH/S)

Publicizing　intensity　(PD/S)

Sales　growth　rate　(△ S/S)

(3) Strong Signals Emission

Number ofIPO firms

Years for IPO

Age ofCEO

Stockholder intensity ( SH/S a )

Publicizing intensity( PD/S b)

Sales growth rate (S/S c)

MPF 32 8 43.8 6.7 67.1 36.1

non-MFP 545 20.3 52.6 3.8 19.7 22.7

Total 577 19.6 52.1 3.9 20.7 23.5

6% 0.4 0.8 1.8 3.4 1.6MPFnon-MPF

1. High functional MP incorporates high density of information emitting strong signals leveraging resonance with consumers. 2. MPF incorporates mobile phone driven innovation with self-propagating FD thereby involves broad stockholders which play a significant role in filling up information discrepancy as information carriers.

3. Consequently, MPF demonstrated a conspicuous IPO accomplishment and subsequent rapid sales increase.

Table 3 Comparison of IPO Performance in Japan’s 577 IPO Firms (2003-2005)

Source: Mitsuda and Watanabe (2007).

a Stockholder intensity: Number of stockholders per sales (¥B).

b Publicizing intensity: Frequency of the firm’s name publicized in WEB over the last 2 years per sales (¥B).

c Sales growth rate (% p.a.).

1.0 1.0

Earlier

FD emergence

Information carrier

Density of information

MPF: Mobile Phone Firms

IPO: Initial Public Offering

Televisions

Car navigation Audio

Video record/reproducers

Video cameras

Mobile phones

Significant at the 10% level



Digital cameras

Fig. 13. Causality of Learning Effects in Technologies Adjacent to Mobile Phones - Results of Granger Causality Test in 7 Innovative Products (2000 - 2007).

4. Learning Theory - Inducer of Resonance

4.1 Learning Nature

Message exchange

Communication

e-mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone



One-seg

Message exchange

Communication

e-mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone

Network externality

Interaction

Diffusion


One-seg








of　IT　diffusion


2003

Mobile phones incorporate self-propagating nature of IT domesticating extensive learning effects.

Source: Kanno, 2009.

Fig. 14. Incorporation of New Functions and Corresponding Learning Frequency Change in Mobile Phones (Jan. 2000 - Apr. 2005).

Cam

era (stationary picture) & M

usic reproduction

TFT

LC

3G service

GP

S

Cam

era (animation) &

Digital (S

D) m

emory card

FM

radio & A

nalogue terrestrial TV

tunet

Noncontact IC

card, Felica

　　

0.5

0.52

0.54

0.56

0.58

0.6

0.62

lear

ning

coe

ffici

ent (

λ)

37251 1080.11078.11076.5 tt

Feb. 2002 Turning point: Jun. 2002

May 2002: Mobile camera feature offered by NTT Docomo and au KDDI

Fig. 15. Trend in Learning Coefficient in Japan’s Mobile Phones (1997-2006).

Lea

rnin

g co

effi

cien

t (

)

Hig

h

Fre

qu

ency

L

ow4.2 Co-evolution between Technology Learning and Consumer Learning

Extensive learning incorporates new functions into mobile phones which induces consumers higher learning leading to a co-evolution between technology learning and consumer learning.

This co-evolution induces resonance between technology and consumption in mobile phones.

Source: Kanno, 2009.

Source: Chen and Watanabe, 2007.

4.3 Autonomous Co-evolutionary Dynamism Emerging Supra-functionality 1. Induced by co-evolutionary learning between technology and consumption,2. Signals tempering consumption emitted by technology and inspiring innovation emitted by consumer resonate,3. This resonance triggers co-emergence of technology and consumption,4. This creates autonomous co-evolutionary dynamism emerging supra-functionality beyond economic value..

Japan’s unique institutional systemsXenophobia and uncertainty avoidance

Self-propagating nature of ITKey feat. Form. though the interact. with institut.

Abundant curiosity, assimilat. proficiency and thoroughness in learning and absorpt.

Extensive learning from technologies adjacent to mobile phones

1. Co-evolution between technology learning and consumer learning

2. Resonance between technology and consumption

3. Co-emergence of technology and consumption

4. Supra-functionality beyond economic value

Fig. 16. Autonomous Co-evolutionary Dynamism Emerging Supra-functionality.

FD emergence trajectory (i) reflecting above mechanism and (ii) without any constraints demonstrates supra-functionality beyond economic value.

Induce

Trigger

Learning from preceding innovationleading to sustainableFD

Represent the following supra-functionality emergence dynamics

Fig. 8. Integration of Production, Diffusion and Utilization Functions: Innofumption.34

5. Optimal Theory: Chasing Supra-functionality Emerging Trajectory

5.1 Dynamics of Supra-functionality Emergence

1. Induced by co-evolutionary learning between technology and consumption,2. Signals tempering consumption emitted by technology and inspiring innovation emitted by consumer resonate,3. This resonance triggers co-emergence of technology and consumption,4. This creates autonomous co-evolutionary dynamism maximizing FD corresponding to Innofumption dynamism.

Utility function

FDNTRYCFDU )(

TY

XY

cXTTX

lnln

/ln

1. FD enhances utility which induces C (consumption) leading to Y increase.

2. Increased Y induces R (R&D) leading to T (technology stock) increase.

3. Increased T enhances N (carrying capacity) leading to FD (= N/Y) increase.

4. Increased FD increases MPT which induces higher ETS.

5. Higher ETS induces X productivity increase ( )

6. Increased productivity increases Y leading to self-propagating FDX

Y

X

T

T

Y

Technology substitution for constrained production factors

: Elasticity of technology substitution (ETS) for X, and c: coefficient.

TX

Y

R

T

Y

X

X

Y

X

X

Y

Y

Y

FD

T

YaY (1 )

1

ETS

MPT

Chase the supra-functionality emerging trajectory which satisfies following conditions without any constraints:

1. Investment intensity maximizing utility, 2. Cost minimum, 3. FD maximum.

35

5.2 Optimal Functionality Development Dynamics

(1) Functionality Development Trajectory in Japan’s Mobile Phones

tata eb

N

eb

NYYY

212

2

1

121 11

Y(t): cumulative number of MP diffusion at time t; N1, N2: carrying capacities; a1, a2: velocity of diffusion;

b1, b2: initial stage of diffusion; and t: time trend by

month (Dec. 95 =0, Jan. 96 =1). Message exchange

Communication

e- mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone

イNetwork externality

イDiffusion

One-seg

Message exchange

Communication

e- mail

IP

GPS

Music distribution

1968 1980 1999 2001 2005

Camera

TV phone

Network externality

Interaction

Diffusion


One-seg


Self- propagating mechanism

Diffusion　of　IT





Acceleration　and　advancement　of　IT　diffusion


2003

Table 2 Estimation of Japan’s Mobile Phones Diffusion by the Bi-logistic Growth Model (Jan. 1996-Dec. 2006)

N1 a1 b1 N2 a2 b2 adj. R2

Parameter 35.147 0.074 5.198 65.418 0.036 14.028 0.999

t-value 2.25 4.59 3.26 3.81 6.74 1.33

)(tYY Production

Carrying capacity

Functionality intensity

Investment intensity

(i) Investment intensity maximizing utility

(ii) Cost minimum

(iii) FD maximum

Optimal FD trajectory

Supra-functionality substitutes for resistance to new innovation

(2) Optimal Functionality Dynamics

)(tNN

)(/)()( tYtNtFDFD

)(/)()( tYtNtss

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

(year)

(in　10　thousand)

NonIP mobile　phone　estimates

IP　mobile　phone　estimates

Mobile　phone　observations

Carrying capacity　8230 Mobile　phone　estimates

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

(year)






0

1000

2000

3000

4000

5000

6000

7000

8000

9000

(year)






　

Y

1999

2001

1998

Source: Watanabe et al. (2008).

1Y

2Y

a0.074 0.030

0.036 0.015

5.3 Optimal FD Dynamics Leading to Supra-Functionality

Japan’s MP development trajectory over the last decade demonstrates supra-functionality emergence dynamics through technology-consumption co-emergence triggered by resonance induced by learning. 36

Fig. 14. Optimal and Actual Levels of FD in Japan’s MP Development Trajectory (1996-2006).

)))1()(

4(()(2

2

12*

a

aaaa

a

aFD

Trajectory under certain investment intensity (cost minimum) that maximizes utility function (utilitymaximum) leading to utmost gratification of consumption (FD maximum)

1. MP e-mail transmission by Sky Walker explored new FD frontier and incorporated MP new social, cultural and aspirational value thereby substituted for resistance to innovation.

2. Its core function transferred to NTT DoCoMo and induced resonance leading to i-mode emergence enabling earlier FD emergence for sustainable FD.

FD

t

33

Jul. 19961st MP

Apr. 19992nd MP

4.223*FD1

6.306*FD2

Feb. 1999

Actual level

Optimal level

(Envelope curve)

Optimal FD dynamics which satisfies

(ii) Cost minimum

(i) Investment intensity maximizing utility

(iii) FD maximum

0

s

H

0)()( 21

tCtC

0

FD

FD#

97/10

54.923

t#

427.1038.0 tFD

954.0204.0 tFD

0.0150.036Y2

0.0300.074Y1

a

Resistanceto innovation

Supra-functionality

Sky Walker

Critical moment(Timing when supra-functionality emerges)

i-mode

Source: Watanabe and Shin, 2009.

6. Conclusion1.

2.

3.

4.

5.

6.

7.

8.

9.

Sustainable FD is decisive to firms competitiveness which can be enabled by earlier emergence of FD by learning preceding innovation.

While co-evolutionary domestication by hybrid MOT accomplished this, post-excessive consumption society necessitates a co-emergence of technology and consumption.

Consumers demand and innovative technology may emerge new value which in turn enhances both demand and innovation leading to spirally developing virtuous cycle.

Resonance of signals emitted by technology and consumers triggers this co-emergence as demonstrated by the resonance between MP’s IT driven self-propagating trajectory and institutional spiral trajectory.

MP has constructed learning chain with technologies incorporated in high-functional MP.

Japanese unique institutional nature with abundant curiosity, assimilation proficiency and learning has leveraged consumers learning leading to co-evolutionary learning between MP and consumers that triggers resonance between them.

FD emergence trajectory reflecting this mechanism without any constraints demonstrates supra-functionality beyond economic value.

Utilizing optimal theory and taking Japan’s MP development over the last decade, this FD emergence trajectory was traced thereby critical moment when supra-functionality emerged was identified.

This timing corresponds to the timing of the emergence of MP e-mail transmission leading to sustainable FD thereby the foregoing mechanism was demonstrated.

37

References 1.

2. 3.

4.

5. 6.

7.

8. 9.

10.

11.

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1 chihiro watanabe jyu ict forum 9 december 2010, jyu, finland resonance between innovation and...

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