Considerations regarding relative advantage in architectures

Abstract

This paper examines the propositions of the so-called “industry theory of architecture,” in particular the logic behind the design process. It studies the proposition developed postwar by many Japanese companies to build organizational capability in integration-based manufacturing, that is, those companies that have an affinity for products with integral architecture. Much of the net exports of goods from Japan have integral architectures. Specifically, on the basis of two hypotheses—design issues have been replaced by simplified processes known as “the search for a solution by systems of equations,” and Japanese companies are more efficient in the trial-and-error search for solutions than those in other countries—an analysis by a simple thought experiment is used. This analysis explores why Japanese companies have a higher potential for establishing comparative advantage (in a Ricardian sense) regarding design costs for integral products. Moreover, this paper indicates that in cases of extremely complex integral products that are dependent on systematic scientific knowledge, rather than mere trial and error, Japanese companies may not have a relative advantage.