Future Direction of Japanese Manufacturers and Human Resources

Abstract

The Japanese manufacturers are good at "value creation" in terms of developing and manufacturing products with excellent engineering and manufacturing, but are poor at "value capture" in terms of creating profit and added value. In order to capture value, Japanese firms have to consider two necessary conditions. First, they need to develop core competences that help maintain their competitive advantages for many years. In particular, Japanese firms need to focus more strategically on specific technological areas and get engineers to keep learning in the area for many years. If engineers accumulate knowledge for a long time, it is impossible for competitors to catch up with for a few years. Second, Japanese manufacturers need to create customer value that comes from not only technological functions but also non-functional elements. Recent high performers like Apple have non-functional premium values. Japanese engineers need to improve capabilities with which they can create authentic customer values including non-functional ones.