4th Industrial Revolution and Economy of System

-- The need for industrial system innovation in Japan from the perspective of paradigm shift --

Abstract

The 4th Industrial Revolution (I 4.0) and Digital transformation (DX) require concurrent transformation in various aspects of the industrial system and its surrounding social systems. The various aspects are business model, the architecture and coordination mechanism of the industrial system, the method of products and solution development, the competitive environment, policies of industrial and science & technology, education system of working people, and the concept of work, etc. These transformation are led by paradigm shift.
Japanese companies' approaches to I 4.0 and DX have based on functional silos in many cases, have seemed to bring too slow and too small changes, and rarely have not led to a full-scale investment.
Because, it is not easy for Japanese companies to adopt the new paradigm, which is different from the one that has supported the past success of Japanese companies. Japanese companies and governments must design system innovation to realize “Economies of systems” from a comprehensive and long-term perspective.
This paper proposes the emerging conceptual framework of I 4.0 and DX to analyze this paradigm shift.