Mechanisms of increasing modularization driven by product depth are described from the perspective of basic effects brought about by microcomputers and firmware. Although long-term stagnation within Japan’s manufacturing industries has persisted since 1995, and in the electronics industry in particular, underpinning this stagnation is the modularization of product architecture. This is further demonstrated by observing the internal structure of optical disk technology. Until now, it was only those integral parts and materials that experienced rapid, indirect intervention by microcomputers and firmware, and thus, Japanese companies have found themselves immersed in a business environment intolerant of a strong and stable integral structure. Microcomputers and firmware will occupy a position of influence in areas such as product functionality, performance, quality, and cost, as well as competitive advantage, to the point of becoming ingrained in the artificial genome of the 21st century. Modularization, which has engendered this artificial genome, accelerates the trend toward open innovation. In the future, a system structure in the form of a macro policy that facilitates collaboration and open innovation as well as the roles of “black box, integral methods, and integration,” will be needed to benefit and support the market dominance of Japanese companies.