Monozukuri with a softer touch

Historically regarded as a hardware manufacturing nation, Japanese firms are combining their Monozukuri philosophy with software advancements to create innovative products in the age of AI, IOT and cloud services

In the early 90s, some commentators tipped Japan to become the world superpower in software development, on the back of its success in high-tech manufacturing. But ultimately, Japan was left trailing far behind the U.S. in software innovation, as Silicon Valley churned out software patents at an incredibly faster rate than Tokyo.

The reason for this is mainly attributed to Japan’s focus on

Monozukuri – making things like semiconductors, televisions, hi-fis, computers and advanced machinery. Japanese companies viewed hardware as their strength and put little value or emphasis on software as a value creator. “A Samurai would never write software!” – so exclaimed a senior executive of one Japan’s largest electronics firm.

But the attitudes towards software have changed with growing internet use and the increasing importance of software, as well as the advent of fourth-industrial- revolution technologies such as AI, IOT and robotics, areas in which Japan aims to be at the forefront over the coming years. Along with advanced robotics, business software is seen as a solution to the country’s chronic labor shortage. The development of business software is growing with some of the country’s large electronics companies buying into the sector. As a result of these changes, the Japanese software industry is set to grow stronger in the future.

“Japan used to consider software as a mere accessory to the main product; hardware. There were times when it was very difficult to charge for software applications. Today, Japanese corporations are growing increasingly aware of the significance of software, and Japan is equipped with the correct competitive technology to develop it,” says Jinya Katsube, COO and Representative Director of Zuken Inc.

“There are only a few companies in Japan that have technologies in terms of both device and application technology required for IOT, we are one of these companies and as such it is one of our strengths” Mr. Shoji Tada, President and CEO, Nippon Systemware

Zuken specializes in software and consulting services for a wide range of fields in the manufacturing sector, from electronics to aerospace and automotive. The company was a pioneer in the development of CAD systems in Japan when it was established in 1976. Four decades after, Zuken has become a leading electronoic design automation (EDA) provider, employing 1,300 employees around the world, including in the Zuken SOZO Center in Silicon Valley, which opened in 2013.

With the emergence of IOT, Mr. Katsube foresees the use of Zuken’s software to design the smart cars of tomorrow: “IOT is having a large impact in the field of engineering. When designing a smart car, manufacturers will be required to design a system that can effectively be connected to its surroundings, and I believe that this demand for cross-device connectivity will be Zuken’s future.”

Another company aiming to gain from the emergence of IOT is Nippon Systemware (NSW). Established in 1966, NSW has expanded its business from software development to device development, system integration services, IOT and cloud services that principally focus on data center services.

“There are only a few companies in Japan that have technologies in terms of both device and application technology required for IOT, we are one of these companies and as such it is one of our strengths. Of course, major Japanese companies also have both of these sectors in their divisions, but as a medium sized company, we have the added advantage of being able to make faster decisions,” says Mr. Shoji Tada, NSW’S president and CEO.

“At NSW, IOT usually covers around 80% manufacturing businesses, cloud, data centers, original electronic manufacturers. Our core is essentially software but we oversee all these businesses in our company, which gives a synergy impact throughout the company.”

Going forward, the company also wants to develop its capabilities in AI. “We have tested a lot of programs during the past year to bring AI into the digital sector, and you can expect to see more AI technologies to be released this year, including more selfdriving cars and other technologies in this area,” says Mr. Tada.

“Going forward, we aim to further expand our business by utilizing new technologies and cultivated know-how and organizational capabilities.”