If we look backwards from this current point, and go back upstream we reach the father of the transistor, Dr William Shockley. The achievements of Dr Shockley who won the Nobel Prize for Physics in 1956 laid the foundations for today's information industry.
The power of the transistor was fully harnessed by Akio Morita and Masaru Ibuka of Sony, and through portable radios, the Walkman, and other products, they established the legend of Japanese high-tech prowess. However, the Walkman lost out to the electronic music retail system iTunes, developed by Apple led by Steve Jobs. Next in the line is Larry Page of Google. In Shockley's time, the transistor itself, the direct result of applying physics, drove technological innovation. In Sony's time, the driving force was the ability to implement and mass-produce technology in devices.
Now, we have moved into an era where innovative competition is a function of information systems. Rather than trying to achieve originality through technical prowess itself, competition is now focused around how functions should be defined, as symbolized by Facebook's "like" button. The theme of product development has shifted away from physical characteristics into psychological aspects such as emotions, and the elements required for successful products have also shifted from simple ingredients to complex systems.
Now, to produce value, companies require not technical prowess but knowledge of the social sciences. A problem for Japan is that it is lagging behind in this field, the source of new value creation. For example, if we look at citations of rankings for universities, we can see that in physics, the University of Tokyo, which leads the way in Japan, is also second on the global rankings. In chemistry, Kyoto University sits in fourth place globally. However, in the field of social sciences, even the University of Tokyo does not feature in the global top 300.
Up until now, it was sufficient for companies simply to continue producing good-quality products. However, the source of value-producing technology in the future will move further towards the realm of social sciences. Companies must be prepared to carefully analyze what is important and work to improve the required capabilities.