ABSTRACT
By contrasting IoT (Internet of Things) with IT (Information
Technology), various evidences of the difference between them are discovered by
our empirical and case studies. For empirical evidence, a comparison is made
between the personal computer as representing a case of IT and the automobiles
as representing a case of the future IoT, since the self-driving of cars is
discussed quite frequently nowadays. Based on their patenting behavior,
the degree of modularization is measured, and effects of digitalization on
modularization are found out to differ between PC and automobile industries.
Similar modularity analysis is employed to sub-module suppliers, and they are
found out to be integrative rather than modularly structured, because analogue
technologies are essential at the level of sub-module supplying. Through our
modularity analyses, it becomes clear that a digitalization brings about a modularization, and will eventually bring
an IoT evolution. In order to illustrate the evolutionary process from
digitalization to internetworking via modularization, we will investigate a
chronology of the machine tool development in Japan ever since 1975. In order
to illustrate the evolutionary process of becoming interconnected, we will make
a study on a construction machinery manufacturer, i.e. how a
manufacturer can go downstream into a service innovation. These case studies
will show clearly that the process of upgrading of ITs into an IoT evolution is
incremental by its nature and is additive in its essence, i.e. the
value is added constantly. Therefore, an essential
feature of IoT innovation is “creative accumulation” rather than “creative
destruction.” In this context, IoT innovation might be favoring some Japanese
companies in terms of its components module suppliers as well as its system integrators. For an illustration of
the Japanese competiveness of IoT module suppliers, two case studies of mobile sensors and of actuators are conducted. Through these case studies, the M & A (merger and acquisition) is found to be effective in terms of adaptive
capacities of extending their core competences into changing fields of
technology applications. This finding is far from the conventional wisdom about
past Japanese strategies in which an extension was made by technological
diversification rather than M & A. For the concept
of creative accumulation to be implemented in the context of IoT evolution, a
cautious strategic positioning rather than that of being different is necessary
and effective. This argument is confirmed by case studies of Japanese
strategies in terms of management of international M & A, of going
downstream into a service innovation, and of R & D strategy of securing an
independence from dominant suppliers. This is a good evidence that this IoT environment might come
to favor again the emerging style of management by some Japanese companies. In
order to summarize these evidence-findings, at the end of this paper, a
comparison in perspectives on innovation is made between IT and IoT
innovations. And it is discussed that IoT innovation is going beyond the Schumpeterian
formulation of innovation.