New Knowledge clusters: new technology is more than noise and bright lights.

Background

In 1950 the world's biggest companies were all industrial manufacturers and raw materials suppliers. It was an era when Ford and General Motors were 'kings of the castle' and in Japan, the Mitsubishi Corporation  was founded and became the country's largest general trading house. Shortly after, in 1953, the Bridgestone Corporation, originally established in 1928 by tabi manufacturer Shojiro Ishibashi, diversified to become Japan's largest tyre manufacturer. It was a time when men, for it was mostly men back then, got their hands dirty in factories and produced goods we could see and touch.

Almost 60 years later there are a new set of additions to the top companies in the Fortune 500. This list includes communications, technology and media businesses with television broadcasting and entertainment industries'. People aspiring to have careers, rather than just earn a crust as they largely did in the manufacturing plants. This shift or 'Change Point' has seen culture emerge as a commodity, to be sold alongside more traditional products such as steel and oil.

Tangible products have been replaced by the intangible. The brand value is as important as the inventory on the company balance sheet. In this world obtaining success through traditional routes such as apprenticeships and learning trade skills, now has been substituted by being the first with the ability to process knowledge.

The transition of knowledge

Raw data is abundant in the Digital Age. Thanks to the Internet, we can supposedly find what we need, when we want it and access information that previously was in the hands of just the well-informed.

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Unfortunately, the sheer scale of this unedited information is overwhelming and consequently rather useless. This is because knowledge makes data valuable not the accessibility. The Change Point here is controlling and interpreting knowledge which can be more powerful than creating knowledge itself. While knowledge can be physically difficult to define, it has increasingly become an important commodity as developed nations swap tools for keyboards in their transition from manufacturing superpowers to Tangible Economies.

Defining knowledge

New knowledge comprises of content, style, ideas, plans, stories, concepts, designs and fashion as chunks of meaning that people can understand, use, value or love according to the UK's Creative Clusters Ltd. Cultural products are generally simple in a physical sense such as a CD, a piece of software, a film or a sheet of paper covered with words. The true value lies in their content, in their meaning or what they represent.

Innovation in science, biotechnology and robotics form the backbone of New Knowledge businesses, not the factory floor which, have largely become automated anyway. In this era it is minds not strength that count and Japan has put its money where it's mouth is and become the world's biggest spender in R & D.

Japan's path of growth from manufacturer to 'center' of new knowledge was charted in the previous article of Change Point (Winter '06 issue). It analyzed how Otaku (geeks) were inadvertently leading Japan's cultural renaissance and how this popularity of geek culture overseas had contributed to the rising sales of related 'Japan Cool' exports such as anime, technology and fashion.

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The Change Point was that being viewed as officially 'cool', had sealed Japan's importance as not just a manufacturer of cheap cars, but as a cultural influencer on the world's stage. Furthermore Japan's shift from a manufacturing economy to a New Knowledge economy had in part been driven by the international demand for its creative commodities such as street fashion, regional foods/alcohol and gaming expertise.

New knowledge economies of the future

The Japanese government is responding to challenges raised by a changing workforce and is developing a sustainable New Knowledge city in Kita Umeda (a prime location north of Osaka station). This major hub services 2.5 million commuters daily and is ideally located due to its proximity to the rest of Asia.

Aside from high-end housing, healthcare facilities, spas and hotels, Kita Umeda will also support research facilities and educational institutes all engaged in producing New Knowledge. Meanwhile robots will perform a range of functions previously carried out by humans to support this city within a city or 'cluster'. The 59-acre site is currently being redeveloped through public and private funds. It is scheduled for completion in 2011 and will provide an insight to Japan's first futuristic city.

Since the future is just four years away, in this case, it is pertinent to remember the next generation robotics market is estimated to grow to JPY8 trillion in the next 18 years (Japan Robot Association data). New Knowledge clusters such as Kita Umeda are driving this expenditure. However, it is key to add good design as it plays an important role in this future too. Good-looking technology such as cute robots, stylish appliances or beautifully designed mobile phones are integral with innovative advances not just as an afterthought. After all, what woman would willingly replace her Marc Jacobs bag with a clunky phone?

Career polarization 

The downside to this new world is humans will be polarized by their career choices. There will be those who create or control knowledge and harness it effectively such as programmers, technicians and managers. Then on the other side, there will be people who perform tasks that robots cannot carry out yet require little knowledge to do so, such as wiping down a cleaner robot after it has efficiently vacuumed an entire building.

In another scenario, fast food chains will no longer employ staff to make food orders simply because a machine can do it more effectively and cost less. Meanwhile sales clerks, if they still exist, will not even need basic arithmetic because all transactions will be made via a customer's mobile phone. On the other hand, a sales strategy to promote a new burger will require even more creativity. Why? Consumers will be bombarded with more messages than ever from the said mobile phone, personal gaming device and even home robot. All of which will act as transmitters and receivers for the owner's personal preferences to the networked world.

These devices, especially our mobile phones--activated by security conscious retina and thumbprint scans, will provide an invaluable insight into every consumer. This information will reveal where a consumer travels (pinpointed by GPS), what they buy and where from, times of purchases, who they called/who called them, email contents, what they watched on TV, music listened to and gaming preferences. In fact all the details needed to build a comprehensible profile so marketers can target the individual more effectively than ever.

Our predictions for future innovations

Our predictions include the developing of enhanced security procedures especially in the banking, mobile phones and automotive industries. These gates will allow consumers to withdraw/transfer money, go shopping or start their car after three checkpoints: retina scan, fingerprint scan and voice/face recognition. Security companies that invest in developing practical and cost effective procedures will flourish, while marketers that do not invest in this technology will see custom flock elsewhere-to more security conscious firms.

Once the realization occurs that a mobile phone will eventually replace cash, keys and other commuter entertainment, phones will be used for purchases, opening doors and wirelessly accessing headlines and other information, the potential for innovation becomes limited only by our imagination.

Contact details

For more innovations that your brand can use to flourish in the New Knowledge world.

Contact David Meredith on 03-5793-5622

By David Meredith, President, Bates Asia Japan Inc