Contributions

  • Hagiu, Andrei, 1977- - Contributor
  • Harvard Business School - Contributor

Publication

2009 - Harvard Business School, Boston, Massachusetts

Language

English

Word Count

10,250 words, Guess

Page Count

41 pages

Identifiers

Description

Japan's industrial landscape is characterized by hierarchical forms of industry organization, which are increasingly inadequate in modern sectors, where innovation relies on platforms and horizontal ecosystems of firms producing complementary products. Using three case studies - software, animation and mobile telephony -, we illustrate two key sources of inefficiencies that this mismatch can create. First, hierarchical industry organizations can "lock out" certain types of innovation indefinitely by perpetuating established business practices. Second, even when the vertical hierarchies produce highly innovative sectors in the domestic market, the exclusively domestic orientation of the "hierarchical industry leaders" can entail large missed opportunities for other members of the ecosystem, who are unable to fully exploit their potential in global markets.

Subjects

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