Saturday, May 17, 2008

Designing to Succeed - Ideas from Japan's Manufacturing Sector

CSIR has come up with a brave new scheme to encourage entrepreneurship among its scientists and researchers. As one of the largest publicly funded R&D organizations in the world, we can expect, in the years to come a surge in scientific entrepreneurship. If there is one area that desperately needs a strong dose of entrepreneurship, it must be the manufacturing sector, which is essential to absorb a growing workforce and to ensure sustainable growth of our economy.

In India, not many places have the tag ‘low-cost manufacturing hub’ - that prize has already been taken by the coastal provinces of China and South-east Asia. While we dither with our infrastructure and regulations, the Chinese have grabbed a good chunk of our market for manufactured products. While some of our manufacturers struggle to compete with the Chinese, we often forget they are merely running on a path that was originally laid by the Japanese a few decades ago -- copy, counterfeit, innovate, and succeed.

These are points on a learning curve that has many lessons for India – especially if we, like the Chinese, examine and learn from the proactive role of the government in promoting the Japanese manufacturing industry.

In the 1950's the Japanese were ridiculed for their cheap and counterfeit products – brittle toys, shoddy bicycles and electrical appliances that anything but durable. An image we now associate with Chinese products that have flooded the international markets. How did the Japanese manufacturing industry metamorphose and create for itself a diametrically opposite image of high-technology, quality, workmanship and durability?

From the outset, the Japanese Government has been honest in identifying the country’s weaknesses and creating policies, institutions and incentives to overcome them. Keeping the manufacturing sector focused on exports has always been an economic imperative for a country that was short on natural resources – they had to focus their efforts on efficiently managing what was available, while keeping a sharp eye on the international markets. Take, for instance, their approach to an important aspect of manufacturing – product design.

In a white paper on the economy published in 1956, the Japanese government singled out Design as a serious weakness. It was recognized that design awareness was quite low even at the corporate level, among companies that aspired for the ‘exporter’ status. A Good Design Selection System (commonly called the "G-Mark" system) was instituted by the Ministry of International Trade and Industry (MITI - the forerunner of today's METI).

Leading designers were called in to the selection committees; young graphic designers like Kamekura Yusaku was invited to design the G-Mark logo that went on to become a widely recognized design classic- just like his posters for the 1964 Tokyo Olympics. Wide press coverage helped enhance the credibility and transparency of the entire selection process.

In its early years, the G-Mark system encouraged simple and functional modeling - a blend of modernist design principles and postwar populism that came to be recognized later as something uniquely Japanese.

Once the system got a foothold in the collective consciousness of the Japanese manufacturing industry, as well as the general public, MITI threw open the competition to the public. From its seventh year onwards, in 1963, G-Mark started advertising for nominations from anybody who could think differently.

Applications started pouring in from individuals, small companies as well as mega corporations. Newspapers started chasing stories and fuelling an abiding public interest in the nominations – much like the Oscars for the movie world. Today, the G-mark awards are an event eagerly awaited annual event in Japan.

Over the last fifty years, the G-Mark has singled out over 30,000 products for design excellence, in products ranging from the classic Nikon-F camera (1966), Sony TR-610 transistor radio (1968) and Walkman (1979) to the latest, energy efficient N700 Bullet Trains (2007) that travel at over 300kmph, setting new benchmarks in rail transportation. Public recognition and commercial success have turned out to be attractive incentives for individuals and companies to come up with newer, more energy efficient designs.

Having successfully built the credibility of G-mark, METI privatized the system in 1998. It is now operated entirely independent of the government, by an agency called Japan Industrial Design Promotion Organization (JIDPO).

The surge in innovation and manufacturing was backed up by a strong patent’s office. By keeping Japan Patent’s Office under MITI - the same ministry that created the G-Mark system – the government not only ensured synergy but also minimized the time required for an innovation to move from the labs to the marketplace.

Given the competitive environment that has been created at home, it is hardly surprising that Japan's manufacturing industry is one of the major driving forces behind its economy. Manufacturing accounts for 22.5% of Japan's real GDP, employs 18% of the country's working population, and more significantly, manufacturing goods account for 93% of all exports from Japan.

India has a long way to go. Manufacturing sector contributes 17% to India's GDP and 12% of employment. Our National Strategy for Manufacturing (NMCC, March 2006) clearly recognizes that a substantial manufacturing base is essential to absorb the workforce and ensure sustainable growth of the economy. It goes on to say that India should aspire to be a global leader in agro-processing, textiles & garments, automobiles and auto components, pharmaceuticals, chemicals and petrochemicals, leather & footwear.

The decade 2006-2015 has been declared the Decade of Manufacturing for India. The Prime Minister has also announced the launch of a ten-year National Manufacturing Initiative with a focus on firm level and macro economic initiatives required to the domestic industry globally competitive.

While aiming our sights at global leadership in, we need go beyond the role of playing second fiddle in the global outsourcing model. We have to create credible institutions that encourage innovation and public participation towards creating a product design paradigm that is uniquely Indian.

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REFERENCES:
1. Economic Survey 2006-2007
2. The G Mark and Good Design, The Japan Journal, April 2008
3. National Strategy for Manufacturing", National Manufacturing Competitiveness Council (NMCC), March 2006
4. Guide to Japan’s Patent System - U.S. Department of Commerce (November 1995)
5. Good Design Award website - http://www.g-mark.org/english/
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