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About this book

This book clarifies the direction of business innovation using new ICT such as the Internet of things (IoT), artificial intelligence (AI), smartphones, and cloud computing through a series of case studies on successful trials and advanced businesses in the Asia-Pacific where many industry sectors have been growing successfully in the 21st century. ICT has been playing an important role in value creation for customers and in profit generation for providers, contributing to various service innovation and business innovation. Now, digitalization using IoT and AI provides solutions to address various issues in the human society, which is transforming services and businesses in the 21st century. “What is the direction of the business innovation using new ICT?” is a highly concerned question for business researchers and practitioners. Aiming to answer the question, this book conducts a number of cases studies in the Asia-Pacific region, including the Mainland China, Taiwan, Japan, Malaysia, Vietnam, as well as Australia. Among the studies, there are 4 cases from ICT providers, 4 cases from traditional and services, and 6 cases from new ICT applications and businesses. Each case analyzes social needs and human desires, new value created, roles of new technologies, processes and difficulties in developing new businesses, the relationship among customers, providers, and stakeholders, value chain co-creation and optimization, factors of success, and business models. Finally, the direction of business innovation with new ICT in the Asia-Pacific is suggested by summarizing the findings from the case studies through the lens of the theoretical analysis in service science.

Table of Contents

Frontmatter

Chapter 1. Overview: Perspectives and Structure

Abstract
ICT has been playing an essential role in value creation for customers and in profit generation for providers, contributing to various service innovation and business innovation. Now, digitalization using Internet of Things (IoT) and Artificial Intelligence (AI) provides solutions to address a wide range of challenges in our society, which is transforming services and businesses in the twenty-first century. “What is the direction of the business innovation using new ICTs?” is a highly relevant question concerned by business researchers and practitioners. The main aim of this book is to clarify patterns and trends of business innovation using new ICT technologies and platforms, such as IoT, AI, cloud computing, 5G network, and smart devices. These are analyzed through a series of case studies on successful trials and advanced business models in the industry sectors that have been experiencing rapid changes over the recent decade in the Asia-Pacific region.
Michitaka Kosaka, Jie Wu, Ke Xing, Shiyong Zhang

Concepts and Frameworks for Cases Analyses from Service Science Perspectives

Frontmatter

Chapter 2. General Trends of Service Innovation with ICT and Their Impact on Business Innovation

Abstract
The general trend of service innovation using ICT and the impact on business innovation is analyzed, which is a basic concept for conducting case studies in this book. First, service and service innovation using ICT are defined. Then service value creation mechanisms with ICTs and successful cases in each generation are illustrated. Then, we show that the ICT revolution significantly influences ICT businesses through investigating the changes of major ICT providers by using Fortune 500 data. A major reason for such changes is the changes to the service value creation mechanism with ICTs and its business model. The most important question in this book is “What are the likely business innovation with new ICT, that is, in the 3rd generation business innovation?” To consider answers to this question, we propose four viewpoints regarding business innovation with new ICTs: (1) expansion of business fields with new ICTs, (2) changes to human desires and social needs, (3) changes in the role of ICT providers, and (4) conversion of new ICTs in the technology space into values in the value space, depending on the organization’s culture and abilities.
Michitaka Kosaka, Jie Wu, Ke Xing, Shiyong Zhang

Chapter 3. Innovation Drivers of ICT Toward Service Evolution: A Study of Service Generations in Japan

Abstract
This article discusses the history and future of ICT-enabled services and how their generational progress enriches our lives. ICT contributed to the efficiency and productivity of services in the first generation. Subsequently, ICT substantiated a large scale of service platforms in the second generation and where product/service providers can collaborate with consumers. Now, ICT extends the possibility of services in the third generation, where well-being of both customers and employees and the society can be increased. These advancements of service are clearly visualized by the interactions of four innovation drivers and exemplified with epoch-making services in Japan.
Shigeru Hosono

Case Studies from ICT Providers’ Perspectives

Frontmatter

Chapter 4. Social Innovation Business Through Value Co-creation with Customers Powered by Lumada: A Case Study of Hitachi Ltd.

Abstract
Hitachi is a unique company which has accumulated manufacturing expertise, ICT and operational technology since its founding more than a century ago. Hitachi is now evolving its Social Innovation Business through digital technology and accelerating collaborative value creation with customers. One of key success factors is Lumada: Hitachi’s IoT core platform providing advanced digital solutions, services, and technologies for turning customers’ data into insights to drive digital innovation. This chapter introduces how Lumada contributes to value co-creation with customers in the era of AI/IoT.
Masaharu Akatsu

Chapter 5. Orchestrating a Brighter World: A Case Study of NEC

Abstract
NEC Corporation is one of Japan’s leading ICT providers and made significant progress in the late twentieth century. This chapter introduces NEC’s new corporate philosophy of “Orchestrating a brighter world” by supporting new ICT technologies such as IoT and AI, and the policy of “Digital Inclusion” whereby these technologies are put to practical use. In particular, we present specific examples of how this approach can provide outcomes such as improved employee morale in the manufacturing sector, new kinds of hospitality based on ICT, and intelligent retail stores, and we discuss NEC’s business development plans and how they will lead to new business innovation.
Miwako Sato, Hideki Sato

Chapter 6. Co-Creating Future of Artificial Intelligence of Things (AIoT) Through Ecosystem Partnership: A Case Study of Advantech Co., Ltd

Abstract
Advantech is the world No. 1 industrial PC manufacturer and ranked No. 5 in the list of Best Taiwan Global Brands in 2018 (Interbrand 2018). While the sales of industrial PCs and various IoT sensing/communication devices still account for more than 80% of their annual revenue, Advantech has recognized the importance of the emerging technologies, including cloud computing, IoT, and artificial intelligence, and its impact on both service and manufacturing sections. Since 2014 Advantech has launched an ambitious project in taking the lead in establishing an IoT service platform and managing its ecosystem. This platform enables domain-specific solution integrators to build industry-specific solution ready packages that incorporate devices, cloud storage, and AI techniques in domains such as factories, hospitals, cities, and transportations. The co-creation process, the business models, the difficulties, and the strategies will be addressed in this article.
Shih-Chieh Jack Hsu, Hui-Mei Hsu, San-Yih Hwang

Chapter 7. Realizing Digital Transformation in Retail Businesses with a Digital Technology Platform and Solutions: A Case Study of NEXTTAO

Abstract
Chinese consumers are highly digitalized, thanks to the quick development of Internet business. China’s traditional retail companies have felt the great urgency for digital business transformation because retailing business needs to satisfy the digitalized consumers every day across all traditional and digital channels. However, China’s traditional retail companies encounter difficulties (for example, fragmented data, process-based back-end legacy system and increasing number of front-end retail applications) for digital transformation. NEXTTAO is a leading digital technology platform and digital solutions provider emerging from China in the recent years. It innovatively solves the traditional companies’ dilemma by proposing a new concept of unified digital technology platform, through which the traditional companies can preserve their legacy assets as well as enjoy the benefit of digital technologies. NEXTTAO also provides multiple digital solutions such as mobile POS, promotion management, inventory optimization etc. In this chapter, we will illustrate how NEXTTAO practices their methodologies and digital technology to realize business values with their clients collaboratively.
Hua Wang

Case Studies on Changes of Traditional Businesses and Services (Manufacturing, Agriculture, Transportation and Education)

Frontmatter

Chapter 8. Readiness for Digital Innovation and Industry 4.0 Transformation: Studies on Manufacturing Industries in the City of Salisbury

Abstract
City of Salisbury in South Australia has strong industrial footprint in the manufacturing sectors and sees Industry 4.0-inspired technology advancement and business innovation playing a defining role to reshape the industry structure of the region. This chapter is to present a systematic analysis on barriers and challenges faced by, capability and readiness of, as well as potential strategies for local manufacturing firms (most of which are SMEs) in City of Salisbury in adopting digital innovation toward Industry 4.0 transformation. Key factors analyzed span: (a) Business; (b) Technology; (c) Ills; (d) Supply Chain; (e) Innovation.
Ke Xing, David H. Cropley, Michelle Leanne Oppert, Chanvi Singh

Chapter 9. Agricultural Business Innovation with New ICT: Case Studies of Fujitsu, Spread and MimosaTEK

Abstract
Recently, the world has been faced four big issues: over population, depletion of natural resources, climate change and food wastage. To solve these crises, agricultural business has been globally noticed as an important application field of new ICT such as Internet of Things (IoT) and artificial intelligence (AI). New ICT is expected to solve various issues related to agricultural business, which include increasing yield optimisation, improving crop protection, optimising food supply chains and so on. We conduct three case studies, which are the Fujitsu case (in Japan) as an existing big ICT company, the Spread case (in Japan) as a plant factory venture company and the MimosaTEK case (in Vietnam) as an IoT venture company. We analyse the direction of agricultural ICT and agricultural business innovation in Asia.
Minh Chau Doan, Michitaka Kosaka

Chapter 10. Aiming to Realize a Smart Society and Seamless Mobility with ICT: JR-EAST’s Challenge for Business Innovation

Abstract
The East Japan railway company (hereafter JR-EAST) is the largest railway company in Japan. Social infrastructure service has progressed according to the progress of ICT. JR-EAST provides a railway transport service, which is among the important social infrastructure services, and has continued provide innovation in transportation services for customers and improvement in its work process by utilizing ICT such as the internet, IoT, and AI. This chapter introduces the history of innovation and future development with ICT and reviews progress in terms of service by ICT. JR-EAST has long contributed to society through its railway transport service and continues to realize business innovation, seamless mobility and convenience through its railway transport service by ICT.
Masahiko Suzuki

Chapter 11. Effect of New ICTs on Vocational Education in China: A Case Study of Wuxi Vocational Institute of Commerce

Abstract
ICTs are redefining almost everything of human activities, including life, work, and even relationships. In modern education, they are main driving forces to the transformation and expansion of education in terms of methodology and content. Vocational education, as an important style of education, particularly relies on ICTs due to its specialties in the large number of candidate students, importance of experiences in practice, and requirement-oriented training. New ICTs are leading to innovations of vocational education from various aspects, which breeds high-quality online education service which is cost-effective and thus affordable and available to more learners. In this study, we take higher vocational education in China as an example to study the effect of new ICTs on the education. By conducting a comprehensive case study on a Chinese vocational institute, we reveal from service science perspective some fundamental findings that we believe are instructional and helpful to guide ICT-driven innovations in vocational education.
Jinfang Cai, Xian Qian

Case Studies on New Businesses with Mobile Devices and Internet

Frontmatter

Chapter 12. Mobile Payment Innovations in China: China UnionPay’s Practice and Experience

Abstract
The popularization of mobile internet has given rise to the demand for flexible and convenient payment methods. For China, it is necessary to keep pace with or even lead the trend of innovation and development in the age of mobile payment. From the perspective of systems engineering, this chapter introduces the research and practice of China UnionPay’s mobile payment project. The general requirements and core engineering problems of the mobile payment project are summarized based on the analysis of the characteristics and engineering difficulties. Integrated innovation of technologies is introduced to resolve the contradiction between ease-of-use and security. Rapid iterative development process is adopted to improve the product release efficiency as well as user experience. The launch of the mobile payment project also opens the window to coordinate the whole payment industry for upgrading and quality-improving.
Quan Sun, Yongkai Zhou, Tao Tang

Chapter 13. Value Co-creation Between Stakeholders in Malaysia’s Automotive Aftermarket E-commerce Industry: A Case Study of Sparke Autoparts

Abstract
Sparke Autoparts Sdn. Bhd. (Sparke) is a start-up E-commerce company co-owned by PKT Logistics Group Sdn. Bhd. (PKT) and Baturu Information Technology Co. Ltd. (Baturu). Sparke is an industrial internet company specialising in automotive parts (autoparts) aftermarket sourcing, supply, transactions and services for the passenger and commercial vehicle markets. Its fully integrated Business-to-Business (B2B) service platform is the first in Malaysia, forming a closed loop of autoparts trading services from parts search, quotation, payment and delivery. Its industry-leading online platform solution is expected to make Sparke a leader in transforming and consolidating the traditional, fragmented autoparts industry in Malaysia. As the company is implementing a new business model that has the potential for disruptive innovation in Malaysia’s autoparts industry, this case study could give benefits to researchers and practitioners. The value co-creation between the various stakeholders—platform and service provider (Sparke), sellers (suppliers and stockists), and buyers (car and truck workshops) is an interesting relationship to be studied, especially on learning how to overcome the many challenges and barriers in introducing the new business model which shows great promise in addressing the various issues that are currently plaguing the traditional way of business in Malaysia’s autoparts industry.
Norani Nordin, Mohd Faizal Ahmad Zaidi, Noorulsadiqin Azbiya Yaacob, Michitaka Kosaka, Michael Tio, Shaun Li Yeoh

Chapter 14. e-Service Innovation Through Malaysian Consumer Perspectives: Case Studies of e-Hailing and e-Hypermarket

Abstract
In recent decades, Malaysian Internet usage has rose rapidly. Malaysia Internet penetration rate has achieved 80% or equivalent to 26 million Internet users. With the rapid growth of the internet usage in Malaysia, consumers are now starting to purchase product and services via online medium. This chapter focuses on how Malaysian consumer value online services as alternatives of getting service. The chapter begins with the current trends of e-service in Malaysia. Two online services, e-hailing and e-hypermarket will be discussed. The gathered consumer value will help industry in providing better e-service.
Nur Fazidah Elias, Ruzzakiah Jenal, Hazura Mohamed, Siti Aishah Hanawi, Hazilah Mohd Amin, Roham Yeganegi, Nur Athirah Nabila Binti Mohd Idros

Case Studies on New Application Fields with New ICTs

Frontmatter

Chapter 15. Networked Coordination to Facilitate Secondhand Electronics Recycling and Exchange: A Case Study on Aihuishou

Abstract
Aihuishou is the biggest digital device recycling and exchange company in China. It has full coverage of the secondhand value chain, dealing with more than 10 million used smartphones and laptops every year. Unlike other recycling firms, AHS not only collects and holds inventory, but also develops its own testing, grading and exchange platform that has redefined how value is created in the secondhand industry. All participants can easily sell or bid for secondhand devices at the best price on the platform. The platform applies algorithms and robotic testing facilities to ease such transaction process.
Xuefeng Chen, Zixiao Ji

Chapter 16. Local Social Innovation by Blockchain Technology: A Trial in a Provincial City in Japan

Abstract
This chapter describes the social application of blockchain technology with the aim of discussing how the concept and technology of blockchain can contribute to changing society. The safe recording system enabled by blockchain is valuable as a basis of supporting improvements in society. This recording system is expected to be combined with the visualisation of people’s activities by Internet of Things (IoT) devices and appropriate service design, thereby achieving social innovation to solve many social issues. After explaining the technical mechanism of blockchain, this chapter describes examples of applying blockchain in industry and local communities as well as a trial using a blockchain developed for solving local social issues in an aging society. As a discussion, we propose the way of alleviating social issues by using blockchain as a “social blockchain design”, which consist of (i) system analysis including analysis of the stakeholders and their relationships, (ii) IoT design to accurately digitalise human activities that are relevant to solve social issues, and (iii) service design to appropriately utilise cryptocurrencies as valuable resources generated from the data of digitalised activities.
Kunio Shirahada, Hiroki Oyama, Tatsuya Ohsaki

Chapter 17. An Information-Sharing System for Multiprofessional Collaboration in the Community-Based Integrated Healthcare System: A Case Study of Nomi City in Japan

Abstract
Currently, Japan is rapidly aging. The Japanese government would like to introduce the community-based integrated healthcare system for this end. The system aims to provide elderly people living at home with appropriate health, medical, and welfare services. It is essential to collaborate among health, medical, and welfare staff to work the system successfully. We have been developing a supporting system for sharing information on the situation of the elderly at home and conducted a field test around one year. The users and supporters with ICT skills got together to develop and operate the system. In this chapter, we introduce a case study of the information-sharing system in Nomi city, Ishikawa Prefecture, Japan. We explain about the effectiveness of our system and findings through the field test.
Hideaki Kanai

Chapter 18. Summary

Abstract
This chapter summarizes the case studies and discusses the trends emerging from the cases for business innovation with new ICTs. Firstly, several key concepts are discussed in connection with business innovation in the twenty-first century. Next, the key characteristics and messages of the case studies are summarized respecting the five questions posed in Chap. 1 and are analyzed in relation to those key concepts. Based on such analysis, a conceptual model for business innovation with new ICTs is then proposed. The chapter concludes with a discussion on the direction for future business and social developments with new ICT solutions beyond COVID-19.
Michitaka Kosaka, Jie Wu, Ke Xing, Shiyong Zhang
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