DEFRAMING STRATEGY How Digital Technologies are Transforming Businesses and Organizations, and How We Can Cope with It 1122445533__99778899881111224433669911__TTPP..iinndddd 11 66//1100//2211 1111::2255 AAMM B1948 Governing Asia TTTThhhhiiiissss ppppaaaaggggeeee iiiinnnntttteeeennnnttttiiiioooonnnnaaaallllllllyyyy lllleeeefffftttt bbbbllllaaaannnnkkkk BB11994488__11--AAookkii..iinndddd 66 99//2222//22001144 44::2244::5577 PPMM DEFRAMING STRATEGY How Digital Technologies are Transforming Businesses and Organizations, and How We Can Cope with It Soichiro Takagi University of Tokyo, Japan NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI • TOKYO 1122445533__99778899881111224433669911__TTPP..iinndddd 22 66//1100//2211 1111::2255 AAMM Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE Library of Congress Cataloging-in-Publication Data Names: Takagi, Soichiro, author. Title: Deframing strategy : how digital technologies are transforming businesses and organizations, and how we can cope with it / Soichiro Takagi, University of Tokyo, Japan. Description: New Jersey : World Scientific, [2022] | Includes bibliographical references and index. Identifiers: LCCN 2021034617 | ISBN 9789811243691 (hardcover) | ISBN 9789811243707 (ebook) | ISBN 9789811243714 (ebook other) Subjects: LCSH: Business--Technological innovations. | Organizational change--Management. | Technological innovation--Economic aspects. | Disruptive technologies. Classification: LCC HD45 .T349 2022 | DDC 658.4/062--dc23 LC record available at https://lccn.loc.gov/2021034617 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. Copyright © 2022 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. For any available supplementary material, please visit https://www.worldscientific.com/worldscibooks/10.1142/12453#t=suppl Desk Editors: Balamurugan Rajendran/Sandhya Venkatesh Typeset by Stallion Press Email: [email protected] Printed in Singapore BBaallaammuurruuggaann -- 1122445533 -- DDeeffrraammiinngg SSttrraatteeggyy..iinndddd 11 2222//77//22002211 22::3355::4422 ppmm 6"×9" b4342 Deframing Strategy About the Author Soichiro Takagi is an Associate Professor at Interfaculty Initiative in Information Studies at The University of Tokyo. He also serves as a fellow at the Art Center of The University of Tokyo and a senior research fellow at Center for Global Communications (GLOCOM) at International University of Japan (IUJ). Through his career, he served as a Professor and the Director of Blockchain Economic Research Lab at GLOCOM, and an Asia Program Fellow at Harvard Kennedy School, etc. His major field is information economics and digital economy, focus- ing on the relationship among information technology, organizations, and the economy. He has examined a variety of topics including offshore outsourcing, cloud computing, open data, sharing economy, digital cur- rency, blockchain, and digital platforms. He has authored many books and articles, including Reweaving the Economy: How IT Affects the Borders of Country and Organization (University of Tokyo Press) and Blockchain Economics: Implications of Distributed Ledgers (World Scientific, co- authored). He received the KDDI Foundation Award in 2019. He received a Ph.D. in information studies from The University of Tokyo. v bb44334422__FFMM..iinndddd 55 1100//77//22002211 1111::2299::3399 AAMM B1948 Governing Asia TTTThhhhiiiissss ppppaaaaggggeeee iiiinnnntttteeeennnnttttiiiioooonnnnaaaallllllllyyyy lllleeeefffftttt bbbbllllaaaannnnkkkk BB11994488__11--AAookkii..iinndddd 66 99//2222//22001144 44::2244::5577 PPMM 6"×9" b4342 Deframing Strategy Acknowledgments The author thanks all the following experts for inspiring discussions in the course of writing this book. I obtained precious knowledge on the develop- ment of platform businesses and the strategies of the software industry from Professor Marshall Van Alstyne at Boston University, and Professor Michael A. Cusumano at the Massachusetts Institute of Technology. I gained knowledge on the latest development of IT business in China from Associate Professor Asei Ito at The University of Tokyo, and Mr. Takeshi Yamaya, an IT journalist covering Asia, as well as Ms. Weilin Zhao, a senior researcher at the Itochu Research Institute. I owe my knowledge on the development of technological architecture to Mr. Takuya Oikawa, CEO of Tably, Co., and great insights on value creation and circulation in local communities to Professor Hideyuki Tanaka at The University of Tokyo and Chief Digital Officer Yasushi Fujii at Nishiaizu Town. I also thank Ms. Mayumi Morinaga at Hakuhodo DY Media Partners for their valuable comments on influencer marketing. I acknowledge that members of GLOCOM at the International University of Japan contributed to the con- tents not only by providing information but also by giving me valuable comments on the contents of the book. I thank Mr. Yasuo Kyobe at Shoeisha for his acceptance of the publication as well as valuable com- ments on the contents for the original Japanese version. My sincere grati- tude goes to Ms. Amirova Nargiza, Ms. Venkatesh Sandya, and Mr. Balamurugan Rajendran of World Scientific group for the decision of publication and editorial works for the English version. A part of the book is based on research supported by JSPS Kakenhi JP15K00460. I thank all the people involved for their s upport and cooperation. vii bb44334422__FFMM..iinndddd 77 1100//77//22002211 1111::2299::3399 AAMM B1948 Governing Asia TTTThhhhiiiissss ppppaaaaggggeeee iiiinnnntttteeeennnnttttiiiioooonnnnaaaallllllllyyyy lllleeeefffftttt bbbbllllaaaannnnkkkk BB11994488__11--AAookkii..iinndddd 66 99//2222//22001144 44::2244::5577 PPMM 6"×9" b4342 Deframing Strategy Contents About the Author v Acknowledgments vii Introduction xiii Part I Introduction of Deframing 1 Chapter 1 The End of “Economies of Scale” 3 Definition of Deframing and Its Three Factors 4 Dissolving and Reintegrating Elements Beyond Frames 6 Scaling Specific-Optimization 8 Individualizing Industrial Structure 10 Efficient Resource Allocation as a Fundamental Force 12 Chapter 2 Deframing Mechanism 15 Beginning of the End of Hierarchical Organizations 15 Why Were Corporate Organizations Required? 16 Transaction Cost Theory Defining Organizational Form 18 Companies as Mutual Aid Organizations 20 Disadvantages of Mature Organizations 23 Drastic Reduction in Transaction Costs Through Technological Evolution 24 Empowerment of Individuals by the Internet 25 ix bb44334422__FFMM..iinndddd 99 1100//77//22002211 1111::2299::3399 AAMM