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TOP CITED ARTICLES IN 2019
INTERNATIONAL JOURNAL OF MANAGING INFORMATION
TECHNOLOGY (IJMIT)
http://airccse.org/journal/ijmit/ijmit.html
ISSN: 0975-5586 (ONLINE); 0975-5926 (PRINT)
A NEW CONCEPT OF R&D IN NEO OPEN INNOVATION -
TRANSFORMATION OF R&D TRIGGERED BY AMAZON
Yuji Tou1
, Chihiro Watanabe 2, 3
, Kuniko Moriya 2, 4
, Victor Vurpillat5
, Pekka NeittaanmÀki2
,
1
Tokyo Institute of Technology, Japan
2
University of JyvÀskylÀ, Finland,
3
International Institute for Applied Systems Analysis (IIASA), Austria,
4
Research and Statistics Department, Bank of Japan, Japan and
5
Global Connexus Inc., USA
ABSTRACT
Amazon was the world’s top R&D firm in 2017. Its R&D investment was double that of 2015, quintuple
that of 2012, and tenfold that of 2011. It deploys a unique R&D model as conducting “routine or periodic
alternations” and “significant improvement” simultaneously. Since traditionally the former is classified as
non-R&D, Amazon’s rapid and notable increase has raised the question of a new R&D definition in the
digital economy. By means of an empirical analysis of the Amazon’s R&D model, this paper attempted to
provide a convincing answer to this question. Amazon has invested considerable resources in extremely
innovative business areas, which has developed its assimilation capacity. In parallel with such forefront
innovation, Amazon is endeavoring to absorb soft innovation resources from external markets and
assimilate them into its business model. This then transforms “routine or periodic alternations” into
“significant improvement”, leading to the company becoming the world’s top R&D firm. Such an
endeavor has triggered a new concept of R&D in neo open innovation and revealed the significance of a
transformation of the R&D concept in the digital economy.
KEYWORDS
R&D, neo open innovation, Amazon, transformation, technology and content
For More Details: http://aircconline.com/ijmit/V11N1/11119ijmit02.pdf
Abstract URL: http://aircconline.com/abstract/ijmit/v11n1/11119ijmit02.html
Volume URL: http://airccse.org/journal/ijmit/vol11.html
REFERENCES
[1] Tou, Y., Watanabe, C., Moriya, K., & NeittaanmÀki, P., 2018. Neo Open Innovation in the Digital
Economy: Harnessing Soft Innovation Resources. International Journal of Managing Information
Technology 10 (4), 53-75.
[2] Bloomberg, 2017. 2017 Global Innovation 1000 Study. Bloomberg, New York.
[3] Fox, J., 2018. Amazon, the Biggest R&D Spender, Does Not Believe in R&D. Bloomberg Opinion,
13 April 2018. https://www.bloomberg.com/view/articles/2018-04-12/amazon-doesn-t-believe-in
research-and-development-spending (retrieved 22.09.2018)
[4] Gershgorn, D., 2018. Amazon’s R&D Spending is Poised to Top the GDP of Iceland. Quarts, 28
December 2018.
[5] World Bank, 2018. National Accounts Data. World Bank, Washington, D.C.
[6] Watanabe, C., Tou, Y. & NeittaanmÀki, P., 2018b. A New Paradox of the Digital Economy: Structural
Sources of the Limitation of GDP Statistics, Technology in Society 55, 9-33.
[7] Watanabe, C., Naveed, K., Tou, Y. & NeittaanmÀki, P., 2018c. Measuring GDP in the Digital
Economy: Increasing Dependence on Uncaptured GDP. Technological Forecasting and Social Change
137, 226-240.
[8] Watanabe, C., Naveed, K., NeittaanmÀki, P., 2015. Dependency on Un-captured GDP as a Source of
Resilience beyond Economic Value in Countries with Advanced ICT Infrastructure: Similarities and
Disparities between Finland and Singapore. Technology in Society 42, 104–122.
[9] Watanabe, C., Naveed, K., NeittaanmÀki, P., Tou, Y., 2016. Operationalization of Un-captured GDP:
The Innovation Stream under New Global Mega-trends. Technology in Society 45, 58–77.
[10] Galloway, S., 2017. The Hidden DNA of Amazon, Apple, Facebook, and Google. Penguin Random
House LLC, New York.
[11] Naveed, K., Watanabe, C. & NeittaanmÀki, P., 2018. The Transformative Direction of Innovation
toward an IoT-based Society: Increasing Dependency on Uncaptured GDP in Global ICT Firms.
Technology in Society 53, 23-46.
[12] Kenney, M., 2013. The Growth and Development of the Internet in the United States. In: Cogut B,
Ed. The Global Internet Economy. MIT Press, Massachusetts.
[13] Knott, A.M., 2017. How Innovation Really Works: Using the Trillion-Dollar R&D fix to Drive
Growth. McGraw Hill, New York.
[14] Green, T., 2018. How Much does Amazon Spend on R&D? Less than You Think. The Motley Fool,
13 June 2018. https://www.fool.com/investing/2018/06/13/how-much-does-amazon-spend-on-rd-less
than-you-thi.aspx (retrieved 10.01.2019).
[15] Amazon, 2018a. Amazon Com. Inc. Annual Report 2017. Amazon.Com, Inc., Seattle.
http://www.annualreports.com/Company/amazoncom-inc (retrieved 06.01.2019).
[16] Amazon, 2018b. Amazon Leadership Principles. Amazon.Com, Inc., Seattle.
https://www.amazon.jobs/en/principles (retrieved 20.11.2018).
[17] Apple, 2018. Apple Inc. Annual Report 2017. Apple Inc., Cupertino.
https://investor.apple.com/investor-relations/financial-information/(retrieved 06.01.2019).
[18] Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), 2018.
Generally Accepted Accounting Principles (GAAP) for Business. FASB, ASC, Washington, D.C.
[19] National Science Foundation (NSF), 2018. Definitions of R&D: An Annotated Compilation of
Official Sources. NSF, Alexandria, Virginia, USA. https://www.nsf.gov/statistics/randdef/#chp3.
(retrieved 10.01.2019).
[20] Watanabe, C., Naveed, N. & NeittaanmÀki, P., 2018a. Digital Solution Transform the Forest-based
Bioeconomy into a Digital Platform Industry: A Suggestion for a Disruptive Business Model in the
Digital Economy. Technology in Society 54, 168-188.
[21] Jenkins, J., 2011. How Amazon. Com Migrated to AWS. 2011 AWS Tour Australia, Closing
Keynote. https://www.slideshare.net/AmazonWebServices/2011-aws-tour-australia-closing-keynote-how
amazoncom-migrated-to-aws-by-jon-jenkins (retrieved 10.01.2019).
[22] Yahoo! Finance, 2018. Amazon.com, Inc. (AMZN), Historical Data.
https://finance.yahoo.com/quote/AMZN/history (retrieved 10.01.2019).
[23] Yahoo! Finance, 2018. Apple Inc. (AAPL), Historical Data.
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[24] Colin, N., 2016. 11 Notes on Amazon. The Family Papers #010. 18 Jan. 2016.
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[25] O’Reilly, T., 2003. The Open Source Paradigm Shift. O’Reilly & Associates, Inc., Sebastopol.
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[26] Watanabe, C., Takayama, M., Nagamatsu, A., Tagami, T. and Griffy-Brown, C., 2002. Technology
Spillover as a Complement for High Level R&D Intensity in the Pharmaceutical Industry. Technovation
22 (4), 245-258.
[27] Rivet, D.J., 2017. Amazon’s Superior Innovation: A Study of Amazon’s Corporate Structure, CEO,
and Reasons behind Why It has become the Most Innovative Company in Today’s Market. University of
New Hampshire Honors Theses and Capstone 343, University of New Hampshire, Durham.
https://scholars.unh.edu/honors/343 (retrieved 10.01.2019
AUTHORS
Yuji Tou graduated from Tokyo Institute of Technology, Japan, and is currently specially appointed
associate professor at Tokyo Institute of Technology, Japan
Chihiro Watanabe graduated from the University of Tokyo, Japan, and is currently Professor Emeritus
at the Tokyo Institute of Technology, a research professor at the University of JyvÀskylÀ, Finland, and a
research scholar at the International Institute for Applied Systems Analysis (IIASA).
Kuniko Moriya graduated from Aoyama Gakuin University, Japan, and is currently is currently Director
of the Bank of Japan.
Victor V. Vurpillat graduated from Calfornia State Polytechnic University, USA, and is currently
Chairman of the Board and Director of Research, Global Connexus Inc., USA
Pekka NeittaanmÀki graduated from the University of JyvÀskylÀ with a degree in Mathematics. He is
currently Professor of the Faculty of Information Technology, University of JyvÀskylÀ, Finland.
A SOLUTION TO THE DILEMMA BETWEEN R&D EXPANSION AND
THE PRODUCTIVITY DECLINE: LESSONS FROM THE R&D MODELS
IN AMAZON AND FINLAND
Yuji Tou1
, Chihiro Watanabe 2,3
, Kuniko Moriya4,2
, Pekka NeittaanmÀki2
,
1
Tokyo Institute of Technology, Japan,
2
University of JyvÀskylÀ, Finland,
3
International Institute for Applied Systems Analysis (IIASA), Austria and
4
Research and Statistics Department, Bank of Japan, Japan
ABSTRACT
As a consequence of the two-faced nature of information and communication technology (ICT), a
majority of ICT leaders have been confronting the critical problem of a dilemma between R&D expansion
and productivity decline in the digital economy. However, Amazon has been able to accomplish a
skyrocketing increase in R&D and market capitalization. Finland has also accomplished balanced
advancement not only of welfare but also economic resurgence. This paper attempted to elucidate the
miracle of two ICT leaders. By means of a comparative empirical analysis of respective development
trajectories, the sources of their success were analyzed thereby the comparative advantage and
disadvantage of each respective trajectories supportive to find a practical solution to the critical problem
of a dilemma were identified. The sources of both successes can be attributed to harnessing the vigor of
soft innovation resources from the marketplace. However, contrary to Amazon’s complementary use,
Finland has depended on substitutionary use. While this approach contributes to easy resurgence, it casts
a shadow to the innovative growth in the future. An insightful suggestion regarding balanced sustainable
growth by cross learning was thus provided.
KEYWORDS
Digital economy, soft innovation resources, Amazon, Finland, dilemma between R&D and productivity
For More Details: http://aircconline.com/ijmit/V11N2/11219ijmit02.pdf
Abstract URL: http://aircconline.com/abstract/ijmit/v11n2/11219ijmit02.html
http://airccse.org/journal/ijmit/vol11.html
REFERENCES
[1] Tou, Y., Watanabe, C., Moriya, K., & NeittaanmÀki, P., 2018b. Neo Open Innovation in the Digital
Economy: Harnessing Soft Innovation Resources. International Journal of Managing Information
Technology 10 (4), 53-75.
[2] Tou, Y., Watanabe, C., Moriya, K., & NeittaanmÀki, P., 2019b. Harnessing Soft Innovation Resources
Leads to Neo Open Innovation. Technology in Society, in print.
[3] B loomberg, 2017. 2017 Global Innovation 1000 Study. Blo omberg, New York.
[4] Fox, J., 2018. Amazon, the Biggest R&D Spender, Does Not Believe in R&D. Bloomberg Opinion,
13 April 2018. https://www.bloomberg.com/view/articles/2018-04-12/amazon-doesn-t-believe-in-
research-anddevelopment-spending (retrieved 22.09.2018).
[5] Statista, 2019. Top Internet Companies: Global Market Value 2018. Statista, Hamburg.
https://www.statista.com/statistics/277483/market-value-of-the-largest-internet-companiesworldwide/
(retrieved 10.01.2019).
[6] Macrotrends, 2019. Apple Market Cap 2006-2018 – AAPL, Chicago.
https://www.macrotrends.net/stocks/charts/AAPL/apple/market-cap (retrieved 08.02.2019).
[7] Macrotrends, 2019. Amazon Market Cap 2006-2018 – AMZN, Chicago.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/market-cap (retrieved 08.02.2019).
[8] Tou, Y., Watanabe, C., Moriya, K., Vurpillat, V., & NeittaanmÀki, P., 2019a. A New Concept of R&D
in Neo Open Innovation: Transformation of R&D Triggered by Amazon. International Journal of
Managing Information Technology 11 (1) in print.
[9] Tou, Y., Watanabe, C., Ilmola, L., Moriya, K. and NeittaanmÀki, P., 2018a. Hybrid Role of Soft
Innovation Resources: Finland’s Notable Resurgence in the Digital Economy. International Journal of
Managing Information Technology 10 (4), 1-22.
[10] International Monetary Fund (IMF), 2018. World Economic Outlook Database 2018. IMF,
Washington, D.C.
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(retrieved 06.02.2019).
[11] United Nations, 2018. World Happiness Report 2018. United Nations, New York.
http://worldhappiness.report/ed/2018/ (retrieved 10.01.2019)
[12] Kenney, M., 2013. The Growth and Development of the Internet in the United States. In: Cogut B,
Ed. The Global Internet Economy. MIT Press, Massachusetts.
[13] R i tala, P., Golnam, A. & Wegmann, A., 2014. Coopetition based Business Models: The Case of
Amazon.com. Industrial Marketing Management 43, 236 249.
[14] K nott, A.M., 2017. How Innovation Really Works: Using the Trillion Dollar R&D fix to Drive
Growth. McGraw Hill , New
[15] Galloway, S., 2017. The Hidden DNA of Amazon, Apple, Facebook, and Google. Penguin Random
House LLC, New York.
[16] Khan, L.L., 2017. Amazon’s Antitrust Pradox. The Yale Law Journal 126, 710-805.
[17] OECD, 2017. OECD Review of Innovation Policy: Finland Assessment and Recommendation.
OECD, Paris.
[18] Watanabe, C., Kondo, R., Ouchi, N., Wei, H. and Griffy-Brown, C., 2004. Institutional Elasticity as
a Significant Driver of IT Functionality Development. Technological Forecasting and Social Change 71
(7), 723-750.
[19] Schelling, T.C., 1998. Social mechanisms and social dynamics, in Hedstrom, P. and Swedberg, R.
eds., Social Mechanisms: An Analytical Approach to Social Theory. Cambridge Univ. Press, Cambridge,
32-43.
[20] International Monetary Fund (IMF), 2017. World Economic Outlook Database 2017. IMF,
Washington, D.C.
[21] World Economic Forum (WEF), 2016. The Global Information Technology Report 2016. WEF,
Geneva.
[22] EU, 2017. Economics of Industrial Research and Innovation, EU, Brussels. [23] Watanabe, C., Tou,
Y. and NeittaanmÀki, P., 2018a. A New Paradox of the Digital Economy: Structural Sources of the
Limitation of GDP Statistics. Technology in Society 55, 9-23.
[24] Watanabe, C., Naveed, K., Tou, Y. and NeittaanmÀki, P., 2018b. Measuring GDP in the Digital
Economy: Increasing Dependence on Uncaptured GDP. Technological Forecasting and Social Change
137, 226-240.
[25] Watanabe, C., Lei, S. and Ouchi, N., 2009. Fusing Indigenous Technology Development and Market
Learning for Greater Functionality Development: An Empirical Analysis of the Growth Trajectory of
Canon Printers. Technovation 29 (2), 265-283.
[26] Watanabe, C., Takayama, M., Nagamatsu, A., Tagami, T. and Griffy-Brown, C., 2002. Technology
Spillover as a Complement for High Level R&D Intensity in the Pharmaceutical Industry. Technovation
22 (4), 245-258.
[27] Watanabe, C., Naveed, K. and Zhao, W., 2015a. New Paradigm of ICT Productivity: Increasing Role
of Un-captured GDP and Growing Anger of Consumers. Technology in Society 41, 21–44
[28] Watanabe, C., Naveed, K. and NeittaanmÀki, P., 2015b. Dependency on Un-captured GDP as a
Source of Resilience beyond Economic Value in Countries with Advanced ICT Infrastructure:
Similarities and Disparities between Finland and Singapore. Technology in Society 42, 104–122
.
[29] Watanabe, C., Naveed, K., NeittaanmÀki, P. and Tou, Y., 2016. Operationalization of Un-captured
GDP: The Innovation Stream under New Global Mega-trends. Technology in Society 45, 58–77.
[30] Statistics Finland, (2018) “National Accounts of Finland,” Statistics Finland, Helsinki.
[31] University of Toronto, 2013. Amazon Business Model Case Study. APS1012 Management of
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[33] Rivet, D.J., 2017. Amazon’s Superior Innovation: A Study of Amazon’s Corporate Structure, CEO,
and Reasons behind Why It has become the Most Innovative Company in Today’s Market. University of
New Hampshire Honors Theses and Capstone 343, University of New Hampshire, Durham.
https://scholars.unh.edu/honors/343 (retrieved 10.01.2019).
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Top Cited Articles in 2019 - International Journal of Managing Information Technology (IJMIT)

  • 1. TOP CITED ARTICLES IN 2019 INTERNATIONAL JOURNAL OF MANAGING INFORMATION TECHNOLOGY (IJMIT) http://airccse.org/journal/ijmit/ijmit.html ISSN: 0975-5586 (ONLINE); 0975-5926 (PRINT)
  • 2. A NEW CONCEPT OF R&D IN NEO OPEN INNOVATION - TRANSFORMATION OF R&D TRIGGERED BY AMAZON Yuji Tou1 , Chihiro Watanabe 2, 3 , Kuniko Moriya 2, 4 , Victor Vurpillat5 , Pekka NeittaanmĂ€ki2 , 1 Tokyo Institute of Technology, Japan 2 University of JyvĂ€skylĂ€, Finland, 3 International Institute for Applied Systems Analysis (IIASA), Austria, 4 Research and Statistics Department, Bank of Japan, Japan and 5 Global Connexus Inc., USA ABSTRACT Amazon was the world’s top R&D firm in 2017. Its R&D investment was double that of 2015, quintuple that of 2012, and tenfold that of 2011. It deploys a unique R&D model as conducting “routine or periodic alternations” and “significant improvement” simultaneously. Since traditionally the former is classified as non-R&D, Amazon’s rapid and notable increase has raised the question of a new R&D definition in the digital economy. By means of an empirical analysis of the Amazon’s R&D model, this paper attempted to provide a convincing answer to this question. Amazon has invested considerable resources in extremely innovative business areas, which has developed its assimilation capacity. In parallel with such forefront innovation, Amazon is endeavoring to absorb soft innovation resources from external markets and assimilate them into its business model. This then transforms “routine or periodic alternations” into “significant improvement”, leading to the company becoming the world’s top R&D firm. Such an endeavor has triggered a new concept of R&D in neo open innovation and revealed the significance of a transformation of the R&D concept in the digital economy. KEYWORDS R&D, neo open innovation, Amazon, transformation, technology and content For More Details: http://aircconline.com/ijmit/V11N1/11119ijmit02.pdf Abstract URL: http://aircconline.com/abstract/ijmit/v11n1/11119ijmit02.html Volume URL: http://airccse.org/journal/ijmit/vol11.html
  • 3. REFERENCES [1] Tou, Y., Watanabe, C., Moriya, K., & NeittaanmĂ€ki, P., 2018. Neo Open Innovation in the Digital Economy: Harnessing Soft Innovation Resources. International Journal of Managing Information Technology 10 (4), 53-75. [2] Bloomberg, 2017. 2017 Global Innovation 1000 Study. Bloomberg, New York. [3] Fox, J., 2018. Amazon, the Biggest R&D Spender, Does Not Believe in R&D. Bloomberg Opinion, 13 April 2018. https://www.bloomberg.com/view/articles/2018-04-12/amazon-doesn-t-believe-in research-and-development-spending (retrieved 22.09.2018) [4] Gershgorn, D., 2018. Amazon’s R&D Spending is Poised to Top the GDP of Iceland. Quarts, 28 December 2018. [5] World Bank, 2018. National Accounts Data. World Bank, Washington, D.C. [6] Watanabe, C., Tou, Y. & NeittaanmĂ€ki, P., 2018b. A New Paradox of the Digital Economy: Structural Sources of the Limitation of GDP Statistics, Technology in Society 55, 9-33. [7] Watanabe, C., Naveed, K., Tou, Y. & NeittaanmĂ€ki, P., 2018c. Measuring GDP in the Digital Economy: Increasing Dependence on Uncaptured GDP. Technological Forecasting and Social Change 137, 226-240. [8] Watanabe, C., Naveed, K., NeittaanmĂ€ki, P., 2015. Dependency on Un-captured GDP as a Source of Resilience beyond Economic Value in Countries with Advanced ICT Infrastructure: Similarities and Disparities between Finland and Singapore. Technology in Society 42, 104–122. [9] Watanabe, C., Naveed, K., NeittaanmĂ€ki, P., Tou, Y., 2016. Operationalization of Un-captured GDP: The Innovation Stream under New Global Mega-trends. Technology in Society 45, 58–77. [10] Galloway, S., 2017. The Hidden DNA of Amazon, Apple, Facebook, and Google. Penguin Random House LLC, New York. [11] Naveed, K., Watanabe, C. & NeittaanmĂ€ki, P., 2018. The Transformative Direction of Innovation toward an IoT-based Society: Increasing Dependency on Uncaptured GDP in Global ICT Firms. Technology in Society 53, 23-46. [12] Kenney, M., 2013. The Growth and Development of the Internet in the United States. In: Cogut B, Ed. The Global Internet Economy. MIT Press, Massachusetts. [13] Knott, A.M., 2017. How Innovation Really Works: Using the Trillion-Dollar R&D fix to Drive Growth. McGraw Hill, New York. [14] Green, T., 2018. How Much does Amazon Spend on R&D? Less than You Think. The Motley Fool, 13 June 2018. https://www.fool.com/investing/2018/06/13/how-much-does-amazon-spend-on-rd-less than-you-thi.aspx (retrieved 10.01.2019). [15] Amazon, 2018a. Amazon Com. Inc. Annual Report 2017. Amazon.Com, Inc., Seattle. http://www.annualreports.com/Company/amazoncom-inc (retrieved 06.01.2019).
  • 4. [16] Amazon, 2018b. Amazon Leadership Principles. Amazon.Com, Inc., Seattle. https://www.amazon.jobs/en/principles (retrieved 20.11.2018). [17] Apple, 2018. Apple Inc. Annual Report 2017. Apple Inc., Cupertino. https://investor.apple.com/investor-relations/financial-information/(retrieved 06.01.2019). [18] Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), 2018. Generally Accepted Accounting Principles (GAAP) for Business. FASB, ASC, Washington, D.C. [19] National Science Foundation (NSF), 2018. Definitions of R&D: An Annotated Compilation of Official Sources. NSF, Alexandria, Virginia, USA. https://www.nsf.gov/statistics/randdef/#chp3. (retrieved 10.01.2019). [20] Watanabe, C., Naveed, N. & NeittaanmĂ€ki, P., 2018a. Digital Solution Transform the Forest-based Bioeconomy into a Digital Platform Industry: A Suggestion for a Disruptive Business Model in the Digital Economy. Technology in Society 54, 168-188. [21] Jenkins, J., 2011. How Amazon. Com Migrated to AWS. 2011 AWS Tour Australia, Closing Keynote. https://www.slideshare.net/AmazonWebServices/2011-aws-tour-australia-closing-keynote-how amazoncom-migrated-to-aws-by-jon-jenkins (retrieved 10.01.2019). [22] Yahoo! Finance, 2018. Amazon.com, Inc. (AMZN), Historical Data. https://finance.yahoo.com/quote/AMZN/history (retrieved 10.01.2019). [23] Yahoo! Finance, 2018. Apple Inc. (AAPL), Historical Data. https://finance.yahoo.com/quote/AAPL/history (retrieved 10.01.2019). [24] Colin, N., 2016. 11 Notes on Amazon. The Family Papers #010. 18 Jan. 2016. https://salon.thefamily.co/11-notes-on-amazon-part-1-cf49d610f195 (retrieved 06.01.2019). [25] O’Reilly, T., 2003. The Open Source Paradigm Shift. O’Reilly & Associates, Inc., Sebastopol. https://www.oreilly.com/tim/archives/ParadigmShift.pdf (retrieved 10.01.2019). [26] Watanabe, C., Takayama, M., Nagamatsu, A., Tagami, T. and Griffy-Brown, C., 2002. Technology Spillover as a Complement for High Level R&D Intensity in the Pharmaceutical Industry. Technovation 22 (4), 245-258. [27] Rivet, D.J., 2017. Amazon’s Superior Innovation: A Study of Amazon’s Corporate Structure, CEO, and Reasons behind Why It has become the Most Innovative Company in Today’s Market. University of New Hampshire Honors Theses and Capstone 343, University of New Hampshire, Durham. https://scholars.unh.edu/honors/343 (retrieved 10.01.2019
  • 5. AUTHORS Yuji Tou graduated from Tokyo Institute of Technology, Japan, and is currently specially appointed associate professor at Tokyo Institute of Technology, Japan Chihiro Watanabe graduated from the University of Tokyo, Japan, and is currently Professor Emeritus at the Tokyo Institute of Technology, a research professor at the University of JyvĂ€skylĂ€, Finland, and a research scholar at the International Institute for Applied Systems Analysis (IIASA). Kuniko Moriya graduated from Aoyama Gakuin University, Japan, and is currently is currently Director of the Bank of Japan. Victor V. Vurpillat graduated from Calfornia State Polytechnic University, USA, and is currently Chairman of the Board and Director of Research, Global Connexus Inc., USA Pekka NeittaanmĂ€ki graduated from the University of JyvĂ€skylĂ€ with a degree in Mathematics. He is currently Professor of the Faculty of Information Technology, University of JyvĂ€skylĂ€, Finland.
  • 6. A SOLUTION TO THE DILEMMA BETWEEN R&D EXPANSION AND THE PRODUCTIVITY DECLINE: LESSONS FROM THE R&D MODELS IN AMAZON AND FINLAND Yuji Tou1 , Chihiro Watanabe 2,3 , Kuniko Moriya4,2 , Pekka NeittaanmĂ€ki2 , 1 Tokyo Institute of Technology, Japan, 2 University of JyvĂ€skylĂ€, Finland, 3 International Institute for Applied Systems Analysis (IIASA), Austria and 4 Research and Statistics Department, Bank of Japan, Japan ABSTRACT As a consequence of the two-faced nature of information and communication technology (ICT), a majority of ICT leaders have been confronting the critical problem of a dilemma between R&D expansion and productivity decline in the digital economy. However, Amazon has been able to accomplish a skyrocketing increase in R&D and market capitalization. Finland has also accomplished balanced advancement not only of welfare but also economic resurgence. This paper attempted to elucidate the miracle of two ICT leaders. By means of a comparative empirical analysis of respective development trajectories, the sources of their success were analyzed thereby the comparative advantage and disadvantage of each respective trajectories supportive to find a practical solution to the critical problem of a dilemma were identified. The sources of both successes can be attributed to harnessing the vigor of soft innovation resources from the marketplace. However, contrary to Amazon’s complementary use, Finland has depended on substitutionary use. While this approach contributes to easy resurgence, it casts a shadow to the innovative growth in the future. An insightful suggestion regarding balanced sustainable growth by cross learning was thus provided. KEYWORDS Digital economy, soft innovation resources, Amazon, Finland, dilemma between R&D and productivity For More Details: http://aircconline.com/ijmit/V11N2/11219ijmit02.pdf Abstract URL: http://aircconline.com/abstract/ijmit/v11n2/11219ijmit02.html http://airccse.org/journal/ijmit/vol11.html
  • 7. REFERENCES [1] Tou, Y., Watanabe, C., Moriya, K., & NeittaanmĂ€ki, P., 2018b. Neo Open Innovation in the Digital Economy: Harnessing Soft Innovation Resources. International Journal of Managing Information Technology 10 (4), 53-75. [2] Tou, Y., Watanabe, C., Moriya, K., & NeittaanmĂ€ki, P., 2019b. Harnessing Soft Innovation Resources Leads to Neo Open Innovation. Technology in Society, in print. [3] B loomberg, 2017. 2017 Global Innovation 1000 Study. Blo omberg, New York. [4] Fox, J., 2018. Amazon, the Biggest R&D Spender, Does Not Believe in R&D. Bloomberg Opinion, 13 April 2018. https://www.bloomberg.com/view/articles/2018-04-12/amazon-doesn-t-believe-in- research-anddevelopment-spending (retrieved 22.09.2018). [5] Statista, 2019. Top Internet Companies: Global Market Value 2018. Statista, Hamburg. https://www.statista.com/statistics/277483/market-value-of-the-largest-internet-companiesworldwide/ (retrieved 10.01.2019). [6] Macrotrends, 2019. Apple Market Cap 2006-2018 – AAPL, Chicago. https://www.macrotrends.net/stocks/charts/AAPL/apple/market-cap (retrieved 08.02.2019). [7] Macrotrends, 2019. Amazon Market Cap 2006-2018 – AMZN, Chicago. https://www.macrotrends.net/stocks/charts/AMZN/amazon/market-cap (retrieved 08.02.2019). [8] Tou, Y., Watanabe, C., Moriya, K., Vurpillat, V., & NeittaanmĂ€ki, P., 2019a. A New Concept of R&D in Neo Open Innovation: Transformation of R&D Triggered by Amazon. International Journal of Managing Information Technology 11 (1) in print. [9] Tou, Y., Watanabe, C., Ilmola, L., Moriya, K. and NeittaanmĂ€ki, P., 2018a. Hybrid Role of Soft Innovation Resources: Finland’s Notable Resurgence in the Digital Economy. International Journal of Managing Information Technology 10 (4), 1-22. [10] International Monetary Fund (IMF), 2018. World Economic Outlook Database 2018. IMF, Washington, D.C. https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD (retrieved 06.02.2019). [11] United Nations, 2018. World Happiness Report 2018. United Nations, New York. http://worldhappiness.report/ed/2018/ (retrieved 10.01.2019) [12] Kenney, M., 2013. The Growth and Development of the Internet in the United States. In: Cogut B, Ed. The Global Internet Economy. MIT Press, Massachusetts. [13] R i tala, P., Golnam, A. & Wegmann, A., 2014. Coopetition based Business Models: The Case of Amazon.com. Industrial Marketing Management 43, 236 249. [14] K nott, A.M., 2017. How Innovation Really Works: Using the Trillion Dollar R&D fix to Drive Growth. McGraw Hill , New
  • 8. [15] Galloway, S., 2017. The Hidden DNA of Amazon, Apple, Facebook, and Google. Penguin Random House LLC, New York. [16] Khan, L.L., 2017. Amazon’s Antitrust Pradox. The Yale Law Journal 126, 710-805. [17] OECD, 2017. OECD Review of Innovation Policy: Finland Assessment and Recommendation. OECD, Paris. [18] Watanabe, C., Kondo, R., Ouchi, N., Wei, H. and Griffy-Brown, C., 2004. Institutional Elasticity as a Significant Driver of IT Functionality Development. Technological Forecasting and Social Change 71 (7), 723-750. [19] Schelling, T.C., 1998. Social mechanisms and social dynamics, in Hedstrom, P. and Swedberg, R. eds., Social Mechanisms: An Analytical Approach to Social Theory. Cambridge Univ. Press, Cambridge, 32-43. [20] International Monetary Fund (IMF), 2017. World Economic Outlook Database 2017. IMF, Washington, D.C. [21] World Economic Forum (WEF), 2016. The Global Information Technology Report 2016. WEF, Geneva. [22] EU, 2017. Economics of Industrial Research and Innovation, EU, Brussels. [23] Watanabe, C., Tou, Y. and NeittaanmĂ€ki, P., 2018a. A New Paradox of the Digital Economy: Structural Sources of the Limitation of GDP Statistics. Technology in Society 55, 9-23. [24] Watanabe, C., Naveed, K., Tou, Y. and NeittaanmĂ€ki, P., 2018b. Measuring GDP in the Digital Economy: Increasing Dependence on Uncaptured GDP. Technological Forecasting and Social Change 137, 226-240. [25] Watanabe, C., Lei, S. and Ouchi, N., 2009. Fusing Indigenous Technology Development and Market Learning for Greater Functionality Development: An Empirical Analysis of the Growth Trajectory of Canon Printers. Technovation 29 (2), 265-283. [26] Watanabe, C., Takayama, M., Nagamatsu, A., Tagami, T. and Griffy-Brown, C., 2002. Technology Spillover as a Complement for High Level R&D Intensity in the Pharmaceutical Industry. Technovation 22 (4), 245-258. [27] Watanabe, C., Naveed, K. and Zhao, W., 2015a. New Paradigm of ICT Productivity: Increasing Role of Un-captured GDP and Growing Anger of Consumers. Technology in Society 41, 21–44 [28] Watanabe, C., Naveed, K. and NeittaanmĂ€ki, P., 2015b. Dependency on Un-captured GDP as a Source of Resilience beyond Economic Value in Countries with Advanced ICT Infrastructure: Similarities and Disparities between Finland and Singapore. Technology in Society 42, 104–122 . [29] Watanabe, C., Naveed, K., NeittaanmĂ€ki, P. and Tou, Y., 2016. Operationalization of Un-captured GDP: The Innovation Stream under New Global Mega-trends. Technology in Society 45, 58–77. [30] Statistics Finland, (2018) “National Accounts of Finland,” Statistics Finland, Helsinki.
  • 9. [31] University of Toronto, 2013. Amazon Business Model Case Study. APS1012 Management of Innovation – Final Team Projects, Spring 2013. University of Toronto, Faculty of Applied Science and Engineering, Toronto. http://www.amgimanagement.com/founder/ProjectSummaries/APS1012_2013_spring_03_Amazon% 20business%20model%20case%20study.pdf (retrieved 10.01.2019). [32] Bezos, J.P., 2013. 2013 Letter to Shareholders. Amazon.com, Inc., Seattle. [33] Rivet, D.J., 2017. Amazon’s Superior Innovation: A Study of Amazon’s Corporate Structure, CEO, and Reasons behind Why It has become the Most Innovative Company in Today’s Market. University of New Hampshire Honors Theses and Capstone 343, University of New Hampshire, Durham. https://scholars.unh.edu/honors/343 (retrieved 10.01.2019). [34] Malczewski, B., 2011. Amazon in Overdrive: Is there More to the Overdrive – Amazon Deal than Just the Kindle? Journal of Electronic Resources Librarianship, 23 (4), 404-408. [35] Izogo, E.E. & Ozo, J.U., 2015. Critical Evaluation of How Well Placed Amazon is to Sustain its Historical Online Retailing. British Journal of Marketing Studies 3 (6), 31-42. [36] Levinson,M., 2007. Amazon’s IT Leader Leaving Huge Customer Service Infrastructure as Legacy. CIO, 17 Oct. 2007. https://www.cio.com/article/2437865/infrastructure/amazon-com-s-it-leader-leaving- huge-customerservice-infrastructure-as-legacy.html (retrieved 10.01.2019). [37] Robischon, N., 2017. Why Amazon is the World’s Most Innovative Company of 2017? Fast Company Magazine, 2 May 2017. https://www.fastcompany.com/3067455/why-amazon-is-the-worlds- most-innovative-company-of2017 (retrieved 10.01.2019).