Utmost Gratification of Consumption by Means of Supra-Functionality Leads a Way to Overcoming Global Economic Stagnation

By Watanabe, Chihiro; Nasuno, Mitsuko et al. | Journal of Services Research, October-March 2011 | Go to article overview

Utmost Gratification of Consumption by Means of Supra-Functionality Leads a Way to Overcoming Global Economic Stagnation


Watanabe, Chihiro, Nasuno, Mitsuko, Shin, Jae-Ho, Journal of Services Research


Japan has constructed a notable model for transforming external crisis into a springboard for new innovation. This can be attributed to technology substitution for constrained production factors inspired by induced bias in innovation. Because of the current global economic stagnation, Japan's model has drawn global concerns. However, the limit of a substitution model in a production function has been revealed in an information society, leading to an increasing significance of the integration of production, diffusion and consumption functions. Consequently, the emergence of supra-functionality encompassing social, cultural, aspirational and emotional needs beyond economic value, leading to utmost gratification of consumption, has become critical. Since a group of consumers with a disability is more demanding of supra-functionality, an empirical reasearch based on an analysis of the demand of such a group and the institutional impediments that hinder the group's ability to achieve utmost gratification was conducted. Japan's mobile phone development trajectory was used for the analysis as its development trend corresponded to emerging from a disability of effective utilization of information technology (IT) in the paradigm shift to an information society and was typical of Japanese institutions in a constrained circumstance. Based on the optimal theory, optimal functionality development trajectory leading to utmost gratification of consumption was compared with that of the actual trajectory. The result demonstrated that while the optimal trajectory was lower than the actual level in its initial stage, it exceeded this level during the period when supra-functionality substituted for resistance to innovation by means of the emergence of mobile phone e-mail transmission. This emergence instilled in customers an exciting story with their own initiative as heroes/ heroines and thrilled them with gratification. This dynamism provides an insightful suggestion for overcoming the current global economic stagnation that has resulted in diminishing consumption.

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Japan has constructed a sophisticated co-evolutionary dynamism between innovation and institutional systems by transforming external crisis into a springboard for new innovation (Watanabe and Zhao, 2006; Watanabe, 2009). This can largely be attributed to the unique features of the nation such as having a strong motivation to overcoming fear based on xenophobia and uncertainty avoidance (Hofstedo, 1991) as well as abundant curiosity, assimilation proficiency, and thoroughness in learning and absorption (OECD, 1997; Tokyo Institute of Technology, 2009). Such explicit dynamism was typically demonstrated by technology substitution for energy in the 1970s, leading Japan to achieve a high-technology miracle in the 1980s (Watanabe, 1992, 1996, 1999).

While Japan's explicit dynamism shifted to the opposite direction in the 1990s due to a systems conflict with the rise of the information society (OECD, 2001, Watanabe et al., 2004), it became reactivated in the early 2000s by a hybrid management of technology between indigenous strength and learning from global best practice (Fukuda and Watanabe, 2008a). Although reactivated firms have multi-polarized during the current period of global economic stagnation (Fukuda and Watanabe, 2008b), Japan's model for transforming a crisis into a springboard for new innovation has drawn global concern.

Given that the important lesson learned from the current globalwide stagnation is the termination of traditional consumption dependent economy that anticipated the recovery of consumption simply by business upturn, supra-functionality beyond economic value encompassing social, cultural, aspirational and emotional needs (Modigliani, 1965; McDonagh, 2008) could only reactivate world consumption.

McDonagh (2008) pointed out that in silver market (market initiated by aged people) consumers want to surround themselves with products that satisfy both functional and supra-functional needs. …

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