Charles Darwin once described the peculiar species on the Galapagos Islands that evolved in isolation—perfectly adapted to their closed environment yet defenseless against external competition. This is precisely the portrayal of Japan's technology sector over the past two decades. The country can manufacture industrial robots with micrometer-level precision and Toyota cars that never break down, yet in the landscape of the digital economy, it is a barren wasteland: no Google, no Facebook, no TikTok, no WeChat, no Taobao—only isolated islands built by local system integrators (SIers).
For a long time, this phenomenon of "hardware giant, software dwarf" has been attributed to Japan's insular culture. But the real ailment lies deep within the relations of production: in Japan's software supply chain, the "user" is no longer the object of service but merely an abstract symbol in contract terms.
And now, this metaphor is crossing the ocean and arriving in China.
Although China's consumer internet has already demonstrated its vitality globally, in the deeper, less visible "deep waters of digital transformation"—from the backend systems of large enterprises to complex industry solutions—a structural convergence is emerging. We are surprised to discover that the path of "high outsourcing, low accumulation," which once trapped Japan's software industry, is quietly being replicated here.
The Vanishing Ghost
In the skyscrapers of Tokyo's Otemachi, consultants in suits plan the digital future on exquisite PowerPoint slides; meanwhile, in another part of the city, dispatched engineers crammed into cramped cubicles stare at screens full of code. Separating the two are hundreds of pages of "Requirement Specifications."
This is a modern version of a "caste system": the upper echelon is responsible for thinking but bears no consequences; the lower echelon is responsible for execution but lacks business understanding. Japan calls this model SIer (system integration), once hailed as the pinnacle of industrial division of labor.
However, this ghost that once haunted Japan is now resurging in our software industry in an even more extreme form: a comprehensive regression from "project outsourcing" to "labor dispatch."
Once upon a time, enterprises purchased software to acquire a "solution"; now, more and more orders are merely to rent "heads." On financial statements, this is whitewashed as "flexible staffing" and "cost reduction and efficiency improvement," but on the engineering front, it means "infinite dilution of responsibility."
When software development is no longer settled based on "delivering results" but on "man-days and hours," the contract between developers and end-users is completely torn apart. For dispatched engineers, their client is no longer the businessperson who actually uses the system but the administrative manager who signs their attendance sheets.
This misalignment of incentives leads to a fundamental distortion of software functionality: systems are no longer designed to empower frontline users but to satisfy the "controllability" of administrative management.
To manage this fluid, trust-deficient dispatched workforce, enterprises must establish cumbersome approval processes and traceability mechanisms. As a result, software is filled with reports designed for "upward reporting" and confirmation buttons designed for "liability avoidance."
Genuine user experience is drowned under the logic of administrative control. Here, there is only the consumption of man-hours, no accumulation of value; only the arrogance of management, no dignity for users.
The Tyranny of Mediocrity
Why, in a market with the world's youngest and most creative pool of engineers, do many B2B software tech stacks exhibit a bizarre premature aging? The answer lies not in technical capability but in transaction costs and the transfer of power.
Under the financial pressure of "cost reduction and efficiency improvement," a quiet purge is underway. Those "technocrats" who pursue excellence but command high salaries are forced to "graduate"; they are replaced by "administrative bureaucrats" skilled in budget control and report embellishment.
For the administrative managers who take over control, technology is no longer a core competency but a vast, uncontrollable black box. They fear the uncertainty brought by innovation and, even more, the political responsibility of project failure. In their logic, outsourcing business to dispatched teams is not only the optimal financial choice but also a shrewd form of "risk outsourcing."
This outsourcing contract essentially becomes a firewall of accountability.
If an in-house team fails in innovation, the manager is held accountable; but if an outsourced project encounters issues, "insufficient supplier capability" becomes the perfect and compliant scapegoat. This mechanism of "internalizing gains, externalizing risks" makes mediocrity the safest survival strategy within the system.
At the execution level, this risk-averse logic creates a typical "lemons market": because buyers are only willing to pay for "man-months" (work hours) and not for "excellence" (results), highly skilled talent is driven out, and system design is forcibly reduced to the "minimum maintainable level."
Thus, technological obsolescence is preserved as a feature—it means that even if the original team is replaced as "consumables," any cheap dispatched worker from a training class can take over at any time.
This forms a perfect closed loop: administrative bureaucrats, for the sake of attractive financial reports and political safety, expel technical elites and introduce a fluid dispatched army; and to accommodate this army, technical standards are actively neutered. Ultimately, enterprises obtain a mediocre but controllable machine but lose a beating heart.
The Eternal Intern
There is an often-overlooked iron law in software engineering: excellent systems are the product of the co-evolution of the team, the code, and the users.
In an ideal model, engineers increasingly understand users through continuous iteration and deepen their skills by filling every "pitfall"; meanwhile, the system, in this process, accumulates business-aligned features like tree rings. This "entanglement of people and systems" is the true value moat of software.
However, the prevalent outsourcing and dispatch models brutally sever this symbiotic bond.
At project sites, personnel rotate like a revolving door. When a group of "newcomers" with no knowledge of business history takes over a system, they see only obscure code, not vivid logic.
They don't know that a seemingly redundant field exists to accommodate the most critical major client; nor do they understand that a peculiar architectural design was meant to handle seasonal traffic surges. Because they lack understanding of users and memory of history, they cannot grasp the "why" of the system and can only mechanically execute the "what."
This cognitive misalignment leads to the most severe "institutional amnesia" in the industry. Codebases become "legacy code mountains" that no one dares to touch; value ceases to grow, leaving only meaningless accumulation.
The cruelest cost of this model is the systematic squandering of human capital.
In Japan, this led to the solidification of the "IT construction worker" class; in China, a similar group is rapidly expanding. Without the soil for long-term business immersion, engineers cannot grow through the compounding of experience. They are forced to wander between different projects, repeating one year of experience for ten years.
This is why we see a bizarre phenomenon: systems are constantly "aging," but the people maintaining them are forever young.
This fracture in the career ladder creates a group of "eternal interns." They have no sense of belonging, no technical accumulation, and, of course, no future.
When the threshold of age 35 arrives, they are seen as "old batteries" with reduced cost-effectiveness and are mercilessly replaced, while the industry gradually hollows out in cycles of low-level repetition.
The Illusion of Compliance
When an organization is filled with fluid, rootless "eternal interns," how can managers ensure that the vast system does not spiral out of control?
The answer can only be to replace trust in people with cold, rigid processes.
To manage this massive "mercenary army," a survival philosophy derived from traditional bureaucratic institutions is transplanted into software engineering: process is more important than results, and liability avoidance is more important than excellence.
In Japanese corporate culture, as long as the process is compliant, even catastrophic failure can be forgiven. Managers know well that relying on a group of disloyal outsourced personnel to pursue "excellence" is unrealistic. Therefore, the goal is downgraded to "controllability." As a result, we see a proliferation of "defensive management."
In the requirements phase, documents grow thicker, not to clarify business logic but to prevent contract disputes—documents transform from carriers of knowledge into handover slips of responsibility.
In the development phase, approval chains are stretched indefinitely, not to control code quality but to ensure every step is documented and traceable, achieving layered accountability.
This management model of "killing creativity with process" not only produces rigid systems but also leads enterprises' digital transformation astray.
True digitalization should be business-oriented—empowering the frontline through data flow, allowing those who hear the gunfire to make decisions. But under the dominance of the "illusion of compliance," we see a large number of "pseudo-digitalization" efforts that are management-oriented.
These systems are designed as electronic approval flows, with the value of data confined within reporting hierarchies. They are like "digital concrete floors"—flat and compliant but barren.
This model, originating from Japan, is leading digitalization astray and is incompatible with the AI era.
The proliferation of AI technology can greatly expand enterprises' service radius, pushing demands toward massive scale, real-time responsiveness, and personalization. Software iteration cycles will no longer be measured in months or quarters but in weeks or even days.
In this "overclocked competition," management-oriented defensive systems appear clumsy and laughable. The outsourcing model relies on lengthy contract negotiations and requirement confirmations; when requirements change weekly, every "change request" to the outsourcer becomes a verdict that delays critical opportunities.
The essence of AI is "removing management" and empowering individuals. Those systems piled up by outsourced armies and wrapped in layers of defensive processes are inherently anti-AI. They not only fail to nurture the flexible soil needed for AI but instead accelerate the aging of enterprises.
The Crossroads
We are facing a dangerous misalignment: the current system specializes in producing "porters," while the only scarcity in the AI era is "gardeners."
The rise of generative AI is rewriting the rules of software engineering. Those standardized, divisible, low-responsibility-density coding tasks will be taken over by AI at zero cost. What will truly be scarce in the future are architects and product people who can understand complex business and solve problems through "human-machine collaboration" amid uncertainty.
Unfortunately, the existing outsourcing and dispatch systems specialize in producing the former while stifling the latter. You cannot delegate innovation through outsourcing contracts, nor can you cultivate "super individuals" capable of harnessing AI on an assembly line.
This is not an irreversible cultural destiny but the result of long-term selection by erroneous incentive mechanisms. The hollowing out of Japan's software industry has proven that when a market prices only "heads" and not "value," it inevitably degenerates into a Galapagos island.
China spent twenty years forging a highly commercialized internet path, but in the deep waters of digital and AI transformation, if it cannot reverse this "deskilling" incentive mechanism, the industry will face a Japan-style chronic degeneration.
Will we continue to choose Japan's "safe mediocrity," or dare to embrace "high-risk innovation"?
Regardless of our choice, there is no doubt that in the ongoing AI race, entry tickets will only be issued to enterprises that have "gardeners," not "porters."