September 27, 2009 – Osaka, Japan,
Nikkei, Japan’s leading newspaper specialized in economy and politics, announced today that Japanese consumer-electronics giants including Sony and Fujitsu are to start marketing in earnest low-end digital consumer-electronics. This is because demand of low-end digital consumer-electronics with limited features is expanding even in developing countries worldwide, growing as the “volume zone” of the market. Taiwan makers have been leading in this market segment and Japanese makers aim to take the offensive by leveraging EMS (Electronic Manufacturing Service) of Taiwan that has manufacturing plant in China, where the labour cost is low.
For mobile PC, Sony is to commission designing and production of net book, mobile PC of price zone around 50,000 yen utilizing EMS. Section responsible for interacting with EMS will be located in PC Division and people responsible for EMS will be located in China. With this strategy, Sony intends to increase its worldwide PC sales from original plan of 6.2 million units for 2009 to more than 10 million. Fujitsu that entered net book market April this year plans to double for 2009 EMS production from 2008 which was 600,000 units. Fujitsu plans to achieve total worldwide PC sales of 6.5 million, including approximately 300,000 units for net book PCs.
As for video camera, Victor will launch new model(s) with price range of 20,000-30,000 yen, half of the current models, in October for European market, and plans to launch in Japan and the U.S. as well. They do so by utilizing EMS reducing cost. Sony has already launched product(s) with price range of 10,000-20,000 yen this spring in the U.S. and Europe.
As for car navigation systems, Pioneer was the first Japanese maker to use EMS, to successfully market product with price of approximately 50,000 yen, which is half their previous products.
As for flat panel TVs, Toshiba plans to increase low price range LCD TVs to achieve sales target of 1.3 million units in 2009 and in 2010 to achieve 3 million units in 2010 for emerging countries. Sharp has already launched a model with price around 50,000 yen in China this year.
According to Display Research, a U.S. market research company, global net book sales is estimated to reach 3.5 million units for 2009 which is more than double of 2008. This is about 20% of total mobile PC sales. In addition, some experts expect that 40-50% of the U.S. video camera market will be of low-end products for 2009.
Japanese digital consumer-electronics giants have been focusing on high-end products that is usually said to be impacted by price competition. Their strength is “vertical” network, engaging in from developing backbone parts to assembling. However, such companies as Taiwan competitors such as Asus and low-end video camera maker under the umbrella of Cisco Systems have been increasing their presence in the worldwide market. If this trend proliferates in Japanese market as well, it is quite possible that Japanese makers would need to further outsource their production offshore.
To the author, it is high time for Japanese consumer-electronics giants to review and change their strategy as appropriate, applying concept and mechanism of “The Innovator’s Dilemma” and “The Innovator’s Solution” of Clayton M. Christensen.
2009年9月23日水曜日
Japan Takes Lead in GHG Emission Reduction in the UN’s Climate Change Summit
Wednesday, September 23, 2009 – Osaka, Japan
Mr. Hatoyama, the new Japanese Prime Minister, made a speech pledging Japan’s mid-term target of 25% GHG (global greenhouse gas = CO2) emission reduction vs.1990 by 2020 at the United Nation’s Climate Change Summit held on September 22 in New York, his debut to the diplomatic setting. He also advocated his initiative of providing to developing and emerging countries Japan’s energy saving technologies and capital aid to help them drive global warming countermeasures. His speech in English won great applause and appreciation in the summit, and it is probably the first time that a speech made by a Japanese Prime Minister won such an applause. However, his aggressive target has not been provoking positive reactions back in Japan.
1. Facts On GHG Emission Reduction Mid-Term Target
Mid-term target of reducing GHG emission is the primary focus of the negotiation among participant countries on post Kyoto Protocol (COP3) after 2013, United Nations Framework Convention on Climate Change / UNFCCC, FCCC. The deadline of the negotiation is COP15 United Nations Climate Change Conference Copenhagen 2009 to be held in Denmark this year.
2. Background of Prime Minister Mr. Hatoyama’s Speech
The target set by the former Prime Minister, Mr. Aso, was 15% reduction vs.2005 (8% reduction vs. 1990); therefore, it is evident that Mr. Hatoyama’s target is extremely aggressive (equivalent to 30% reduction vs. 2005). He had set this target as his policy, mentioned in his speeches in Tokyo earlier this month, and announced to Japanese media on 20th this month, although he may well have been aware that there would be resistances from Japan domestic (industries and economy opinion leaders). His intention is to take the initiative in the upcoming international negotiation settings by advocating aggressive target and supporting measures in his debut diplomacy setting in his own words. (First policy he set was taking the initiative from bureaucrats in making speeches at press conferences etc. so that politicians will be delivering their message in their own words). Such a “performance” in the international community conference symbolizes and delivers strong message on the change in political administration and of his style of politics, which is “politician taking the initiative”.
- 25% Reduction of CO2, Message to be Delivered in Upcoming Diplomatic Settings by Prime Minister Mr.Hatoyama
http://megoyanagi.blogspot.com/2009/09/new-japanese-government-officially.html
- How Japanese Government to Develop New Information Disclosure System with Media, Achieving Objectives & Promoting Interactive Communication with Media
http://megoyanagi.blogspot.com/2009/09/how-japanese-government-ti-develop-new.html
The new target announced is the most aggressive among all participant countries, as is shown from the table below. (Source: September 23 Japanese article from Nikkei, Japan’s leading newspaper specialized in economy and politics; translated by the author).
GHG Emission Reduction Target by 2020 of Developed Countries
(The reason that some target is not specific is that the target is specified under specific condition such as “in the case which other countries advocate sufficient reduction target”)
Country Name / Reduction Rate (%) / Standard Year / Availability of Purchasing Emission Quotas
Japan / 25 / 1990 / yes
The U.S. / 14 / 2005 -
EU / 20 - 30 / 1990 / yes
Canada / 20 / 2006 / -
Russia / 10 - 15 / 1990 / -
Switzerland / 20 - 30 / 1990 / yes
Australia / 5 - 25 / 2000 / yes
* Composed by Nikkei based on documents on framework of the U.N. climate change agreement owned by the agreement offices
3. How Mr. Hatoyama Was Careful In Making His Speech
Prime Minister Mr. Hatoyama was careful in making his speech, not forgetting to be considerate in presenting such an aggressive target. His speech included concrete measures compared with his previous speeches made in Tokyo, Japan, but he deliberately made the expression regarding “reduction compared with which year“ not to be too specific, using the expression such as “if I would state comparing with 1990” instead of “vs. 1990”, taking into consideration of the U.S. who had set the 2005 as the standard year in setting the target. He also was careful to avoid misunderstanding from other countries that Japan is prominent in presenting such an aggressive target. He did so by encouraging major GHG emission countries including the U.S., China and India to actively join in his initiative, advocating his Hatoyama initiatives including the principles below.
Hatoyama Initiatives
1) Public and private sectors of developed countries will contribute to additional capital aid.
2) Rules for measuring the effectiveness of aid will be developed.
3) Co-existence of capital aid and preservation of intellectual property right will be fulfilled.
4. Positive Reactions From The International Community
The speech was highly evaluated, with positive comments from participants. The overall reaction from the international community is positive from each standpoint.
The U.S. gave positive reaction backed up by President Obama’s positive speech in the summit, who said that countermeasure for global warming is the U.S. focus and is resolved to take actions. Regarding the reduction target he emphasized that both developed and developing countries need to take responsibility to achieve the target. He also showed his intention of reaching international consensus on this issue at CPO15 to be held in December in Copenhagen, Denmark. He advocated the need of making consensus among all countries including emerging countries, stating hat the only solution is all major countries collaborate to take measures, while developing countries (that had been emitting global warming gasses) have responsibilities to initiate the discussion.
EU evaluated the Japanese aggressive target. EU had been positive in activating trading CO2 emission quotas among countries with the objective of reducing CO2 emission globally, and therefore they would like to deepen collaboration with Japan and lead debate on this issue in the international community. Mr. Okada, the new Minister of Foreign Affairs, had meetings with Ministers of Foreign Affairs of Sweden, the current chairperson of EU, and Spain. The EU side agreed on the importance of solving climate change issue and highly evaluated Japan’s mid-term target of 25% reduction of CO2 emission vs.1990. In addition, the Minister of Climate Change and Energy of Denmark also evaluated the aggressive target of Japan.
Reactions from developing and emerging countries are subtle but not negative at all. Emerging countries including China and India have been strengthening initiatives to reduce global warming gasses in individual sectors such as generation of electricity. One point to note is that their consistent stance is that it is the developed countries responsible for the past global warming that should commit to the aggressive reduction target to be achieved by 2020.
5. Negative Reactions from Japan Domestic Opinion Leaders
It is true that aggressive target has been triggering technological innovation and creation of new industry and employment, but the reaction from Japan so far has been rather negative. This is because Mr. Hatoyama has not yet sufficiently explained to industries and related opinion leaders that are to bear the burden in accomplishing the target. Another reason is that whether emerging countries such as China would really participate in this international initiative of GHG emission reduction is still under question.
To achieve the target, industries would need to reduce 20-30% GHG emission from manufacturing plants, which would be a big burden. It is possible that industries whose GHG emission is large such as iron and steel would be forced to reduce its production, which could lead to drastic production shift from Japan to overseas. And if sufficient CO2 emission reduction is not achieved, they would need to purchase GHG emission quotas from overseas. This is estimated to cost more than 1 trillion yen, according to a government official.
Reaction from economy and commerce associations is quite negative because the target would clearly mean increase in cost. There have been critical comments, requesting the new government to set target taking into consideration both fairness among the international community and reasonability of Japanese citizen’s burden. In fact, there are series of evidences that many Japanese industries/companies are still suffering from high cost and are negatively impacted by new government’s policy, so it is more than natural that the industry and other opinion leaders would react negatively. The break even point of many manufacturing companies has been deteriorating drastically which means that their cost competitiveness under current circumstances is tough. And the recent stock pricing trend of Japan imply that Japanese companies are already negatively impacted by new government’s policy, and it is natural that they would give negative reaction.
- Drastic Deterioration in Break Even Point Ratio of Japanese Manufacturers May Well Indicate Further Tough Job Market in Japan
http://megoyanagi.blogspot.com/2009/09/drastic-deterioration-in-break-even.html
- New Coalition Government Policy, High Yen and Supply & Demand Oppressing Japanese Companies, Being Behind Worldwide Stock Prices Trend
http://megoyanagi.blogspot.com/2009/09/new-coalition-government-policy-high.html
6. Upcoming Challenges For The New Hatoyama Administration To Overcome
Having succeeded in debut the highest-level international conference advocating an aggressive target, a practical “international commitment”, Prime Minister Hatoyama needs to tackle tough challenges upon returning to Japan. He would need to minimize domestic resistances, and draft and execute action plans to achieve the target, taking initiative of post COP3 debate in the international community.
Achieving the target is not easy even if the international community’s reaction is positive, because even internationally, the entire environment is quite tough. It was when Mr. Obama changed the U.S. policy on this issue of proactively reducing GHG emission to cooperate and make harmony with the international community that the international negotiation for GHG emission reduction started to drive. However, Mr. Obama also has health care reform issue to handle and the U.S. Diet is now focusing on this issue, so the deliberation in the Diet of bill regarding GHG is behind schedule. If there is no concrete progress in the G20 summit started 24th this month, it is quite possible that the targeted consensus to be made in December becomes rather difficult.
The feasibility of capital aid execution by developed countries is still a question. EU would like to make consensus of reduction target leveraging capital aid of a tens of billions of dollars. However, discussions among developed countries, that are to raise funds for the capital aid, are still ongoing, far behind the original timeline.
And, even if Mr. Hatoyama manages to convince Japanese industries, related associations, opinion leaders and citizens, the hurdle is still quite high. According to the estimation developed during the former Aso administration, it is vital to increase the solar cell implementation by 5500% (55 times the current implementation) and shift 90% of new car sales to EV cars in order to achieve 25% reduction in GHG emission vs.1990.
Achieving an extremely aggressive target would require something very drastic, some kind of breakthrough. It is passive and conservative target that people tend to agree to easily but they are usually not so much energized by such target, not coming up with innovative ideas, thus often failing to achieve the target. But history teaches us that although at first people are negative at first because it seems absolutely unrealistic, they finally agree and support extremely aggressive target set under tough environment. Such a target delivered by a leader with passion energizes and wins support from followers and related stakeholders. They will then get united to exert maximum effort, leading to creation of innovation and break through, and as a result being successful in achieving the target.
Reduction in GHG emission is an issue that each one of us on this planet is required to take action for the sustainability of human kind, and it is possible to convert this issue to business opportunities as well. It has potential to drive innovations and creation of new industry and employment, meaning growth in world economy and sustainable growth. It is highly hoped that the international community and all stakeholders in each country come in consensus and take their own responsibility to achieve their respective goal.
* The information on the summit is based on series of articles in Nikkei, Japanese leading newspaper specialized in economy and politics, dated September 23, 2009.
Mr. Hatoyama, the new Japanese Prime Minister, made a speech pledging Japan’s mid-term target of 25% GHG (global greenhouse gas = CO2) emission reduction vs.1990 by 2020 at the United Nation’s Climate Change Summit held on September 22 in New York, his debut to the diplomatic setting. He also advocated his initiative of providing to developing and emerging countries Japan’s energy saving technologies and capital aid to help them drive global warming countermeasures. His speech in English won great applause and appreciation in the summit, and it is probably the first time that a speech made by a Japanese Prime Minister won such an applause. However, his aggressive target has not been provoking positive reactions back in Japan.
1. Facts On GHG Emission Reduction Mid-Term Target
Mid-term target of reducing GHG emission is the primary focus of the negotiation among participant countries on post Kyoto Protocol (COP3) after 2013, United Nations Framework Convention on Climate Change / UNFCCC, FCCC. The deadline of the negotiation is COP15 United Nations Climate Change Conference Copenhagen 2009 to be held in Denmark this year.
2. Background of Prime Minister Mr. Hatoyama’s Speech
The target set by the former Prime Minister, Mr. Aso, was 15% reduction vs.2005 (8% reduction vs. 1990); therefore, it is evident that Mr. Hatoyama’s target is extremely aggressive (equivalent to 30% reduction vs. 2005). He had set this target as his policy, mentioned in his speeches in Tokyo earlier this month, and announced to Japanese media on 20th this month, although he may well have been aware that there would be resistances from Japan domestic (industries and economy opinion leaders). His intention is to take the initiative in the upcoming international negotiation settings by advocating aggressive target and supporting measures in his debut diplomacy setting in his own words. (First policy he set was taking the initiative from bureaucrats in making speeches at press conferences etc. so that politicians will be delivering their message in their own words). Such a “performance” in the international community conference symbolizes and delivers strong message on the change in political administration and of his style of politics, which is “politician taking the initiative”.
- 25% Reduction of CO2, Message to be Delivered in Upcoming Diplomatic Settings by Prime Minister Mr.Hatoyama
http://megoyanagi.blogspot.com/2009/09/new-japanese-government-officially.html
- How Japanese Government to Develop New Information Disclosure System with Media, Achieving Objectives & Promoting Interactive Communication with Media
http://megoyanagi.blogspot.com/2009/09/how-japanese-government-ti-develop-new.html
The new target announced is the most aggressive among all participant countries, as is shown from the table below. (Source: September 23 Japanese article from Nikkei, Japan’s leading newspaper specialized in economy and politics; translated by the author).
GHG Emission Reduction Target by 2020 of Developed Countries
(The reason that some target is not specific is that the target is specified under specific condition such as “in the case which other countries advocate sufficient reduction target”)
Country Name / Reduction Rate (%) / Standard Year / Availability of Purchasing Emission Quotas
Japan / 25 / 1990 / yes
The U.S. / 14 / 2005 -
EU / 20 - 30 / 1990 / yes
Canada / 20 / 2006 / -
Russia / 10 - 15 / 1990 / -
Switzerland / 20 - 30 / 1990 / yes
Australia / 5 - 25 / 2000 / yes
* Composed by Nikkei based on documents on framework of the U.N. climate change agreement owned by the agreement offices
3. How Mr. Hatoyama Was Careful In Making His Speech
Prime Minister Mr. Hatoyama was careful in making his speech, not forgetting to be considerate in presenting such an aggressive target. His speech included concrete measures compared with his previous speeches made in Tokyo, Japan, but he deliberately made the expression regarding “reduction compared with which year“ not to be too specific, using the expression such as “if I would state comparing with 1990” instead of “vs. 1990”, taking into consideration of the U.S. who had set the 2005 as the standard year in setting the target. He also was careful to avoid misunderstanding from other countries that Japan is prominent in presenting such an aggressive target. He did so by encouraging major GHG emission countries including the U.S., China and India to actively join in his initiative, advocating his Hatoyama initiatives including the principles below.
Hatoyama Initiatives
1) Public and private sectors of developed countries will contribute to additional capital aid.
2) Rules for measuring the effectiveness of aid will be developed.
3) Co-existence of capital aid and preservation of intellectual property right will be fulfilled.
4. Positive Reactions From The International Community
The speech was highly evaluated, with positive comments from participants. The overall reaction from the international community is positive from each standpoint.
The U.S. gave positive reaction backed up by President Obama’s positive speech in the summit, who said that countermeasure for global warming is the U.S. focus and is resolved to take actions. Regarding the reduction target he emphasized that both developed and developing countries need to take responsibility to achieve the target. He also showed his intention of reaching international consensus on this issue at CPO15 to be held in December in Copenhagen, Denmark. He advocated the need of making consensus among all countries including emerging countries, stating hat the only solution is all major countries collaborate to take measures, while developing countries (that had been emitting global warming gasses) have responsibilities to initiate the discussion.
EU evaluated the Japanese aggressive target. EU had been positive in activating trading CO2 emission quotas among countries with the objective of reducing CO2 emission globally, and therefore they would like to deepen collaboration with Japan and lead debate on this issue in the international community. Mr. Okada, the new Minister of Foreign Affairs, had meetings with Ministers of Foreign Affairs of Sweden, the current chairperson of EU, and Spain. The EU side agreed on the importance of solving climate change issue and highly evaluated Japan’s mid-term target of 25% reduction of CO2 emission vs.1990. In addition, the Minister of Climate Change and Energy of Denmark also evaluated the aggressive target of Japan.
Reactions from developing and emerging countries are subtle but not negative at all. Emerging countries including China and India have been strengthening initiatives to reduce global warming gasses in individual sectors such as generation of electricity. One point to note is that their consistent stance is that it is the developed countries responsible for the past global warming that should commit to the aggressive reduction target to be achieved by 2020.
5. Negative Reactions from Japan Domestic Opinion Leaders
It is true that aggressive target has been triggering technological innovation and creation of new industry and employment, but the reaction from Japan so far has been rather negative. This is because Mr. Hatoyama has not yet sufficiently explained to industries and related opinion leaders that are to bear the burden in accomplishing the target. Another reason is that whether emerging countries such as China would really participate in this international initiative of GHG emission reduction is still under question.
To achieve the target, industries would need to reduce 20-30% GHG emission from manufacturing plants, which would be a big burden. It is possible that industries whose GHG emission is large such as iron and steel would be forced to reduce its production, which could lead to drastic production shift from Japan to overseas. And if sufficient CO2 emission reduction is not achieved, they would need to purchase GHG emission quotas from overseas. This is estimated to cost more than 1 trillion yen, according to a government official.
Reaction from economy and commerce associations is quite negative because the target would clearly mean increase in cost. There have been critical comments, requesting the new government to set target taking into consideration both fairness among the international community and reasonability of Japanese citizen’s burden. In fact, there are series of evidences that many Japanese industries/companies are still suffering from high cost and are negatively impacted by new government’s policy, so it is more than natural that the industry and other opinion leaders would react negatively. The break even point of many manufacturing companies has been deteriorating drastically which means that their cost competitiveness under current circumstances is tough. And the recent stock pricing trend of Japan imply that Japanese companies are already negatively impacted by new government’s policy, and it is natural that they would give negative reaction.
- Drastic Deterioration in Break Even Point Ratio of Japanese Manufacturers May Well Indicate Further Tough Job Market in Japan
http://megoyanagi.blogspot.com/2009/09/drastic-deterioration-in-break-even.html
- New Coalition Government Policy, High Yen and Supply & Demand Oppressing Japanese Companies, Being Behind Worldwide Stock Prices Trend
http://megoyanagi.blogspot.com/2009/09/new-coalition-government-policy-high.html
6. Upcoming Challenges For The New Hatoyama Administration To Overcome
Having succeeded in debut the highest-level international conference advocating an aggressive target, a practical “international commitment”, Prime Minister Hatoyama needs to tackle tough challenges upon returning to Japan. He would need to minimize domestic resistances, and draft and execute action plans to achieve the target, taking initiative of post COP3 debate in the international community.
Achieving the target is not easy even if the international community’s reaction is positive, because even internationally, the entire environment is quite tough. It was when Mr. Obama changed the U.S. policy on this issue of proactively reducing GHG emission to cooperate and make harmony with the international community that the international negotiation for GHG emission reduction started to drive. However, Mr. Obama also has health care reform issue to handle and the U.S. Diet is now focusing on this issue, so the deliberation in the Diet of bill regarding GHG is behind schedule. If there is no concrete progress in the G20 summit started 24th this month, it is quite possible that the targeted consensus to be made in December becomes rather difficult.
The feasibility of capital aid execution by developed countries is still a question. EU would like to make consensus of reduction target leveraging capital aid of a tens of billions of dollars. However, discussions among developed countries, that are to raise funds for the capital aid, are still ongoing, far behind the original timeline.
And, even if Mr. Hatoyama manages to convince Japanese industries, related associations, opinion leaders and citizens, the hurdle is still quite high. According to the estimation developed during the former Aso administration, it is vital to increase the solar cell implementation by 5500% (55 times the current implementation) and shift 90% of new car sales to EV cars in order to achieve 25% reduction in GHG emission vs.1990.
Achieving an extremely aggressive target would require something very drastic, some kind of breakthrough. It is passive and conservative target that people tend to agree to easily but they are usually not so much energized by such target, not coming up with innovative ideas, thus often failing to achieve the target. But history teaches us that although at first people are negative at first because it seems absolutely unrealistic, they finally agree and support extremely aggressive target set under tough environment. Such a target delivered by a leader with passion energizes and wins support from followers and related stakeholders. They will then get united to exert maximum effort, leading to creation of innovation and break through, and as a result being successful in achieving the target.
Reduction in GHG emission is an issue that each one of us on this planet is required to take action for the sustainability of human kind, and it is possible to convert this issue to business opportunities as well. It has potential to drive innovations and creation of new industry and employment, meaning growth in world economy and sustainable growth. It is highly hoped that the international community and all stakeholders in each country come in consensus and take their own responsibility to achieve their respective goal.
* The information on the summit is based on series of articles in Nikkei, Japanese leading newspaper specialized in economy and politics, dated September 23, 2009.
New Press Conference Policy of Japanese Government
Wednesday, September 23, 2009 – Osaka, Japan
The first issue tackled by the new Japanese government led by new Prime Minister, Mr. Hatoyama, upon kick-off his new administration, was announcing the change in press announcement policy at the night of September 16, the first day of the new administration. The objective is to take initiatives from the bureaucrats. This has provoked hot debate among journalists and media.
1. How the press announcement was done and how government information used to be delivered to media
Press conference spoken by the head of ministries are held regularly and ad-hoc basis (e.g. emergency announcement), and it was bureaucrats that composed speeches; the spokespersons simply read the script. Also, major ministries had been regularly holding press conferences, speakers being administrative vice minister, assistant vice minister and chief of bureau, i.e. bureaucrats. Such press conferences can be covered specifying the speaker. Major ministries had also been regularly holding round-table conference by the same speakers. With this system, the news is covered by not specifying the speaker so usually such expression as “executive of so so ministry” as the speaker is used.
In addition, that some reporters regularly rode with administrative vice minister on his way to work to “communicate” and inform the essence to other reporters because they cannot possibly have enough time to communicate with administrative vice ministers even though they visit their house before going to work.
This system may seem “collusion” between the bureaucrats and the media, but it is true that this system was established as a result of long-year coordination of public (i.e. government) and media. Government has accountability and responsibility of information disclosure. Media has responsibility of answering to citizen’s right to know about the government. And “press club” exists as the interaction of the responsibility of the two parties.
The existence of press club is valid even though there has been some criticism, and what is critical question was bureaucrats had 100% control over information disclosure to the media and citizens.
2. The objective of new policy of press announcement and communication with media is to exclude bureaucrats
In the night of September 16, Mr. Hirano, the Chief Secretary Cabinet, announced the policy that “under the new government, no more press conferences by bureaucrats will be held”. This means that in the future, press conference will be only by politicians, i.e. ministers, deputy ministers and ministerial aids, with the objective of the new press conference policy is to take initiative from the bureaucrats. Briefing such as background explanation will not be included in this regulation. With this announcement, some ministries actually decided to abolish regular press conference spoken by the minister. Media’s reaction to the policy was negative, with such comments as “news control”.
The biggest merit of the policy is fulfillment of the objective, i.e. politicians taking the initiative to change Japan. Japanese government faced this challenge for many years and had been one of the biggest issues and therefore the new policy can be highly evaluated and appreciated. In addition, the politicians will be speaking in their own words to deliver their own strong message with passion. Speech in the speaker’s own words would also enhance speaker’s ownership, accountability and commitment. So speeches would surely be convincing, unlike most previous speakers of the press conference who read the script in monotone, even incorrectly in a few cases.
The demerits of the policy are the increase in the workload of politicians (speakers), question of whether they are capable of explaining details the bureaucrats had been explaining to the media, and communication to the media being non-interactive and less intensive compared to what it had been. Bureaucrats had been communicating intensively on the daily basis, so too much control of communication between bureaucrats and media could refrain two parties from communicating frankly, interactively and intensively. This could lead to between the two parties may well lead to possible decrease in the quantity and quality (including background and nuance) of information disclosed to the media compared to what it had been.
3. Ideal information disclosure system is expected to be created and developed by both the new government and media
Strategic and effective information disclosure of the government to communicate interactively with the media and citizens would greatly contribute to driving change, the objective and mission of the new government. From that perspective, it seems evident that the old press conference system needs review and improvement, and it is quite logical that this issue of press announcement policy, one of the most important and symbolic issue, was handled first.
There is no “the only correct solution” as in all issues, and it is highly desired that the new government and media collaborate to develop an ideal total information closure system including official press conference and unofficial settings on the daily basis. Such a new system would fulfill the responsibilities of both two parties (government and media), and achieve the new government’s objectives of the new policy announcement while accepting maximum freedom of research, reporting and expressing oneself of media.
* Information on the past press announcement and how the government communicated with the media is from a Japanese column which was posted on Nikkei PB web site on September 17
http://www.nikkeibp.co.jp/article/column/20090917/182230/
The first issue tackled by the new Japanese government led by new Prime Minister, Mr. Hatoyama, upon kick-off his new administration, was announcing the change in press announcement policy at the night of September 16, the first day of the new administration. The objective is to take initiatives from the bureaucrats. This has provoked hot debate among journalists and media.
1. How the press announcement was done and how government information used to be delivered to media
Press conference spoken by the head of ministries are held regularly and ad-hoc basis (e.g. emergency announcement), and it was bureaucrats that composed speeches; the spokespersons simply read the script. Also, major ministries had been regularly holding press conferences, speakers being administrative vice minister, assistant vice minister and chief of bureau, i.e. bureaucrats. Such press conferences can be covered specifying the speaker. Major ministries had also been regularly holding round-table conference by the same speakers. With this system, the news is covered by not specifying the speaker so usually such expression as “executive of so so ministry” as the speaker is used.
In addition, that some reporters regularly rode with administrative vice minister on his way to work to “communicate” and inform the essence to other reporters because they cannot possibly have enough time to communicate with administrative vice ministers even though they visit their house before going to work.
This system may seem “collusion” between the bureaucrats and the media, but it is true that this system was established as a result of long-year coordination of public (i.e. government) and media. Government has accountability and responsibility of information disclosure. Media has responsibility of answering to citizen’s right to know about the government. And “press club” exists as the interaction of the responsibility of the two parties.
The existence of press club is valid even though there has been some criticism, and what is critical question was bureaucrats had 100% control over information disclosure to the media and citizens.
2. The objective of new policy of press announcement and communication with media is to exclude bureaucrats
In the night of September 16, Mr. Hirano, the Chief Secretary Cabinet, announced the policy that “under the new government, no more press conferences by bureaucrats will be held”. This means that in the future, press conference will be only by politicians, i.e. ministers, deputy ministers and ministerial aids, with the objective of the new press conference policy is to take initiative from the bureaucrats. Briefing such as background explanation will not be included in this regulation. With this announcement, some ministries actually decided to abolish regular press conference spoken by the minister. Media’s reaction to the policy was negative, with such comments as “news control”.
The biggest merit of the policy is fulfillment of the objective, i.e. politicians taking the initiative to change Japan. Japanese government faced this challenge for many years and had been one of the biggest issues and therefore the new policy can be highly evaluated and appreciated. In addition, the politicians will be speaking in their own words to deliver their own strong message with passion. Speech in the speaker’s own words would also enhance speaker’s ownership, accountability and commitment. So speeches would surely be convincing, unlike most previous speakers of the press conference who read the script in monotone, even incorrectly in a few cases.
The demerits of the policy are the increase in the workload of politicians (speakers), question of whether they are capable of explaining details the bureaucrats had been explaining to the media, and communication to the media being non-interactive and less intensive compared to what it had been. Bureaucrats had been communicating intensively on the daily basis, so too much control of communication between bureaucrats and media could refrain two parties from communicating frankly, interactively and intensively. This could lead to between the two parties may well lead to possible decrease in the quantity and quality (including background and nuance) of information disclosed to the media compared to what it had been.
3. Ideal information disclosure system is expected to be created and developed by both the new government and media
Strategic and effective information disclosure of the government to communicate interactively with the media and citizens would greatly contribute to driving change, the objective and mission of the new government. From that perspective, it seems evident that the old press conference system needs review and improvement, and it is quite logical that this issue of press announcement policy, one of the most important and symbolic issue, was handled first.
There is no “the only correct solution” as in all issues, and it is highly desired that the new government and media collaborate to develop an ideal total information closure system including official press conference and unofficial settings on the daily basis. Such a new system would fulfill the responsibilities of both two parties (government and media), and achieve the new government’s objectives of the new policy announcement while accepting maximum freedom of research, reporting and expressing oneself of media.
* Information on the past press announcement and how the government communicated with the media is from a Japanese column which was posted on Nikkei PB web site on September 17
http://www.nikkeibp.co.jp/article/column/20090917/182230/
2009年9月22日火曜日
New Budgeting Policy of Japanese Government
Tuesday, September 22, 2009 – Osaka, Japan
Nikkei, Japan’s leading newspaper specialized in economy and politics, reported on September 21 that the new Japanese government established a new budgeting policy of practically implementing multiple-year appropriation from 2010. The framework of the policy will be developed by a committed to be established within the National Strategy Bureau headed by Mr. Kan, and is planned to be submitted in the middle or end of October. There would be no legislative problem in “practical” implementation of the new budgeting system. There are three main budgeting revisions, all of which are designed to improve the effective use of budget.
First revision is practical implementation of multiple-year appropriation. The long custom has been forcing to use up the budget for the fiscal year because of one-fiscal year budget system. This system led to long-year custom of unnecessary road work performed only to use up the fiscal year budget so that the budget can be acquired the following fiscal year. What the government is trying to do is implementing a multiple-year appropriation concept and framework of the U.K., that enables the remaining fiscal budget to be carried over to the following year. In line with this, the government is also planning to establish a foundation and/or revising law(s).
Second revision is abolition of “ceiling” system that started in 1961 as budget request framework. Currently each ministry requests budget by each related expenses such as public work projects and social security according to budgetary request guideline. Instead, the National Strategy Bureau is to prioritize business. The Bureau will compose revenue framework from sources including the government’s economic forecast, and business whose budget exceed this framework could be carried over to the following year.
Third revision is improving budget inspection system. Currently Ministries of Finance and General Affairs and Board of Audit inspect the waste and validity of budget. The inspection will be changed to politics-driven, and achievement progress of the numbers based on the policy set at the beginning of the fiscal year will be monitored. And in the future, the government is to study to implement a system linking this inspection and monitoring with personnel evaluation of government officials. An example is comparing number of prospect users of airport and roads before construction and the actual number of users after the construction, and should a big gap between the two be found, it would be reflected to the personnel evaluation of government officials concerned.
To the author, in short, the three revisions are implementing systems proliferating in many private companies. In many companies, Corporate Planning or Business Plan Analysis department (equivalent to the National Strategy Bureau in the new government) prioritizes business and leads budgeting, although how the top-down and bottom-up are mixed depends on the company.
Mid-term and/or long-term strategy, road map and plan is developed first aligning with the company’s mission and vision, which is then broken down to annual business plan, and quarterly/monthly plan. Performance is monitored regularly and together with the latest forecast, adjustment is made flexibly. And usually MBO (Management by Objectives) is used, linking the goal of company/organization and individual, and reviewing what extent the team and individual target is achieved as well as processes (value & behaviour) of achievement.
The new budgeting system is a solving problem of root cause of such issue as the recent interdiction of additional appropriation for 2009 that do not contribute to business environment improvement. The interdiction has triggered big debate and confusion which is not a surprise and its feasibility is question. With the new revised budgeting system, this kind of issue should not occur.
The long-year systems and customs of public sector are unbelievable for people in the private sector. The new policy and system may have negative impact on some industries and companies such as construction, but in general, it should have positive impact from total optimization perspective. It is highly desired that the new policy is implemented without fail for effective use of budget and higher productivity of the government, meaning growth of the nation and better life of all citizens.
Nikkei, Japan’s leading newspaper specialized in economy and politics, reported on September 21 that the new Japanese government established a new budgeting policy of practically implementing multiple-year appropriation from 2010. The framework of the policy will be developed by a committed to be established within the National Strategy Bureau headed by Mr. Kan, and is planned to be submitted in the middle or end of October. There would be no legislative problem in “practical” implementation of the new budgeting system. There are three main budgeting revisions, all of which are designed to improve the effective use of budget.
First revision is practical implementation of multiple-year appropriation. The long custom has been forcing to use up the budget for the fiscal year because of one-fiscal year budget system. This system led to long-year custom of unnecessary road work performed only to use up the fiscal year budget so that the budget can be acquired the following fiscal year. What the government is trying to do is implementing a multiple-year appropriation concept and framework of the U.K., that enables the remaining fiscal budget to be carried over to the following year. In line with this, the government is also planning to establish a foundation and/or revising law(s).
Second revision is abolition of “ceiling” system that started in 1961 as budget request framework. Currently each ministry requests budget by each related expenses such as public work projects and social security according to budgetary request guideline. Instead, the National Strategy Bureau is to prioritize business. The Bureau will compose revenue framework from sources including the government’s economic forecast, and business whose budget exceed this framework could be carried over to the following year.
Third revision is improving budget inspection system. Currently Ministries of Finance and General Affairs and Board of Audit inspect the waste and validity of budget. The inspection will be changed to politics-driven, and achievement progress of the numbers based on the policy set at the beginning of the fiscal year will be monitored. And in the future, the government is to study to implement a system linking this inspection and monitoring with personnel evaluation of government officials. An example is comparing number of prospect users of airport and roads before construction and the actual number of users after the construction, and should a big gap between the two be found, it would be reflected to the personnel evaluation of government officials concerned.
To the author, in short, the three revisions are implementing systems proliferating in many private companies. In many companies, Corporate Planning or Business Plan Analysis department (equivalent to the National Strategy Bureau in the new government) prioritizes business and leads budgeting, although how the top-down and bottom-up are mixed depends on the company.
Mid-term and/or long-term strategy, road map and plan is developed first aligning with the company’s mission and vision, which is then broken down to annual business plan, and quarterly/monthly plan. Performance is monitored regularly and together with the latest forecast, adjustment is made flexibly. And usually MBO (Management by Objectives) is used, linking the goal of company/organization and individual, and reviewing what extent the team and individual target is achieved as well as processes (value & behaviour) of achievement.
The new budgeting system is a solving problem of root cause of such issue as the recent interdiction of additional appropriation for 2009 that do not contribute to business environment improvement. The interdiction has triggered big debate and confusion which is not a surprise and its feasibility is question. With the new revised budgeting system, this kind of issue should not occur.
The long-year systems and customs of public sector are unbelievable for people in the private sector. The new policy and system may have negative impact on some industries and companies such as construction, but in general, it should have positive impact from total optimization perspective. It is highly desired that the new policy is implemented without fail for effective use of budget and higher productivity of the government, meaning growth of the nation and better life of all citizens.
Japan Postal Administration – Drastic Policy Change from Former Koizumi Administration
Japan Postal Administration Business to be Revised – The Government Expected to Successfully Coordinate with Related Parties and Overcome Challenges
Tuesday, September 22, 2009 – Osaka, Japan
Nikkei, Japan's leading newspaper specialized in economy and politics, reported on September 21 that the new Hatoyama Administration earnestly started to revise Postal Administration Business that former Koizumi Administration had been aggressively initiating, and it is clear that this would give direct and extreme impact on related industries/companies operating in Japan.
Mr. Kamei, the new Minister of Posts and Telecommunications as well as Finance explicitly said his policy that bill of freezing selling stocks of Postal Administration Business will be submitted in the upcoming ad-hoc Diet to be held this autumn. This means that the future direction of the business revision will be composed as “Fundamental Law of Postal Administration Business Reform”, including how divisional companies are to be formed and how the government is to hold stocks.
Postal Administration Business of Japan, consisting of 4 businesses of post offices, postal business, banking/finance, and insurance, had been privatized in October 2008, and the selling of stocks held by the government is to start as soon as the latter half of 2010 and to complete in the end of September 2017 (government to remain holding 1/3 of stocks for post offices and postal business).
This was the biggest topic and initiative under Koizumi Administration. It is because of this timeline that Mr. Kamei is in a hurry to submit the bill. And the reason for freezing the selling of stocks is anxiety of maintaining post office network. Post office management is dependent on banking/finance and insurance business because their revenue is generated from commission fee of contract business from the two businesses. This means that if relationship in capital is abolished, it is possible that business contract is cancelled. The new government is also to review services of postal administration business.
There are many possible options regarding how divisional companies are to be formed and how the government is to hold stocks, which are the discussion points in drafting the bill. It may well take time to come to an optimum option with consensus with all related parties; in fact, it is not clear whether related parties can really discuss in detail to come to concrete action plan in limited time. Having said that, what is quite possible is that the government is to invest 50%+ of stocks in order to maintain control of the management.
With the above, it is quite possible that freedom of Postal Administration management such as business alliance and starting new business shrinks, and it would become more difficult to a develop sustainable business model while successfully coordinating with industries that are to be directly impacted. Such industries/companies are of course banking/finance, insurance, postal and telecommunication industries/companies, the most impacted being banking/finance industry/companies. This is because the banking/finance branch network and business of Postal Administration is as big as the total of all Japanese major financial institutions of private sector, and although at present the limit of saving at Postal Administration banking/finance is 10 million yen (no limit for private sector) to control the power of Postal Administration.
However, government’s control over Postal Administration would imply unbalanced power between public sector of Postal Administration and private sector. For this reason, successful coordination of competition requirements with private institutions would be the key.
To the author, this issue is closely linked with the complicated issue of Mr. Nishikawa, who became the head of the privatized Postal Administration Business in October 2008, and whether he should resign or not had been a big issue, leading to resignation of Mr. Hatoyama, the former Minister of General Affairs (brother of the new Prime Minister), and still is under hot discussion by the new government members. It is quite possible that the new policy intends also to solve this problem.
It is highly desired that the government drafts the policy and action plan that would lead to sustainable growth for all parties thus building Win-Win relationship with all related parties with fair process; i.e. through discussion and coordination with related parties. The bill drafted with such process would surely be successfully passed in the ad-hoc Diet to become an official law, and executed smoothly.
Tuesday, September 22, 2009 – Osaka, Japan
Nikkei, Japan's leading newspaper specialized in economy and politics, reported on September 21 that the new Hatoyama Administration earnestly started to revise Postal Administration Business that former Koizumi Administration had been aggressively initiating, and it is clear that this would give direct and extreme impact on related industries/companies operating in Japan.
Mr. Kamei, the new Minister of Posts and Telecommunications as well as Finance explicitly said his policy that bill of freezing selling stocks of Postal Administration Business will be submitted in the upcoming ad-hoc Diet to be held this autumn. This means that the future direction of the business revision will be composed as “Fundamental Law of Postal Administration Business Reform”, including how divisional companies are to be formed and how the government is to hold stocks.
Postal Administration Business of Japan, consisting of 4 businesses of post offices, postal business, banking/finance, and insurance, had been privatized in October 2008, and the selling of stocks held by the government is to start as soon as the latter half of 2010 and to complete in the end of September 2017 (government to remain holding 1/3 of stocks for post offices and postal business).
This was the biggest topic and initiative under Koizumi Administration. It is because of this timeline that Mr. Kamei is in a hurry to submit the bill. And the reason for freezing the selling of stocks is anxiety of maintaining post office network. Post office management is dependent on banking/finance and insurance business because their revenue is generated from commission fee of contract business from the two businesses. This means that if relationship in capital is abolished, it is possible that business contract is cancelled. The new government is also to review services of postal administration business.
There are many possible options regarding how divisional companies are to be formed and how the government is to hold stocks, which are the discussion points in drafting the bill. It may well take time to come to an optimum option with consensus with all related parties; in fact, it is not clear whether related parties can really discuss in detail to come to concrete action plan in limited time. Having said that, what is quite possible is that the government is to invest 50%+ of stocks in order to maintain control of the management.
With the above, it is quite possible that freedom of Postal Administration management such as business alliance and starting new business shrinks, and it would become more difficult to a develop sustainable business model while successfully coordinating with industries that are to be directly impacted. Such industries/companies are of course banking/finance, insurance, postal and telecommunication industries/companies, the most impacted being banking/finance industry/companies. This is because the banking/finance branch network and business of Postal Administration is as big as the total of all Japanese major financial institutions of private sector, and although at present the limit of saving at Postal Administration banking/finance is 10 million yen (no limit for private sector) to control the power of Postal Administration.
However, government’s control over Postal Administration would imply unbalanced power between public sector of Postal Administration and private sector. For this reason, successful coordination of competition requirements with private institutions would be the key.
To the author, this issue is closely linked with the complicated issue of Mr. Nishikawa, who became the head of the privatized Postal Administration Business in October 2008, and whether he should resign or not had been a big issue, leading to resignation of Mr. Hatoyama, the former Minister of General Affairs (brother of the new Prime Minister), and still is under hot discussion by the new government members. It is quite possible that the new policy intends also to solve this problem.
It is highly desired that the government drafts the policy and action plan that would lead to sustainable growth for all parties thus building Win-Win relationship with all related parties with fair process; i.e. through discussion and coordination with related parties. The bill drafted with such process would surely be successfully passed in the ad-hoc Diet to become an official law, and executed smoothly.
2009年9月21日月曜日
Reality of Aging Society Of Japan
Monday, September 21, 2009 – Osaka, Japan
The third Monday of September is a national holiday of “Respect-for-Senior Citizens Day” in Japan. There have been articles in the newspapers and TV news related to aging society, depicting the reality of the aging society of Japan, whose average age for female is the oldest and is one of the country whose problem of aging society is severe.
Nikkei, Japan's leading newspaper specialized in economy and politics, today reported that according to the survey implemented and analyzed by Ministry of Internal Affairs and Communications (MIC) on estimated population as of September 15, senior citizens above 65 years old increased from 2008 by 800,000 people reaching the highest in the history which is 28.98 million people, even though population of 15-64 years old decreased by 760,000 people from 2008 to 81.56 million people. This is 22.7% of the total population, which is 0.6 point increase from 2008. The female senior citizen over 65 years old is more than 25% of the total population.
Moreover, the household with such senior citizen is 18.21 million, which is increase by 1.8 million from 5 years ago. This includes 4.14 households in which a senior citizen lives on his/her own, meaning higher possibility of solitary death.
TV news this morning reported a few senior citizens full of vitality, both physically and mentally. A 103 year old man looks after himself, leading extremely healthy live including shaving and taking a towel bath of cold water which is known as very good for health. His dining habit is also good; he eats balanced diet cuisines of appropriate quantity, and chews at least 30 times before swallowing. He is fluent in 5 languages and enjoys calligraphy. He says that the secret of being physically and mentally healthy is having something to live for.
A woman of 87 year old is, surprisingly, an active athlete, specialized in 200 metres. She is a record holder of 200 metres for Japanese women over 65 years old of approximately 46 seconds. She started to sprint in earnest when a relay member was desperately needed in a sports day when she was 70 years old and she joined extemporarily. Since then, she has been doing training to sprint everyday and participating in various competitions, giving smashing results. She says that she would like to keep on running as long as she is physically healthy.
The aging society is a big issue in Japan. Because of this issue, the former government established a health care system for the latter-stage elderly in 2008, which had been a topic under hot discussion in the General Election held in August 30. Mr. Nagatsuma, the new Health, Labour and Welfare Minister (nicknamed “Mr. Pension” because he had been asking tough questions on pension before the new government was kicked off), announced recently that this policy will be change/terminated.
The new policy would have direct impact on the senior citizens and on healthcare industry. Of course, the aging society would have impact on overall society, economy, and labour market. Whatever the policy and regulation of the new government may be, it seems that senior citizens cannot simply segmented by their age group and more flexibility is desired.
The third Monday of September is a national holiday of “Respect-for-Senior Citizens Day” in Japan. There have been articles in the newspapers and TV news related to aging society, depicting the reality of the aging society of Japan, whose average age for female is the oldest and is one of the country whose problem of aging society is severe.
Nikkei, Japan's leading newspaper specialized in economy and politics, today reported that according to the survey implemented and analyzed by Ministry of Internal Affairs and Communications (MIC) on estimated population as of September 15, senior citizens above 65 years old increased from 2008 by 800,000 people reaching the highest in the history which is 28.98 million people, even though population of 15-64 years old decreased by 760,000 people from 2008 to 81.56 million people. This is 22.7% of the total population, which is 0.6 point increase from 2008. The female senior citizen over 65 years old is more than 25% of the total population.
Moreover, the household with such senior citizen is 18.21 million, which is increase by 1.8 million from 5 years ago. This includes 4.14 households in which a senior citizen lives on his/her own, meaning higher possibility of solitary death.
TV news this morning reported a few senior citizens full of vitality, both physically and mentally. A 103 year old man looks after himself, leading extremely healthy live including shaving and taking a towel bath of cold water which is known as very good for health. His dining habit is also good; he eats balanced diet cuisines of appropriate quantity, and chews at least 30 times before swallowing. He is fluent in 5 languages and enjoys calligraphy. He says that the secret of being physically and mentally healthy is having something to live for.
A woman of 87 year old is, surprisingly, an active athlete, specialized in 200 metres. She is a record holder of 200 metres for Japanese women over 65 years old of approximately 46 seconds. She started to sprint in earnest when a relay member was desperately needed in a sports day when she was 70 years old and she joined extemporarily. Since then, she has been doing training to sprint everyday and participating in various competitions, giving smashing results. She says that she would like to keep on running as long as she is physically healthy.
The aging society is a big issue in Japan. Because of this issue, the former government established a health care system for the latter-stage elderly in 2008, which had been a topic under hot discussion in the General Election held in August 30. Mr. Nagatsuma, the new Health, Labour and Welfare Minister (nicknamed “Mr. Pension” because he had been asking tough questions on pension before the new government was kicked off), announced recently that this policy will be change/terminated.
The new policy would have direct impact on the senior citizens and on healthcare industry. Of course, the aging society would have impact on overall society, economy, and labour market. Whatever the policy and regulation of the new government may be, it seems that senior citizens cannot simply segmented by their age group and more flexibility is desired.
2009年9月20日日曜日
25% CO2 Reduction, Message to be Delivered in Upcoming Diplomacic Settings by Prime Minister Mr.Hatoyama - What Does This Mean?
Sunday, September 20, 2009 – Osaka, Japan
The Chief Cabinet Secretary of the new Japanese government, Mr. Hirano, announced today which was just broadcasted in the 9 o’clock evening news, that 25% reduction of CO2 emission vs. 1990 is to be fulfilled by 2020. Mr. Hirano also said that this message will be strongly delivered by Mr. Hatoyama, the new prime minister of Japan, in his diplomacy debut, his first visit to the U.S. to meet President Obama, and at the United Nations General Assembly.
This policy was clearly stated in the manifest of the DPJ, the current ruling party, and although it is in line with the global trend of co-existence with the global environment, it is possible that this policy will provoke hot discussions and resistance from the industry world and Japanese citizens.
This policy would mean possible severe regulation and allocation of reduction in CO2 emission to each industry sector and companies operating in Japan (including Japan branch of foreign capital companies). Automobile companies have already taken this trend as a business opportunity and started aggressively to develop and market EV cars. And electronics companies are focusing on environmentally friendly energy and battery business and on developing and marketing eco (environmentally friendly, energy saving and economic) electric appliances. Such automobile and electronic companies had been recently benefiting from the old ruling party’s policy of “Eco Point”, leading to increase in sales. However, in general, severe regulation and allocation of reduction in CO2 emission would be a burden and negatively impact from cost perspective. This negative impact has already been seen reflected in the stock price, as stated in the article posted on September 19.
New Coalition Government Policy, High Yen and Supply & Demand Oppressing Japanese Companies Resulting in Behind Worldwide High Stock Prices Trend
This policy should drive energy saving in all settings (public and private; work place, public places and home settings), and therefore minimum use of electricity including further warm and cool biz is likely to be promoted. This kind of promotion at workplace may well encourage employees to improve productivity and go home as early as possible which also may mean work-life balance and further driving energy saving at public places and home settings. But too much promotion could lead to negative impact, such as debate leading to refraining illumination at amusement and shopping quarters and people would be deprived of entertainment at night and the town would lose “vigour”.
The Japanese new government needs to come into consensus on this policy with the industry world opinion leaders and win the positive public opinion. The government surely would not want to drop its supporting rate with this issue; from Mr. Koizumi’s reform, it is apparent that the “life line” of the Hatoyama government to successfully solve many problems to change Japan. As in the previous article posted on September 6,
The DPJ Expected to Lead Japan to Change Similarly to Turnaround of Ailing Companies but with More Dynamism and Complexity
this policy is not highly evaluated by the governor and citizen so it may well be tough for the new government to convince key members, but this process cannot be ignored, similarly to turnaround and change management of global companies.
The Chief Cabinet Secretary of the new Japanese government, Mr. Hirano, announced today which was just broadcasted in the 9 o’clock evening news, that 25% reduction of CO2 emission vs. 1990 is to be fulfilled by 2020. Mr. Hirano also said that this message will be strongly delivered by Mr. Hatoyama, the new prime minister of Japan, in his diplomacy debut, his first visit to the U.S. to meet President Obama, and at the United Nations General Assembly.
This policy was clearly stated in the manifest of the DPJ, the current ruling party, and although it is in line with the global trend of co-existence with the global environment, it is possible that this policy will provoke hot discussions and resistance from the industry world and Japanese citizens.
This policy would mean possible severe regulation and allocation of reduction in CO2 emission to each industry sector and companies operating in Japan (including Japan branch of foreign capital companies). Automobile companies have already taken this trend as a business opportunity and started aggressively to develop and market EV cars. And electronics companies are focusing on environmentally friendly energy and battery business and on developing and marketing eco (environmentally friendly, energy saving and economic) electric appliances. Such automobile and electronic companies had been recently benefiting from the old ruling party’s policy of “Eco Point”, leading to increase in sales. However, in general, severe regulation and allocation of reduction in CO2 emission would be a burden and negatively impact from cost perspective. This negative impact has already been seen reflected in the stock price, as stated in the article posted on September 19.
New Coalition Government Policy, High Yen and Supply & Demand Oppressing Japanese Companies Resulting in Behind Worldwide High Stock Prices Trend
This policy should drive energy saving in all settings (public and private; work place, public places and home settings), and therefore minimum use of electricity including further warm and cool biz is likely to be promoted. This kind of promotion at workplace may well encourage employees to improve productivity and go home as early as possible which also may mean work-life balance and further driving energy saving at public places and home settings. But too much promotion could lead to negative impact, such as debate leading to refraining illumination at amusement and shopping quarters and people would be deprived of entertainment at night and the town would lose “vigour”.
The Japanese new government needs to come into consensus on this policy with the industry world opinion leaders and win the positive public opinion. The government surely would not want to drop its supporting rate with this issue; from Mr. Koizumi’s reform, it is apparent that the “life line” of the Hatoyama government to successfully solve many problems to change Japan. As in the previous article posted on September 6,
The DPJ Expected to Lead Japan to Change Similarly to Turnaround of Ailing Companies but with More Dynamism and Complexity
this policy is not highly evaluated by the governor and citizen so it may well be tough for the new government to convince key members, but this process cannot be ignored, similarly to turnaround and change management of global companies.
2009年9月19日土曜日
New Coalition Government Policy, High Yen and Supply & Demand Oppressing Japanese Companies, Being Behind Worldwide High Stock Prices Trend
Sunday, September 19, 2009 – Osaka, Japan
Nikkei, Japan's leading newspaper specialized in economy and politics, reported today that Japan is behind worldwide trend of high stock prices. This is because of the stock price drop of companies especially those engaged in business related to investment in public sector and finance, even though stock prices of electronics benefitting from demand recovery of ubiquitous networking devices and energy benefitting from increase in international commodity price have risen. This implies that majority of Japanese companies may well be negatively impacted due to the 3 anxieties, and same goes for Japan branch of foreign capitals.
Nikkei reports that although global slowdown is observed to have hit the bottom is supporting the lower price, 3 anxieties are acting as oppression burden, leading to drop in stock prices of majority of Japanese companies. The 3 anxieties are:- a)uncertainty of new policy under coalition; b)anxiety of further proceeding of high yen; and c)deterioration of supply & demand attributing to decrease in investing from foreign capital.
The new ruling party of the DPJ advocates that manufacturing companies basically should stop utilizing dispatched employees, and this would mean increase in their cost in general. The DPJ also advocates 25% reduction of CO2 emission vs.1990 by 2020, which is in line with global trend, but could be a big burden for iron and steel manufacturers and electric power companies. Furthermore, the recent comment about moratorium of Mr. Kamei, the new Financial Services Minister who is also responsible for postal services, already had impacted negatively to the Japan stock market.
And the recent comment of Mr. Fujii, the new Treasury Minister, could be interpreted as accepting high yen, leading to the second anxiety. The assumed exchange rate for 2009 major manufacturing companies announced by Tankan in July was 1 US dollars = 94.85 yen, but the recent exchange rate had been of higher yen than this already. This means that expectation for upward adjustment of financial achievement could recede.
Attitude of foreign investors who had been the only investor of Japanese stocks is changing because they want to see how the new coalition government takes off. Indeed, they had been active in buying Japanese stocks from April to August this year but in September they had been selling more than buying.
Looking at the ranking of fluctuation of their average stock price after the general election on August 30, top 10 companies that had gone up are mostly electronics and energy companies. The no.1 company of SUMCO (an electronics company) went up as much as15%. On the other hand, the worst 10 companies, i.e. companies whose stock price dropped the most after the general election are mostly financial institutes.
Since stock price tends to lead the actual business and economy, the above fact is an implication of the possible challenges the companies face in the upcoming future. Also, although the above is all about Japanese companies, it is possible that Japan branches of foreign capitals are to be impacted similarly because they are players in the same game; they operate in the same Japanese business environment and under the same Japanese regulation.
Nikkei, Japan's leading newspaper specialized in economy and politics, reported today that Japan is behind worldwide trend of high stock prices. This is because of the stock price drop of companies especially those engaged in business related to investment in public sector and finance, even though stock prices of electronics benefitting from demand recovery of ubiquitous networking devices and energy benefitting from increase in international commodity price have risen. This implies that majority of Japanese companies may well be negatively impacted due to the 3 anxieties, and same goes for Japan branch of foreign capitals.
Nikkei reports that although global slowdown is observed to have hit the bottom is supporting the lower price, 3 anxieties are acting as oppression burden, leading to drop in stock prices of majority of Japanese companies. The 3 anxieties are:- a)uncertainty of new policy under coalition; b)anxiety of further proceeding of high yen; and c)deterioration of supply & demand attributing to decrease in investing from foreign capital.
The new ruling party of the DPJ advocates that manufacturing companies basically should stop utilizing dispatched employees, and this would mean increase in their cost in general. The DPJ also advocates 25% reduction of CO2 emission vs.1990 by 2020, which is in line with global trend, but could be a big burden for iron and steel manufacturers and electric power companies. Furthermore, the recent comment about moratorium of Mr. Kamei, the new Financial Services Minister who is also responsible for postal services, already had impacted negatively to the Japan stock market.
And the recent comment of Mr. Fujii, the new Treasury Minister, could be interpreted as accepting high yen, leading to the second anxiety. The assumed exchange rate for 2009 major manufacturing companies announced by Tankan in July was 1 US dollars = 94.85 yen, but the recent exchange rate had been of higher yen than this already. This means that expectation for upward adjustment of financial achievement could recede.
Attitude of foreign investors who had been the only investor of Japanese stocks is changing because they want to see how the new coalition government takes off. Indeed, they had been active in buying Japanese stocks from April to August this year but in September they had been selling more than buying.
Looking at the ranking of fluctuation of their average stock price after the general election on August 30, top 10 companies that had gone up are mostly electronics and energy companies. The no.1 company of SUMCO (an electronics company) went up as much as15%. On the other hand, the worst 10 companies, i.e. companies whose stock price dropped the most after the general election are mostly financial institutes.
Since stock price tends to lead the actual business and economy, the above fact is an implication of the possible challenges the companies face in the upcoming future. Also, although the above is all about Japanese companies, it is possible that Japan branches of foreign capitals are to be impacted similarly because they are players in the same game; they operate in the same Japanese business environment and under the same Japanese regulation.
2009年9月13日日曜日
Drastic Deterioration in Break Even Point Ratio of Japanese Manufacturers May Well Indicate Further Tough Job Market in Japan
Sunday, September 13, 2009 – Osaka, Japan
Nikkei, Japan's leading newspaper specialized in economy and politics, reported today that break even point ratio* of Japanese manufacturers for 2008 increased by 13.1% from 2007 to 89.2%, reaching the level of 7 years ago. This is because the degree of cost reduction such as of fixed cost was not in line with the drastic reduction in sales attributing to worldwide bad economy. It is said that the performance of manufacturers are beginning to improve, but since increasing sales is difficult companies will need to further cut costs to improve break even point ratio. This implies that there will be further job and/or salary cuts meaning tough job market continues.
This finding is based on the Nikkei’s survey in which data of 1009 manufacturers listed whose metrics can be compared on the consecutive basis were collected and analyzed. The most critical reason for the deterioration in break even point ratio is reduction in sales, which was minus 10.7% vs. 2007 for 2008.
Looking into more details, it can be concluded that companies were unable to cope sufficiently with drop in sales. This is because variable cost such as cost of raw materials was minus 9.7% vs. 2007 for 2008, i.e. the attrition rate is smaller than that of sales. On the other hand, fixed cost was plus 1.5% vs. 2007 for 2008 although personnel cost was minus 2.9% vs. 2007 for 2008. This is because companies had been aggressively investing until the first half of 2008 leading to depreciation being plus 7.6% vs. 2007 for 2008. It is estimated that consolidated sales for the year ending in March 2010 would be minus 13% vs. previous year and cost reduction would be the key for performance improvement.
Looking into more detail by industry, break even point ratio for automobile that has dropped sales drastically in the U.S. and Europe reached 96.2% which was increase by 23% from 2007, and this figure is serious because it had not surpassed 90% since 1995. Other industries whose drop in the figure was serious include oil (71 points), nonferrous (8 points), precision machinery (16 points). Food was the only industry whose figure improved among 17 industries.
Break even point ratio of over 100% means cost is bigger than sales thus the company going in red. Break even point ratio of Advantest Corporation whose sales of semiconductor test equipment reached 150% resulting in consolidated operation loss of 49.5 billion yen. Therefore, the company is planning to decrease fixed cost by job and salary cut in order to decrease the amount of loss. It is likely that other companies would take the same measures to improve their break even point; therefore, the job market is likely remain tough for the time being.
* Break Even Point Ratio: break even point of a company is the sales when the cost and sales is the same. Dividing this by the actual sales is the break even point ratio. Below 100% means the company is in black and over 100% means the company is in red. The smaller the break even point ratio, the more resistant to drop in sales thus better profitability.
Nikkei, Japan's leading newspaper specialized in economy and politics, reported today that break even point ratio* of Japanese manufacturers for 2008 increased by 13.1% from 2007 to 89.2%, reaching the level of 7 years ago. This is because the degree of cost reduction such as of fixed cost was not in line with the drastic reduction in sales attributing to worldwide bad economy. It is said that the performance of manufacturers are beginning to improve, but since increasing sales is difficult companies will need to further cut costs to improve break even point ratio. This implies that there will be further job and/or salary cuts meaning tough job market continues.
This finding is based on the Nikkei’s survey in which data of 1009 manufacturers listed whose metrics can be compared on the consecutive basis were collected and analyzed. The most critical reason for the deterioration in break even point ratio is reduction in sales, which was minus 10.7% vs. 2007 for 2008.
Looking into more details, it can be concluded that companies were unable to cope sufficiently with drop in sales. This is because variable cost such as cost of raw materials was minus 9.7% vs. 2007 for 2008, i.e. the attrition rate is smaller than that of sales. On the other hand, fixed cost was plus 1.5% vs. 2007 for 2008 although personnel cost was minus 2.9% vs. 2007 for 2008. This is because companies had been aggressively investing until the first half of 2008 leading to depreciation being plus 7.6% vs. 2007 for 2008. It is estimated that consolidated sales for the year ending in March 2010 would be minus 13% vs. previous year and cost reduction would be the key for performance improvement.
Looking into more detail by industry, break even point ratio for automobile that has dropped sales drastically in the U.S. and Europe reached 96.2% which was increase by 23% from 2007, and this figure is serious because it had not surpassed 90% since 1995. Other industries whose drop in the figure was serious include oil (71 points), nonferrous (8 points), precision machinery (16 points). Food was the only industry whose figure improved among 17 industries.
Break even point ratio of over 100% means cost is bigger than sales thus the company going in red. Break even point ratio of Advantest Corporation whose sales of semiconductor test equipment reached 150% resulting in consolidated operation loss of 49.5 billion yen. Therefore, the company is planning to decrease fixed cost by job and salary cut in order to decrease the amount of loss. It is likely that other companies would take the same measures to improve their break even point; therefore, the job market is likely remain tough for the time being.
* Break Even Point Ratio: break even point of a company is the sales when the cost and sales is the same. Dividing this by the actual sales is the break even point ratio. Below 100% means the company is in black and over 100% means the company is in red. The smaller the break even point ratio, the more resistant to drop in sales thus better profitability.
Subtle Balancing Needed to Form the New Government – A Big Challenge that the Prime Minister-In-Waiting Needs to Overcome
September 13, 2009 – Osaka, Japan
The DPJ leader Yukio Hatoyama has been filling key posts and creating his new organization, to be kicked-off on September 16. The goal is to take the initiative away from bureaucrats, while making a “leadership unit” of coalition with the 2 allies and creating a top legislative body of the Diet management to unify the Government the ruling party of the DPJ. The challenge for Mr. Hatoyama is 4 things he needs to balance to successfully form the new organization.
First balance is the power between politicians and bureaucrats. This had been an issue for a long time, and the hot topic for manifest discussion during the General Election. Taking initiatives away from bureaucrats is the first priority the DPJ need to fulfill in smoothly managing the government to make policies stated in the manifest executed without fail.
The second balance is among the three parties to form the new Cabinet; the DPJ, Social Democratic Party and Kokumon Shinto (People’s New Party). Mr. Hatoyama aims to solve this by making alliances with the 2 parties to form coalition and involve the party heads in the Cabinet, asking what the two party heads would like to be responsible for reference. With different view on diplomatic and security policy among the 3 parties, agreeing to form a coalition did take time; therefore, the coalition cannot be said to be strong and Mr. Hatoyama would need to manage continuous delicate balancing to maintain the coalition.
The third balance is among each politician of the Cabinet. Being the first time for the DJP to become a ruling party to form the new Cabinet, no one basically would have experience as a member of a Cabinet. This means that in theory “star player” cannot be anticipated so Mr. Hatoyama needs to overcome this weakness by “team power”. This is why he is aiming to form a unit or leadership team consisting of members from 3 parties, rather than individual politicians, to play the leading role in developing policy.
The forth and the last balance is between the government (Cabinet) and the ruling party. Mr. Hatoyama aims to solve this problem by balancing the “power in theory” of a top legislative body of the Diet management between the government and the ruling party. The new body announced on September 12 is to consist of 5 members in total; 2 from the government side (Mr. Hatoyama and Mr. Naoto Kan, another DPJ acting leader, as state minister in charge of the National Strategy Bureau,) and 3 from the ruling party side (Mr. Ichiro Ozawa as secretary general of the party, the No. 2 post, Mr. Hirohisa Fujii, a supreme adviser for the party, who is a strong candidate for the post of finance minister, and a diet policy committee chairman). DPJ Secretary General Mr. Katsuya Okada as Foreign Minister, who is currently a member, will be excluded in the new body. Unifying the government and the ruling party is designed to be achieved by including state minister in charge of the National Strategy Bureau who also plays the role of Policy Research Council chairman in the body; however, with this subtle balance, it is possible that the ruling party’s power wins in such case as handling of the bill.
It is a matter of fact that organization and personnel issues are sensitive and face subtle balancing, regardless of the type and size or the organization. Organization is the “mirror” of strategy and together with personnel announcement is the most powerful message from the leader regarding his policy and strategy. Though there is no “correct” answer, optimum solution needs to be created and adopted.
References:-
Shape of DPJ Emerging
http://search.japantimes.co.jp/cgi-bin/ed20090909a1.html
DPJ, two allies agree to form coalition
http://search.japantimes.co.jp/cgi-bin/nn20090910a1.html
Nikkei.net articles on the new top legislative body of the Diet management (in Japanese)
http://www.nikkei.co.jp/news/main/20090913AT3S1201U12092009.html
http://www.nikkei.co.jp/news/main/20090913AT3S1201O12092009.html
The DPJ leader Yukio Hatoyama has been filling key posts and creating his new organization, to be kicked-off on September 16. The goal is to take the initiative away from bureaucrats, while making a “leadership unit” of coalition with the 2 allies and creating a top legislative body of the Diet management to unify the Government the ruling party of the DPJ. The challenge for Mr. Hatoyama is 4 things he needs to balance to successfully form the new organization.
First balance is the power between politicians and bureaucrats. This had been an issue for a long time, and the hot topic for manifest discussion during the General Election. Taking initiatives away from bureaucrats is the first priority the DPJ need to fulfill in smoothly managing the government to make policies stated in the manifest executed without fail.
The second balance is among the three parties to form the new Cabinet; the DPJ, Social Democratic Party and Kokumon Shinto (People’s New Party). Mr. Hatoyama aims to solve this by making alliances with the 2 parties to form coalition and involve the party heads in the Cabinet, asking what the two party heads would like to be responsible for reference. With different view on diplomatic and security policy among the 3 parties, agreeing to form a coalition did take time; therefore, the coalition cannot be said to be strong and Mr. Hatoyama would need to manage continuous delicate balancing to maintain the coalition.
The third balance is among each politician of the Cabinet. Being the first time for the DJP to become a ruling party to form the new Cabinet, no one basically would have experience as a member of a Cabinet. This means that in theory “star player” cannot be anticipated so Mr. Hatoyama needs to overcome this weakness by “team power”. This is why he is aiming to form a unit or leadership team consisting of members from 3 parties, rather than individual politicians, to play the leading role in developing policy.
The forth and the last balance is between the government (Cabinet) and the ruling party. Mr. Hatoyama aims to solve this problem by balancing the “power in theory” of a top legislative body of the Diet management between the government and the ruling party. The new body announced on September 12 is to consist of 5 members in total; 2 from the government side (Mr. Hatoyama and Mr. Naoto Kan, another DPJ acting leader, as state minister in charge of the National Strategy Bureau,) and 3 from the ruling party side (Mr. Ichiro Ozawa as secretary general of the party, the No. 2 post, Mr. Hirohisa Fujii, a supreme adviser for the party, who is a strong candidate for the post of finance minister, and a diet policy committee chairman). DPJ Secretary General Mr. Katsuya Okada as Foreign Minister, who is currently a member, will be excluded in the new body. Unifying the government and the ruling party is designed to be achieved by including state minister in charge of the National Strategy Bureau who also plays the role of Policy Research Council chairman in the body; however, with this subtle balance, it is possible that the ruling party’s power wins in such case as handling of the bill.
It is a matter of fact that organization and personnel issues are sensitive and face subtle balancing, regardless of the type and size or the organization. Organization is the “mirror” of strategy and together with personnel announcement is the most powerful message from the leader regarding his policy and strategy. Though there is no “correct” answer, optimum solution needs to be created and adopted.
References:-
Shape of DPJ Emerging
http://search.japantimes.co.jp/cgi-bin/ed20090909a1.html
DPJ, two allies agree to form coalition
http://search.japantimes.co.jp/cgi-bin/nn20090910a1.html
Nikkei.net articles on the new top legislative body of the Diet management (in Japanese)
http://www.nikkei.co.jp/news/main/20090913AT3S1201U12092009.html
http://www.nikkei.co.jp/news/main/20090913AT3S1201O12092009.html
2009年9月6日日曜日
Japanese Gaming Industry Are Facing “Diversity and Multi-polarity” Evident from CEDEC 2009 – The Same for Other Industries Also?
Sunday, September 6, 2009 – Osaka, Japan
CEDEC 2009, the largest conference in Japan targeting Gaming Developers, was held September 1-3 in Yokohama, which clearly depicted today’s Japanese gaming industry summarized by diversity and multi-polarity, i.e. large vs small projects and global vs local. 2500+ participants and 1000 people to join student version CEDEC “Fair to research and study the industry” started this year gathered to the venue. The size of the conference expanded, expressing the sense of crisis of both the developers and management of gaming industry.
1) World is drastically changing with diversity and multi-polarity
The worldwide game industry trend was briefly explained in the opening session, which can be summarized that the game industry is expanding attributing to 2 key words, “diversity” and “multi-polarity”.
Diversity is expansion of device and community space besides gaming platform such as iPhone and social media including Facebook and Twitter. Thus, it is clear that gaming player population is increasing but majority are games they play are those that can be played free of charge, meaning negative impact on the current game device market from revenue and business aspect. Multi-polarity is about the emerging gaming market in China, India and Latin America. In these regions, market expansion is driven by net café online games and presence of Japanese gaming is extremely low.
These reveal that the business environment of Japanese gaming companies is tough, especially in China. Market size estimation of China for 2008 is 238.8 billon yen, which is almost the size of current Japanese game soft market for family use of 300 billion yen. It is possible that China’s market become bigger than Japan’s in 2009 although sales per person for China is far behind Japan. This means emergence of an enormous market.
2) Japanese gaming companies are suffering from dilemma
With Chinese government’s regulation and so forth, Japanese companies are struggling to enter Chinese market. Chinese companies are steadily improving their competitive advantage and meeting local needs to enhance their business and presence in the Chinese market. The fact that Japanese companies are struggling to adapt to multi-polarity is apparent from their foreign sales radio data. 6 game giants excluding Nintendo for 2008 first half was less than 25%.
Severe market environment in the western countries is a negative factor for Japanese companies although they know they need to expand business abroad, and consequently they are relying on Japan domestic package market. Japanese market size (hardware and software) is 600 billion yen for 2008 in total, which is less than 1/3 of the U.S. (2.1 trillion yen) and Europe (2.3 trillion yen), and is merely 12% of the worldwide market of 5 trillion yen. Therefore Japanese companies want to expand their overseas business but that is not easy because market environment of package soft in the U.S. and Europe is severe due to expansion of cheap and casual social gaming market.
3) Gaming companies face tough rival of “Casual gaming” companies that 1.25 million people enjoy
Social gaming offensive action of Japanese companies has started, such as Gree Inc. that estimated what kind of society it would be in 2010 and then developed corporate strategy. Gree estimated that market with mobile phone and mobile game devices will be created and community service would be the centre of the Internet business, and integrated SNS Usocial media) services, their main business, with game. Their killer content is casual game developed by their own Japanese developers leveraging Flash. 1.25 million members are already benefiting from their services and they aim to increase members to 20-30 million to create the biggest virtual community in Japan.
Gree is performing well financially, too, but has not announced its global strategy. Although they develop in Japan their development expense is low, and much revenue is generated by online advertising and item billing/charge. As a company of 100 employees, sales of 13.9 billion yen and operation profit of 8.3 billion yen for June 2009 is good. Gree is aiming to become No.1 in Japan local mobile market, but is planning to acquire users of home setting game market and therefore is a strong rival for gaming companies.
4) Japanese gaming companies can learn from best practices from other industry to deveop their strategy
Best practices of Capcom Co. Ltd’s case, whose gaming development is said to be functioning most effectively in Japan, may give Japanese gaming companies some clues for them to develop their strategy. Capcom restructured development organization with key words of cheap, agile and challenge to enhance the total power of development team. Cheap means efficiency by integrating game engine system. Agility means review of organization by gradual integration to 1 big development department with 600 developers, which resulted in positive effects such as reduction in developers waiting for next task and veteran staff educating new comers leading to faster learning. Challenge means challenging in the field of game that is not currently hot and/or gaming that is said to be difficult to develop in Japan in order to pursue enjoyment of gaming. This resulted in a successful game development with expense of 2 billion yen and they will invest 120 developers for the consecutive gaming development.
5) Web 2.0 social media (Twitter) is also playing a role for diversity and multi-polarity
Though their approach is different, both strategy of Gree and Capcom are based on local characteristics of Japan, which had been a hot topic throughout CEDEC. The issue is the optimum degree of applying local characteristics to the corporate strategy, but no one could estimate nor come to a conclusion because of the drastic change the global market is currently going through. However, some speakers estimated that diversity of new “input” such as motion controller, touch screen and sound recognition, and of new “output” such as hi-vision, BV (binocular vision) and AR (augmented reality) leads to “new interactive experience” and activate the market.
Diversity and multi-polarity seemed to have been occurring also among congress participants. Many of them had iPhone and were twittering by Twitter. There were some who did not know Twitter but such people also started twittering by leaning how to use word of mouth.
Japanese companies in other industry of high tech, electronics and automobile may also be experiencing dilemma of Japanese companies and diversity and multi-polarity mentioned above, and their future depends on how they adapt to changing business environment, create and/or position in the new market, and leverage diversity and multi-polarity to develop and execute their unique corporate strategy. Leveraging and benefitting from Web 2.0 would also be vital for companies to be competitive.
* Information about CEDEC is from a Japanese online article posted in Nikkei web site on September 4.
CEDEC 2009, the largest conference in Japan targeting Gaming Developers, was held September 1-3 in Yokohama, which clearly depicted today’s Japanese gaming industry summarized by diversity and multi-polarity, i.e. large vs small projects and global vs local. 2500+ participants and 1000 people to join student version CEDEC “Fair to research and study the industry” started this year gathered to the venue. The size of the conference expanded, expressing the sense of crisis of both the developers and management of gaming industry.
1) World is drastically changing with diversity and multi-polarity
The worldwide game industry trend was briefly explained in the opening session, which can be summarized that the game industry is expanding attributing to 2 key words, “diversity” and “multi-polarity”.
Diversity is expansion of device and community space besides gaming platform such as iPhone and social media including Facebook and Twitter. Thus, it is clear that gaming player population is increasing but majority are games they play are those that can be played free of charge, meaning negative impact on the current game device market from revenue and business aspect. Multi-polarity is about the emerging gaming market in China, India and Latin America. In these regions, market expansion is driven by net café online games and presence of Japanese gaming is extremely low.
These reveal that the business environment of Japanese gaming companies is tough, especially in China. Market size estimation of China for 2008 is 238.8 billon yen, which is almost the size of current Japanese game soft market for family use of 300 billion yen. It is possible that China’s market become bigger than Japan’s in 2009 although sales per person for China is far behind Japan. This means emergence of an enormous market.
2) Japanese gaming companies are suffering from dilemma
With Chinese government’s regulation and so forth, Japanese companies are struggling to enter Chinese market. Chinese companies are steadily improving their competitive advantage and meeting local needs to enhance their business and presence in the Chinese market. The fact that Japanese companies are struggling to adapt to multi-polarity is apparent from their foreign sales radio data. 6 game giants excluding Nintendo for 2008 first half was less than 25%.
Severe market environment in the western countries is a negative factor for Japanese companies although they know they need to expand business abroad, and consequently they are relying on Japan domestic package market. Japanese market size (hardware and software) is 600 billion yen for 2008 in total, which is less than 1/3 of the U.S. (2.1 trillion yen) and Europe (2.3 trillion yen), and is merely 12% of the worldwide market of 5 trillion yen. Therefore Japanese companies want to expand their overseas business but that is not easy because market environment of package soft in the U.S. and Europe is severe due to expansion of cheap and casual social gaming market.
3) Gaming companies face tough rival of “Casual gaming” companies that 1.25 million people enjoy
Social gaming offensive action of Japanese companies has started, such as Gree Inc. that estimated what kind of society it would be in 2010 and then developed corporate strategy. Gree estimated that market with mobile phone and mobile game devices will be created and community service would be the centre of the Internet business, and integrated SNS Usocial media) services, their main business, with game. Their killer content is casual game developed by their own Japanese developers leveraging Flash. 1.25 million members are already benefiting from their services and they aim to increase members to 20-30 million to create the biggest virtual community in Japan.
Gree is performing well financially, too, but has not announced its global strategy. Although they develop in Japan their development expense is low, and much revenue is generated by online advertising and item billing/charge. As a company of 100 employees, sales of 13.9 billion yen and operation profit of 8.3 billion yen for June 2009 is good. Gree is aiming to become No.1 in Japan local mobile market, but is planning to acquire users of home setting game market and therefore is a strong rival for gaming companies.
4) Japanese gaming companies can learn from best practices from other industry to deveop their strategy
Best practices of Capcom Co. Ltd’s case, whose gaming development is said to be functioning most effectively in Japan, may give Japanese gaming companies some clues for them to develop their strategy. Capcom restructured development organization with key words of cheap, agile and challenge to enhance the total power of development team. Cheap means efficiency by integrating game engine system. Agility means review of organization by gradual integration to 1 big development department with 600 developers, which resulted in positive effects such as reduction in developers waiting for next task and veteran staff educating new comers leading to faster learning. Challenge means challenging in the field of game that is not currently hot and/or gaming that is said to be difficult to develop in Japan in order to pursue enjoyment of gaming. This resulted in a successful game development with expense of 2 billion yen and they will invest 120 developers for the consecutive gaming development.
5) Web 2.0 social media (Twitter) is also playing a role for diversity and multi-polarity
Though their approach is different, both strategy of Gree and Capcom are based on local characteristics of Japan, which had been a hot topic throughout CEDEC. The issue is the optimum degree of applying local characteristics to the corporate strategy, but no one could estimate nor come to a conclusion because of the drastic change the global market is currently going through. However, some speakers estimated that diversity of new “input” such as motion controller, touch screen and sound recognition, and of new “output” such as hi-vision, BV (binocular vision) and AR (augmented reality) leads to “new interactive experience” and activate the market.
Diversity and multi-polarity seemed to have been occurring also among congress participants. Many of them had iPhone and were twittering by Twitter. There were some who did not know Twitter but such people also started twittering by leaning how to use word of mouth.
Japanese companies in other industry of high tech, electronics and automobile may also be experiencing dilemma of Japanese companies and diversity and multi-polarity mentioned above, and their future depends on how they adapt to changing business environment, create and/or position in the new market, and leverage diversity and multi-polarity to develop and execute their unique corporate strategy. Leveraging and benefitting from Web 2.0 would also be vital for companies to be competitive.
* Information about CEDEC is from a Japanese online article posted in Nikkei web site on September 4.
The DPJ Expected to Lead Japan to Change Similarly to Turnaround of Ailing Companies but with More Dynamism and Complexity
Sunday, September 6, 2009 – Osaka, Japan
Japanese governors evaluate social security policies the DPJ’s manifest, Nikkei, the Japan’s leading newspaper specialized in economy and politics, reported yesterday as the survey result Nikkei implemented lately. The result is in line with what Japanese citizens are requesting to the new Japanese government for them to lead better lives.
According to Nikkei, the survey was implemented to 46 governors excluding Aichi prefecture governor who was on a business trip. The question was which policies of the DPJ’s manifest do they evaluate and think is/are the first priority to be implemented. Multiple answers were accepted.
From the survey result, it is apparent that healthcare and social security are the vital items the governors highly evaluate. Top of the list was increase in developing doctors with 19 people, followed by withdrawal of policy of restraining social security expense growth with 11 people. Others such as a certain amount of financial incentives per child and 25% reduction in CO2 emission followed with only 4 people. Making motorway free similarly to the U.K. which has been a hot debate was evaluated by only 3 governors but on the contrary 16 answered that they do not evaluate this policy.
These results overlap with the voices of Japanese citizens interviewed and broadcasted in TV news to make comments on what they expect to the new leading party to improve their lives. Many said that healthcare including increase in doctors and other healthcare experts plus hospitals is vital, and that social welfare including pension issues needs to be solved. Regarding measures to increase children to solve the aging society problem, many said that more “fundamental and systematic” measures to change the society and infrastructure are required.
Japanese citizens also request to the new leading party to stimulate business to improve the economy and employment situation, which is quite natural because they are all directly affected financially by the bad economy. This is a requirement to stimulate the consumer spending and expand domestic market demand. However, domestic market demand expansion alone is limited and something else to stimulate the business and economy is required such as reconstructing the total social infrastructure and fostering to develop new promising industries especially in the area of energy and environment, agriculture, healthcare and IT, and as incentives to attract direct (and indirect) investment to Japan. The reason this kind of issue was not mentioned in the survey to governors could be that there are so many other issues that are more critical, and that it is the companies that are the main players for this issues.
Free comments in the survey as “request and expectation” included clear vision and strategy for growth at an early stage from Mr. Hashimoto of Osaka, and freeing Japanese politics from bureaucratic-oriented style from Mr. Ishihara of Tokyo. Both are “must” of many turnarounds of ailing companies.
The DPJ are expected to lead change the “Japan Corporation” in very much the same way as many turnaround of companies that achieved V-shared recovery leveraging change management. With its size and complexity, this is indeed a big challenge but must be fulfilled for the country and its citizens of today and tomorrow.
Japanese governors evaluate social security policies the DPJ’s manifest, Nikkei, the Japan’s leading newspaper specialized in economy and politics, reported yesterday as the survey result Nikkei implemented lately. The result is in line with what Japanese citizens are requesting to the new Japanese government for them to lead better lives.
According to Nikkei, the survey was implemented to 46 governors excluding Aichi prefecture governor who was on a business trip. The question was which policies of the DPJ’s manifest do they evaluate and think is/are the first priority to be implemented. Multiple answers were accepted.
From the survey result, it is apparent that healthcare and social security are the vital items the governors highly evaluate. Top of the list was increase in developing doctors with 19 people, followed by withdrawal of policy of restraining social security expense growth with 11 people. Others such as a certain amount of financial incentives per child and 25% reduction in CO2 emission followed with only 4 people. Making motorway free similarly to the U.K. which has been a hot debate was evaluated by only 3 governors but on the contrary 16 answered that they do not evaluate this policy.
These results overlap with the voices of Japanese citizens interviewed and broadcasted in TV news to make comments on what they expect to the new leading party to improve their lives. Many said that healthcare including increase in doctors and other healthcare experts plus hospitals is vital, and that social welfare including pension issues needs to be solved. Regarding measures to increase children to solve the aging society problem, many said that more “fundamental and systematic” measures to change the society and infrastructure are required.
Japanese citizens also request to the new leading party to stimulate business to improve the economy and employment situation, which is quite natural because they are all directly affected financially by the bad economy. This is a requirement to stimulate the consumer spending and expand domestic market demand. However, domestic market demand expansion alone is limited and something else to stimulate the business and economy is required such as reconstructing the total social infrastructure and fostering to develop new promising industries especially in the area of energy and environment, agriculture, healthcare and IT, and as incentives to attract direct (and indirect) investment to Japan. The reason this kind of issue was not mentioned in the survey to governors could be that there are so many other issues that are more critical, and that it is the companies that are the main players for this issues.
Free comments in the survey as “request and expectation” included clear vision and strategy for growth at an early stage from Mr. Hashimoto of Osaka, and freeing Japanese politics from bureaucratic-oriented style from Mr. Ishihara of Tokyo. Both are “must” of many turnarounds of ailing companies.
The DPJ are expected to lead change the “Japan Corporation” in very much the same way as many turnaround of companies that achieved V-shared recovery leveraging change management. With its size and complexity, this is indeed a big challenge but must be fulfilled for the country and its citizens of today and tomorrow.
2009年9月2日水曜日
Labour Market Mechanism for the General Public is Universal, Applying Also to Politicians but More Severely?
Wednesday, September 2, 2009 - Osaka, Japan
From “physical move” of people as the result of the general election it seems that labour market mechanism applies to the political world. The collapse of the long year rule under one leading party forced many people go out of work, just like the collapse of world economy led to plunge in labour market and made many people jobless.
The transfer of political power from the LDP to the DPJ is making physical move of space and people in political world. BOJ Gov (Bank of Japan Governor) and government officials are visiting the DPJ instead of the LDP. The LDP is to give over to the DPJ their meeting room symbolizing the political power. The defeated LDP politicians have closed their election campaign offices and are now busily moving out of their offices and public dormitory for Diet members.
The defeated LDP politicians now are out of work in theory. To make their living, many of them may well become active in giving lectures, participating in panel discussion at conferences, making comments in TV programmes, and writing books, based on their long year experience and expertise in politics. But that is probably difficult for “Koizumi Children”, who became politicians in the last election held 4 years ago without sufficient preparation, and they probably would have hard time to switch their career again. That would be the case especially if they should had been easy in their political activities, and have not achieved tangible outcome and/nor have not learned something meaningful. It would be extremely difficulty for them to go back to occupation, position/role they used to engage in this tough economy after 4 year hiatus, especially in the current economic environment.
The defeated politicians are not the only people who have become jobless. Politicians usually have a number of secretary and staff. Many veteran LDP candidates that lost the election are said to had dozens of secretary and staff and they are laid off now. It really is like an employee working in a company suddenly is laid off for redundancy or for the company becoming bankrupt thus is automatically fired. What is more, it is said that there are two types of secretaries; one with some kind of indemnity and can gain some benefit when they are fired, and the other without such indemnity. If an employee is asked to leave the company as involuntarily retirement, he/she is usually provided with some kind of package including additional retirement benefits, but that is not the case for the latter secretaries, as it seems.
The labour market mechanism seems to be fully applicable to the political world, but in a much more and severe manner.
From “physical move” of people as the result of the general election it seems that labour market mechanism applies to the political world. The collapse of the long year rule under one leading party forced many people go out of work, just like the collapse of world economy led to plunge in labour market and made many people jobless.
The transfer of political power from the LDP to the DPJ is making physical move of space and people in political world. BOJ Gov (Bank of Japan Governor) and government officials are visiting the DPJ instead of the LDP. The LDP is to give over to the DPJ their meeting room symbolizing the political power. The defeated LDP politicians have closed their election campaign offices and are now busily moving out of their offices and public dormitory for Diet members.
The defeated LDP politicians now are out of work in theory. To make their living, many of them may well become active in giving lectures, participating in panel discussion at conferences, making comments in TV programmes, and writing books, based on their long year experience and expertise in politics. But that is probably difficult for “Koizumi Children”, who became politicians in the last election held 4 years ago without sufficient preparation, and they probably would have hard time to switch their career again. That would be the case especially if they should had been easy in their political activities, and have not achieved tangible outcome and/nor have not learned something meaningful. It would be extremely difficulty for them to go back to occupation, position/role they used to engage in this tough economy after 4 year hiatus, especially in the current economic environment.
The defeated politicians are not the only people who have become jobless. Politicians usually have a number of secretary and staff. Many veteran LDP candidates that lost the election are said to had dozens of secretary and staff and they are laid off now. It really is like an employee working in a company suddenly is laid off for redundancy or for the company becoming bankrupt thus is automatically fired. What is more, it is said that there are two types of secretaries; one with some kind of indemnity and can gain some benefit when they are fired, and the other without such indemnity. If an employee is asked to leave the company as involuntarily retirement, he/she is usually provided with some kind of package including additional retirement benefits, but that is not the case for the latter secretaries, as it seems.
The labour market mechanism seems to be fully applicable to the political world, but in a much more and severe manner.
2009年9月1日火曜日
Is Diversity Coming to Japanese Politics to Penetrate Throughout the Nation?
Tuesday, September 1, 2009 - Osaka, Japan
What Japanese media named “Ozawa Girls” (vs. “Koizumi Children” in the previous election) played an important role in the DPJ’s historic victory in the general election held on August 30. This seems to imply that diversity is coming into Japanese political world at last, which may have positive impact on Japan, to drive diversity throughout the nation.
The main player of the DPJ’s strategy were “Ozawa Girls”, are new female candidates, mostly in 30s, allocated as rival candidates of LDP veterans with the intention of Mr. Ozawa, the former DPJ representative. They are mostly of younger generation compared to “Koizumi Children”. Quite a few already have been engaged in social activities, including an candidate who had been a serious advocate in solving a medical/healthcare issue from her own experience, herself suffering from a disease.
The DPJ’s strategy was a big success. The mass media and the general public were extremely attentive to “Ozawa Girls” although they were absolutely new with no experience nor achievement in the political world. The strategy also forced LDP veteran candidates to focus on their own election, stopping them to visit around Japan to make back-up speeches for other new and/or younger LDP candidates.
“Ozawa Girls” need to learn from “Koizumi Children” to be truly succeed as positicians. They have not really gone through preparatory training as politicians. They have not worked their way up the food chain to become politicians. They benefited much from public criticism of LDP. Now that they have been elected to serve to improve the country, they will be tested and evaluated by the citizens whether they really deserve the position they won by the election. They would need to achieve tangible results if they are to be re-elected in the next election, which would not be like the August 30 election but is assumed to be much more tough one for DPJ.
In conclusion, “Ozawa Girls” have potential to positively impact Japanese society, which is behind many other countries on Diversity in general. “Ozawa Girls “ could become a break through in the Japanese politics with their vitality, competence, clear mission/belief and strong will. With strong leadership and sponsorship, favourable environment and support, they would be able to unleash their potential and through experience, pickup quickly to grow as good politicians and contribute to change and improve the country. If that do become a reality, it is possible that they become the role model to drive diversity throughout the nation.
Megumi Oyanagi
What Japanese media named “Ozawa Girls” (vs. “Koizumi Children” in the previous election) played an important role in the DPJ’s historic victory in the general election held on August 30. This seems to imply that diversity is coming into Japanese political world at last, which may have positive impact on Japan, to drive diversity throughout the nation.
The main player of the DPJ’s strategy were “Ozawa Girls”, are new female candidates, mostly in 30s, allocated as rival candidates of LDP veterans with the intention of Mr. Ozawa, the former DPJ representative. They are mostly of younger generation compared to “Koizumi Children”. Quite a few already have been engaged in social activities, including an candidate who had been a serious advocate in solving a medical/healthcare issue from her own experience, herself suffering from a disease.
The DPJ’s strategy was a big success. The mass media and the general public were extremely attentive to “Ozawa Girls” although they were absolutely new with no experience nor achievement in the political world. The strategy also forced LDP veteran candidates to focus on their own election, stopping them to visit around Japan to make back-up speeches for other new and/or younger LDP candidates.
“Ozawa Girls” need to learn from “Koizumi Children” to be truly succeed as positicians. They have not really gone through preparatory training as politicians. They have not worked their way up the food chain to become politicians. They benefited much from public criticism of LDP. Now that they have been elected to serve to improve the country, they will be tested and evaluated by the citizens whether they really deserve the position they won by the election. They would need to achieve tangible results if they are to be re-elected in the next election, which would not be like the August 30 election but is assumed to be much more tough one for DPJ.
In conclusion, “Ozawa Girls” have potential to positively impact Japanese society, which is behind many other countries on Diversity in general. “Ozawa Girls “ could become a break through in the Japanese politics with their vitality, competence, clear mission/belief and strong will. With strong leadership and sponsorship, favourable environment and support, they would be able to unleash their potential and through experience, pickup quickly to grow as good politicians and contribute to change and improve the country. If that do become a reality, it is possible that they become the role model to drive diversity throughout the nation.
Megumi Oyanagi
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