2010年7月25日日曜日

Abnormal Weather Worldwide – Why and Effects

Osaka - Sunday, July 25, 2010

Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 22 and 25, 2010 about recent worldwide abnormal weather. There have been repeated heavy rains in China and Japan, extremely hot summer days China, Russia, some parts of Europe and Japan, and extremely cold winter days in some parts of South America. The abnormal weather has been affecting economy and lives of citizens worldwide.

1. Why abnormal weather worldwide?

“Abnormal weather/climate” is a rare phenomenon that occurs once in 30 years or more, but such phenomenon has been increasing lately. According to JMA ((Japan Meteorological Agency), frequency of abnormal weather/climate 1975 - 2004 compared to 1901 – 1930 is 2.16 times for East Asia and 2.53 times for Europe. It can be said that the frequency has been increasing worldwide excluding Southern Africa.

Possible reasons for recent global abnormal weather are as below.

1) Heat wave in northern hemisphere

Some countries in northern hemisphere are covered by heat wave, attributing to meandering of upper westerly that flows from west to east. Assistant Professor Nakamura of University of Tokyo says that the heat wave has triggered consecutive abnormal weather worldwide. This is also said to be the reason of strong high pressure in Russia, Eastern Europe and East Asia meaning extreme heat that resulted in repeated heavy rains in China and Japan.

Professor Yamakawa of Japan University points out that meandering is not unusual but the degree is abnormally large. He adds that it is quite possible for this trend to continue until September. The meandering is, according to Professor Tachibana from Mie University, triggered by high water temperature of low latitude areas of North Atlantic Ocean. It is quite possible that activated convection developed high pressure in the eastern U.S. to prevent westerly flow and created meandering.

2) Arctic oscillation phenomenon

Arctic oscillation phenomenon is when the air pressure near the North Pole and its surroundings become reversed like a seesaw. Professor Yamazaki from Hokkaido University points out that with current pattern in which air pressure of the North Pole is low and air pressure of mid-latitude area is high, it is likely that cold air is accumulated in north pole and places such as Europe and Siberia tends to get hot.

3) High temperature of Eastern Pacific tropical waters

Sea temperature of Eastern Pacific tropical waters have been higher than usual and developed high pressure near Japan, leading to extreme heat, according to Professor Yamagata of University of Tokyo. He adds that La Nina phenomenon, the reverse of El Nino phenomenon, is to occur, meaning it is quite possible that extreme heat remains in northern hemisphere for a while. Also, Professor Yamakawa adds that it is possible that there will be increased number of strong typhoons this year.

2. What is the effect of abnormal weather economy and lives of citizens worldwide?

Effects range from crop yield decrease, floods and landslides such as the case in Japan mentioned in the previous article What are the Effects of the Recent Heavy Rains in Japan? to deaths of many people.

1) China

Since June, there have been repeated torrential rains in central and southern China from which more than 700 people died and 1,130 billion people have been affected.

Repeated heavy rains’ negative effect on crops is also severe, equivalent to economic loss of approximately 142.2 billion RBM (1.83 yen). Being anxious of negative effect on harvesting in autumn, production plan is now being reviewed.

Three Gorges Dam, a world class dam located in mid-point of Yangtze, recorded historical water volume flowing in dams since 1998 on July 20. Water volume flowing out was immediately increased and closed ship navigation for 4 days. This led to temporal negative effects on transportation between industrial regions such as Shanghai.

2) Russia

One in a century hot summer days were recorded, and in some southern regions the temperature reached as high as 40℃ with little rain. With spreading drought, government and farmers in south and midlands announced as emergency situation. Russia’s agriculture ministry had already estimated crop yields for July 2010 – June 2010 such as wheat to be 85 million ton, which is decrease by 12% from previous year; however, it is quite possible that revision of estimation is required. An executive of Russia crop association pointed out the possibility of this year’s export to be reduced by 20%.

With estimation of lack in wheat supply, wheat future quotation of Chicago rose by more than 20% in July. On July 23, it was as high as 5.9625 / bushel, which is at a high level since June 2009.

In some other regions in China it has been extremely hot, leading to effects similarly to other parts of the world that have been suffering from hot summer days.

3) North Korea

With nationwide heavy rains in the end of July, a whole village in northern part of the country was flooded.

4) France

There had been extremely hot summer days of over 35℃ temporarily. Therefore, a new loan system was launched with interest rate as low as 4 – 5% to help people buy air conditioners.

5) Germany

There has been extremely hot summer days. Air conditioning of high-speed railway ICE broke down, and many passengers were carried to hospitals because of heat stroke and dehydration.

6) Southern part of South America

Historically cold winter days were recorded. People who died from reasons attributing to cold weather such as pneumonia and carbon monoxide poisoning due to imperfect combustion of heaters have reached over 200 in total in countries such as Argentina, Peru and Bolivia. And on July 20, food was supplied to people living in the streets in Argentina.

On July 21, the Paraguay government announced that approximately 2,000 cows died nationwide. The reason is assumed to be low temperature.

3. Is there no positive effect at all?

Extremely hot summer days after the rainy season in Japan have some positive effect on consumer spending. But in total, abnormal weather has more negative effect on economy, business and lives of people.

1) How temperature rise in summer has positive effect on consumer spending

According to estimation of a private research company, average temperature rise by 1℃ in Tokyo and Osaka July – September from previous years increases consumer spending by 433.3 billion yen. This means a positive effect on GDP by 0.3%.

Such estimation seems to be quite true. With the arrival of hot summer days (many parts including Tokyo reaching above 35℃, even 38.9℃ in Gunma), business of summer products started to pick up, supporting recovery of consumer spending. As a result, Nikkei average stock price at Tokyo Stock Exchange Market on July 21 was declining but stock price of air conditioner makers such as Daikin and Fujitsu General gone up. Stocks of beverage makers such as Itoen and Asahi Breweries were popular.

2) Some examples of consumer recovery with rise in temperature

(1) Air conditioner


It is usually said that when sweltering night continues for more than three days air conditioners start to sell well, and indeed in many mass merchandisers air conditioners started to sell well on July 19. For example, in a leading mass merchandiser, air conditioner sales for July 20 – 21 were 2-1/2 to 3 times that of last year.

(2) Bed clothing for summer

Sales of bed clothing for summer made from excellent ventilation materials are now strong in department stores. Sales of pillows and mattresses made from such materials increased by 50% from last year for 2 leading department stores. Another leading department store doubled selling space of related goods from July 21.

Sales of under wears that absorbs sweat well and dries quickly are strong, and a leading retailer is to speed up purchasing of such products (price range = 500 – 980 yen). The annual sales plan for such goods is 4.25 million in volume. So far, products are being sold at the pace of 50% more than the plan and therefore the retailer made additional order to a factory in China.

(3) Foods and beverages

Water melon sales started to become strong, according to wholesalers. In a Tokyo’s wholesaler market, water melons of top brands were traded at 3,675 yen for 13kg, which is approximately 8% higher than previous years.

Beer business started to become strong, too. By the end of July, Asahi Breweries will increase supply of its main product “Asahi Super Dry” at below 0℃ by 300 restaurants, equivalent to 50% increase, compared with beginning of the month.

Ice crème business started to pick up, too. Ice crème business of a leading maker was hovering at only 3% increase from last year until the middle of July. But from July 19 after the end of the rainy season, it has increased by double digit.

(4) Leisure

Summer leisure business also started to pick up. Visitors of a major pool in Tokyo for July 19-21 (extended weekend) increased by 40% from last year, reaching 34,900 people.

3) Consumer spending overall

The above sales pick-ups do not mean overall consumer spending has recovered across all industry. Total sales of leading department stores for July 1 – 19 are minus by 1.4% and 1.0% from last year. Also, if the temperature rises too much for too many days, less people (especially elders) would be visiting stores for shopping.

What is more, Japan’s crop harvesting is also estimated to be lower than previous years, and almost 20 people have died already from heat stroke.

2010年7月19日月曜日

Turning Point in Japan’s Trade with China

Osaka – Monday, July 19, 2010

Nikkei, Japanese newspaper specialized in business and economy, reported today that Japan’s trade with China is at the verge of turning point and may even abolish trade deficit with China to make it trade surplus. With low cost made in China products imported to Japan, trade deficit with China had been around 2 to 3 trillion per year since the middle of 1990s but for 2009 it has shrunk to approximately 480 billion yen.

This is because of the increase in purchasing power of China accompanied by economic growth. There are also qualitative changes in trade such as automobile trade started to drive export from Japan to China. These indicate that China is transforming from “factory of the world” to “market of the world”, and China’s presence as both production site and consumption market is drastically increasing.

If Japanese companies succeed to penetrate Chinese consumption market, it may not only contribute to abolishing trade deficit with China making it trade surplus but also to optimizing total trade imbalance.

1. What is the recent trend of Japan’s trade with China?

1) Analysis and estimation by Barclays Capital


Balance of trade with China for January – March 2010 was surplus, excluding seasonal factors, is the conclusion of their analysis. When they estimated by adding their original adjustment of seasonal factors to trade statistic data issued by Ministry of Finance, trade balance with China is 740 billion yen per year in surplus, although it had been in deficit for the past 21 years since October – December 1988.

2) Indication of data issued by Ministry of Finance, the primary source of Barclay Capital’s analysis

Data issued by Ministry of Finance also reveals changes in Japan’s trade with China. In 2009 with worldwide economy recession triggered by Lehman's fall, import from China to Japan decreased by 16% from 2008, when export to China from Japan decreased only by 4% from 2008.

There are 2 points that needs to be taken into note of. One is that China’s recovery which was earlier than developed countries minimized the trade decreased. The other is that trade of finished products such as automobile and high tech equipments increased prominently.

Percentage of export of transportation equipments (passenger cars, trucks etc.) increased by 3% from 2008 to 10.12% in 2009. This is about double from 5.15% in 2004 when it was at one of the lowest level because of local production by Japanese companies (in the midst when China was called “factory of the world”).

Similarly, for January – March 2010, export of video equipments such as video cameras were 1.6 times of January – March 2009, and export of digital cameras especially of high end products increased by approximately 80%.

2. Why Japan’s trade with China had been in deficit for a long time?

Primary reason why Japan’s trade with China had been in red for a long time is the fact that Japanese companies positioned China as production country/site instead of consumption market with its low labour cost. Japan’s key industry had been clothes until 1990s and shifted to electronics after 2000; however, their business flow had remained the same. Raw materials and components were exported to China from Japan and finished products produced were imported from China to Japan. This means that the value added in China by production equals trade deficit.

3. How has Japan’s trade with China changed (or started to change) today?

However, finished product drives export from Japan to China today. According to JANA (Japan Automobile Manufacturers Association, Inc.), approximately 96,400 cars were exported January – May 2010, which is 50% increase from January – May 2009. Passenger cars including Toyota’s LEXUS constitute approximately 89,600 of them. Japanese companies had been preserving domestic production for these kinds of high end, value-added products and Chinese consumers are aggressive in buying such products today.

This is because China’s purchasing power has been increasing with high economic growth when Japan’s purchasing power has been decreasing with low birthrate combined with aging population and low growth in average income. With disparity in economic growth of the two countries, it is quite possible that scenario of Japan’s trade with China turning from deficit to surplus becomes a reality.

4. How has China’s purchasing power been drastically increasing? How is it estimated to continue increasing and why?

Consumer spending amount of China has been drastically increasing and it is estimated be more than that of Japan in 2020. According to the white paper of international trade and industry for 2010, China’s consumer spending is only 1.53 trillion USD for 2008, which is less than that of 60% of Japan’s. However, in 2010 it is estimated to drastically increase to 5.570 billion USD, which is 3.6 times that of 2008. This is incredible because this surpasses Japan’s consumer spending which is 3.61 billion USD.

China’s consumption market is estimated to continue increasing drastically even with decrease in population similarly to Japan, supported by increase in middle income households. China’s middle income households whose annual income is between 5,000 and 35,000 USD is estimated to almost double from 500 million people in 2010 to 9700 million people in 2020.

An expert in international trade views on recent trends that seem negative factors for employers support such estimation and outlook that China’s import from Japan is likely to continue to increase. He views that the recent repeated labour disputes and increase in labour cost are in fact increase in income for employees, meaning increase in purchasing power of consumers (= employees). Therefore he concludes that exports of finished products from Japan to China would continue to increase despite decrease in total population.

5. What are upcoming challenges and risks for Japanese companies?

On-the-spot challenge and risk for Japanese companies is increase in labour cost of China, but their primary upcoming challenge would be to find new business opportunites in China. Also, in leveraging China’s internal demand, it is quite possible that local production in China becomes more active meaning stable export of raw materials and components from Japan to China is also inevitable.

Leveraging Chinese consumption market is a common challenge for all developed countries of matured economy. This means that global competitiveness and speed of Japanese companies would be vital to expand export to China. This is why a consultant of BCG (Boston Consulting Group) says that Japanese companies would not succeed entering and penetrating Chinese market unless they increase market share in China at an early stage.

On the other hand, if Japan’s trade with China becomes in surplus, it is possible that a new view in foreign currency exchange might emerge, which is a risk for Japanese companies. Developed countries that have been requesting revaluation of RMB market with the objective of taking corrective action imbalanced global economy but they may regard RMB appropriate against yen as it is.

2010年7月18日日曜日

What are the Effects of the Recent Heavy Rains in Japan?

Osaka - Sunday, July 18, 2010

Since the end of July there has repeatedly been concentrated heavy rains almost nationwide (excluding Hokkaido) as explained in the previous article Why Repeated Heavy Rains Then Extreme Heat in Japan?, leading to negative effects such as people dying from landslides and flooded river in western Japan. As of July 18, 9 people have died and at least 5 people are missing and being searched, and thousands of people in many regions have evacuated from their homes.

In this article the author would like to introduce some of the examples of what happened and how some people have faced and/or survived.

1. Transportation

1) Trains

Shinkansen bullet train had stopped one day between Kyoto and Gifu Hashima stations once due to heavy rain.

Also, some local trains also stopped or had to be driven by reduced speed, affecting many people. In fact, when the author was on a local JR (Japan Railway) train on the way to work, it stopped for a while and then started to be driven by extremely reduced speed due to torrential rain. This made her arrive at her destination station 1-1/2 hour later than the original schedule, when it would only take just over 1 hour to get to the destination.

2) Roads

Some roads had to be closed due to landslides. This made some remote villages in the mountains isolated.

Also, many roads were flooded so people could not drive their car. It was difficult even to walk on flooded roads, as demonstrated by reporters of TV programmes.

2. Residents and stores

1) Houses

Some houses built near the mountains were damaged by landslides. Owners of such houses interviewed by TV programme reporters said that they were terrified to see large rock as big as cupboard and/or mud/sands attacking their house, and were shocked to see what happed afterwards; everything was ruined as if there had been a huge earthquake. It could have been worse because no one was in the room of the main target of the rocks and sands.

Some other houses reported suffered from severe floods. Very recently a river in/near the mountains in Hiroshima flooded and flooded river water mixed with landslide sands attacked many houses nearby. An old lady managed to survive in the midst of such a situation. She was trapped in the kitchen when her house flooded and was drifted into the river but managed to break the window to escape outside, used the chain for stabilizing PG (propane gas) as safety rope and was lucky to find a roof of a hut to escape to a road.

Even after the floodwaters receded in some regions, mud remains inside the houses. Electrical equipments were ruined, so did cars that were parked outside.

2) Stores

Many stores also suffered from floods and their goods to be sold were all ruined. Some store owners managed to evacuate their good to be sold upstairs but did not have time to evacuate all.

Electrical equipments were ruined, meaning investment is needed for the store owners to restart their business. For example, industrial refrigerators that food shops and restaurants store their goods and/or ingredients were ruined even if it looks good outside and need to be replaced with new ones immediately.

Another example reported is the case of hair dresser business owners. Their electric chairs were also ruined and they would need to repurchase them to restart their business. That would mean much investment.

3. Vegetables

1) Melons

Melons that were just before harvesting and shipping were ruined by the flood. After the flood had gone they look good outside but not inside. Since they had been in muddy flood water for a while, they have absorbed muddy water and therefore are not eligible. The melon farmers really regret; only if they had harvested and shipped one day before…

2) Chinese cabbages

Many Chinese cabbages were also ready for harvest when flooded. After the flood had gone, they really looked miserable in TV news.

And, the prices of various vegetables have gone up drastically again, after the prices had gone back to normal when they once gone up with abnormal weather in spring, as explained in the previous article How the Recent Weather Instabiolity Affecting Us? (Part 1).

4. The author’s final thoughts

There may well be more negative effects of the territorial rains on the society, economy and lives of people.

There has been abnormal climate/weather such as floods and extreme heat worldwide and the recent torrential rains in Japan seem to be a part of worldwide abnormal weather. This is a global environment issue and we all need to take actions immediately to solve this issue before the ecosystem collapses totally.

Why Repeated Heavy Rains Then Extreme Heat in Japan?

Osaka - Sunday, July 18, 2010

Since the end of July there have been torrential rains almost nationwide (excluding Hokkaido) causing severe landslides and floods. Even though it had been in a rainy season it was quite unusual to have such repeated, concentrated heavy rains for such a long period of time. Heavy rains stopped for this weekend marking the end of the rainy season for this year but there still remains a risk of such torrential rains again. What is more, it is quite possible that hot summer days will follow the weather recovery.

1. What is the reason for concentrated and repeated heavy rains?

The fact that atmosphere has been apt to be unstable is the reason for the concentrated and repeated heavy rains, attributing to strong warm and humid air flowing in from high pressure in the Pacific Ocean, and to cold air occasionally coming in stratosphere, when rainy season front has stayed hear Japan much longer than previous years.

The rainy season front has now moved up north east and should gradually further move north and disappear, but thunder clouds are being developed in regions strongly affected by strong damp warm air from the south even far away from the front. Damp warm air comes in following the rim of the Pacific high pressure. When there is cold air stratosphere, upper air current will become more violent.

Professor Yamagata of University of Tokyo says that another background for torrential rains is El Nino phenomenon that occurred from last summer to this spring. According to his explanation, this phenomenon makes the sea temperature of Eastern Pacific tropical waters higher than usual. Together with the flow of atmosphere made high pressure near Philippines strong. This made more humid air from topics come into Japan.

2. What is expected to come immediately after the end of the rainy season?

With stronger Pacific high pressure covering Japan we should have more sunny days and be free from heavy rains in most part of Japan for a while. It is forecasted that in Eastern Japan the highest temperature of the day will be extremely high.

However, it is possible that there will be localized heavy rains when the temperature hits high in inland and mountains and upper air current develops thunder clouds. It is forecasted that in northern Japan there will be many days that is not so sunny.

3. What is expected to come in the future?

What is called La Nina phenomenon, which is the reverse of El Nino phenomenon, is expected to occur in the future. With this phenomenon, Japan is to be covered with high pressure and therefore more likely to be extreme heat.

According to JMA (Japan Meteorological Agency), there is not yet such a sign of active convection current near Philippines; however, professor Yamagata assumes that in western Japan it will be extremely hot summer days from the end of July to August. In fact, on July 17, the temperature rose as high as 35.2℃ in Fukui and above 30.℃ in many parts of Japan including Tokyo and Osaka, and it was officially announced that the rainy season for this year has ended.

2010年7月11日日曜日

How Japanese Athletes Are Becoming Global and World Class

Osaka – Sunday, July 11, 2010

Soon after Japan lost the game with Paraguay in the 2010 World Cup in the first final tournament session playing extra time and then lost in penalty kicks, some players who had won attention including Keisuke Honda and Yuto Nagatomo are now being approached by western professional soccer teams and negotiation of relocation started. In fact, Eiji Kawashima, the goal keeper of the Japan soccer team for the 2010 World Cup, already moved to a Belgium team on July 6, and today on July 11 Keisuke Honda just left Japan from Narita International Airport to relocate in Russia. This seems to be another sign of Japanese athletes getting more and more global.

1. How were most sports and athletes in Japan in 20th century?

Sports and athletes in Japan used to be rather domestic in general in 20th century.

Although it may be a little unexpected, perhaps the sport that had already been international sport in Japan is sumo wrestling, which is the national sport of Japan. There have been non-Japanese sumo wrestlers from in 1970s long ago who had come from Hawaii, Mongol and Eastern Europe countries. In fact, the current and recent Yokozuna wrestlers (the highest rank players, only 2 at maximum) have been non-Japanese.

Baseball is another sport that had some non-Japanese players. Most of them were ex-major league players, who were invited to join a Japanese professional baseball team. And of course, world-class non-Japanese athletes do play in major golf tournaments held in Japan.

But most sports in Japan have been domestic and homogeneous, and few Japanese athletes relocated to overseas. Japanese athletes who played games or tournaments abroad (excluding games such as Olympics and World Championships) were extremely limited; they were mostly professional athletes of golf and tennis.

2. How did Japanese athletes start to go global?

The author would like to focus on the case of baseball and soccer in briefly explaining how Japanese athletes started to go global because she feels their case is easy to understand how Japanese athletes started to go global.

1) Baseball

Hideo Nomo, a pitcher, was the first Japanese to relocate to the U.S. to join a major league team in 1995, which was a great risk for his baseball life/career. Until then it was believed that Japanese baseball players would not succeed in major league due to lack of skills compared to major league players although baseball had been one of the most popular sport in Japan, and many people paid much attention to how he gets on.

It must have been tough to relocate in another country as a pioneer but Hideo proved that a Japanese baseball player can be successful in the major league. And then other Japanese baseball players started to relocate to the U.S. to join a major league team, some famous players including Ichiro, Hideki Matsui, Daisuke Matsuoka, Hideki Okajima and Tsuyoshi Shinjo (who have come back to Japan now), of different position followed Nomo to relocate to the U.S. to play in a major league team.

Now, relocating to the U.S. to join a major league team has become one of a popular option for successful Japanese baseball players.

2) Soccer

Soccer was mostly of an amateur sport that was not so popular in Japan. But with the start of the J (Japan) League in 1993 meaning making soccer a professional sport. This marked the start of evolution of Japan soccer evolution; i.e. how the skills of Japanese soccer players improved, how soccer became popular, and how the sport and players became global.

With the J League, soccer players of the league would be blessed with necessary environment to concentrate on soccer to become a top level player. With tournaments of the league, they would have more opportunities than before to play soccer, leading to enhancement in the overall level of the league. Their games would go on the air and information on the league would be posted on media. This attracted people’s attention, meaning more boys to start playing soccer dreaming of becoming a professional player, and enhancement in the environment and infrastructure/systems of developing young soccer players. This is how Japan managed to join the World Cup games in 1998.

Playing in the World Cup games has significant meaning in the globalization of the sport and athletes. Although the level/skills of Japanese soccer players in general still may not be up to the world class and the team result of the World Cup game was not necessarily good, some European soccer teams found a few competent players such as Hidetoshi Nakata and Shunsuke Nakamura and invited to join their team. Without playing in the World Cup games, such athletes probably did not have a chance to relocate to Europe to be a member of one of the top class team.

Similarly to baseball, now, relocating abroad to join and play in a world class team is a well accepted option for Japanese successful soccer players. In fact, Eiji Kawashima, who relocated to Belgium on July 6, had set his goal as joining a European team since he was quite young and had been preparing for it.

Eiji not only practiced much soccer, he aggressively acquired 4 European languages. Hidetoshi Nakata supported him in acquiring Italian and understanding “European soccer”. Eiji decided to acquire European languages because he knew it would be inevitable to be a successful goal keeper of a European team, who would need to communication with the team members much during the game in the native language. His language proficiency was prominent in the press conference that was held immediately after he arrived in Belgium.

3. What are the requirements for athletes to truly become world class athletes?

It is highly likely that in the near future, soft skills such as language and intercultural communication skills as well as hard skills of the sport the athletes specialize in determine how the athletes could truly become global and world class athletes. Many of the Japanese athletes of golf and tennis who often play abroad speak English very well already. This is mostly for their survival similarly to Mr. Kawashima; for golf for instance, English proficiency is one of the requirements to be able to play in tournaments held in the U.S. In fact, successful non-Japanese sumo wrestlers have acquired Japanese extremely well and have adapted to Japanese society, manners and culture, and tradition of sumo wrestling.

There is a lesson from how athletes become truly successful, world class athletes. It is that the determinants of becoming truly globalized and world class athlete are the requirements for business person to be successful in the global business world.

2010年7月4日日曜日

Quantitative and Qualitative Effects of the 2010 World Cup

Osaka – Sunday, July 4, 2010

Big event such as the World Cup has positive effect on the economy and the society, both quantitative and qualitative, although the quantitative effect on the economy solely is usually discussed. In the case of the 2010 World Cup, it is estimated that it has positive effect on the Japanese economy equivalent to 300 billion yen.

The author has no comment to the rationale of the valuation of 300 billion yen. To her, the positive effect is beyond value of 300 billion yen; there are far more positive effects that cannot be valuated. In this article, the author would like to discuss both the quantitative and qualitative positive effects of the 2010 World Cup to Japan.

1. What is the quantitative positive effect of the 2010 World Cup?

The Yahoo! Japan news reported on June 30 that the Japan Soccer Team of the World Cup 2010 had positive effect on the Japanese economy equivalent to 300 billion yen, according to an estimation of an expert.

1) The constituent of the positive effect equivalent to 300 billion yen

On June 29, an expert in this field said in an interview of a newspaper that, according to his personal analysis and estimation the positive effect on the economy is equivalent to 290 billion yen for everything until the soccer team won the ticket to play in the final tournament and additional 10 billion yen for the final tournament game, totaling 300 billion yen.

300 billion yen does not include that of digital consumer electronics. What is included are mainly eating and drinking, World Cup goods, businesses related to watching and enjoying the soccer games, and DVDs and gaming that are to be launched later this year.

2) 300 billion compared with positive effect on the economy of other sport games

300 billion is smaller than that of the previous World Cup games but is far greater than that of WBC (World Baseball Classics) of March 2009 when Japan won the first prize to achieve second successive victory, which was estimated as approximately 55 billion yen.

Simple comparison of the two sport games (the World Cup and WBC) is impossible because of the difference in their history and size. However, it goes without saying that the “power” of the World Cup is enormous.

3) 300 billion yen compared to the previous World Cup games

300 billion yen for the 2010 World Cup is smaller that that of previous World Cup games. The positive effect on the Japanese economy for the 2002 World Cup, co-hosted by Japan and South Korea, was estimated as 2 trillion yen, from construction of new stadiums to overseas supporters visiting Japan. And for the 2006 World Cup held in Germany it was estimated as over 400 billion yen.

Big events such as the World Cup games are expected to give positive economic effect and usually private research companies officially estimate and announce. However, they decided not to do so for the 2010 World Cup held in South Africa. The reason they say is that precise estimation of positive effect solely of the World Cup is extremely difficult.

The over 400 billion yen for the 2006 World Cup is mostly of digital consumer electronics, and incentives and consumer spending stimulation measures are taken by the Japanese government for digital consumer electronics. Also, the fact that digital broadcasting is to start in July 2011 also is a stimulant for consumers to purchase new digital consumer electronics. Therefore, they refrained from official estimation and announcement for the 2010 World Cup.

2. What is the qualitative positive effect of the 2010 World Cup?

The author would say inspiration and learning are other positive effects on Japan and its people that cannot necessarily be valuated but are extremely important.

1) Inspiration from the Japan Soccer Team

The whole nation was inspired by the Japan soccer team when there were many depressing news elsewhere, and were united.

Frankly speaking, the advance review of the Japan soccer team was not good, which is another reason why private research companies did not officially estimate and announce the positive effect on the Japanese economy for 2010 World Cup. The mass media did not broadcast much about the team as previous World Cup. When the team left Japan at night, there were only 70 or so supporters at the airport to see them off, when 4200 people were at the Kansai International Airport to welcome the team back to Japan on July 1. And only the passionate soccer fans watched the first 2010 World Cup game that the Japan team played, which was with Cameroon.

Although the team had lost all 4 official games they played just before the World Cup but they won the first game with Cameroon by 1-0. Mass media and the general public were fascinated by the victory. Many people including those people who were not so interested in soccer (including the author) watched the games later played, which were with Denmark (won 3-1) and Holland (lost 1-0). Many TV programmes featuring the World Cup and the Japan soccer team went on the air after the victory over Cameroon. And the whole nation supported the first final tournament game with Paraguay and cried to the defeat, after playing extra time and then lost in penalty kicks.

2) Lesson learned from the Japan Soccer Team

What we learned from the Japan soccer team includes “teamwork (and leadership)” and “never give up”. In fact, the message from Mr. Okada, the coach, is about the two, which were delivered in the press conference held in a hotel in Osaka on July 1. To the author, the 2 lessons cannot be valuated but extremely precious, which are universal regardless of the country, industry, organization, era etc.

(1) Teamwork and leadership

At the press conference, Mr. Okada, looking back at the past 2-1/2 years, said that team building did not proceed as anticipated but made the team concept unchanged. There were ups and downs and the team did have hard times; however, they continuously worked hard without changing their vision and goal.

Teamwork is what has been introduced in many TV programmes lately as the key for the victory when, as experts point out which team members (players) also are fully aware off, the skill of each players are inferior compared with players in previous World Cup and needs much work to be done to catch up the world class level. Great teamwork of the Japan soccer teams was prominent from how the players behaved in the World Cup games and from the press conference as well. Mr. Okada let some team member did performances at the press conference, such as imitation and singing an African song.

In the press conference and in other interviews that went on the air, all team members emphasized the importance of the teamwork. They said that the Japan soccer team was superb and that they are so proud of being a member of the team. In addition, they were thankful for Mr. Okada who led them until that day, who said that the team members were all superb, wanted to make them play once more in the 2010 World Cup, and it is his inadequacy that they could not get into top 8.

It is clear that Mr. Okada’s was successful to lead and build an excellent team to maximize the team power. Each team members unleashed their potential and complemented one another to make synergy, i.e. making 1+1 bigger than 2.

(2) Never give up

In the press conference Mr. Okada also said not to give up even at hard times, as a message to children. He said that he was happy to see shining eyes of many young people welcoming him and the team at the airport. Then he delivered a message to children “I have been saying this to the team members as well. There are good and bad times in soccer and life, but the bad time is an opportunity for us to grow. The Japan soccer team members demonstrated through the World Cup 2010 games the courage to face up with difficulty when faced with obstacles. Never give up even in tough times”.