EU-Japan Free Trade Agreement (FTA) and Economic Partnership Agreement (EPA) closer to conclusion

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With US withdrawal from TPP and BREXIT, the EU-Japan Free Trade Agreement moves to the center of attention

EU-Japan Free Trade Agreement and Economic Partnership Agreement nearing conclusion, maybe this summer.

EU and Japan started to prepare for Free Trade Agreement (FTA) and the political framework Economic Partnership Agreement (EPA) at the 20th EU-Japan Summit in May 2011, three years after Japan and USA had jointed the Trans-Pacific Partnership (TPP) negotiations.

For several years, TPP was catching headlines, Prime Minister Shinzo Abe saw TPP as a core component of his Abenomics program to restarted Japan’s economy from 20 years of stagnation. The EU-Japan FTA and EPA negotiations always seemed to be in the shadow of TPP.

In the meantime, President Trump has decided to withdraw from TPP, and the UK seems to be on the way to BREXIT.

The EU-Japan FTA and EPA negotiations have moved to the center of attention, and seem to near conclusion.

Trade in goods is only one of 14 different working groups – a modern FTA is very complex

  1. Trade in goods (including Market Access, General Rules and Trade Remedies)
  2. Non-Tariff Measures and Technical Barriers to Trade
  3. Rules of Origin
  4. Customs and Trade Facilitation
  5. Sanitary and Phytosanitary Measures
  6. Trade in Services
  7. Investment
  8. Procurement
  9. Intellectual Property (including Geographical Indications)
  10. Competition Policy
  11. Other issues (General and Regulatory Cooperation, Business Environment, Animal Welfare)
  12. Trade and Sustainable Development
  13. Dispute Settlement
  14. General, Institutional and Final Provisions and Transparency

Don’t be blinded: Free Trade Agreements reduce business costs and risks and create access – but they don’t guarantee business success

the Free Trade Agreement will open new sectors previously closed to any foreign company in Japan, e.g. railways procurement, and reduce many barriers, however, top-class leadership, deep Japan knowledge at all levels of management, sufficient investments, and products or services with a large competitive advantage remain crucial to success in Japan.

Free Trade Agreements reduce business costs and risks, but do not eliminate them.

More about the EU-Japan trade negotiations:
http://eu-japan.com/eu-japan-agreements/eu-japan-trade-negotiations/

BREXIT

http://eu-japan.com/eu-japan-agreements/brexit-japan/

Copyright (c) 2017 by Eurotechnology Japan. All Rights Reserved.

Reduce your energy costs in Japan and Japan’s energy situation post-Fukushima

Delegation of the European Union EU to Japan in Tokyo

Energy costs in Japan: A presentation to diplomats from the 28 EU countries (+ Norway and Switzerland) given at the EU Delegation in Tokyo on Thursday 18 May 2017

How can you reduce your energy bills?

Energy costs in Japan, how to reduce energy costs, and the current energy situation in Japan post-Fukushima are inherently linked and are the topics of this talk given by Gerhard Fasol at the EU Delegation (EU Embassy) in Tokyo on Thursday 19 May 2017.

Electricity prices in Japan compared to EU countries. Electricity charges in Japan are about 40% cheaper than in Germany.

Energy costs in Japan: Even now, post-Fukushima, electricity costs in Japan are not particularly high, if Japan was a EU country, Japan’s electricity costs would be ranked at about 15th or 16th rank.

Japan’s electricity charges are about 40% cheaper than in Germany, and on a similar level as in France or UK.

  • Ireland c€59.01
  • Germany c€40.28
  • Spain c€37.26
  • Sweden c€36.11
  • Portugal c€33.41
  • Denmark c€32.78
  • Czech Republic c€31.92
  • Cyprus c€31.79
  • Austria c€29.88
  • Finland c€29.20
  • Italy c€26.61
  • Slovakia c€26.30
  • France c€25.09
  • Luxembourg c€24.29
  • Croatia c€23.10
  • Japan c€23
  • Slovenia c€22.68
  • UK c€20.19
  • Poland c€18.80
  • Hungary c€18.35
  • ….

(source: Eurostat as of July 2013, energy costs in Japan: electricity costs for Japan are typical Tokyo household electricity charges)

Paradigm shift: redesign the electricity grid

We see a paradigm shift: we need to change how we think about energy. Our electricity supply system has been built over the last more than 100 years and many design principles have been decided 100 years and have then been frozen in, although they might not be the best choices any more in today’s world.

Traditional electricity grids are designed top-down, with large centralized power stations at the top, and a distribution system down to the end users.

This traditional hierarchical top->down integrated grid structure is globally in the process of reinvention. The different services:

  1. generation
  2. transport
  3. grid frequency stabilization
  4. distribution

are being split into separate businesses, and each one is being deregulated. In addition, the top-down structure is changed: renewable energy sources, micro-hydropower station and other sources feed electricity into the grid from the bottom-up, requiring changes in the design and management of power grids.

In Japan the traditional electricity grid has three hierarchical layers:

  1. Special high voltage (特別高圧)
    1. 500kV, 270kV, 140kV
    2. 60kV
    3. 20kV
  2. High voltage (高圧) 6kV
  3. Low voltage (低圧) 200V, 100V

These three markets (1) Special high voltage, (2) High Voltage, (3) Low voltage, are approximately of equal size in Japan, and represent each about 1/3 of Japan’s electricity market. The (3) Low voltage market was deregulated on April 1, 2016, and the other two market sectors earlier. Up to March 31, 2016, 10 regional electricity operators had the monopoly in the retail (low voltage) sector of their regions. Since April 1, 2016, all markets are liberated and low voltage segment consumers are free to buy their electricity from a number of suppliers.

50Hz/60Hz

Electricity started in Japan in 1893:

  • The first generator in Tokyo was from the German firm AEG, and therefore 50Hz
  • The first generator in Osaka was from the US firm General Electric, and therefore 60Hz

Event today the west of Japan has 60Hz, while the east has 50Hz. Since semiconductor electronics enables frequency conversion, and since long distance transport is frequently DC anyway, this 50Hz/60Hz split is very unlikely to change.

AC/DC

For historic reasons, most electricity is delivered to end customers as AC (alternating current), however most consumption today is increasingly DC (direct current). e.g. LED lighting, computers and most IT equipment including data centers require DC electricity. Solar power plants also produce DC electricity. Battery storage also requires and delivers DC electricity. So we might see an increasing shift to DC electricity supplies.

How to reduce your energy bill

Energy costs in Japan: in the past urban design typically maximized electricity sales:

  • “All Denka” was a long-term campaign by Japan’s electricity industry to maximize the consumption of electricity
  • design model:
    • build the town in order to sell as much electricity/air-conditioners/gas as possible
    • top-down: huge nuclear power stations far away + top-down distribution system
    • single windows, save money on insulation
    • heating in winter, air conditioning in summer

In the future

  • communities, companies and household take responsibility of energy locally
  • “positive energy buildings”: buildings generate and sell electricity instead of consuming. Example: MORI-Roppongi Hills
  • THINK: Marunouchi & MORI Buildings: “we want to be so well prepared for disasters, that people don’t run from our buildings, but that people come to our buildings for safety”
  • take responsibility!

How to reduce your energy bill > earn money selling electricity

    Plan, design and build energy positive buildings, sell electricity

  • cut consumption
    • Insulate
    • buy low-energy equipment, e.g. air-conditioner, washing machine
    • LEDs instead of bulbs and fluorescent tubes
    • energy management system
  • generate electricity:
    • solar, wind, heat-exchangers, heat-pumps, co-generation
    • fuel cells (e.g. Bloom (gas), or Enefarm, Panasonic) > off-grid
  • negotiate supply contracts, combine gas & electricity & phone/internet to get discounts
    • e.g. all three major phone companies (KDDI, Docomo, SoftBank) sell electricity, internet access etc + electricity. Combine: phone, internet, electricity to get discounts.

Nature governs energy – nature cannot be fooled

Today’s energy situation in Japan is directly a function of the outcome of the Fukushima-Dai-Ichi disaster.

To understand the reasons for why the Fukushima-Dai-Ichi disaster happened, it is necessary to go back in history, there is not one single reason for this nuclear disaster but many starting at the design decisions taken even before the construction started.

It is instructive to compare the situation of TEPCO’s Fukushima-Dai-Ichi nuclear power plant with Tohoku Electric Power’s Onagawa nuclear power plant:

  • TEPCO’s Fukushima-Dai-Ichi nuclear power plant: tsunami height = 13 meters, one of the worst nuclear disasters
  • Tohoku Electric Power’s Onagawa nuclear power plant: tsunami height = 13 meters: successful shut down without damage, served as a refuge for about 300 people from the neighborhood who had lost their homes in the tsunami and earthquake disasters

Why the difference?

  • TEPCO’s Fukushima-Dai-Ichi nuclear power plant: ground elevation was reduced from 35 meters to 10 meters to save cooling water pumping costs
  • Tohoku Electric Power’s Onagawa nuclear power plant: Yanosuke Hirai carefully research previous tsunamis, especially the Great Jogan Tsunami of July 13, AD 869, built 13.8 meters above sea level

Read in detail in our review of the Fukushima and Tohoku disasters, 6 years after, our blog of March 11, 2017:
http://www.eurotechnology.com/2017/03/11/tohoku-disaster-6-years/

A few days after the Fukushima-Dai-Ichi disaster, US President Obama sent 150 top nuclear engineers to Japan for 11 months to assist directly the Japanese Prime Minister and the Japanese Government and TEPCO to mitigate the nuclear disaster. The Leader of this team of 150 US nuclear experts was Chuck Casto, who I invited two times to talk at the Ludwig Boltzmann Forum events. Read Chuck Casto’s explanations of the Fukushima Disaster here:

I also invited the Kiyoshi Kurokawa, the former Chairman of Japan’s Parliamentary Commission into the Fukushima Nuclear Disaster, to speak at the Ludwig Boltzmann Forum:
Kiyoshi Kurokawa: “Groupthink can kill” (6th Ludwig Boltzmann Forum 20 February 2014)

Summary

  • Nature governs energy, and nature cannot be fooled (Richard Feynman)
  • Global trend: reengineering the grid. Localize, democratize, liberalize, deregulate
  • Renewable energy: wind power can cover all of Japan’s energy needs (in principle)
  • Energy, electricity and gas market liberalization is going ahead

Interview in The Economist:

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Copyright (c) 2017 by Eurotechnology Japan. All Rights Reserved.

Japan GDP growth and losses at Japan Post – Gerhard Fasol interviewed by Rico Hizon on BBC TV

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Japan’s economy grows five quarters in a row, and Japan Post books losses of YEN 400.33 billion (US$ 3.6 billion) for an acquisition in Australia

Japan GDP growth, growth of 2%/year. Still, Japan’s economy is the same size as in 2000, while countries like France, Germany, UK today are double the size as in the year 2000

Japan GDP growth: We have seen 5 quarters of economic growth in Japan, for the January-March 2017 quarter the consensus is that the Japanese Government is likely to announce economic growth corresponding to an annual growth rate of around 2%/year (update: Japan’s Government announced an annual growth rate of 2.2%/year).

Generally the business mood in Japan is optimistic now, personal consumption and industrial orders are growing. We see investments in preparation for the 2020 Olympics. Venture start-ups and venture investments are growing, while still at a low level, we see venture businesses developing not only in Tokyo, but also in regional centers around Japan.

One mid-term risk to Japan GDP growth is the potential implementation of the postponed consumption tax rate increase.

The big picture however is, Japan’s economy today is approximately the same size as 17 years ago in 2000. During the same 17 years most major economies, e.g. France, Germany, UK have doubled in size. France, Germany, UK’s economies today are about twice the size as in 2000, while Japan’s economy today is about the same size as in 2000. Quarterly GDP figures just measure the short term fluctuations of this long term behavior.

Rico Hizon: so what would Japan have to do to restart long term growth?

Gerhard Fasol’s answer

Japan would have to do three things to restart economic growth long term:

  1. Population: Implement policies to make it easier for families to have children, shift spending from the aged to children, improve eduction, shorter work hours, build children’s day care centers, gender equality
  2. Implement Prime Minister Abe’s “third arrow”, the reforms. Deregulation not just in a few “special zones” but nation wide.
  3. Improve corporate governance to improve company’s growth, globalization and management.

Japan Post trips up on globalization: books YEN 400.33 (US$ 3.6 billion) losses due to an acquisition in Australia – with a Toshiba connection

Japan Post announced a loss of YEN 400.33 (US$ 3.6 billion), and a resulting net loss of YEN 28.98 billion (US$ 260 million) for the fiscal year ending March 31, 2017.

Japan Post Holdings was launched on the Tokyo Stock Exchange with the IPO on Nov 4, 2015.

Investors expect major growth of Japan Post Holdings into a global business, such as Deutsche Post has with privatization and later the acquisition and merger with the global logistics group DH about 20 years ago.

Around the time of the IPO Japan Post announced the acquisition of the Australian logistics group Toll for about YEN 620 billion (US$ 5.5 billion), while Toll’s market cap previous to the acquisition was about YEN 410 billion (US$ 3.7 billion).

Japan Post’s recent write-down at Toll is about equal its pre-acquisition market cap, or about 65% of the acquisition prize.

The deep problem of Japan Post’s steep write-downs at the Australian acquisition Toll, is that this casts doubts on Japan Post’s developments into a global business.

The Toshiba connection: Japan Post’s former CEO, Taizo Nishimuro (西室 泰三), previously served as CEO and Chairman of Toshiba

CEO of Japan Post at the time of the questionable Toll acquisition was no other than Mr Taizo Nishimuro (西室 泰三), former CEO and Chairman of Toshiba, now honorary advisor of Toshiba, who spent all his career at Toshiba, working at Toshiba since 1961. Toshiba is currently in severe difficulties caused primarily by Toshiba’s acquisitions of US nuclear construction firms, however Toshiba’s fundamental problems go back much much longer.

Japan Post Holding [6178]

Japan Post Holdings was founded on 23 January 2006, following the path to privatization initiated by Prime Minister Koizumi of Japan’s national Post Office.

Japan Post Holdings is listed on the Tokyo Stock Exchange (No. 6178), IPO was on 4 November 2015, and has five divisions:

  1. Japan Post Service (日本郵便株式会社): mail delivery
  2. Japan Post Network (郵便局株式会社): Post Offices = retail and real estate
  3. Japan Post Bank (株式会社ゆうちょ銀行): Tokyo Stock Exchange No. 7182
  4. Japan Post Insurance (株式会社かんぽ生命保険): life insurance. Tokyo Stock Exchange No. 7181
  5. Toll Holdings: logistics

Copyright (c) 2017 by Eurotechnology Japan. All Rights Reserved.

Bill Emmott and Gerhard Fasol – A conversation about Japan’s future

Bill Emmott and Gerhard Fasol - A conversation about Japan's future

Bill Emmott and Gerhard Fasol

Bill Emmott is an independent writer and consultant on international affairs, board director, and from 1993 until 2006 was editor of The Economist. http://www.billemmott.com

Gerhard Fasol is physicist, board director, entrepreneur, M&A advisor in Tokyo. http://fasol.com/

A conversation about Japan’s future

Bill Emmott:

I came first to Japan in 1983 as Economist Tokyo Bureau Chief, staying until 1986. Then in 1988 I came back on sabbatical leave and wrote “The sun also sets: why Japan will not be number one”, which against my expectation when it was published in 1989 found big resonance in Japan. The stock market was plunging, and mine was the most immediately available explanation. Ever since, journalists have constantly asked me what the sun is doing now! It also meant that even when I became editor in chief of The Economist in 1993 I spent much more time focused on Japan than I had expected, visiting as often as I could to keep track of the post-bubble developments, and wrote a book that appeared only in Japanese translation called “Kanrio no Taizai”, or the bureaucrats’ deadly sins. But later, with Prime Minister Koizumi consolidating reforms, and the banking system at last getting cleared up, I sent myself back in 2005 to research and wrote a much more optimistic special supplement for The Economist which became a book, “The sun also rises”.

Throughout the 35 years since I first came to Japan, I have both been fascinated and struck by the fact that although this is in so many ways an inward-looking self-contained nation, foreign observers are listened to and even have a chance of having a positive impact.

One element that had featured consistently in my writings ever since the 1980s had been observations and expectations for a growing role for women in employment and power. This seemed logical given that, at least before the bubble burst, Japan was heading for a labour shortage, but also the Equal Employment Law of 1986 had led to more females being recruited by major organisations. Japan’s excellent education surely meant that the underused half (= women) of the adult population would soon be used more productively.

Of course, this has developed a lot more slowly than I expected or hoped, partly for cultural reasons but also because Japan has not in fact had a labour shortage, until now.

I wanted to meet you, Gerhard tonight because we both are fascinated by the role Japanese women have in making Japan such a fascinating country, and how the many really strong Japanese women could have key roles in bringing growth and dynamic change back to Japan.

  • Could Japanese women have bigger roles for the development of Japan?
  • What is holding women back in Japan?
  • Who are the role models?

I am making interviews with high-achieving Japanese women to try to find answers, and plan to compile them into a book later this year. What would you say, Gerhard? And anyway, how did you end up here?

Gerhard Fasol:

My path to Japan is quite different than yours, Bill. I came to Japan first in 1984 as Fellow of Trinity College Cambridge, and scientist at the Max-Planck-Institute in Stuttgart, part of a project to build a research cooperation with NTT’s R&D labs. I saw that Japan was very important in technology and weakly linked to the outside – and still is today, I think. So in 1984 I decided to make Japan my second professional focus in addition to physics and electronics. Like you – the deeper I get into Japan, the more I learn about Japan, the greater my fascination, and my motivation to contribute.

Now I am working on many different projects, working on international technology M&A projects, and I am also one of a microscopic number of foreigners on the Board of Directors of a stock market listed Japanese corporation – reforming Japanese corporate governance hands-on.

Could Japanese women have bigger roles for the development of Japan?

Gerhard Fasol:

I think that the equal participation of women in leadership is directly linked to the population issue, ie the number of children born.

According to the Inter-Parliamentary Union in 2016 http://data.worldbank.org/indicator/SG.GEN.PARL.ZS

  • in Japan 10% of Members of Parliament were women,
  • while in Sweden 44% of Members of Parliament are women,
  • 37% in Germany and
  • 26% in France –
  • the world average is 23% women in Parliaments.

In Japan the ratio of women in Parliament has increased from 1% in 1990 to 10% in 2016, so there is progress. If we extrapolate, and if the trend continues, then it might take another 30 years or so until Japan reaches world average in terms of women bringing women’s views into Parliament, and taking part in making the laws. And it might take Japan 100 years to reach Scandinavian standards of women’s participation in making the laws of the land – unless there is some acceleration in Japan.

Japan’s most powerful Ministry, the Ministry of Finance, did not hire any women into career positions for a period of about 10 years!

At the 2015 New Year event of Kyoto Bank, Keidanren Chairman Mr Sadayuki Sakakibara showed that Japan’s spending on aged people is dramatically higher than spending on children, and that this ratio is increasing with time, Japan spends more and more on aged people and less and less on children. There are two ways to look at this situation:

  • one way is to say: we have an aging society, therefore its only natural to spend more on
    the aged, and less for children
  • the opposite way to look at the same situation is to say: we are spending less and less for children, no wonder we have fewer and fewer children. If we did more for young people, maybe people will have more children….

Actually most Japanese women I talk to want 2-3 children, but many cannot for financial reasons.

By nature, women give birth to children, not men, so more women in decision making positions including Government and Parliament will bring children’s issues into decision making.

As an example, child birth costs in Japan are not covered by health insurance, while they are everywhere in Europe. There are many other open and hidden costs of having children in Japan compared to Europe.

We discussed some of these issues at the recent Ludwig Boltzmann Forum on women’s development and leadership, which I organized here in Tokyo http://www.boltzmann.com/forum/2016-womens-leadership/

What is holding women back in Japan?

Gerhard Fasol:

The most important factor are mindsets. The key to give more power to women in Japan is to change mindsets, to change the way of thinking.

As an example, the Prefecture of Kanagawa in 2015 created the “woman act” committee, under the slogan “women, step by step, take more responsibility”, however this committee both in 2015 and also in 2016 consisted of 11 men – not one single woman leader: http://www.pref.kanagawa.jp/osirase/0050/womanact/
Why not create a committee of 11 women leaders to lead efforts on gender equality in Kanagawa Prefecture? Why not promote women to leadership positions in Kanagawa Prefecture?

Another factor holding women back are the very long working hours common in Japan. As an example, at a recent EU-Japan gender equality conference, the Danish polician Astrid Krag, who was Minister for Health and Prevention at the age of 29 – 32 years, and who has two children, explaned that in the Parliament of Denmark the decision was taken not to take any vote after 4pm, so that Members of Parliament can be back home by 5pm, collect children from daycare centers in time etc. So in the Parliament of Denmark it is guaranteed that Members of Parliament can leave at 4pm. In today’s Japan such action is unthinkable, age 29 – with young children – would be unbelievably young for a Government Minister in Japan. https://en.wikipedia.org/wiki/Astrid_Krag

Late-night or overnight sessions at work, including Parliament, makes life incredibly difficult in Japan for parents with young children, doubtlessly contributing to the small number of women in top positions in Japan.

Who are the role models?

Gerhard Fasol:

Despite these difficulties, there is a substantial number of very strong women in Japan, who have worked their way up into leadership positions.

Examples are the Mayor of Yokohama, Ms Fumiko Hayashi, who succeeded in a very distinguished business career, and the Governor of Tokyo, Ms Yuriko Koike, who won the election on her own as an independent candidate, because she did not receive the backing of her party.

Bill Emmott:

That is great, as I have now interviewed Koike-san and plan to interview Hayashi-san during my next visit. Personally, as well as admiring women who have made it to the top in the tough political world I also admire and am interested in women succeeding as entrepreneurs and as executives in entrepreneurial companies. By starting and building their own companies, women can really create new realities, showing that new organisational cultures are possible in a Japanese context. Do you agree?

Gerhard Fasol:

Japan has quite a number of women entrepreneurs and business leaders, Ms Tomoko Namba, Founder of Japan’s Internet company DeNA come to mind,
https://ja.wikipedia.org/wiki/南場智子
as well as Ms Fujiyo Ishiguro, Founder and CEO of the NetYear Group:
http://www.bloomberg.com/research/stocks/people/person.asp?personId=867078&privcapId=717286

Science is also an interesting area. We have women leaders in Japanese medicine, I invited some for the Ludwig Boltzmann Forum on women’s development and leadership http://www.boltzmann.com/forum/2016-womens-leadership/

Kyushu University has one single full Professor of Medicine Professor Kiyoko Kato, she explains the situation of women in Japanese Obstetrics and Gynecology here http://www.boltzmann.com/forum/2016-womens-leadership/kiyoko-kato-obstetrics-gynecology/
while Professor Kyoko Nomura has built a center to support women medical doctors and women medical researchers at Teikyo University. She spoke about the situation facing women in medicine in Japan here: http://www.boltzmann.com/forum/2016-2/kyoko-nomura/

Towards the future

Gerhard Fasol:

The tantalizing issue is that the key is to change mindsets, and thats at the same time superficially easy, but at the same time incredibly hard. Thus outstanding strong Japanese women – and there are many of them – have a choice either to work their way up to the top in Japan, start their own company in Japan, or on the other hand to move to Europe, elsewhere in Asia, or to the USA – I know several strong Japanese women, including several Japanese medical doctors, who have moved to Europe or USA. They might of course come back to Japan at a later stage bringing global views and experiences to leadership positions in Japan in the future. I am very optimistic for the future of Japan – sometimes I wish things were moving faster.

Bill Emmott:

I agree entirely. I see Japanese women as both victims of the slow speed of change and as solutions to it. They really could make the Japan of 2030 look quite different, in all sorts of ways. It will be fascinating to watch.

Bill Emmott and Gerhard Fasol met at the restaurant MusMus in Tokyo

left to right: Gerhard Fasol, Ms Atsuko Konta (Manager of the restaurant MusMus), Bill Emmott
left to right: Gerhard Fasol, Ms Atsuko Konta (Manager of the restaurant MusMus), Bill Emmott
Copyright (c) 2017 by Bill Emmott and Gerhard Fasol. All Rights Reserved.

Tohoku disaster 6 years: March 11, 2011 14:46:24

(c) eurotechnology.com

6 years and many lessons learnt since the Tohoku earth quake and Tsunami and Fukushima-Dai-Ichi nuclear disasters

Tohoku disaster and Fukushima nuclear disaster lead to Japan’s energy market liberalization

Tohoku disaster: On Friday March 11, 2011 at 14:46:24, the magnitude 9.0 “Great East Japan earthquake” caused a tsunami, reaching up to 40.4 meters high inland in Tohoku.

Japan’s National Police Agency registers 15,894 deaths and 2,562 missing people.

TEPCO’s Fukushima Dai-1 nuclear power plant vs Tohoku Electric Power Corporation’s Onagawa Nuclear Power Plant

One of the world’s worst nuclear disasters started at Tokyo Electric Power (TEPCO) Fukushima Dai-1 Nuclear Power Plant.

The Onagawa Nuclear Power Plant, owned and operated by Tohoku Electric Power Company, and built under Yanosuke Hirai, was closest to the 2011/3/11 earthquake’s epicenter, and survived the quake without major damage and was successfully shut down, and served as a refuge for 300 people from the neighborhood who had lost their homes. There were radiation alarm signals at Onagawa Power Station, but these alarms were caused by radioactive fallout blown from Fukushima-Dai-Ichi by winds, and did not originate from Onagawa.

The Onagawa Nuclear Power Plant was the only nuclear power plant in the region of the Tohoku Earthquake that survived the earthquake without any major damage.

On Yanosuke Hirai’s insistence, Tohoku Electric Power Company built Onagawa Nuclear Power Plant at 13.8 meters above sea level, while during the construction of TEPCO’s Fukushima Dai-1 plant the natural ground elevation was reduced from 35 meters to 10 meters. The Tsunami reached 13 meters height in both locations.

In 1990 Tohoku Electric Power Company (Onagawa Nuclear Power Station Construction Office) published a detailed analysis of the Great Jogan Tsunami of AD 869

Yanosuke Hirai had researched the Great Jogan Tsunami of July 13, 869, which was caused by the 869 Sanriku Earthquake (貞観地震). The results were taken into account in planning the Onagawa Nuclear Power Station, and published in 1990:

Hisashi Abe, Toshisada Sugeno, Akira Chigama, (Onagawa Nuclear Power Station Construction Office)
“Estimation of the Height of the Sanriku Jogan 11 Earthquake-Tsunami (AD 869) in the Sendai Plain”
Zisin (Journal of the Seismological Society of Japan, 2nd Series), Vol. 43 (1990) No. 4 P 513-525

See also the “869 Sanriku earthquake” entry in Wikipedia.

Fukushima nuclear disaster mitigation. US sends 150 nuclear experts headed by Chuck Casto to work with the Japanese Prime Minister and top leaders for 11 months to help deal with the Fukushima disaster

The USA sent a team of about 150 nuclear experts for 11 months to Japan to assist TEPCO and the Japanese Government in mastering the nuclear crisis. This team was headed by Chuck Casto – read some of his conclusions here:

Japan’s first ever Parliamentary Commission

Japan’s Parliament for the first time ever created an Independent Parliamentary Commission to analyze the nuclear disaster, headed by Kiyoshi Kurokawa, read the summary of his talk “Groupthink can kill” here (including videos describing the Commissions results in simple easy to understand terms).

Three former TEPCO executives have now been indicted by a citizen’s prosecution committee.

Nuclear disaster leads to energy market liberalization in Japan

Japan’s faith in nuclear power was shaken, leading to development of renewable energy, liberalization and long overdue reforms of Japan’s energy sector.

Quakes and after-quakes

The figures show that more than 300 earthquakes of magnitude 5 or larger occurred since the major quake on March 11, 2011 at 14:46. The epicenters of quakes lie mostly where the Pacific Plate moves under the North American Plate on which Tohoku lies.

According to our knowledge earth quakes are mathematically speaking a “chaotic” phenomenon, and scientific arguments are, that it is difficult if not impossible to predict earth quakes with precision. (Figure: Wolfram Alpha LLC)

Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)

Nuclear fallout on Tokyo: radiation levels in Tokyo/Shinjuku

Starting with Tuesday 15 March 2011, radioactive fallout came down on Tokyo as shown in the figures below.

Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria
Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria

Radiation levels in Tokyo (Shinjuku and Shibuya) and Tsukuba:

Radiation in Tsukuba (until April 13, 2011) compared to Austria
Radiation in Tsukuba (until April 13, 2011) compared to Austria

The blue curve above shows the radiation levels in Tokyo/Shinjuku as measured and published by the Tokyo Metropolitan Institute for Public Health here:

  • each hour for the last 24 hours
  • daily starting March 1

The red curves show maximum and minimum data as measured by TEPCO in Tokyo-Shibuya, and published here: TEPCO radiation data

The green curves show radiation data measured by Japan’s highly respected AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

Radiation levels in Tsukuba

The green curves show radiation data measured by AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

The radiation measurement results in Tsukuba are considerably higher than found in Tokyo, but have decreased close to the top levels found naturally in Austria and in many other countries.

The differences in the data between Tokyo and Tsukuba could be because Tsukuba is 60km closer to Fukushima, could be caused by weather conditions, but they could also be caused by differences in the measurement equipment or a combination of these factors.

Eurotechnology-Japan newsletters in March/April 2011

In a series of newsletters, our company informed our customers, and friends about the nuclear disaster impact on Tokyo. Our newsletters were reposted by our readers to 100s of friends, and in some cases influenced the decisions by foreign subsidiaries here in Tokyo. In the days following the nuclear disaster, it was difficult for non-phycists to understand the true situation, and what the radioactive fallout really meant.

Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

Mobile internet coming of age: i-Mode’s 18th birthday

i-mode menu NTT docomo

The global mobile internet was born today 18 years ago, on February 22, 1999

NTT Docomo announced the start of i-Mode on February 22, 1999 at a press conference in Tokyo

Today, 18 years ago, on February 22, 1999, Mari Matsunaga, Takeshi Natsuno, and Keiichi Enoki announced the start of the world’s first successful mobile internet service to a small number of people who made it to NTT Docomo’s press conference in Tokyo.

For many years, Japan was the global hotspot for mobile internet, mobile broadband, fixed net broadband (FTTH), there is a very long list of inventions, innovation, new services and products which were successfully brought to market in Japan, and in some cases it took 10 years or longer for these same services to succeed elsewhere in the world.

Examples of services and products which saw their invention, or first successful global mass market introduction in Japan include:

Inventing the mobile internet vs capturing global value

Undoubtedly the biggest success story emerging from Japan’s pioneering mobile internet days is SoftBank

After Vodafone acquired a controlling stake in Japan Telecom, it took Vodafone at least one year to realize that instead of a far east backwater waiting for Vodafone, Japan’s mobile market was actually years ahead of Europe at that time. By the time Vodafone realized that instead of sailing into an easy market, they had actually entered the world’s most ferociously competitive market, it was too late, Vodafone sold its Japan operations to SoftBank, which turned out the failing Vodafone-Japan within a few months of intense efforts. SoftBank’s acquisition of Vodafone-Japan and the successful turn-round became the basis for SoftBank to implement Masayoshi Son’s plan to create one of the world’s most important companies.

Other Japanese success stories resulting from pioneering the mobile internet

Japan has created one of the most vibrant smart phone games eco-system, with a large number of smart phone game companies growing, many listed on the Tokyo Stock Exchange.

Beyond games, Japan has created a vibrant sector of internet and mobile ventures, founded in the wave of Japan’s mobile internet and FTTH broadband adoption. However, because of Japan’s well known Galapagos syndrome, few have made it into global success stories yet. However, its not too late.

eMoji made it into MoMa.

QR codes are all over China, however not monetized by Denso Wave, the Toyota family company which invented QR codes for automotive parts management.

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Toshiba nuclear write-off. BBC interview about Toshiba’s latest nuclear industry write-offs

Toshiba crisis

Toshiba is expected to announce write-off provisions on the order of US$ 6 billion today

Toshiba is on Tokyo Stock Exchange warning list for possible delisting in March 2017

This morning 7:30am I was interviewed on BBC TV Asia Business Report about an update of Toshiba’s ongoing crisis, which has been 20 years in the making.

Here some notes in preparation for my interview.

What is Toshiba’s situation now?

Toshiba’s market cap today is YEN 1024 billion = US$ 9.6 billion.
Toshiba is expected today to announce write-off provisions on the order of US$ 6 billion.
Toshiba owes about US$ 5 billion to main banks as follows:

Mizuho YEN 183.4 billion
SMBC YEN 176.8 billion
Sumitomo Mitsui Trust Holdings YEN 131.0 billion
BTMU YEN 111.2 billion
Total YEN 602.4 billion = US$ 5.3 billion

Toshiba is on notice for delisting by the Tokyo and Nagoya Stock Exchanges, and faces the risk of being delisted by March 15, 2017, i.e. in about 4 weeks from now.

Toshiba is trying to raise capital e.g. by seeking investment in the IC/flash memory division, however, Toshiba seeks to keep control, so Toshiba is trying to raise a minority share, or non-voting shares or similar, in order not to lose control.

How did Toshiba get into a situation to potentially need to write off US$ 6 billion?

Toshiba acquired 87% of the US nuclear equipment manufacturer Westinghouse.

While Westinghouse is a famous name, what Toshiba actually acquired seems to have gone through a period of restructuring.
For an analysis see “Westinghouse: Origins and Effects of the Downfall of a Nuclear Giant”, in the World Nuclear Industry Status Report: https://www.worldnuclearreport.org/Westinghouse-Origins-and-Effects-of-the-Downfall-of-a-Nuclear-Giant.html

In 2015 Toshiba acquired the construction company SHAW’s assets from the Chicago Bridge & Iron Company CB&I for US$ 229 million plus assumed liabilities. CB&I had acquired SHAW for US$ 3.3 billion in July 2012, and SHAW has on the order of US$ 2 billion annual sales.

Why did Toshiba acquire a company for US$229 million, which has US$ 2 billion annual sales, and which was in 2012 acquired for US$ 3.3 billion? Which factors reduced the value of this company from US$ 3.3 billion to US$ 229 million within the 3 years from 2012 to 2015?
Presumably because there are large liabilities arising from nuclear construction, which Toshiba now seems to have to assume.

Cost overruns and delays are not uncommon in the nuclear industry. Similar issues happened with a Finnish nuclear reactor recently, see: https://en.wikipedia.org/wiki/Olkiluoto_Nuclear_Power_Plant

What is likely to happen now with Toshiba? Is Toshiba too big to fail?

Difficult to say what will happen. Toshiba is a huge corporate group with about 200,000 employees and many factories in many countries, so clearly Toshiba is not going to disappear without trace.

The immediate risk is that Tokyo Stock Exchange carries out its warning, and delists Toshiba, which will further increase Toshiba’s ability to raise capital. In the case of a delisting, private equity, and/or government might invest and restructure, and Toshiba might be split up. For example, Toshiba’s nuclear Westinghouse division is totally separate from its very successful flash memory division, there is not much business logic in having both under one holding company.

Impact on UK

Toshiba acquired 60% of UK based NuGeneration with the view to build nuclear power stations in the UK. This project requires Toshiba to contribute to the funding of the nuclear project, for which Toshiba would probably need a financially healthy partner.

What is the big picture? How did Toshiba get into this crisis?

Toshiba’s crisis has been building up for 20 years, and is in my view a consequence of corporate governance issues over a long time.

Essentially, Toshiba should have been reformed 20 years ago from the top down.

Japan’s 8 electronics giants have had essentially no growth and no profits for 20 years. This tragedy has been obvious for many years now, and was a big contributing factor for Japan’s government to reform Japan’s corporate governance laws and regulations, see:

Toshiba’s Board of Directors was exchanged in September 2015, and now includes several very capable and experienced Japanese independent Board Directors, but unlike Hitachi, even today neither Toshiba’s Board of Directors, nor Toshiba’s Executive Board include one single foreigner. 

One might think that a huge global group like Toshiba with complex businesses around the globe might benefit from a variety of view points and experiences from different countries at Supervisory Board and Executive Board level – not all just from one single country. Japanese corporations including Hitachi, SoftBank, Nissan and a small number of others are now recognizing the benefits of diversity of experience and viewpoints at Supervisory Board and Executive Board level.

We can only hope that Toshiba’s executives and Board Directors have the experience and ability to solve the extremely complex issues deep inside the bowels of the US nuclear construction industry – far away on the other side of the world.

Japan electronics industries – mono zukuri. Preview this report:

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Changing Japanese management – a talk on 6 October 2016 at the Embassy of Sweden

Gerhard Fasol: Changing Japanese management – a talk on 6 October 2016 at the Embassy of Sweden Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016 Corporate governance reforms in Japan

Corporate governance reforms in Japan

Changing the way Japanese corporations are managed: Can it make Japanese iconic corporations great again?

A talk by Gerhard Fasol at the Embassy of Sweden organized by the Embassy of Sweden, The Swedish Chamber of Commerce in Japan (SCCJ), and the Stockholm School of Economics

You need to know more details about corporate governance reforms in Japan?

Corporate governance reforms in Japan – practical views

Abstract: Changing the way Japanese corporations are managed

The Executive Management Board and the Supervisory Board are normally independent and composed of different people – except in Japan. In Japan traditionally Executive Management Board and the Supervisory Board are one and the same, ie the Executives of traditional Japanese companies supervise themselves – no surprise that the CEO seldom fires himself!

It is obvious that such self-supervision has big disadvantages, and may be one of the major reasons for Japan’s weak economic growth, and several recent corporate scandals. Companies in basically all other countries are managed by an Executive Management Board, which is supervised by a Supervisory Board, which approves or vetoes all major decisions of the company, and evaluates the performance of the Executive Manager, including the Chief Executive/CEO, and if necessary fires executives including the CEO, and selects and approves the new CEO.

To remedy this problem with the governance of Japanese corporations, Japan’s Government, the Tokyo Stock Exchange, and the Financial Services Agency have been changing the rules to improve the supervision of Japanese companies.

Speaker profile

Dr. Gerhard Fasol is one of a microscopic number of foreigners who is an independent Director on the Management and Supervisory Board, and also a Member of the Audit Board of a stock market listed Japanese corporation, and he will talk from several years of first-hand experience of how Japanese companies are supervised, which changes are on the way, and which further improvements are necessary to improve the management and supervision of Japanese corporations.

Date: Thursday October 6th, 2016, 18:30

Place: Alfred Nobel Auditorium, Embassy of Sweden, 10-3-400 Roppongi 1-chome, Minato-ku, Tokyo 106-0032

Details and registration

Further details here.

To register please contact the Swedish Chamber of Commerce in Japan.

Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016
Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016
Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016
Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016
Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016
Gerhard Fasol "Corporate governance reforms in Japan" Embassy of Sweden on 6 October 2016
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016

Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

SoftBank acquires ARM Holdings plc: paradigm shift to internet of things (IoT)

eurotechnology softbank

On 18 July 2016 SoftBank announced to acquire ARM Holdings plc for £17 per share, corresponding to £24.0 billion (US$ 31.4 billion)

SoftBank acquires ARM: acquisition completed on 5 September 2016, following 10 years of “unreciprocated love” for ARM

On 18 July 2016 SoftBank announced a “Strategic Agreement”, that SoftBank plans to acquire ARM Holdings plc for £24.0 billion (US$ 31.4 billion, ¥ 3.3 trillion) paid as follows:

  • Cash on Hand: £16.7 billion (US$ 12.5 billion, ¥ 2.3 trillion)
  • Loans: £7.3 billion (US$ 9.5 billion, ¥ 1.0 trillion)
  • Total: £24.0 billion (US$ 31.4 billion, ¥ 3.3 trillion)

(excluding 20.4 million shares (1.4%) that SoftBank already owned on 18 July 2016).

Acquisition schedule:

  • 18 July 2016: Strategic agreement between SoftBank and ARM announced by SoftBank
  • 5 September 2016: effective date of Scheme of acquisition
  • 6 September 2016: ARM delisted, cancellation of listing of ARM shares
  • 12 September 2016: cancellation of listing of ARM US Depositary shares (ADS)

Straight line from SoftBank’s acquisition of Vodafone-Japan to acquisition of ARM

In a detailed interview in Nikkei on 3 September 2016, Masayoshi son explained that he was interested in ARM ever since about 1906, when saw the paradigm shift from PC to mobile, when he discussed his designs for mobile internet handsets with Steve Jobs, and when he acquired Vodafone-Japan (see: Why did Vodafone fail in Japan? … and miss an opportunity of US$ 83 billion).

SoftBank’s acquisition of Vodafone Japan is explained here: Softbank acquires Vodafone Japan with co-investment from Yahoo KK

SoftBank’s acquisition of Vodafone Japan – in combination with having developed YAHOO-Japan into the leading internet service company in Japan – enabled SoftBank to become a key global player in mobile communications.

Masayoshi Son: unreciprocated love for ARM for 10 years

In the Nikkei interview of 3 September 2016, Masayoshi Son explains that he had an “one-sided / unreciprocated love for ARM” for at least 10 years, but decided to acquire SPRINT first. After acquiring SPRINT he had to pay down debt before being able to acquire ARM now.

ARM Holdings plc

ARM was founded on 27 November 1990 as Advanced RISC Machines, however the abbreviation ARM was first used in 1983 and initially meant “Acorn RISC Machines”.

Acorn Computers Ltd was founded in 1978 in Cambridge (UK) by Hermann Hauser and Chris Curry to produce computers, and its most famous product was the BBC Micro Computer.

ARM has built an ecosystem of IC design systems and platforms which are at the core of low energy consumption ICs and CPUs for smartphones and many other electronic devices and cars. ARM may become or already is one of the core technology companies for the Internet of Things (IoT).

SoftBank’s ARM Business Department’s name changed to “New Business Department”

On 3 September 2016 SoftBank announced that the name of SoftBank’s ARM Business Department has been changed to SoftBank New Business Department.

Preview – SoftBank today and 300 year vision report:

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Pokemon Go – everybody loves Pikachu…

Pokemon Go is great – but will it bring another Nintendo boom as in 2009? or even exceed 2009?

Pokemon Go is great – but will it bring another Nintendo boom as in 2009? or even exceed 2009?

Google spin-out Niantic Labs’ augmented reality smartphone game booms to the top of charts

Niantic Labs is specialized on augmented reality games. In a previous game, Ingress, players selected about 15 million memorable locations globally. Niantic picked about 5 million of these crowd source generated locations, placed characters out of 740 Pokémon characters at such Pokéstops. Using smartphones, GPS, cameras and their avatars, players hunt Pokémon characters placed at Pokéstops, bring them to arenas/gyms and let their Pokémon characters fight for arenas/gyms. Thats just the beginning, and we can imagine many ways to expand this basic game structure, for example Pokéstops and Gyms sponsored by stores or corporations.

Overcoming Galapagos

Pokémon Go’s success is also significant, because the fundamentally Japanese Nintendo and The Pokémon Company are overcoming the Japan-Only Galapagos Syndrome by cooperating with Google and San Francisco based Google spin-out Niantic.

At the same time, Pokémon Go is also an indication of the power Nintendo can achieve in the smart phone sector. Will Nintendo dethrone current smart phone game kings Mixi and Gung-Ho in Japan?

Everybody loves Pikachu… No. 25 of currently 740 Pokémon characters

For the open day at my older son’s high school, kids made posters introducing their country: the highest mountain, the most characteristic flower, and the most famous person.

One Japanese student writes: “The Prime Minister is the most famous person in Japan, because he decides everything”.

Another Japanese student writes: “Pikachu is Japan’s most famous person, because everybody loves Pikachu”. Which of the two Japanese students knows more about his own country?

Pikachu is No. 25 of currently 740 Pokémon characters, and represents electricity with his zig-zag lightening bolt tail, and bright yellow color.

Pokémon character developer The Pokémon Company estimates the global market for Pokémon characters to be US$ 48 billion.

Nintendo market cap increases from US$ 20.3 billion to US$ 31.5 billion from 6 to 13 July, 2016

Nintendo shares rise from ¥14,055 in the morning of July 6, 2016 to ¥21,830 at close on July 13, 2016

Nintendo market cap rises from ¥ 2.56 trillion (US$ 20.3 billion) in the morning of July 6, 2016 to ¥ 3.09 trillion (US$ 31.5 billion) at close on July 13, 2016

Nintendo boomed around 2009 by disrupting the game world with motion sensing Wii and two-screen handheld DS game consoles. Smartphone disruption reduced Nintendo to pre-2006 size in sales, and profits did not yet recover to pre-boom levels.

Nintendo revenues peaked in 2009, and are now back to where they were before 2006
Nintendo revenues peaked in 2009, and are now back to where they were before 2006
Nintendo income peaked in 2009, and just recently recovered from losses - has not yet reached pre-2006 levels
Nintendo income peaked in 2009, and just recently recovered from losses – has not yet reached pre-2006 levels

Unexpected consequences- The Bank of Kyoto booms, and Bank of Kyoto’s 4.5% holding in Nintendo is worth more than 1/2 of Bank of Kyotos market cap

The Bank of Kyoto owns 4.5% of Nintendo, at close on July 13, 2016, this holding is worth YEN 139 billion (US$ 1.4 billion).

The Bank of Kyoto (TSE Code 8369) at the close on July 13, 2016 has a market cap of YEN 274 billion (US$ 2.64 biliion)

Thus Bank of Kyoto’s holding in Nintendo corresponds to more than one half of its value. This also means that Nintendo is worth about 10 times as much as the Bank of Kyoto.

The Pokémon Company – global market size estimate for Pokémon characters estimate: US$ 48 billion

The Pokémon Company manages and develops the currently 740 Pokémon characters.

The Pokémon Company is a private company owned in equal 1/3 parts by Nintendo KK, KK Game Freek and KK Creatures. KK Game Freek and KK Creatures are both privately held game development companies

More details and analysis in our Report on Japan’s game markets and makers.

Niantic Labs

Niantic Labs, focused on augmented reality games, is a Google spin-out founded in 2010, headed by John Hanke, one of the founders of Keyhole, which is at the basis of Google Earth.

Niantic Labs had staged initial funding of US$ 90 million equally from Google (1/3), Nintendo (1/3) and The Pokémon Company (1/3), and since then an additional Series A round in February 2016, plus we assume that Founder John Hanke, maybe Google at spin-out, other founders likely also own equity. So its not clear to us how much exactly Nintendo owns of Niantec, either directly or via its holding in the Pokémon Company.

There was a augmented reality company in Japan, Tonchi-Dot 頓智ドット株式会社(トンチドット) which created a augmented reality app called Sekai-Camera during i-Mode and Galake-Phones, but it ended all services on January 22nd, 2014.

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Kiyoko Kato: Current state of female doctors in Japanese Obstetrics and Gynecology

Kiyoko Kato, Professor, Department of Gynecology and Obstetrics, Graduate School of Medical Sciences, Kyushu University

The current state of female doctors in Japanese Obstetrics and Gynecology

「日本の産科婦人科における女性医師の現状」

Kiyoko Kato, Professor, Department of Gynecology and Obstetrics, Graduate School of Medical Sciences, Kyushu University

加藤聖子、教授。九州大学大学院医学研究院。生殖病態生理学

The Ludwig Boltzmann Forum on Women’s development and leadership was held on Monday 16 May 2016 in Tokyo in honor of Dame Carol Black’s visit to Japan.

View the full workshop program here.

(Summary of Professor Kiyoko Kato’s keynote written by Gerhard Fasol)

Kiyoko Kato, Professor
Department of Gynecology and Obstetrics
Graduate School of Medical Sciences
Kyushu University

Japanese Obstetrics and Gynecology: improving medical care requires gender equality – higher numbers and higher retention of women medical doctors

  • 18% of medical doctors in Japan in 2008 are female, 82% are male. Back in 1976 only about 10% of medical doctors were female
  • Medical school: in 1976 about 13% of medical students were women, this ratio increased up to about 35% peaking around the year 2000, and subsequently decreases slowly to around 32% in 2008.

Thus the ratio of women medical doctors are slowly increasing in Japan.

The M-curve

About 90% medical doctors enter employment after graduation, remain employed at that level until about 35 years after graduation, when employment ratios slowly decrease due to retirement.

For women medical doctors, the employment ratio curve is M-shaped, with a minimum at about 76% employment approximately 11 years after graduation, at an age around 36 years, after this minimum many women medical doctors enter employment again, reaching similar employment ratio’s as men about 35 years after graduation.

62% of women medical doctors leaving their employment do this because of pregnancy, child birth or child care (80% in case of women younger than 45 years age).

Obstetrics and gynecology medical doctors older than 40 years are predominantly men, while doctors younger than 40 years are predominantly women

For medical doctors aged 40 years and over, obstetrics and gynecology specialists are predominantly men: women obstetricians and gynecology make up less than 10% of doctors at higher ages.

This ratio is reversed for obstetricians and gynecologists younger than 40 years of age: women outnumber male doctors, below 30 years age, women doctors outnumber men nearly by a factor of 2.

There is a clear trend: older medical doctors in the obstetrics and gynecology field are predominantly male, while below the age of 40 years, women dominate by an increasing ratio.

Kyushu University Hospital: Professor Kiyoko Kato is the one and only woman Full Professor of Medicine

Kyushu University has 135 female doctors, and 81.5% are on part-time contracts, only 18.5% have full time employment.

Ratio of women at different levels of the career pyramid:

  • Part-time intern doctors: 36.3% are women
  • Part-time doctors: 30.1% are women
  • Full-time doctors: 8.6% are women
  • Assistant Professors: 22 women vs 187 men (11.8% are women)
  • Lecturers: 1 single woman vs 48 men (2%)
  • Associate Professors: 1 single woman vs 31 men (3%)
  • Full Professors: 1 single woman vs 24 men = Professor Kiyoko Kato (4%)

Only one single woman has achieved promotion into each of the higher ranks of Lecturer, Associate Professor and Full Professor, indicating that any women at all in these higher academic medical Professor ranks are rare exceptions rather than the rule (no mention here of still higher ranks, such as Hospital Directors, Deans, Heads of Department, or University President).

Professor Kiyoko Kato then explained her own career, where she spent time studying in the USA, gave birth to her first child in the USA, and then to her second child after returning to Japan. She had to cope with several challenges, e.g where one of the hospitals she worked was shut down. Finally Professor Kiyoko Kato was appointed Full Professor at Kyushu University Medical School.

Professor Kiyoko Kato proposes that three issues need to be solved:

  • improve the work environment during pregnancy and child bearing
  • re-integration assistance: re-education and support after leave of absence
  • remove obstacles to career improvements

Improve the work environment during pregnancy and child bearing: the “Kyushu University Perinatal period cradle net project” 「周産期ゆりかごネットプロジェクト」

With support from the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Kyushu University created the “Kyushu University Perinatal period cradle net project” (2013 – 2017). In Japanese 「周産期ゆりかごネットプロジェクト」, the website is here:
http://www.med.kyushu-u.ac.jp/yurikago/
and an overview of the project can be found here:
http://www.med.kyushu-u.ac.jp/yurikago/data.html

As the websites show, the “Kyushu University Perinatal period cradle net project” is carefully designed, structured and provides a depth of support for women medical doctors to give birth and pursue their career. Women doctors are given part-time positions in the out patient department after returning from leaves of absence.

So far seven women doctors have taken advantage of this program, and several have been assisted to return to full or part-time employment, two are still absent because of a second pregnancy. Part-time work in the outpatient department assisted them to return back to full time employment. Experiencing the hospital as a patient during birth also provided valuable experience.

Re-integration assistance: re-education and support after leave of absence. The Kyushu University Kirameki Project.

To support re-integration after absence, Kyushu University created the “Kirameki Project” (Kirameki = glitter, shine). The Kirameki Projekt is described on the website here:
https://www.kyudai-kirameki.com/

2007-2009 the Kirameki Project helped female medical workers, female doctors, dentists and nurses to re-integrate after leave of absence.

From 2010 the program (“Kyushu University Hospital Kirameki Project”) was expanded to support continuation of the career for doctors, dental doctors, nurses for both men and women, because of delivery, child care, or disease / medical leave.

The aims of the project are to promote women doctors, dentists, and nurses who would have to resign their positions due to family reasons including marriage, children, husband’s job transfer etc, and to help them pursue their career after marriage.

Activities of the Kirameki Project are:

  • survey the problems of women doctors, dentists and nurses after marriage
  • recruit qualified but “hibernating” female medical personnel
  • learning programs
  • promote “high spirits”, encourage
  • on the job training in the out-patient department

Structured programs of the Kirameki Project:

  • Administrative: refresher program
  • Reestablishment: getting back to work program
  • Suspension/leave: web based education
  • Medical specialist: continuing specialist medical education
  • Marriage, child-care: continuing education
  • Residents, newcomer nurses: basic training
  • Students: gender equality education

Remove obstacles to career improvements

Assist women researchers after child birth and during child rearing: support attending international conferences, support system for hiring research assistants and technicians for research support.

Construct a support system:

  • Return support after child-care leave: day nursery, team medical care including emergency mutual help system, flexible working time, e.g. 9-5 work day
  • Improvement of career: system of supporting female researchers during child bearing and child rearing, grants for female researchers to support technicians

Professor Kiyoko Kato’s wishes and expectations for female doctors

  • responsibility and awareness
  • gratitude to all who helped
  • contribution to medical progress
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership

Notes

Summary of Professor Kiyoko Kato’s keynote written by Gerhard Fasol, view the full workshop program and summaries of all other keynotes here.

Copyright·©2016 ·Eurotechnology Japan KK·All Rights Reserved·

Dame Carol Black: Advancing women in healthcare

Dame Carol Black

Advancing women in healthcare

Dame Carol Black DBE FRCP FMedSci, Principal of Newnham College, Cambridge University, and Expert Adviser on Health and Work, Department of Health and Public Health England

The Ludwig Boltzmann Forum on Women’s development and leadership was held on Monday 16 May 2016 in Tokyo in honor of Dame Carol Black’s visit to Japan.

View the full workshop program here.

(Summary of Dame Carol Black’s keynote written by Gerhard Fasol)

Dame Carol Black DBE FRCP FMedSci
Principal of Newnham College, Cambridge University.
Dame Carol Black has held top positions in medicine and now holds high-level policy advisory positions on health and work in the United Kingdom.

Women in healthcare – Women in the British National Health Service

The gender imbalance in the National Health Service is reflected by the facts that 77% of the total workforce is female, while only 7% of female staff are doctors or dentists, ie only 5.4% of total workforce are female doctors or dentists.

41% of Chief Executives are women.

81% of non-medical staff are women.

Alison Wolf and the XX Factor

Alison Margaret Wolf, Baroness Wolf of Dulwich CBE, is a British economist, and the Sir Roy Griffiths Professor of Public Sector Management at King’s College London, see:

In her book “The XX Factor: How Working Women Are Creating A New Society” (Profile Books 2013), Alison Wolf writes that women are split into two groups: one group sacrificing family for rapid professional advancements, while the other group of women opts for having children at a young age, and remain in low level positions. As a result, inequality is growing faster among women than among men, and low status and low paid jobs are predominantly done by women:

  • 97% of secretaries are female
  • 92% of registered nurses are female
  • 89% of nursing, psychiatric and home health aides are female
  • 90% of maids and housekeeping cleaners are female

The fundamentals: what are the essential characteristics of “good employment”?

  • Good work: is stable and safe, allows individual control, is flexible, gives opportunities, promotes wellbeing, reintegrates sick or disabled people if possible.
  • Good workplaces: have visible senior leadership and well trained managers, enable staff engagement, empower employees to care for their own health

Good news for medicine, less good news for academic medicine

Generally we have achieved a good situation regarding gender equality in medicine. We have achieved meritocracy, and their are no reports providing evidence for systematic barriers against women’s professional advancement. Both intake and retention for women in medicine is high, and the pay scales are the same.

A study (Royal College of Physicians (RCP) Working Party 2009), investigated the female share of Consultants (= established Senior Medical Professionals in the UK), and showed the ratio of women is highest (38% – 49%) in “more plan-able” and “more people oriented” specializations such as general practice or paediatrics, while women’s share is lowest (8% – 23%) in “more technology oriented” and “more unpredictable” specializations such as anaesthetics or surgical specializations.

There is far less progress in academic medicine, and cultural stereotypes and bias remain, see:

Women’s advance into top leadership positions suffers from “cultural” prejudices, e.g. prejudices that women too kind, too caring, not logical or strong enough, or otherwise unsuited to lead.

Prominent leadership roles for women, Prominent medical leadership

Prominent leadership roles need investment in the “extras”, leads leadership dimension in each speciality, and requires career single-mindedness.

Prominent medical leadership requires investment of time “over and above” the ordinary duties, requires professional “stewardship contributions”.

The top 200 leadership positions will naturally go to those who pursue their career goals with a high degree of single-mindedness.

Women choosing the route towards prominent leadership roles need encouragement and support, they need:

  • role models
  • mentors, and
  • sponsors

Role models: Prominent women leaders in UK medicine

  • Una O’Brien, Permanent Secretary, Department of Health
  • Professor Dame Sally Davies, Chief Medical Officer
  • Dame Julie Moore, CEO, University Hospitals Birmingham, NHS FT
  • Claire Murdoch, CEO, Central and NW London NHS Foundation Trust
  • Professor Jane Dacre, PRC Physicans
  • Clare Marx CBE, PRC Surgeons
  • Dr Suzy Lishman, PRC Pathologists
  • Dr Maureen Baker, Chair, RC General Practitioners

Need to debunk leadership myths

Its important not to fall into the traps of common leadership myths, e.g. that leadership is inborn, that leadership is that of a lone genius, that they must inspire others to follow their vision, the leadership requires formal authority, or that all leaders have common personality features.

We need to avoid similar leadership myths in medicine, e.g. that men naturally make better leaders.

Dame Carol Black: From a shoe-making village in decline to Government Advisor

Dame Carol Black is born in the shoe-making village of Barwell, Leicestershire, went to Grammar School in Market Bosworth, were she became Head Girl, despite her working class background.

Dame Carol Black studied first History, then Medical Social Work and finally Medicine at the University of Bristol, specialized in Rheumatology research, focusing on Scleroderma. Later advanced to Medical Director, Royal Free Hospital, President of the Royal College of Physicians, Chairman of the Academy of Medical Royal Colleges, Chair of the Nuffield Trust on Health Policy, then advising Government as National Director for Health and Work, and now Principal of Newnham College, Cambridge.

A major step was Dame Carol Black’s advancement to Medical Director of the Royal Free Hospital, since this meant not just responsibility for an institution or a group or a department, but also responsibility for the health of a population.

Leading the Royal College of Physicians

The Royal College of Physicians was founded by Royal Charter by Henry VIII on 23 September 1518 with the aim to promote the highest standards in medicine.

The skills required were: understanding a wide landscape, consensual leadership, standing ground when necessary, negotiating with Whitehall (= British Government) and building trust.

Chairing all the Medical Royal Colleges – The Academy, 2006-2009

Dame Carol Black from 2006-2009 chaired this group of 21 independent organizations. As Chair, Dame Carol Black had no executive powers, needed to lead by persuasion and with consensus.

Advising Government

Dame Carol Black shared several of her experiences advising Government and highest ranking Government officials and Ministers.

Key was to become valuable in the eyes of Government officials by giving independent advice based on scientific evidence, in combination with remaining totally unpolitical.

Dame Carol Black became a champion for the “cause” of health and work, and kept totally out of politics, never revealing any political views or opinion, and wrote three major reports.

The Confidence Code – forget perfection…Striving for perfection can waste women’s time, and hold back the best from reaching the top

Perfectionism and lack of confidence is large a female issue, see Katty Kay and Claire Shipman: The Confidence Code – the science and art of self-assurance, and what women should know.

Women tend to be held back by striving for perfection, while men tend to take more risks. Striving for perfection can waste women’s time, and hold back the best from reaching the top.

Women in healthcare, Women and careers, women in scientific careers

The issue of Women in Scientific Careers was examined in the “Science and Technology Committee – Sixth Report – Women in scientific careers” by the British House of Commons Science and Technology Committee in February 2014, which can be downloaded here as a pdf file:
http://www.publications.parliament.uk/pa/cm201314/cmselect/cmsctech/701/701.pdf

This UK House of Commons report finds some common traits which hold women back from reaching top leadership positions, including that women may perceive promotions as undesirable, wait until they meet all perceived criteria for promotion while men often take higher risks and may behave more speculatively, and women may think that “political” skills are required to reach the top.

Finally, to reach top leadership positions, we need:

  • self confidence
  • aspiration
  • risk taking
  • resilience
  • speaking out
  • staying motivated after failure
  • mentors, sponsors, role models
  • networks
  • personal values aligned to organisational values
Dame Carol Black DBE FRCP FMedSci: Advancing women in healthcare
Dame Carol Black DBE FRCP FMedSci: Advancing women in healthcare
Dame Carol Black DBE FRCP FMedSci: Advancing women in healthcare
Dame Carol Black DBE FRCP FMedSci: Advancing women in healthcare
Dame Carol Black DBE FRCP FMedSci, Principal of Newnham College Cambridge, and  Professor Kyoko Nomura, Associate professor, Department of Hygiene and Public Health, Teikyo University, School of Medicine
Dame Carol Black DBE FRCP FMedSci, Principal of Newnham College Cambridge, and Professor Kyoko Nomura, Associate professor, Department of Hygiene and Public Health, Teikyo University, School of Medicine

Notes

Summary of Dame Carol Black’s keynote written by Gerhard Fasol, view the full workshop program and summaries of all other keynotes here.

Copyright·©2016 ·Eurotechnology Japan KK·All Rights Reserved·

Ludwig Boltzmann Forum on Women’s development and leadership – objective

Gerhard Fasol

Ludwig Boltzmann Forum on Women’s development and leadership – workshop objective

The Ludwig Boltzmann Forum on Women’s development and leadership was held on Monday 16 May 2016 in Tokyo.

View the full workshop program here, Gerhard Fasol’s keynote lays out the objectives of the workshop in the present article.

Gerhard Fasol CEO, Eurotechnology Japan KK, Board Director, GMO Cloud KK. former faculty Cambridge University, and Trinity College, and Tokyo University

Gerhard Fasol
CEO, Eurotechnology Japan KK,
Board Director, GMO Cloud KK.
former faculty Cambridge University, and Trinity College, and Tokyo University

Ludwig Boltzmann Forum on Women’s development and leadership: objectives

There are two immediate objectives for the Ludwig Boltzmann Forum on Women’s Development and Leadership:

  1. empower women leaders with global leverage
  2. lets change mind sets

I am building the Ludwig Boltzmann Forum as global leadership platform honoring my great-grandfather, and the Ludwig Boltzmann Forum on Women’s Development and Leadership is part if this initiative:

  • drive innovation based on science and technology
  • “there is no other forum for open discussions among leaders in Japan other than the Ludwig Boltzmann Forum” (said one of Japan’s top technology leaders, former Board Director of Japan’s largest Telecommunications Operator, former President of a large University, and former President of one of Japan’s most important technology organizations)

and as an additional bonus we will create new cooperations and new initiatives.

Ludwig Boltzmann Forum on Women’s development and leadership – my actions so far

Several confidential preparations with Japanese Ministry officials and foreign Embassies in Japan.

One key conclusion from preparations: top priority and most difficult is to change mindsets in Japan regarding empowering women and gender issues

At the 8th Ludwig Boltzmann Forum on 18 February 2016 at the Embassy of Austria in Tokyo, honored by the participation of Her Imperial Highness, Princess Takamado, and Nobel Prize Winner Shuji Nakamura, invited Professor Kyoko Nomura to give the keynote “Gender inequality in Japan: a case report of women doctors“.

Next step is today’s (16 May 2016) “Ludwig Boltzmann Forum on Women’s development and leadership”.

How to change mindsets? Expand the solution space and add new dimensions!

The basic issues, empowering women and men to combine child care and professional development, work towards greater equality and improving decision making by implementing diversity of decision makers are similar all over the world, especially in Europe and Japan.

Learning solutions from each other, expands the dimensionality of the solution space.

Expanding the solution space: learning about The Federal Ministry for Families and Youth

When we are looking for solutions to solve difficult problems, our search for solutions is limited by our experience, knowledge and imagination. Our search for solutions is in space of limited dimensionality. In many cases solutions exist outside the space we are considering.

Therefore to reach better solutions, its necessary to expand this solution space. Looking how other countries solve similar problems is one straight forward way to expand the dimensionality of the solution space, and that is where the Ludwig Boltzmann Forum aims to contribute.

As an example, many people in Japan do not know that most European countries have a Family Ministry (家族省), which represents Families at the Cabinet level. In fact, most Japanese people I have been discussing this issue with are perplexed by the possibility of a Family Ministry (家族省), and usually in response ask, what the tasks of a Family Ministry would be.

If your country does not have a Family Ministry, if you have never heard about a Family Ministry, its difficult to come up with the proposal to create a Family Ministry, and its difficult to imagine what a Family Ministry should do.

At the same time, in today’s internet age, its in theory only a click away to have a look at a Family Ministry: here is the webpage of Austria’s Family Ministry: Das Österreichische “Bundesministerium für Familien und Jugend” (The Austrian Federal Ministry for families and youth, オーストリア連邦家族・青年省)

And here is the current Austrian Minister for Family and Youth, Dr. Sophie Karmasin. 49 years old, with two children, Dr Sophie Karmasin has achieved a Doctorate in Psychology on “consumer behavior in the health market”, from 1993 to 2013, for 13 years she has pursued a very successful career in industry, most recently as Managing Director/CEO of a major market research company, before becoming party independent Minister of Family and Youth. She is not affiliated with any political party, but independent politician since 2013.

Expanding the solution space: wouldn’t it be better to have at least one woman on a committee promoting women’s empowerment?

Compare Family and Youth Minister Dr Sophie Karmasin with the all-male “woman act.” committee promoting women’s equality in Japan’s Kanagawa Prefecture, wouldn’t it be better to have at least one woman on a committee promoting women? But unless you are familiar on how this is done in other countries, your solution space is limited to what you know.

Why did today’s Ludwig Boltzmann Forum on Women’s development and leadership happen? Because of Trinity College Cambridge

At a recent event of Trinity College Cambridge in Hong Kong, I met with Dame Carol Black, and our meeting led to today’s Forum.

Trinity College was founded By King Henry VIII in 1546 by combining the two older colleges King’s Hall and Michael House and seven Hostels. Sir Isaac Newton worked at Trinity College and about 32 Nobel Prize winners are or were members of Trinity College. Trinity College is part of the University of Cambridge

More about Trinity College Cambridge, for example on the website of our Trinity in Japan Society.

Why Ludwig Boltzmann Forum? Who is Ludwig Boltzmann?

Ludwig Boltzmann is one of the world’s most important physicists and we use his results and tools every day. Here are some examples of his work:

  • How we measure temperature (Kelvin, Celsius) is directly linked to Boltzmann’s constant k, especially after the new definitions of the SI International System of measurement units
  • S = k log W, linking macroscopic entropy to the microscopic statistics of molecules, and linking statistical mechanics with measuring information, and the arrow of time
  • the Stefan-Boltzmann radiation law
  • Boltzmann transport equations are used to design jet engines and aircraft and in semiconductor physics and many other areas
  • philosophy of nature
  • and much much more….

I am developing the Ludwig Boltzmann Forum a global leadership platform in honor of my great-grandfather.

Ludwig Boltzmann and women’s development and leadership

1872 Ludwig Boltzmann met Henriette von Aigentler (my great-grandmother), who was refused permission to unofficially audit lectures at Graz University, where Ludwig Boltzmann later became University President. Ludwig Boltzmann advised her to appeal, in 1874 Henriette passed the exam as high-school teacher, and on 17 July 1876, Ludwig Boltzmann and Henriette von Aigentler married.

One of Ludwig Boltzmann’s students is Lise Meitner (November 1878 – 27 October 1968). She was only the second woman to be awarded a PhD in Physics from the University of Vienna. Later she was part of the team that discovered nuclear fission, Otto Hahn was awarded the Nobel Prize for this work. Element No. 109, Meitnerium, is named after Lise Meitner.

Ludwig Boltzmann Forum on Women’s development and leadership – outlook and next steps

  • Lets build the Ludwig Boltzmann Forum on women’s development and leadership together
    • Lets empower women leaders
    • Lets change mind sets
  • Lets build the Ludwig Boltzmann Forum into a global leadership platform based on science and logic
    • lets expand the solution space for important problems, and work towards implementing these solutions
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership
Ludwig Boltzmann Forum on Women’s development and leadership

Ludwig Boltzmann Forum on Women’s development and leadership: Notes

Ludwig Boltzmann Forum on Women’s development and leadership summary written by Gerhard Fasol, view the full workshop program and summaries of all other keynotes here.

Copyright·©2016 ·Eurotechnology Japan KK·All Rights Reserved·

SONY 70th Birthday: Happy Birthday SONY!

eurotechnology.com

Today: by far the strongest profits are not from electronics or Playstation, but from the subsidiary SONY Financial Holdings Inc within Japan

SONY 70th Birthday: Tokyo Tsushin Kogyo (Totsuko) was founded on May 7, 1946

SONY celebrates 70th Birthday today – SONY’s predecessor Tokyo Tsushin Kogyo (東京通信工業株式会社), Totsuko (東通工) was founded on May 7, 1946 by:

following preparations going back to 1945.

Outside Japan there is a tendency to focus on one of the two co-founders, Akio Morita, however, as an engineer Masaru Ibuka was as least as important a co-founder.

Masaru Ibuka (井深大), co-founder

Masaru Ibuka (井深大) was a passionate engineer, and drove much of the technical product development, recruiting and leading some of the best engineers.

Read Masaru Ibuka’s obituary in NATURE here: “Obituary: Masaru Ibuka (1908-97). Electrical engineer and co-founder of SONY” by Gerhard Fasol.

Read also: Masaru Ibuka, Founder of SONY, Obituary for NATURE

SONY over the most recent 18 years (1998-2016)

compound annual growth rate (CAGR) = 1.0% over the last 18 years

Essentially, over the last 18 years (FY ending March 31, 1998 – FY ending March 31, 2016), SONY’s revenues=sales have been stable, growing on average 1% per year.

SONY's revenues/sales grow at an average compound annual growth rate (CAGR) of 1.0% over the 18 years from FY1998-FY2016
SONY’s revenues/sales grow at an average compound annual growth rate (CAGR) of 1.0% over the 18 years from FY1998-FY2016

net income/profit margin = 0.4% over the last 18 years

Net income/profits have been 0.4% (approximately zero) averaged over these 18 years – as is characteristic for Japan’s top 8 electronics multinationals.

Back in the days of Trinitron vacuum tube TVs and mechanical Walkman tape recorders, SONY’s products could command relatively high profit margins, the falling edge can be seen in the Figure below: gross profit margins were as high as 8% back in 1998, and net profit margins as high as 3% of sales. However, averaged over the last 18 years, net profit margins average about 0.4%.

SONY's average net income/profit margin over the last 18 years has been very close to zero.
SONY’s average net income/profit margin over the last 18 years has been very close to zero.

SONY’s subsidiary “SONY Financial Holdings Inc” (60% owned by SONY) is by far the most profitable division of SONY

SONY publishes detailed reports of operating profits for its different divisions, showing that by far the most profitable division are Financial Services, which are not an integral part of the SONY Corporation (ソニー株式会社), but a partly (60%) owned and separately managed subsidiary SONY Financial Holdings Inc (ソニーフィナンシャルホールディングス株式会社).

In the latest financial report for the Financial Year ending March 31, 2016, SONY Finance has twice as much income/profit as the next most profitable divisions – SONY’s Financial Services (mainly offering credit card and banking services inside Japan) are and have been by far the most profitable division of SONY for many years.

SONY Financial Holdings Inc (ソニーフィナンシャルホールディングス株式会社) is a subsidiary of SONY, and is independently listed on the Tokyo Stock Exchange [TSE Code 8729], was founded on April 1, 2004, and IPO was on Oct 11, 2007. SONY owns 60% of SONY Financial Holdings Inc’s shares.

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Shuji Nakamura on 2nd and 3rd Generation Solid State Lighting

Shuji Nakamura

Shuji Nakamura’s invention to save energy corresponding to about 60 nuclear power stations by 2020

2nd and 3rd Generation Solid State Lighting

For Shuji Nakamura’s invention of high-efficiency GaN double-heterostructure LEDs he was awarded the Nobel Prize in Physics 2014, while his employer sued him in the USA for leaking intellectual property – Shuji Nakamura won this court case, and his employer lost the case. To defend himself and his family, Shuji Nakamura countersued in Japan, and the Japanese court awarded Shuji a substantial award in a settlement. Shuji shared some insights into the comparison of IP lawsuits in US vs Japan with us at the 8th Ludwig Boltzmann Forum.

Shuji moved to the University of California Santa Barbara, and is now building the company Soraa in Silicon Valley with investments from major US VC funds. Soraa may already be or is likely to be soon much bigger in value than Shuji’s previous Japanese employer. Soraa develops 2nd and 3rd Generation Solid State Lighting products.

Energy savings corresponding to 60 nuclear power stations by 2020

The global lighting revolution triggered by Shuji Nakamura’s inventions leads to energy savings corresponding to 60 nuclear power stations by 2020 – 60 nuclear power stations less will need to be built than without Shuji Nakamura’s inventions.

2nd Generation and 3rd Generation Solid State Lighting

With his venture company Soraa, Shuji is now working on 2nd Generation Solid State Lighting (GaN on GaN substrates) and 3rd Generation Solid State Lighting (laser lighting, which allows much higher light density), and which is already in use for car headlights.

Why squeeze Nobel Prize winner Shuji Nakamura into a top-down narrative?

Shuji Nakamura showed with a long list of newspaper clippings, TV show extracts, and Japanese Government agency announcements that he is being squeezed into a top-down innovation narrative, which is at odds with the findings of the Nobel Prize Committee of the Swedish Academy of Science.

Shuji Nakamura asks why he is being squeezed retrospectively into a top-down innovation narrative.

The truth is that most real innovation is bottom-up and disruptive, not government planned and top-down.

At the 8th Ludwig Boltzmann Forum we had intense discussions between Her Imperial Highness, Princess Takamado, Professor Makoto Suematsu, Nobel Prize Winner Shuji Nakamura, Professor Nomura, JST-President Michinari Hamaguchi, and several other Japanese technology and R&D leaders.

Read a summary of Shuji Nakamura’s talk here.

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Makoto Suematsu: fast-tracking medical research in Japan

Makoto Suematsu (President, Japan Agency for Medical Research and Development AMED) AMED: Mission and Perspectives to fast-track medical R&D

Makoto Suematsu, Founding President of Japan’s new Agency for Medical Research and Development AMED: The situation in Japan is so crazy, but now I will stay in Japan because I have a mission

Medical research in Japan: Fast-tracking medical research and development in Japan

In April 2015 Japan created the new “Japan Agency for Medical Research and Development, AMED” inspired by the US NIH (National Institutes of Health), “to promote integrated research and development in the field of medicine”.

Professor Makoto Suematsu was selected as the founding President of AMED, to build up this new Japanese national medical research agency.

Professor Makoto Suematsu is not only an outstanding medical professional and researcher, but he is also extremely outspoken about the many changes necessary to “fast-track” medical research in Japan, and particularly to overcome the fragmentation, “the Balkanization” of medical research in Japan, due to several different competing and overlapping supervising Government ministries and agencies in the past.

Professor Makoto Suematsu also explained the priorities he is setting to set out with relatively modest resources.

At the 8th Ludwig Boltzmann Forum we had intense discussions between Her Imperial Highness, Princess Takamado, Professor Makoto Suematsu, Nobel Prize Winner Shuji Nakamura, Professor Nomura, JST-President Michinari Hamaguchi, and several other Japanese technology and R&D leaders.

Read a summary of AMED-President Makoto Suematsu’s talk directly here.

8th Ludwig Boltzmann Forum, Tokyo 18 February 2016
8th Ludwig Boltzmann Forum, Tokyo 18 February 2016

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Top-down vs bottom-up innovation: Japan’s R&D leaders at the 8th Ludwig Boltzmann Forum

Ludwig Boltzmann Forum

How to fast-track innovation in Japan

Shuji Nakamura’s invention of high efficiency LEDs enable us to reduce global energy consumption by an amount corresponding to 60 nuclear power stations by 2020, for which he was awarded the 2014 Nobel Prize in Physics.

Still, a poster child for bottom-up innovation, Shuji Nakamura was sued by his employer, left for the USA, and is now building a company in Silicon Valley which might soon become bigger than his former Japanese employer.

Why does Shuji Nakamura’s bottom-up innovation not fit into top-down innovation narratives?

Why does Shuji Nakamura’s bottom-up innovation not fit into top-down innovation narratives? Would Japan be a better and faster growing place with a better balance between bottom-up and top-down innovation? Does top-down innovation work at all?

Shuji Nakamura came specially from the USA to address many of Japan’s science and technology R&D leaders at the 8th Ludwig Boltzmann Forum, and explain why it makes no sense to try squeezing his bottom-up inventions into a top-down narrative and why its better to overcome established top-down narratives.

Read how Shuji Nakamura tries to help Japan’s leaders to overcome top-down-only narratives, and understand what bottom-up innovation means.

The 8th Ludwig Boltzmann Forum brought together Nobel Prize Winner Shuji Nakamura, the leaders of Japan’s two major research and technology R&D funding organizations, Professor Nomura, who is working to overcome gender inequality for Japan’s (too few) medical doctors, and several of Japan’s technology leaders to discuss how to accelerate innovation in Japan.

Her Imperial Highness, Princess Takamado honored us by taking a very active part, and asking thoughtful questions to Nobel Winner Shuji Nakamura and other speakers.

Read and join the discussions with Japan’s R&D leaders’ talks held at the 8th Ludwig Boltzmann Forum.
[in Japanese 日本語]

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Fukushima nuclear disaster: 5 years since the Tohoku earthquake and tsunami on 2011/3/11 at 14:46:24

(c) eurotechnology.com

5 years and many lessons learnt since the Tohoku and Fukushima disasters

Tohoku disaster and Fukushima nuclear disaster lead to Japan’s energy market liberalization

Tohoku disaster: On Friday March 11, 2011 at 14:46:24, the magnitude 9.0 “Great East Japan earthquake” caused a tsunami, reaching up to 40.4 meters high inland in Tohoku.

Japan’s National Police Agency registers 15,894 deaths and 2,562 missing people.

TEPCO’s Fukushima Dai-1 nuclear power plant vs Tohoku Electric Power Corporation’s Onagawa Nuclear Power Plant

One of the world’s worst nuclear disasters started at Tokyo Electric Power (TEPCO) Fukushima Dai-1 Nuclear Power Plant.

The Onagawa Nuclear Power Plant, owned and operated by Tohoku Electric Power Company, and built under Yanosuke Hirai, was closest to the 2011/3/11 earthquake’s epicenter, and survived the quake without major damage and was successfully shut down, and served as a refuge for 300 people from the neighborhood who had lost their homes. There were radiation alarm signals at Onagawa Power Station, but these alarms were caused by radioactive fallout blown from Fukushima-Dai-Ichi by winds, and did not originate from Onagawa.

The Onagawa Nuclear Power Plant was the only nuclear power plant in the region of the Tohoku Earthquake that survived the earthquake without any major damage.

On Yanosuke Hirai’s insistence, Tohoku Electric Power Company built Onagawa Nuclear Power Plant at 13.8 meters above sea level, while during the construction of TEPCO’s Fukushima Dai-1 plant the natural ground elevation was reduced from 35 meters to 10 meters. The Tsunami reached 13 meters height in both locations.

In 1990 Tohoku Electric Power Company (Onagawa Nuclear Power Station Construction Office) published a detailed analysis of the Great Jogan Tsunami of AD 869

Yanosuke Hirai had researched the Great Jogan Tsunami of July 13, 869, which was caused by the 869 Sanriku Earthquake (貞観地震). The results were taken into account in planning the Onagawa Nuclear Power Station, and published in 1990:

Hisashi Abe, Toshisada Sugeno, Akira Chigama, (Onagawa Nuclear Power Station Construction Office)
“Estimation of the Height of the Sanriku Jogan 11 Earthquake-Tsunami (AD 869) in the Sendai Plain”
Zisin (Journal of the Seismological Society of Japan, 2nd Series), Vol. 43 (1990) No. 4 P 513-525

See also the “869 Sanriku earthquake” entry in Wikipedia.

Fukushima nuclear disaster mitigation. US sends 150 nuclear experts headed by Chuck Casto to work with the Japanese Prime Minister and top leaders for 11 months to help deal with the Fukushima disaster

The USA sent a team of about 150 nuclear experts for 11 months to Japan to assist TEPCO and the Japanese Government in mastering the nuclear crisis. This team was headed by Chuck Casto – read some of his conclusions here:

Japan’s first ever Parliamentary Commission

Japan’s Parliament for the first time ever created an Independent Parliamentary Commission to analyze the nuclear disaster, headed by Kiyoshi Kurokawa, read the summary of his talk “Groupthink can kill” here (including videos describing the Commissions results in simple easy to understand terms).

Three former TEPCO executives have now been indicted by a citizen’s prosecution committee.

Nuclear disaster leads to energy market liberalization in Japan

Japan’s faith in nuclear power was shaken, leading to development of renewable energy, liberalization and long overdue reforms of Japan’s energy sector.

Quakes and after-quakes

The figures show that more than 300 earthquakes of magnitude 5 or larger occurred since the major quake on March 11, 2011 at 14:46. The epicenters of quakes lie mostly where the Pacific Plate moves under the North American Plate on which Tohoku lies.

According to our knowledge earth quakes are mathematically speaking a “chaotic” phenomenon, and scientific arguments are, that it is difficult if not impossible to predict earth quakes with precision. (Figure: Wolfram Alpha LLC)

Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)

Nuclear fallout on Tokyo: radiation levels in Tokyo/Shinjuku

Starting with Tuesday 15 March 2011, radioactive fallout came down on Tokyo as shown in the figures below.

Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria
Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria

Radiation levels in Tokyo (Shinjuku and Shibuya) and Tsukuba:

Radiation in Tsukuba (until April 13, 2011) compared to Austria
Radiation in Tsukuba (until April 13, 2011) compared to Austria

The blue curve above shows the radiation levels in Tokyo/Shinjuku as measured and published by the Tokyo Metropolitan Institute for Public Health here:

  • each hour for the last 24 hours
  • daily starting March 1

The red curves show maximum and minimum data as measured by TEPCO in Tokyo-Shibuya, and published here: TEPCO radiation data

The green curves show radiation data measured by Japan’s highly respected AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

Radiation levels in Tsukuba

The green curves show radiation data measured by AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

The radiation measurement results in Tsukuba are considerably higher than found in Tokyo, but have decreased close to the top levels found naturally in Austria and in many other countries.

The differences in the data between Tokyo and Tsukuba could be because Tsukuba is 60km closer to Fukushima, could be caused by weather conditions, but they could also be caused by differences in the measurement equipment or a combination of these factors.

Eurotechnology-Japan newsletters in March/April 2011

In a series of newsletters, our company informed our customers, and friends about the nuclear disaster impact on Tokyo. Our newsletters were reposted by our readers to 100s of friends, and in some cases influenced the decisions by foreign subsidiaries here in Tokyo. In the days following the nuclear disaster, it was difficult for non-phycists to understand the true situation, and what the radioactive fallout really meant.

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Mobile internet’s 17th birthday

The global mobile internet revolution started with Docomo’s i-Mode on February 22, 1999

The global mobile internet revolution started with Docomo’s i-Mode on February 22, 1999

i-Mode, Happy Birthday!

Today, exactly 17 years ago, on February 22, 1999, NTT-Docomo launched the world’s first mobile internet service, i-Mode, at a press conference attended only by a handful of people.

NTT-Docomo created the foundation of the global mobile internet revolution, and i-Mode is still a cash-cow for Docomo in Japan, but Docomo did not succeed to capture global value.

i-Mode pioneered many business models, which are today monetized by Apple and Google (mainly via Android).

i-Mode also contributed to make Japan the world’s biggest App market in terms of cash revenues, and helped Japanese app companies to be among the world’s largest and top grossing.

Read in detail in our blog:
i-Mode was launched Feb. 22, 1999 in Tokyo – birth of mobile internet

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SHARP and the future of Japan’s electronics

SHARP and the future of Japan’s electronics

SHARP is in the news, but its about Japan’s US$ 600 billion electronics sector

The need for focus and active portfolio management

SHARP, supplier of displays to Apple, faces repayment of about YEN 510 billion (US$ 4.2 billion) in March.

Innovation Network Corporation of Japan INCJ (産業革新機構) and Taiwan’s Honhai Precision Engineering (鴻海精密工業) “Foxconn” compete for control of SHARP.

While SHARP makes headlines, the big-picture issues are:

  1. corporate governance reforms in Japan
  2. the future of Japan’s US$ 600 billion electronics sector, which dominated world electronics in the 1980s but failed to keep up with the evolution and growth of global electronics.

To survive Japan’s old established electronics conglomerates have two choices:

  1. focus on a small number of key products (remember Apple CEO Tim Cook showing that all of Apple’s products fit on one small table)
  2. actively managed portfolio model

however, for Japan’s economy to prosper, Japan needs many more young fresh new companies in addition to the old established conglomerates.

Interviews for BBC-TV and French Les Echos

Last week I was interviewed both live on BBC-TV and also by the French paper Les Echos about SHARP’s future:

In summary, I said that its not just about SHARP’s current predicament, but its about corporate governance reform in Japan, about reinventing Japan’s electronics sector, and that its more likely at this stage that Japan’s Innovation Network Corporation (INCJ) will take control SHARP, since INCJ is not just concerned with SHARP but with the bigger picture of restructuring Japan’s electronics sector.

INCJ has concepts for combining SHARP’s display division with Japan Display, and has plans for SHARP’s electronics components divisions, and for the white goods division, and other divisions.

SHARP governance: How and why did SHARP get into this very difficult situation?

SHARP is a poster child for the urgent need for corporate governance reform in Japan.

Essentially SHARP assumed that the world market for TVs and PC displays will continue to demand larger and larger and more expensive display sizes, and thus took bank loans to build a very large liquid crystal display factory in Sakai-shi, south of Osaka.

In addition, SHARP, has a huge portfolio of many different products ranging from office copying machines and printers and scanners, mobile phones, high-tech toilets, liquid crystal displays, solar panels, and hundreds of other products. SHARP keeps adding new product ranges constantly expanding its portfolio of businesses, and rarely sells loss making divisions.

Effective and strong independent, outside Directors on the Board might have asked questions during the decision making leading to the building of the Sakai factory. They might have asked for a Plan B, in case the global display market takes a turn away from larger and larger and more expensive displays, or if the competition heats up and prices start decreasing, they might have asked about SHARP’s competitive strengths, they might have also questioned the wisdom to finance an expensive factory via short-term bank loans as opposed to issuing shares to spread the risks to investors.

Its not just outside Directors, shareholders could have also asked such questions.

SHARP has about YEN 678 billion (US$ 5.6 billion) debt, most is short-term debt, and in a few weeks, in March 2016, SHARP needs to repay about YEN 510 billion (US$ 4.2 billion), and needs to find this amount outside.

SHARP is a Japanese electronics company, founded in 1912 by Tokuji Hayakawa in Tokyo as a metal workshop making belt buckles “Tokubijo”, and today one of the major suppliers of liquid crystal displays for Apple’s iPhones, iPads and Macs.

SHARP today has about 44,000 employees, many factories across the globe, sales peaked around YEN 3000 billion (US$ 30 billion) in 2008, and show a steady downward trend since 2008.

Revenues (profits) peaked in 2008, and have fallen into the red since.

SHARP's revenues (sales) peaked in 2008, and since then stagnated around YEN 3000 billion (US$ 30 billion), and show a downward trend ever since
SHARP’s revenues (sales) peaked in 2008 around YEN 3000 billion (US$ 30 billion), and show a downward trend ever since
Averaged over the last 14 years, SHARP shows average annual net losses of around YEN 38 billion per year (US$ 380 million per year)
Averaged over the last 14 years, SHARP shows average annual net losses of around YEN 38 billion per year (US$ 380 million per year)

What future for SHARP? Focus vs portfolio company

SHARP (or rather, its creditors, the two “main banks” Mizuho and Mitsubishi-Tokyo-Bank, and others controlling the fate of today’s SHARP) needs to decide whether it focuses on a group of core products, in which case it needs to be No. 1 or No. 2 globally for these products. Successful examples are Japan’s electronic component companies.

Or on the other hand, SHARP could be a portfolio company, in which case this portfolio must be actively managed.

What future for Japan’s US$ 600 billion electronics sector?

Japan’s 8 large electronics conglomerates:

  • Hitachi
  • Toshiba
  • Fujitsu
  • NEC
  • Mitsubishi Electric
  • Panasonic
  • SONY
  • SHARP

combined have sales of about US$ 600 Billion, similar to the economic size of The Netherlands, but combined for about 15 years have shown no growth and no profits. They are poster children for the urgent need for corporate governance reform in Japan.

These 8 electronics conglomerates are portfolio companies, and they need to manage these portfolios actively, such as General Electric (GE) or the German chemical industry are doing. Germany’s large chemical and pharmaceutical industries started active and drastic product portfolio management in the 1990s, and are continuing constant and active portfolio optimization via acquisitions, spin-outs, and other M&A actions, and so is GE.

A stark contrast are Japan’s very successful, profitable and growing electronics component companies.

Innovation Network Corporation of Japan INCJ (産業革新機構)’s dilemma

INCJ aims “to promote the creation of next generation businesses through open innovation” according to its website.

Japan’s NIKKEI financial daily mentions INCJ’s dilemma, whether attempting the rescue of an old conglomerate is compatible with its mission to create next generation business through open innovation.

Why “let zombie companies die” is beside the point

Concerning SHARP some media wrote headlines along the lines of “let zombie companies die”. Thats easy to write, however, SHARP is a group with 44,000 employees, many factories, about US$ 30 billion in sales annually.

“Let this zombie die” is not an option, SHARP has 100s of products, and divisions, and the best solution for each of these divisions is different. And that is exactly what the Innovation Network Corporation of Japan seems to be considering in its plans for SHARP.

I think the way forward is not “to let zombies die”, but to develop private equity in Japan

I think the move of Atsushi Saito, one of the key drivers of Japan’s corporate governance reforms, from CEO of Tokyo Stock Exchange/ Japan Exchange Group, to Chairman of the private equity group KKR is a tremendously important one in this context.

Will there be native Japanese private equity groups with sufficient know-how and ability to take responsibility of restructuring Japan’s electronics sector? Thats maybe the key question.

Why its not really about nationalism

Some media bring a nationalist angle into SHARP’s issues. However, Nissan was rescued by French Renault, UK’s Vodafone acquired Japan Telecom, and there are many other examples, where foreign companies acquire Japanese technology companies.

I don’t think nationalism is an issue here. The key issues is to create and implement valid business models for Japan’s huge existing electronics sector, and more importantly, create a basis for the growth valid new companies – not just reviving old ones.

Japan electronics industries – mono zukuri. Preview this report:

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