Japan top grossing smartphone apps

5 top listed smartphone app companies have combined market cap of US$ 14 billion (excluding LINE)

LINE is currently a private company and LINE’s company value is generally estimated in the US$ 10-15 billion range, so if we include LINE, the combined market value of Japan’s top 5 smartphone game companies is on the order of US$ 24 – 29 billion.

Top grossing apps in Japan’s iPhone and Google Play/Android app stores on June 6, 2015

Japan’s smartphone app market is the world’s largest in terms of cash revenues according to AppAnnie. Lets analyze which apps are at the top-grossing in the world’s largest app market.

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iPhone app store top grossing ranking (June 6, 2015)

  1. Monster Strike by MIXI
  2. Puzzle & Dragons by GungHo
  3. Final Fantasy Record Keeper by DeNA
  4. LINE by LINE Corporation
  5. Actual powerful pro baseball by KONAMI
  6. all 25 top-grossing iPhone apps on June 6, 2015

Google Play Android app store top grossing ranking (June 6, 2015)

  1. Monster Strike by Mixi
  2. Puzzle & Dragons by GungHo
  3. LINE Disney tsumu tsumu by LINE Corporation and Walt Disney Corporation
  4. White Cat Project by Colopl Inc.
  5. Sword and sorcery. Logres of Swords and Sorcery – original popular online RPG by Marvelous Inc.
  6. all 25 top-grossing Google-Play store Android apps on June 6, 2015

Market capitalization of the companies involved:

  • Mixi: YEN 443 billion (US$ 3.5 billion)
  • GungHo: YEN 580 billion (US$ 4.6 billion)
  • LINE: unlisted
  • Konami: YEN 324 billion (US$ 2.6 billion)
  • Colopl: YEN 312 billion (US$ 2.5 billion)
  • Marvelous: YEN 86.8 billion (US$ 0.7 billion)

Analyzing the market capitalization of these companies, it is obvious that a large part – or all – of the value is in the smartphone games.

As an example, Mixi’s core business was the mixi Social Network, which lost weight with the success of Facebook in Japan, until the breakthrough success of its Monster Strike game during FY2014.

How are foreign companies doing in Japan’s smartphone app market?

Disney achieved consistently high rankings in cooperation with LINE for the tsumu-tsumu game.

Next highest ranking foreign game is the Finland based, 73.2% SoftBank owned, Clash of Clans by Supercell on rank 12.

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Japan Google Play top grossing Android apps

25 Japan Google Play top grossing Android Apps of June 6, 2015 (All Categories)

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  1. No. 1 Monster strike (by Mixi)
  2. No. 2 Puzzle & Dragons by GungHo
  3. No. 3「LINE: ディズニーツムツム」LINE Disney tsumu tsumu (by LINE Corporation & Disney)
  4. No. 4「白猫プロジェクト」”White Cat project” by COLOPL Inc.
  5. No. 5 「剣と魔法のログレスいにしえの女神・人気の本格オンラインRPG」Sword and sorcery. Logres of Swords and Sorcery – original popular online RPG by Marvelous Inc.
  6. No. 6 「クイズRPG 魔法使いと黒猫のウィズ」”Quiz RPG magic using black cat whiz” by COLOPL Inc.
  7. No. 7 「グランブルーファンタジー】」Grandblue Fantasy by Cygames Inc. (Cygames is a joint-venture company between CyberAgent (74.04%) and DeNA (24.03%), originally founded in May 2011 as a subsidiary of CyberAgent Corporation)
  8. No. 8 LINE PokoPoko by LINE Corporation
  9. No. 9 LINE by LINE Corporation
  10. No. 10 FINAL FANTASY Record Keeper by DeNA
  11. No. 11「実況パワフルプロ野球」”Actual powerful pro base ball” by KONAMI
  12. No. 12 Clash of Clans by Supercell. Supercell is now valued at US$ 5.3 billion and 73.2% owned by SoftBank.
  13. No. 13「ファントム オブ キル」”Phantom of the Kill” by gumi Inc.
  14. No. 14 Love life! School Idol Festival by KLab Inc.
  15. No. 15 OnePiece Treasure Cruise (by Bandai Namco Entertainment Inc)
  16. No. 16 LINE POP2 by LINE Corporation
  17. No. 17「スクールガールズストライカーズ」”Schoolgirl strikers” by Square Enix Ltd.
  18. No. 18 Dragon poker by Asobism Co Ltd
  19. No. 19 Dragon Quest Monsters Superlight (by Square Enix)
  20. No. 20 「戦国炎舞 ‐KIZNA‐ 【人気の本格戦国RPG】」Sengoku Enbu – KIZNA – (popular true waring states RPG) by Sumzap Inc (株式会社サムザップ) (Sumzap Inc. is a 100% owned subsidiary of CyberAgent Corporation).
  21. No. 21 LINE Rangers by LINE Corporation
  22. No. 22 Summoners War by Com2uS Corporation (a South Korean game developer company)
  23. No. 23 「ブレイブフロンティア 【無料本格RPG-ブレフロ】」 Brave Frontier by Alim Co Ltd
  24. No. 24 「消滅都市」  Extinction capital – Everything in its right place. By Wright Flyer Studios Inc.
  25. No. 25 「ユニゾンリーグ◆-ユニフレと冒険-人気本格オンラインRPG」Unison League – (popular original RPG) by Ateam Inc.

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Japan iOS App store 25 top grossing

25 Top Grossing iPhone Apps of June 6, 2015 (All Categories)

  1. No. 1 Monster strike (by Mixi)
  2. No. 2 Puzzle & Dragons by GungHo
  3. No. 3 FINAL FANTASY Record Keeper by DeNA
  4. No. 4 LINE by LINE Corporation
  5. No. 5「実況パワフルプロ野球」”Actual powerful pro base ball” by KONAMI
  6. No. 6「LINE: ディズニーツムツム」LINE Disney tsumu tsumu (by LINE Corporation & Disney)
  7. No. 7「チェインクロニクル・本格シナリオRPG/エヒクロ」”Chain chronicle original scenario RPG / Chaincro” by SEGA Corporation
  8. No. 8「白猫プロジェクト」”White Cat project” by COLOPL Inc.
  9. No. 9 Love life! School Idol Festival by KLab Inc.
  10. No. 10 MOBIUS FINAL FANTASY by Square Enix Inc.
  11. No. 11 「剣と魔法のログレスいにしえの女神・人気の本格オンラインRPG」Sword and sorcery. Logres of Swords and Sorcery – original popular online RPG by Marvelous Inc.
  12. No. 12 Clash of Clans by Supercell. Supercell is now valued at US$ 5.3 billion and 73.2% owned by SoftBank.
  13. No. 13 LINE PokoPoko by LINE Corporation
  14. No. 14 「クイズRPG 魔法使いと黒猫のウィズ」”Quiz RPG magic using black cat whiz” by COLOPL Inc.
  15. No. 15 「戦国炎舞 ‐KIZNA‐ 【人気の本格戦国RPG】」Sengoku Enbu – KIZNA – (popular true waring states RPG) by Sumzap Inc (株式会社サムザップ) (Sumzap Inc. is a 100% owned subsidiary of CyberAgent Corporation).
  16. No. 16 Dragon poker by Asobism Co Ltd
  17. No. 17 「グランブルーファンタジー】」Grandblue Fantasy by Cygames Inc. (Cygames is a joint-venture company between CyberAgent (74.04%) and DeNA (24.03%), originally founded in May 2011 as a subsidiary of CyberAgent Corporation)
  18. No. 18 Dragon Quest Monsters Superlight (by Square Enix)
  19. No. 19 OnePiece Treasure Cruise (by Bandai Namco Entertainment Inc)
  20. No. 20 Game of War – Fire Age by Machine Zone Inc. (a Palo Alto based game venture company)
  21. No. 21 Summoners War by Com2uS Corporation (a South Korean game developer company)
  22. No. 22 Tsuri Suta (Tsuri = Angling) (by GREE)
  23. No. 23 LINE Manga – free popular manga, daily renewed content by LINE Corporation
  24. No. 24 Hunter x Hunter Battle Allstars (by NamcoBandai Games Inc)
  25. No. 25 Puyo puyo!! Quest (by Sega Corporation)

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Smartphone games disrupt Japanese video game industry

24 new listed smartphone game companies achieve net income twice as high as all top 8 traditional video game companies combined

Its not just Nintendo being disrupted, its the whole Japanese video games industry

In the most recent version of our report on Japan’s game industry, we added 24 publicly listed new smartphone game companies (listed on the Mothers market or the second or first sections of the Tokyo Stock Exchange), and we also added not-yet-publicly-traded LINE, and we will add more in future editions.

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There has been much media focus on Nintendo and how it is affected by the rise of smartphone freemium games, and how it will react. But our analysis shows that its not just Nintendo thats affected, but the whole traditional Japanese video game industry.

Smartphone games disrupt:

During financial year just ended, 24 publicly listed Japan’s smartphone game companies earned twice as much income as all top 8 traditional video game companies combined.

Combined net income in FY2014 (which for most companies ended on March 31, 2015) for 24 publicly listed Japanese new smartphone game companies is about YEN 200 billion (about US$ 2 billion), compared to a combined net income of about YEN 100 billion (about US$ 1 billion) for all top 8 traditional Japanese video game companies:

net income of Japan's top 8 traditional video game companies is about US$ 1 billion in FY2014
net income of Japan’s top 8 traditional video game companies is about US$ 1 billion in FY2014 (source: official company financial reports)
net income of 24 listed Japanese new smartphone game companies combined in FY2014 is about US$ 2 billion
net income of 24 listed Japanese new smartphone game companies combined in FY2014 is about US$ 2 billion (source: official company financial reports)

Japanese smartphone games have global impact and capture global value

Japanese smartphone game companies are in leading positions on global scale (Source: AppAnnie):

  • The globally No. 1 ranked top grossing company for iOS and Google-Play app stores combined is a Japanese company: LINE
  • 2 out of the top-10 top-grossing smartphone game companies globally (iOS plus Google-Play app stores combined) are Japanese companies
  • 5 out of the top-10 top-grossing apps globally (iOS plus Google-Play app stores combined) are Japanese apps

Learn more about Japan’s games industries

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Nintendo smartphone pivot?!

Nintendo partners with DeNA

Taking Nintendo intellectual property and characters to smartphones

Nintendo was founded on September 23, 1889 by Fujasiro Yamauchi in Kyoto for the production of handmade “hanafuda” cards. Nintendo Headquarters are still located in Kyoto (you can see the Nintendo headquarters building from the Kyoto railway station).

The Chinese characters used to write Nintendo’s original Japanese company name in Japanese mean something like “leave the responsibility to heaven or to god”.

Nintendo has been through many pivots during its more than 100 years history, and Nintendo can afford to take its time to do things right, and it did when smartphones started disrupting industry sector after industry sector, and did not stop disrupting the games industry.

Nintendo has a home advantage – the epicenter of the global games industry is in Japan, and not surprisingly, Japan is by far the world’s No. 1 biggest smartphone games market by cash income (other markets are bigger in terms of free downloads, but Japan is No. 1 globally in terms of cash revenues). So Japanese game companies have a big home advantage.

The No. 1 company ranked by gross revenues of the combined total iPhone + Android app market is also a Japanese company.

Yesterday, March 18, 2015, Nintendo announced to join forces with DeNA to jointly develop smartphone games including subscription based game services as a platform to leverage Nintendo’s iconic intellectual properties and characters.

Do you understand the big picture of Japan’s games industries, which drive the global game market? Make sure you do – and read our report:

“Japan’s game makers and markets (27th edition)”

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Sir Stephen Gomersall: Globalization and the art of tea

by Hitachi Chief Executive for Europe and subsequently Hitachi Board Director (2004-2014)

Sir Stephen Gomersall: Princess Chichibu Memorial Lecture to the Japan British Society at Ueno Gakuen, Tokyo, 5 March 2015

Sir Stephen Gomersall: It is a great honour to be giving this lecture this evening.

HIH Princess Chichibu was a charming and broad-minded Patron of this Society and of the many charities to which she devoted her later life. I remember her as a frequent visitor to the Embassy in the 70s, in her dusky blue or apple green kimonos, and occasionally turning up to watch when a British University Rugby team came to Japan.

She also personified the affinity between Japan and the United Kingdom which has its origin in our historical ties and in the nature of our peoples. I felt this throughout my years of living in Japan, and my job as Ambassador was made incomparably easier by the goodwill and respect of many segments of Japanese Government and society towards Britain. But we can't assume that things will always continue in the same way: images can lag behind reality, and relationships have to be nurtured and given concrete meaning.

Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi
Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi's Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.

Our friendship, differences and challenges

So I've chosen to talk about why two countries which are so geographically remote and different from each other have a strong affinity and interest in developing our cooperation; and some of the joint challenges we face, and the contrast in the way our two countries have adapted to the huge changes of the last decades.

Three changes

The biggest change to affect the whole world over this period is what is loosely called globalisation.

Globalisation can be defined as the results, in economic, social and cultural terms, of the mobility of capital, production and people in a free global economy, and of the consequent international division of labour.

This has coincided with a second and more destabilising set of changes in the global structure of power, and the weakening, if you like, of any over-arching system, legal or military, of world governance. This began with the dissolution of the Soviet Union, has continued with the shift from the old G7 to the newer G20, the rise of China in particular, and consequent changes in the position of the United States. New threats of terrorism originating in failed states, and in Japan's case, the threat from North Korea, are part of this troubling mix.

One can add a third change – the internet, digital and media revolutions – which to the positive have empowered people outside government, helped development in poor countries and created massive consumer convenience; have made political protest easier, as in Egypt and Ukraine; but on the negative have opened new possibilities for cyber warfare and terrorist recruitment, and arguably in the West at least, accentuated the short-termism and sensationalism of contemporary politics.

So I would like to talk, not from an academic standpoint, but from my experience about how I perceive Japan and the UK have been impacted and coped with these in our foreign policy, politics, economy and industry.

The Tea Ceremony as metaphor

But let me first explain how the Art of Tea came into the title.

A very small act of globalisation took place when my friend and fellow Embassy language-student, Robert Cooper and I decided that the study of Tea might be a good route to immersion in a part of Japanese culture and presented ourselves for induction to the Master of the Tea Ceremony at Tokeiji in Kamakura. This is a very famous temple, and its lightly constructed, almost translucent tea house had a special and very tiny door, hardly the size of a dog kennel, through which new initiates had to prostrate themselves on first entry. This had not been built for gaijin, but Robert, who went first in his jeans, an American shirt and dazzling white tennis socks which he thought sufficiently close to tabi, and I crawled through it into the presence of a shocked but stoical Sensei within.

This wizened figure, with a loosely wrapped kimono and upright hair, then intoned to us in courteous but almost impenetrable Japanese some of the history of the Temple, the relationship between Tea and Zen, the necessity of subordination of self, and the rewards which might be ours through striving for perfection in the art of making tea and the service of others. Thereafter we attended almost every week for a year, and slowly learned to be less clumsy in the complex handling of cloths and utensils and better to master the numbing effects of sitting for four hours on our ankles.

After some months, what had been a pain yielded to appreciation of the surroundings, the shadows of leaves on the sunlit walls of the teahouse, and even the beautiful kimono of the younger female class members who usually started the afternoon round. Our teacher was the Sensei's daughter, a wan lady who kept a steely eye on our sequence of movements, and admonished us and the other students kindly if our foot strayed onto the border of the tatami or our fukusa slipped out of our trouser belts. Thus a whole afternoon could pass in eight rounds of tea, and hardly a word would be said beyond the ritual appreciation of the received cup. By contrast, the mizuba, with its utilitarian sink and stone floor where the cups were washed would be a hive of chatter among the arriving and departing housewives or men students arriving after Saturday work. And when it was all over, we would walk with painful knees down the temple steps to re-join the noise and fumes of the motorcars and the ding dong of the railway crossing by Enkakuji, heading for the bar.

We were constantly encouraged to improve our Art, and always made welcome. We got used to the silence, and began to appreciate that mastering of the physical act of making tea could be a gateway to a sense of harmony, appreciation of nature and the seasons, and communion with a group of people united in performing this simple act of service as beautifully and selflessly as possible.

Being drawn into this world was genuinely precious and even cleansing, and in my mind became a metaphor for many aspects of Japanese life and organisation which are built on a preference for the group, harmony, equality, service, perfection and self-discipline.

But at the end there was always a real world outside.

Now of course I don't suggest for a moment that traditional Japanese art and culture seeks only to create or perpetuate a perfect illusion, but there is a sense in which the British tradition has been to venture out and throw oneself wide open for better or for worse, while the Japanese is more comfortable with consensus, even silence, its own familiar peer groups and known relationships. Japan makes internal pacts and compromises, which for the purposes of this lecture go under the guise of the Art of Tea.

Foreign Policy and standing in the world.

Britain and Japan have very different philosophical traditions, part of which originates from the 250 years during which Britain went through maritime Empire and industrial revolution, while Japan remained cloistered under the Bakufu. Post-war Britain has remained confident of its place at the international top table, its close relationship with the United States, and its continuing network of international connections. Apart from a moment of hubris in the Suez invasion, it has justified or demonstrated this through its active role in the UN Security council, the retention of its nuclear deterrent and military participation, at a higher level at any rate than our other European allies, in international actions in Iraq and Afghanistan.

Japan too has been at its strongest when it has been open and looking outward. The isolation of the Bakufu was ultimately self-defeating, while Japan surged forward after the importation of Chinese scholarship in the eighth century, and became a successful modern state after the Meiji revolution. The post-war Constitution enabled Japan to re-establish itself internationally, and enjoy a period of high growth through access to foreign technology, domestic capital and world markets. It is distressing sometimes to hear the Constitution described as 'anti-Japanese'.

Today's Japan has established itself as a country with a peaceful foreign policy, an economic power house making an important contribution to international economic cooperation; opinion polls show Japan internationally much admired except in China and Korea. Japan has significant soft power based on its culture.

The baseline for the modern UK-Japan relationship can be set in the eighties and nineties, when Japan was the pre-eminent nation in Asia, and the UK still the leading pro-American voice in the EU. During this time a core UK-Japan agenda was developed, based on the very similar views of what kind of world we wanted to see after the collapse of the Soviet Union.

The elements of this agenda are built around free trade, the rule of law, peaceful conflict resolution and support for the United Nations. The UK and Japan were co-architects of the Kyoto Protocol on Climate Change in 1997. Britain enjoyed support at the UN from Japan on action on Iraq and Libya; the UK supported Japan's first deployments of self-defence forces to the Gulf and Afghanistan.

This political relationship continued during the Blair-Koizumi period, predicated on strong support for our mutual ally, the United States.

Relations with the United States

The United States is a huge friend and guarantor for both Japan and Europe, but cannot be expected to defend us if we don't defend ourselves. Noticeably it was the United States which flew sorties in the East China Sea not long ago after a particular Chinese threat to the Senkakus, just as it was the United States which did the same when the Russians recently made menacing noises towards the Baltic States. But with a Congress no longer so clearly internationalist or prepared to step into every security breach and rightly demanding more burden-sharing from its allies, Japan and Europe need to have the capabilities, and relationship with America, to fulfil our side of the bargain.

What I have described is, and should be, the base state of a UK-Japan relationship founded on cooperation between two closely aligned countries. As global number three and number six economies we each have an important voice – if we can use it effectively – and this in turn depends upon our economy, defence, and international friendships and alliances.

But since 2008, a number of clouds have passed across the European and Japanese skies. One is disillusionment with the consequences of the invasion of Iraq and the troubles in the Middle East; another big one the global financial crisis of 2008, which had huge consequences in the EU; and a third the rise, part opportunity, part threat, of China, together with heightened tension in East Asia as a whole. Viewed from Japan, an increased UK/European focus on China came at exactly the point that Japan-China relations began to deteriorate. These are among the factors which have caused both sides to become more preoccupied with issues close to home. Perhaps changes in the Japanese Government didn't help either, but they are reasons why both sides may have questioned whether the relationship was really as important to the other as we traditionally maintained. The outstanding UK response, public and private, to the Great Tohoku Earthquake was a big affirmative, but even so these questions remain in the air.

Two nations in retreat?

Compared with our past, some people will ask whether in fact we are now looking at two nations in retreat.

The reaction in Britain to UK deployments to Iraq and Afghanistan, at the popular level, has been quite deep. Although both missions were partially achieved and people were very proud of our troops, these nonetheless exposed the difficulty for our relatively lightly armed forces in dealing with unorthodox warfare. Increasing resources had to be committed with diminishing political returns. Since the end of the Cold War, successions of defence reviews have eaten away at the numbers of personnel and front-line units in our forces. And our spending – though better than most Europeans, is perilously close to the minimum 2% of GNP level expected by NATO.

A second is the dominance of domestic issues in politics, and sudden concern about the future of Britain as a United Kingdom. We are now facing a general election. The battle-ground is likely to be the economy, where the two large parties – Conservative and Labour – in reality have not a lot dividing them on economic philosophy, and not a lot of room in any case for manoeuvre in trying to reduce the national deficit, but still appeal to the electorate daily in terms of what benefits they can deliver to their traditional followers – what Labour refers to as 'ordinary people', and the English middle class and better-off voters for the Conservatives. New promises over the health service, welfare provisions, taxation, university tuition and the like burst daily on the airwaves and then fizzle. This is a rather narrow-band form of politics over how to divide resources within the society to the benefit of one group or another, with very little search for consensus on these difficult issues. Since party membership has fallen dramatically, it is not certain how much core loyalty exists to these parties within the electorate. In the meanwhile an anti-European, anti-immigration party has been taking support from both major parties; and the Scottish National Party, after losing the referendum on independence by 55-45%, has bounced back and will certainly press for further separation should it hold influence in Westminster after 7 May.

This is not good news for anyone.

One plausible factor behind this fragmentation of current British politics is that globalisation has created different categories of winners and losers from those familiar in the traditional class divide, and that devolution has actually broken the Westminster system of politics. Regional disparities, particularly between London, the North and Scotland, are now accentuated by rhetorical politics. Another element is that across the country there are groups of people, mainly white, older or unemployed, with lower skills or shrunken pensions who feel threatened by immigration and the cutting back of the welfare state. Concepts of community and identity have become confused. While the Mayor of London can revel in the vigour of London's 'melting pot' society, in other regions the disparity of wealth and opportunity can create an anti-metropolitan, anti-traditional party backlash, resulting in a large increase in disaffected or floating voters.

The third is the UK's relationship with Europe, and here again there is a parallel with Japan.

The founding purpose of the EU was to achieve peace in Europe after the Second World War through economic integration. It achieved this spectacularly well between France and Germany, together with rising living standards for the poorer agricultural regions of Europe. The same logic applied in the eighties and nineties, when enlargement was extended to Greece, Spain and Portugal who made the transition from dictatorship to democracies. Mrs Thatcher recognized this and argued not only that the Single Market should be accelerated, but that Europe should act together in international affairs whenever it could achieve more by speaking with a single voice in the world. She vehemently opposed the idea of one government for Europe, but in reality the major countries have never wanted that, and the threat disappeared when the EU was enlarged to 26 countries in 2004. Game set and match to Britain, you would have thought.

However, instead of celebrating the victory of Mrs Thatcher's vision of Europe as a voluntary Union of sovereign member states, parts of the media and Conservative party have continued to brand the European Union as a conspiracy to take British money, to over-regulate our life, and limit the UK's national sovereignty, and this drip, drip, drip of anti-EU argument from within his own party led Mr Cameron to open the Pandora's Box of a referendum on our continuing membership in the next parliament, if he is re-elected.

The current bone of contention with the EU is on the impact of the free movement of people, a basic principle of the Union, which is blamed for excessive immigration, even though the UK economy has desperately needed foreign labour to function. The Government says it needs 'reforms' to recommend a yes vote, but is not yet specifying what those reforms need to be.

We know what Japan thinks about this, because it has openly said that Japanese investment in UK is for the EU.

And the Americans have equally said they hope the UK will remain a strong voice in Europe.

Former Prime Minister John Major has argued, most cogently from the Tory side, that if outside the EU, the UK would be 'much diminished' internationally, and would still have to conform to EU regulations while having no part in deciding them.

That is why I am not so pessimistic about the eventual result, but it is an issue we could do without when the Middle East is in tatters and the Russians are in the Ukraine.

Japan's position in Asia

This invites comparisons with Japan's position in Asia.

The rise of China gives China a weight very like that of Germany within the EU, in terms of regional balance, but unlike the EU, there is no regional framework to moderate tensions between Japan, China and Korea or build a collective Asian Economic Community.

A recent Gaimusho briefing I attended on Japan's security environment gave great detail on the number of China's incursions around the Senkaku Islands and unilateral moves in the South China Sea; but was designed to show Japan as the sinned-against party, and Japan's self-restraint, with no discussion of possibilities for improving relations.

Maintaining balance with China requires patience and steel. Economically Japan cannot re-surpass China, nor can it take the support of South East Asian countries for granted should it come to a stand-off.

Given the speed of increase in China's defence spending, a posture of increased preparedness on Japan's part, and ability to cooperate more with allies, is certainly justified.

Even without constitutional change, Japan's defence doctrine is evolving fast with regard to collective self-defence and military exports, though not the percentage of defence spending in the budget. The UK would I'm sure support Japan's becoming a 'normal' military power, but the manner in which it is done will have a considerable effect on the acceptance of regional countries and allies alike. If based upon deterrence and proportionate response to potential threats, it will be well understood. However Japan does suffer in the view of its allies whenever things are said and done politically which look like poking the adversary in the eye.

The counterpart of deterrence has to be engagement, and building structures for the long term which will moderate trilateral relations for the better. The economic interdependence between Japan and China is already such that both countries fortunately have a strong interest in keeping tensions within bounds, and this can be further built on. A Kohl/Mitterrand moment, when the two leaders held hands in a French war cemetery, looks a long way off in Asia, but Mr Abe is a strong leader and, though I know it is a much dismissed view here, there are useful lessons to be learned from the political achievements of the European Union. Benefits must also come from encouraging young people to travel between Japan, China and Korea.

Though I've discussed China, I haven't found much so far to say about TEA!

The concern most frequently voiced among Japanese friends is lack of interest of young people in foreign study or travel, and the very poor level of attainment in languages among Japanese businessmen, politicians and academics, leading to Japan being discounted in international gatherings, and leaving the floor open to competitors, China particularly, to exploit.

We are here in a university with high standards in international communication, so I won't stir that particular pot, but revert to the issue later in the context of business.

To summarize the story so far, I do think voters respond positively to politicians who have a long-term strategy for strengthening their nation and can articulate to their people where they want their country to stand in the world and what needs to be done.

Mrs Thatcher's appeal to many beyond her own party was that she was prepared to confront the reasons for the UK's economic decline and do something about it. And two very important points underlying her policies were pretty immutable truths of international affairs – the first being that a nation's influence is in direct proportion to the strength of its economy; and the second, that in a world where threats can come from unexpected quarters, nations need to secure their own defences, through adequate armed forces and strong alliances.

Though we are geographically distant, it is very important that the UK recognize its interest in East Asian Security, and Japan continue to play its part in Europe. There would be no better way of symbolizing that than the early conclusion of the EU-Japan Free Trade Agreement.

Economy and Industry

Let us turn now to the economy. Here we see rather greater contrast.

Benefits of Globalisation for Britain

Britain has benefited hugely from globalisation. As I see it, Japan has been slower to adapt but has strength in depth.

As you know, Britain went through a severe economic decline in the 1950s to 70s when our largely nationalised heavy industries, and many of the people who worked in them, were cut back as a result of global competition, from Japan among others. The Thatcher government finally brought labour market reforms, privatisation of public assets, and encouragement of foreign investment into manufacturing. The liberalisation of financial markets established London as a global centre for financial and other services. Manufacturing has declined in volume, but improved in quality, and the UK remains a world centre for research and innovation in universities.

This structure continues to form the backbone of the UK economy, with the state sector – government, education, health and public services, accounting for 43 percent of GDP. The relative flexibility of our economy, and the ability of the pound to float against other currencies, account for our outperformance of other Eurozone economies in the last two years, though that is not to say that there are not considerable weaknesses as well, as I will come to.

I remember being chided by Japanese commentators for the 'Wimbledonisation' of the UK economy – acting as host to foreign players but having very few national champions. And I remember a huge joy when for a while Japanese Sumo was dominated by Mongolian and Baltic wrestlers. However, whether you call it Wimbledonisation or having an open economy, it accords with British traditions and basically works for the UK.

It has continued apace, with the government welcoming Chinese investment in UK infrastructure, Tata buying our steel and automotive companies, Japan investing in UK energy, etc. It is open house.

And of course we have the advantage of English being the international language of business, the south side of Hyde Park being the recreational space for thousands of French families.

From an economic standpoint, our two major challenges are still the public finances and education/skills.

Japan and globalisation

Japan by contrast has been harder hit, arguably because it has protected its domestic market more.

In the manufacturing sector, Japan has huge assets at home – very high levels of engineering, a disciplined workforce, and is a global leader in quality. But it now has if anything too much hard productive capacity relative to the size of the domestic market. Twenty five years ago, protectionism in the US or Europe was a reason for Japanese companies to transfer production overseas, but now the reason is demographic contraction and the extreme difficulty of making substantial margins at home. In our own company, though everything has been done to avoid loss of domestic jobs, the ratio of workers in Japan to locals overseas within our workforce has fallen from two-thirds to nearer half.

Twenty years ago, it was already evident that Japanese companies trading abroad, and therefore exposed to global competition, could be extremely flexible even in the face of the yen moving from 100 to 70 to the dollar. On the other hand, domestic sectors – retail, banking, insurance companies – with only other Japanese firms as competition, were very slow to consolidate and restructure, and as a result suffered in some cases slow deaths by overcrowding and indebtedness.

In high tech one found not Wimbledon but Galapagos – whereby mobile phone companies for example took their domestic market to very high levels of specification, making it difficult for new entrants from outside to come in, but sacrificed the opportunity to determine the global standards being set in the international market, ceding the leadership in the process to the US and Korea.

Even now, Japan's percentage of Foreign Direct Investment to GNP is the lowest for any OECD country, and with most markets matured and fully supplied by domestic incumbents, it is hard to see that changing.

The common thread behind many of these stratagems has been to avoid disruption to the Japanese market through having foreign competition within, and to maintain employment – in other words the policies of the TEA HOUSE. And yet these have not staunched the hollowing out and increasing disparity of wealth in rural Japan compared with the metropolis. What is far more likely to stimulate new domestic growth is more competition from new players, market reform to liberate new forms of industry – for example in high-volume agriculture – and population growth.

If the aim is to increase domestic demand, 'where is the third arrow?' is still the key question. So far, it seems, quantitative easing has produced a short term benefit for large corporations in stock values and profits from overseas earnings, but these have not yet trickled through to wages and domestic consumption – and could be another example of a policy which produces contrary results by shrinking from reform.

Immigration is a hot topic

Given the UK's shortage of skills, and Japan's shortage of young people, it's not surprising that Immigration is a hot potato for both countries.

Britain has always had open doors to immigration for economic reasons. During our post-war recovery, we accepted migrants from our former colonies to do low-grade jobs.

This was brought home to me when I acted as a part-time census officer in 1971, and discovered that a single road of terraced houses in inner London was neatly segregated between old white widows, with their cats and milk-bottles, the Mediterranean Italian and Greek migrants, never there to accept the census form because they were presumably out partying, Indian and Pakistani families fearful of the authorities and barely prepared to respond from behind a chained door, the old Caribbeans from Jamaica and Trinidad, unable to write the form themselves, but proud and welcoming to their tidy homes, and other black working class households, only scraping it together economically, and often working all hours.

Since then the Asian communities have spread to many Midlands and Northern cities and become middle class. They have high aspirations for the education of their children, who look like Asians but behave like their British peers. These communities are now becoming represented in local government, teaching, broadcasting, Parliament and even the Cabinet. They are increasingly the backbone of our medical services.

Because of the turmoil in the Middle East, there is a portion within the Muslim communities, which is prone to radicalisation by fundamentalist Imams or jihadi social media – and a constant worry to our security services.

Since the 1980s the Government has severely curtailed further immigration from non-EU countries, so that these communities are now to all intents and purposes indigenous and there is no way or intention to repatriate them.

A second source of immigration has been the European Union. Freedom of movement is a basic principle, under which many Brits have gone to work or retire in Europe, and many Europeans, primarily from Poland and Eastern Europe, have come to work in the UK. They come under a legal right, but in significant numbers. Net migration into the UK was 298,000 last year.

A third group are refugees from conflicts in Africa and the Middle East – Somalis, Kurds and North Africans, entering illegally from other parts of the EU. This is a humanitarian issue for the EU, with the burden falling much more heavily on France and Italy.

It is the inability to limit the second category of able-bodied and work-hungry immigrants from EU countries which arouses the most controversy, especially in the run-up to an election. Go into any British hotel or restaurant, and you will find Spanish or East European receptionists, waiters and cleaners. Look for a builder fix your house, and a Pole will probably be more reliable.

This shows a key weakness of the British economy, which is a shortage of skills, and also gives rise to complaints among the unskilled population that 'foreigners are taking their jobs'. The right-wing UKIP party then lay this all at the door of the EU, claim that migrants are defrauding the social security system, and that our country, saved by our Forefathers from German invasion during the Blitz etc., is is now being taken away from us. Fortunately this is a war of words, rather than on the street, but still a powerful message to some older voters.

In reality EU residents in the UK, of whom there are 1.4 million, pay much more in taxes on their income than they consume in social benefits. And it is inconceivable that the health service could function, or all the public construction projects planned in the next decade be completed, without a heavy involvement of foreign labour. The government is seeking to provide more welfare to work and apprenticeship opportunities to young British people. But the danger is in the effect this could have in the short term if we are faced with an EU referendum.

Japan's situation is completely different, but still has to confront the reality that Japan will inevitably decline unless it can find an answer to its ageing and shrinking population. It is hard to envisage permanent immigration from Asia to Japan of the sort Britain accepted two generations ago, even though the British example on assimilation is quite encouraging. It is equally implausible that artificial intelligence – robots that substitute for human workers – will be able to build roads, sewers, or power stations in the future. Emotion will have to give way to pragmatism. And more work permits for qualified foreign workers will have to be introduced to support industries like construction and transport and increased foreign tourism. When this happens on a significant scale, international marriages are bound to occur, and issues of nationality of husbands and children arise.

I came across such pragmatism ten years ago in Akita when a number of EU Ambassadors were invited by the Governor to give a seminar on attracting foreign investment into the Prefecture. In the evening he offered a splendid reception with three entertainments; first the local lads demonstrating the Kanto-matsuri with lanterns on poles; second a Japanese lady of advanced years performing an elegant geisha dance, and third a cacophonous bunch of Filipina wives of local farmers performing a bamboo dance.

So this topic is a slight deviation from the Anglo-Japanese theme but is critical to the future of both countries, and one that touches companies like mine who need to become more globalised.

Globalisation poses tough challenges for Japanese companies, but is the only way forward.

Now let me turn to the experience of my own company.

Hitachi, with its characters for the 'rising sun' and its resonant creed of 'Harmony, Sincerity and Pioneering Spirit' has often been taken as a proxy for Japan itself, and its production did indeed exceed 1% of Japanese GNP thirty years ago.

Today it is very good example of a company having to make a profound transition in order to grow within the global economy.

Hitachi started out as late as 1910 as a motor-winding outfit for the mining industry in Tohoku, but quickly advanced into power generation, electrical control and traction equipment. These elite divisions were the breadwinners and training grounds for generations of Presidents. The company creed was monozukuri – perfection in manufacturing – and ochibo hiroi – wasting nothing and learning from experience. Hitachi also prided itself on its research capability, clustered in leafy campuses on the Ibaragi hillsides. So large was the company in the area, that when the Tohoku Earthquake hit in 2011, it suffered structural damage to 2000 buildings.

When I joined I was impressed by the Hitachi's serious ethos, and by the dedication to quality of product. I am a proud employee and would always risk my shirt on the company's ability to deliver a product. I did however notice that the grand men who ran the company back then seemed very out of touch with the international world, that the organisation was very hierarchical, that a company of 380,000 people worldwide behaved as if it were a universe in itself, and for all its technological excellence, it produced rather modest profits.

This great company was not just a tea pot, it was a TEA PLANTATION! I say this to emphasize how far things have come since then.

Much has been written about the contrast between Japanese and UK companies, most notably Ronald Dore's book 'British Factory, Japanese Factory' of 1970 contrasting Hitachi and GEC, and a much more recent book by Inagaki and Whitaker in 2005 called 'The New Community Firm' . This also charts the rise and decline of Hitachi as a classic Japanese 'community company', with very little diversity, but in which loyalty was repaid by security. By the late '90's the need to globalise to survive was already being internally articulated, but the authors found that the policies touted to achieve that were implemented with lip-service only. Comparing Hitachi with its American equivalent GE, then under Jack Welch, it concluded that a company dedicated to looking after its core community of Japanese permanent employees would really struggle to introduce the degree of performance management and profit-oriented decision-making of a western enterprise.

This was the company I joined in 2004 as the first foreigner made responsible for proposing and implementing an overseas regional strategy. This job has given me many excitements, and a ringside seat in understanding the roots of the company and the huge changes and sacrifices which it has had to make to get to today's position.

For example, at that time we were making televisions. Rather than have other people assemble them locally to our design, using components taken from the market, our management had invested huge sums in a modern factory in Miyazaki, employing thousands. One by one the shining models came out, each supposedly a winner, but never at a price at which we could make a profit in the European market. The simple fact was that there was global over-supply, and though we could make supremely good products, others could do so for half the price or less.

This story was repeated in semiconductors, displays and hard disk drives, leading in 2008 to losses at a level never seen by any Japanese company, and was the origin not only of a decision to exit these commodity sectors, but also to bring in a new management which reset the company's strategy to the provision not of products but of solutions, not in the consumer, but in the global social infrastructure market.

Slowly this is paying off, but again it requires a shift in organisation and management which challenges every tea-drinking tenet of the so-called community firm.

To explain what I mean,

  1. In value creation, the key is no longer production, but innovation: this requires individualism, and the breaking of internal silos. It needs teamwork and people with a combination of disciplines, rather than those who have perfected a single one. Monozukuri still matters, but is no longer a winning ingredient.
  2. Japanese companies are very technology rich; but to take that technology overseas in the form of infrastructure projects requires a whole new range of skills which do not exist within a traditional manufacture and export organisation. Local political knowledge, commercial, project finance and management capability, and usually a local engineering base for customisation of technology; and the development of local supply chains to match global or local prices.
  3. It requires the whole factory-led power structure to be turned inside out, and authority shifted to the front line, where the customer is. This is a complete break with the tradition whereby power resided with the factory side in Japan, to one where more commercial people outside Japan should become the key decision-takers. Sales units which previously handled foreign markets from Japan become redundant. It also means that the system of promoting domestic engineers over a lifetime into the leadership of the big business units will also evolve, marking a huge shift in career expectations.
  4. In total, a gene pool heavily weighted to engineering needs to become multifaceted, and above all, international. This means changing the system whereby operations overseas are managed by expats on two or three year tours; it means promoting non-Japanese into leadership positions; it means measuring performance objectively, and promoting people with leadership potential much earlier in their careers; and recruiting young people with different backgrounds and skills. Implementing such change takes a long time.
  5. One of my annual duties was to lecture the new intake of 800 young Japanese for 30 minutes on what it is to be 'global'. My message was simply to travel, absorb, and think for yourself. 'Talk to them in English' the Chairman said – 'it will be good for them'. Well I tried, but since language was never among the entry criteria, the result was a predictable blank wall. Reverting to Japanese, I then joined the other executives for a walkabout among the new recruits at the drinks which concluded the induction ceremony. I pitched in to a group of young men, who shied away from me as if I had the ebola virus. I persisted in English for a while, but finally said to them in Japanese, 'oh well then, what business group are you due to join?' 'Ah, we, we're the baseball group!' came the reply. The community firm lived on. More encouragingly I found two young girls who seemed more anxious to engage me in conversation. Not realising their nationality to begin with I engaged them in Japanese, whereupon they explained that they were foreign graduates, one Korean and one Chinese, from technical universities in the Kansai. 'Goma-san', they said, still in perfect Japanese, and looking around the room of 800 future colleagues. 'What should we do to survive in a company like this?' I thought this question was a sign of great promise, and advised them to win respect as professionals, and voice their own opinions, firmly and politely.
  6. Diversity is a weak point in many organisations, not only in Japan, but often proves in practice to be liberating for all concerned. The most enjoyable team I ever worked in was the UK Mission in New York in the 1990s where over half of our front line negotiators and the entire legal team were women. It is part, but only part of creating a healthy atmosphere of camaraderie and internal competition within a team. Unfortunately the role of many good women in the company is still to make TEA.
  7. Governance is another vital topic, in the light of the Olympus and other similar failures. Part of the greatness of the Chairman who rescued the company from its disaster of 2008 was to bring diversity into the Board of Directors. I was quickly followed by three other non-Japanese Board members, two Americans and one Singaporean, all eminent in their fields. The Japanese Directors too were business men and women of deep experience. Simultaneous interpretation was provided, but it soon happened that conversation would flow spontaneously into English as well. More than that, with the introduction of foreigners who thought it was their duty to speak their opinions in Board meetings, the Japanese members also perked up and became much more interested in debate. It was a huge leap forward. By any international standards, the Board was a model. But my conclusion was that it is not the composition of the Board, but its degree of oversight and influence which is the real issue. The key shift is to move from a situation where the Board simply gives legal authority to decisions already made by the Executive, to one where the Board also debates strategy and can examine the management of the company.
  8. In other words, governance should be not TEA, but SPARKLING WATER.

Huge contribution of Japanese companies to the UK economy.

Japanese companies have made a huge contribution to the UK economy and to the Government's aim, still only half achieved, of rebalancing the economy towards manufacturing. It is estimated that they provide 140,000 jobs, and most notably the surplus in automotive exports that the UK now enjoys is in large measure due to Japanese (and now significantly Indian) investment.

Hitachi's two largest overseas projects are coincidentally in the UK, and both very visible and vital from the point of view of renewing the country's rail and power infrastructure. There isn't time to go into detail, but in September we will open a factory in North East England to build the next generation of intercity and commuter trains; and the second is to plan and hopefully build a privately owned and operated nuclear power plant based on our latest Japanese operating design.

As a Brit of course, I'm very proud that the company is prepared to commit such huge investment to the British market. But from a company point of view, what is most encouraging are that these are transformational projects in the company's journey towards becoming globally competitive.

In the rail case, the decision has been taken to put the global headquarters of the rail business in the UK. Even Japan now comes under this organisation. And that is the consequence of the exceptional foreign leader brought into the business twelve years ago.

In the nuclear case, it was a courageous decision to take a business which after the Fukushima earthquake had suffered a sudden domestic collapse, and re-orient it towards the global market. It is anything but simple, but a hugely motivating challenge.

Conclusions

On Japan-UK relations

On the UK-Japan relationship, I believe there is a huge reservoir of good will, common interest and complimentary talent. To sustain it we should focus not on sentiment but on what we can do together to address today's issues – trade, conflict prevention, international development, anti-terrorism, and including now collaboration in defence preparedness.

With Japan there is a bond of trust, magnified by the contribution Japan continues to make to the UK economy and its support on international issues. This, and our common values, should be reflected in a special quality of political relationship and cooperation. Frequent dialogue and mutual openness, even in addressing our problems, is hugely valuable.

We must commit to burden-sharing with the United States through having sufficient readiness to look after ourselves in the first instance.

As far as Britain in Europe and Japan in Asia are concerned, retreat into isolation is an illusion and a dead end. We need to make these relationships work, and business should lead both countries to sensible policies.

More generally on world affairs.

With regard to globalisation and management

Putting the inner community first is a very natural and admirable human instinct, but as a principle of politics or business organisation it does not work.

Because we live in a globalised and competitive world, we have to be strong and efficient. More good and strength comes through openness and letting talent rise and lead.

There are many ways of binding an organisation together. The greatest is shared pride in success. Community, charity and compassion is precious but belongs at level of local and personal life.

Good politicians and business leaders are those who allow creativity and diversity to flourish, but can also articulate a sense of direction and what is right and wrong.

Finally

Because of my background I have spoken with the perspectives and beliefs of someone who wants to see Japan and the UK play a role in shaping the world, and companies like my own be Japanese but international at the same time, realising their full potential value in the global market place. I accept that that is not everyone's view. It is possible to argue that living standards in Japan are good and creativity abundant in many areas; and that somehow, even without disruptive change, Japan can keep its head down and will find ways of dealing with the issues we have talked about. As you gather, my response would be that it is very difficult for companies in particular to maintain a static state in a competitive world – you are either a competitor or not, though you can change from one to the other; and the same goes, as we saw after the Thatcher reforms, for nations too.

But it is also a slightly regretful belief, for as I love this country and its attachment to personal loyalty and all the things we enjoyed in that first tea experience, I understand why many, perhaps in this audience, might take that view.

Stephen Gomersall, Tokyo, March 2015

(Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi's Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.)

Copyright (c) 2015 Sir Stephen Gomersall and Eurotechnology Japan KK All Rights Reserved

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Crisis leadership post-Fukushima: Dr. Chuck Casto

Global leadership in the extreme

Dr Chuck Casto: Leader of the US Integrated Government and NRC efforts in Japan during the Fukushima nuclear accident in 2011

I don’t think that there is anyone with deeper insight into the Fukushima-Dai-Ichi nuclear disaster, its management, causes and consequences, than Dr. Chuck Casto.

Dr Casto arrived in Japan a few days after March 11, 2011, representing the US Government regarding the Fukushima-Dai-Ichi nuclear disaster, and heading a team of 150 US nuclear industry experts, and for 11 months advised the Japanese Prime Minister and Ministers on the Fukushima-Dai-Ichi disaster management.

Dr. Chuck Custo is licensed nuclear power station operator, and as regional NRC Regulator was responsible for the safety of 23 US nuclear power stations.

We were lucky and honored to have Dr. Chuck Casto as one of the keynote speakers at the 7th Ludwig Boltzmann Forum in Tokyo.

Click to read a summary of Dr Chuck Casto’s keynote
Dr. Chuck Casto: Global leadership in the extreme: crisis leadership in post-Fukushima.

Related talks (click to read summaries of the talk and watch videos):

Reading the talks above will give you a good insight into the key causes and implications of the Fukushima-Dai-Ichi nuclear disaster by the world’s best experts directly involved in this nuclear disaster management.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Angela Merkel in Japan to discuss renewable energy

German Federal Chancellor Angela Merkel in Japan March 9-10, 2015

Hopes for Japan and Germany share at least part of the path to renewable energy

Germany’s Federal Chancellor Angela Merkel, Physicist with a PhD (Chancellor Angela Merkel’s PhD thesis is available here) and several scientific publications to her credit, visits Tokyo today Monday 9 March and tomorrow Tuesday 10 March 2015.

Angela Merkel’s official interview preparing for Japan visit

In the official interview commenting on her Japan trip (watch on YouTube here), Chancellor Merkel says: “Wir setzen jetzt sehr auf erneuerbare Energien. Und ich glaube, Japan sollte auch diesen Weg gehen – und geht ihn ja auch. Und wir sollten ihn vor allem in Deutschland und Japan auch ein Stueck zusammen gehen. Das heisst, ich werde dort auch ueber den Ausbau erneuerbarer Energien sprechen.”

Our translation to English: “We put much emphasis on renewable energy now. I think Japan should also go along this path – and indeed goes along this path. We should proceed on this path at least partly together. This means, I will talk about the expansion of renewable energy during my Japan visit.”

Report: Energy efficiency – opportunities for Japan and Europe

The Konrad-Adenauer-Stiftung, a German public policy think-tank financed by German Government funds, recently organized conferences on Energy efficiency in Tokyo, Kyoto and Kobe, and engaged our company to produce a report on “Energy efficiency – opportunities for Japan and Europe”.

Download the report free of charge as a pdf-file here from the Konrad-Adenauer-Stiftung website (pdf-file).

If you need to know more, read our reports:

Preview “Renewable energy Japan” research report

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Japanese acquisitions in Europe total € 6 billion in 2015

Overcoming Japan’s “Galapagos syndrome”

Globalizing Japan’s high-tech industries

At the Bank of Kyoto’s New Year celebration meeting, Japan’s stagnation and need for globalization were center of discussion – despite focus on globalization, the present author was more or less the only non-Japanese invited and attending(!).

The Chairman of Japan’s Industry Federation KEIDANREN, Mr Sakakibara (Chairman of Toray (東レ株式会社)), deplored that Japan’s economy is the only major industrial country not growing, and emphasized the need to overcome Japan’s well known Galapagos syndrome.

In an effort to overcome lack of growth in Japan, Japanese companies over the last years have been extremely active acquiring European technology companies – actually our company advised several Japanese companies’ M&A teams on European acquisition strategies and opportunities.

Japanese companies are particularly active acquiring European technology companies – this year alone, the EU-Japan investment registry shows Japanese acquisitions in Europe totaling € 6 billion – far more than European acquisitions in Japan this year.

Japanese acquisitions this year in Europe include:

Post-merger know-how and execution are key

It is well-known that EU <-> Japan post-merger management requires substantial management know-how. While such management known-how has been built up between US-Japan over many years, EU-Japan investments had only a shorter time to develop, and in many cases companies are not willing to invest sufficiently in such know-how. As a consequence the majority of EU <-> Japan investments has failed unfortunately – poster-children are the failures of Vodafone’s acquisitions in Japan and the failures of Docomo’s investments in EU, and there are many more examples.

To overcome these problems, several recent Japanese investments are substantial investments but short of 100% where local European management is kept in place – following the Renault-Nissan success story. Indeed, Carlos Ghosn has emphasized that the Renault-Nissan investment would probably have failed, had it been a 100% take-over.

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i-Mode was launched February 22, 1999 in Tokyo – birth of mobile internet

The mobile internet was born 16 years ago in Japan

Galapagos-Syndrome: NTT Docomo failed to capture global value

On February 22, 1999, the mobile internet was born when Mari Matsunaga, Takeshi Natsuno and Keiichi Enoki launched Docomo’s i-Mode to a handful of people who had made the effort to the Press Conference introducing Docomo’s new i-Mode service. KDDI soon followed with EZweb, and J-Phone with Jsky (J-Phone was acquired by Vodafone, which was unable to manage J-Phone, Vodafone then sold the company to SoftBank).

i-Mode’s popularity soon exceeded any expectation: Docomo for some periods had to limit new subscriptions.

With Steve Jobs’ love for Japan, and Apple’s intense supplier relationships with Japan, its not farfetched to see connections between i-Mode and iPhone, in particular the i-Mode ecosystem and Java-based i-Appli’s are forerunners of today’s apps and apps-ecosystems.

At that time there was no Wikipedia, and Docomo had no English-language website at all, so our company Eurotechnology Japan KK’s information was more or less the only English language information openly available about i-Mode. We were bombarded by requests from many major semiconductor firms, telecom operators, investment banks, students and world-famous business schools for our i-Mode report and related business development and strategic work.

Learn about Japan’s telecom markets: read the 65th edition of our report.

Today 5 of the global top-10 top-grossing Apps are Japanese

While Docomo never managed to capture global value from inventing and first introducing the mobile internet, the No. 1 top-grossing company globally, and five of the top-10 globally top-grossing Apps for iOS and Google-Play combined are Japanese (source: App-Annie).

Japan’s app market is the world’s largest in terms of cash revenues

Its also no coincidence that in terms of cash value, Japan’s is the world’s largest app-market for iOS and Google-Play combined, bigger than the US market and the Chinese market in terms of cash value. (source: App-Annie).

App-Annie’s data to our knowledge only cover the iOS and Google-Play app-stores, not the i-Mode and other mobile internet businesses, so Japan’s actual mobile app economy is even larger than App-Annie data show.

Which are the top-grossing apps in Japan?

i-Mode is still alive and kicking – and a big business for Docomo

i-Mode is still today the mobile internet system for Docomo’s traditional flip-phones which are still an important part of the market, and recently made headlines since sales for traditional flip-phones were rising, while smartphone sales were (temporarly?) dropping.

i-Mode (and EZweb for KDDI, and Yahoo-mobile for SoftBank) will still be important business for some time to come in Japan.

Copyright (c) 2015 ·Eurotechnology Japan KK All Rights Reserved

Google Play Japan – top grossing Android Apps ranking

Android smart phone apps ranking in Japan by gross revenues (Feb. 18, 2015)

Japan game market report (398 pages, pdf-file):
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AppAnnie showed that in terms of combined iOS AppStore + Google Play revenues, Japan is No. 1 globally, spending more than the USA. Therefore Japan is naturally the No. 1 target globally for many mobile game companies!

Android Google Play – Japan “Top Grossing” apps ranking of February 18, 2015:

Note that the Android/Google Play ranking shown here is very similar to the iOS top grossing ranking.

  • No. 1 Puzzle & Dragons by GungHo
  • No. 2 Monster strike (by Mixi)
  • No. 3 白猫プロジェクト (= white cat project) (by Colopl Inc.)
  • No. 4 クイズRPG 魔法使いと黒猫のウィズ (= Quiz RPG (role playing game) The World of Mystic Wiz, the which and the black cat wiz) (by Colopl Inc.)
  • No. 5 LINE Disney tsumu tsumu (by LINE Corporation) (ツムツム = Tsum Tsum)
  • No. 6 LINE PokoPoko (by LINE Corporation)
  • No. 7 Dragon Quest Monsters Superlight (by Square Enix)
  • No. 8 LINE (by LINE Corporation)
  • No. 9 Final Fantasy Record Keeper (by DeNA Ltd)
  • No. 10 LINE Rangers (by LINE Corporation)
  • No. 11 Love life! School Idol Festival (by KLab Inc.)
  • No. 12 Logres of Swords and Sorcery – popular online RPG (by Marvelous Inc.)
  • No. 13 Runaway lives motorcycle Tiger (by Donuts Co Ltd)
  • No. 14 Clash of Clans (by Supercell)
  • No. 15 Chain chronicle – real scenario RPG (ChainChro = チェンクロ) (by SEGA Corporation)
  • No. 16 Actual powerful pro-baseball (実況パワフルプロ野球) (by KONAMI)
  • No. 17 Schoolgirl strikers (by Square Enix)
  • No. 18 Puyo puyo!! Quest (by Sega Corporation)
  • No. 19 LINE POP2 (by LINE Corporation)
  • No. 20 Granblue Fantasy (by Cygames Inc)
  • No. 21 Drift Spirits (by Bandai Namco Games Inc)
  • No. 22 Pro baseball Pride 2014 (by Colopl Inc.)
  • No. 23 Sengoku Enbu – KIZNA – (by Sumzap Inc)
  • No. 24 Dragon poker (by Asobism Co Ltd)
  • No. 25 Gandam Conquest (by Bandai Namco Games Inc)

Japan’s iconic game companies created many game categories – this tradition carries over to mobile gaming now.

Japan game market report (398 pages, pdf-file):
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Japan smartphone app rankings by cash revenue (iOS)



Top grossing app ranking (Feb. 10, 2015)

AppAnnie showed that in terms of combined iOS AppStore + Google Play revenues, Japan is No. 1 globally, spending more than the USA. Therefore Japan is naturally the No. 1 target globally for many mobile game companies, and quite a few of the top grossing apps in Japan are of foreign origin – can you guess which?!

Japan game market report (398 pages, pdf-file):
[buy] [subscribe] [information]

iOS AppStore-Japan “Top Grossing” ranking of February 10, 2015:

Note that the iOS ranking shown here is very similar to the Android / Google Play top grossing ranking.

  • No. 1 Monster strike (by Mixi) from rank 2 on July 13, 2014
  • No. 2 Puzzle & Dragons by GungHo (from rank 1 on July 13, 2014)
  • No. 3 白猫プロジェクト (= white cat project) (by Colopl Inc.)
  • No. 4 Dragon Quest Monsters Superlight (by Square Enix) (from Rank 12 on July 13, 2014)
  • No. 5 LINE Disney tsumu tsumu (by LINE Corporation) (ツムツム = Tsum Tsum) (from Rank 3 on July 13, 2014)
  • No. 6 Final Fantasy Record Keeper (by DeNA Ltd)
  • No. 7 LINE (by LINE Corporation)
  • No. 8 Love life! School Idol Festival (by KLab Inc.) (was rank 9 on July 13, 2014)
  • No. 9 LINE PokoPoko (by LINE Corporation)
  • No. 10 Logres of Swords and Sorcery – popular online RPG (by Marvelous Inc.) (was rank 14 on July 13, 2014)
  • No. 11 Clash of Clans (by Supercell) (was rank 5 on July 13, 2014)
  • No. 12 Runaway lives motorcycle Tiger (by Donuts Co Ltd)
  • No. 13 Drift Spirits (by Bandai Namco Games Inc)
  • No. 14 Actual powerful pro-baseball (実況パワフルプロ野球) (by KONAMI)
  • No. 15 Sengoku Enbu – KIZNA – (by Sumzap Inc) (was rank 8 on July 13, 2014)
  • No. 16 Sword Art Online Code Resister (by Bandai Namco Games Inc)
  • No. 17 Chain chronicle – real scenario RPG (ChainChro = チェンクロ) (by SEGA Corporation)
  • No. 18 Schoolgirl strikers (by Square Enix)
  • No. 19 Summons Board (by GungHo Online Entertainment)
  • No. 20 Puyo puyo!! Quest (by Sega Corporation) (was rank 11 on July 13, 2014)
  • No. 21 Granblue Fantasy (by Cygames Inc)
  • No. 22 LINE Manga – daily reload of popular manga free of charge (by LINE Corporation)
  • No. 23 Brave frontier (by Alim Co Ltd) (was rank 4 on July 13, 2014)
  • No. 24 Dragon poker (by Asobism Co Ltd) (was rank 6 on July 13, 2014)
  • No. 25 LINE POP2 (by LINE Corporation)

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Japan in 2015 – analysis

Thoughts and analysis for 2015

Abenomics?!

The trick of course is the third arrow, the reforms. Read what Professor Takeo Hoshi has to say about Abenomics, Japanese economist, who has worked his way up US Universities, and has now reached the position of Professor of Economics at Stanford University. By the way, here is my talk at Stanford University – some years ago, but much of it still applies today.

Japan’s energy

Japanese people’s views on nuclear power are polarized, and its unclear and unpredictable when nuclear power stations will be switched on again in Japan. Read what the Governor of Niigata Prefecture has to say, who hosts the world’s largest nuclear power plant with 7 reactors and 8 GigaWatt capacity.

According to the Japanese Energy Fundamental Law, the Government has to publish an official Energy Basic Plan at regular intervals. You can read the 4th Energy Basic Plan published on April 11, 2014, and listen to a commentary on it for The Economist here on YouTube. The 4th Energy Basic Plan starts with the assumption that Japan is poor in natural energy resources, which of course is only true if we restrict “natural energy resources” to fossil resources. Japan is actually potentially very very rich in renewable energy sources, as the scenario plans developed by Japan’s Industry and Economy Ministry (METI) and Japan’s Environmental Ministry show.

Solid state lighting saves energy

GaN LEDs were invented and commercialized in Japan, and Shuji Nakamura, Isamu Akasaki and Hiroshi Amano won the 2014 Nobel Prize in Physics for this work. Read the summary of Shuji Nakamura’s keynote at the 5th Ludwig Boltzmann Forum.

Post-Galapagos and globalization of Japan’s technology groups

To overcome Japan’s Galapagos issues and to acquire technologies and market access, Japanese companies are acquiring overseas: read a list of Japanese acquisitions in Europe here.

Foreign companies in Japan, and Japanese companies overseas face a dilemma: expensive expatriates with limited local know-how, or local management? Japanese companies seem to have finally reached the conclusion that Japanese managers eg sent to Germany are in most cases not the best choice to lead a German-based multinational company – here are some great recent examples:

  • Docomo acquires a majority stake in net mobile AG, however net mobile AG remains a publicly listed company. Read details here.
  • NTT DATA acquires SAP solution provider itelligence AG, however itelligence AG remains an independently managed company under the founder’s management, and grows aggressively via acquisitions all over the globe. Read details here.
  • NTT Communications acquires a majority of Integralis, Integralis is renamed NTT Com Security AG, however NTT Com Security AG remains traded on the m:access market of the Munich Stock Exchange. Read details here.

Carlos Ghosn is very well aware of such multi-cultural management issues and how to solve them, however too many EU companies in Japan are not. If they were, EU investments in Japan could be at least 50% higheras you can read here.

Best wishes, and much success in 2015!

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

EU Japan FTA

Free Trade Agreement (FTA) and Economic Partnership Agreement (EPA)

Preparations:

EU Japan FTA trade negotiations initiated: At the 20th EU-Japan Summit of May 2011 the EU and Japan decided to start preparations for both a Free Trade Agreement (FTA) and a political framework agreement (Economic Partnership Agreement, EPA).

For updates and further details see: http://eu-japan.com/eu-japan-agreements/eu-japan-trade-negotiations/

May 2012: after one year of discussions, the EU agreed with Japan on an agenda for future negotiations covering market access.

On 18 July 2012, the EU Commission asked the EU Member States for agreement on opening Free Trade Agreement negotiations with Japan.

On 29 November 2012, the Council authorized the Commission to start trade negotiations with Japan.

The EU Japan FTA trade negotiations were officially launched on 25 March 2013 by EU President Jose Manuel Barroso, President Herman Van Rompuy and Japanese Prime Minister Shinzo Abe.

EU Japan FTA trade negotiations: First round (Brussels, 15-19 April, 2013)

Press release: First Round of EU-Japan Trade negotions (Brussels, 19 April 2013)

EU team leader: Mauro Petriccione, Director in the European Commission’s Directorate General for Trade

Japan team leader: Ambassador Jun Yokota (横田淳), Ministry of Foreign Affairs

Japanese Ministry for Foreign Affairs, Press Release

EU Japan FTA trade negotiations: Second round (Tokyo, 24 June – 3 July 2013)

Japanese Ministry for Foreign Affairs, Press Release: Second Round of Negotiations on the Japan EU Economic Partnership Agreement (EPA) as well as a Japan EU Strategic Partnership Agreement (SPA)

EU Japan FTA trade negotiations: Third round (Brussels, 21-25 October 2013)

Japanese Ministry for Foreign Affairs, Press Release: Third Round of Negotiations on the Japan EU Economic Partnership Agreement (EPA)

EU Japan FTA trade negotiations: Fourth round (Brussels, 27-31 January 2014)

Japanese Ministry for Foreign Affairs, Press Release: Fourth Round of Negotiations on the Japan EU Economic Partnership Agreement (EPA)

EU Japan FTA trade negotiations: Fifth round (Tokyo, 31 March – 4 April, 2014)

Press release by the Foreign Ministry of Japan (4 April 2014)

EU Japan FTA trade negotiations: Sixth round (Tokyo, 7-11 July 2014)

Sixth Round of Negotiations on the Japan EU Economic Partnership Agreement (EPA) (Foreign Ministry of Japan, Press release)

EU Japan FTA trade negotiations: Seventh round (Brussels, 20-24 October 2014)

Japanese Ministry for Foreign Affairs, Press Release: Seventh Round of Negotiations on the Japan EU Economic Partnership Agreement (EPA)

EU Japan FTA trade negotiations: Eighth round (Tokyo, 8-12 December 2014)

Japanese Ministry for Foreign Affairs, Press Release: Eighth Round of Negotiations on the Japan EU Economic Partnership Agreement (EPA)

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

Nuclear safety – Niigata Governor Hirohiko Izumida

“Japan needs to prepare fourth level and fifth level defense-in-depth to nuclear accidents”

Governor Hirohiko Izumida: “Nuclear power operating companies should have their headquarters at the nuclear power plant in order to immediately take responsibility and respond.”

Governor Hirohiko Izumida (泉田裕彦) is elected by the 2.3 million people of Niigata Prefecture to be responsible for their lives, safety and assets. The world’s largest nuclear power plant, Kashiwazaki Kariwa Nuclear Power Station (柏崎刈羽原子力発電所) with seven reactors and 8 GigaWatt power, is located in Niigata Prefecture, but as all other nuclear power stations in Japan, it is currently switched off.

On October 15, 2014, Governor Izumida in his official role, explained a long list of detailed safety concerns, and a list of necessary changes in legislation and emergency command regulations in order to ensure nuclear safety. These safety concerns include the reduced responsibilities of the new Japanese Nuclear Regulatory Commission (NRC), which limits its responsibility to technical issues, and shies away from the broader issues of nuclear accident management, in particular, IAEA’s fourth level and fifth level of defense-in-depth. Governor Izumida demands a full investigation of the Fukushima nuclear disaster which should address who is responsible, and in particular also why the knowledge of the meltdown was hidden for more than two months.

Niigata Governor Hirohiko Izumida’s safety concerns – overview:

  1. Safety concerns regarding the Nuclear Regulatory Commission (NRC)
    1. the Fukushima accident was not yet sufficiently investigated or reviewed
    2. shrinking jurisdiction of the NRC. Regulatory safety standards have been reduced to performance standards. NRC have reduced their actual work.
    3. insufficient support for IAEA “defense-in-depth”. No provision at all for IAEA fifth level, and insufficient provision for IAEA fourth level response
    4. insufficient support for municipalities
  2. Safety concerns regarding nuclear accident preparations
    1. no meltdown countermeasures
    2. decision making during crisis, e.g. seawater flooding of a reactor in risk of meltdown. Salarymen including Presidents of companies are not equipped for such serious decisions during crisis.
    3. emergency response under high radiation. Revision of labor laws is necessary. Immediate response team needs to be created.
  3. Safety concerns regarding evacuation policies
    1. unification of legal systems: natural disaster response and nuclear disaster response needs to be integrated, and two-tiered command structure needs to be unified
    2. decisions of nuclear disaster response needs to be reformed
    3. insufficient response for sheltering in place when evacuation is impossible
    4. current regulations for the distribution of Iodine tablets are impossible to implement. Need for realistic regulations which can actually be implemented in case of disaster.
    5. Disaster response under high radiation levels: reform of labor laws necessary. Need to clarify hierarchy and issue of orders during emergency. Must review laws for command structure, responsibility and compensation.
    6. Other concerns: screening and decontamination, safety of assets in evacuation areas, nuclear disaster prevention system.
  4. Safety concerns regarding TEPCO
    1. Inadequate investigation and review. No one has taken responsibility for the Fukushima accident. TEPCO has not explained who was responsible for the 2 months delay in acknowledging the meltdown.
    2. Economic issues are given priority over safety. TEPCO should have their headquarters at the nuclear power station in order to immediately take responsibility and respond.

Kashiwazaki Kariwa Nuclear Power Station (柏崎刈羽原子力発電所)

Kashiwazaki Kariwa Nuclear Power Station (柏崎刈羽原子力発電所) is the world’s largest nuclear power station, and consists of 7 reactors with a total capacity of about 8 GigaWatt. It began operations in September 1985.

Kashiwazaki Kariwa Nuclear Power Station is located about 220km from Tokyo, in Niigata-ken in the village Kariwa (刈羽村) near the town Kashiwazaki (柏崎市), and about 80km from the Niigata Prefecture capital Niigata-shi. Niigata Prefecture has about 2.3 million population.

At the time of this article, the Kashiwazaki Kariwa Nuclear Power Station, as all other Japanese nuclear power stations, is completely switched off, and the time of a potential restart of any of its seven reactors is unclear.

The Heisei 19 (2007) Chuetsu Offshore Earthquake” (平成19年新潟県中越沖地震)

The Heisei 19 (2007) Chuetsu Offshore Earthquake” (平成19年新潟県中越沖地震) (Niigata Prefecture Government record for the 2007 Chuetsu Offshore Earthquake) took place on July 16, 2007 at 10:13am of magnitude 6 on the Japanese Shindo-Scale, and caused fires and a number of other worrying defects at Kashiwazaki Kariwa Nuclear Power Station.

Lessons learnt and implemented from the fires and other defects caused by the 2007 Chuetsu Offshore Earthquake at the Kashiwazaki Kariwa Nuclear Power Station

Hirohiko Izumida was Governor of Niigata at the time of the 2007 Chuetsu Offshore Earthquake on July 16, 2007. The Kashiwazaki Kariwa Nuclear Power Station was about 20km from the epicenter, the ground at the Nuclear Power station dropped about 1.5 Meters leading to a fire of the transformer at the nuclear reactor Unit 3.

Due to the damage caused by the earthquake, Niigata Prefecture Government had no communication link to the Kashiwazaki Kariwa Nuclear Power Station, all we could do was to follow the fire on public television. There had been a hotline, but it was not secure, and because of the dropped land, the entrance door to the building containing the hotline connection became warped and the hotline became unaccessible at the nuclear power station.

Land dropped by 1.5 meters and distorted pipes which caused the fire. We are concerned that similar damage could render the venting tubes dysfunctional.

Governor Izumida insisted that a seismically secure communications building and hotline should be built at Kashiwazaki Kariwa Nuclear Power Station and also at other nuclear power stations including the Fukushima Nuclear Power stations.

We requested TEPCO very strongly to build a secure building for a secure hotline between the Nuclear Power Station and the Prefectural Government Office. Initially, TEPCO rejected this request, because at that time such a hotline was not required by regulations, and Governor Izumida was told that it should be sufficient to use mobile phones for emergency communications (note that Japan’s mobile phone networks were largely out of service for several days after the March 11, 2011 Tohoku earthquake).

Governor Izumida insisted that a seismically isolated building for a hotline and a secure hotline be built, and because of the strong instance this hotline was built. Governor Izumida also insisted that the same type of secure communications buildings and hotlines should be built at other nuclear power stations including Fukushima Dai Ichi. The secure communications building and hotline at Fukushima Dai Ichi was only completed 8 months before the March 11, 2011 earthquake.

Governor Izumida feels, that if he had not insisted on the construction of secure communications buildings and hotlines at Fukushima and Kashiwazaki-Kariwa nuclear power stations, there might be no-one living in Tokyo today.

Governor Izumida demands improvement of fire fighting infrastructure at nuclear power stations.

At the 2007 Chuetsu Offshore Earthquake the underground emergency water supply lines were destroyed, and the fire fighting forces could not help and had to leave the nuclear power plant. We insisted on improvements of the fire fighting infrastructure.

Governor Izumida has grave concerns on the current work of the Nuclear Regulatory Commission (NRC)

We have grave concerns on the Nuclear Regulatory System today, as the Fukushima accident has not yet been fully investigated. Therefore it is not yet possible to draw all necessary lessons from the Fukushima disaster for the necessary new nuclear regulatory system.

We believe that the current Nuclear Regulatory Commission (NRC) is shrinking its responsibility: we believe that the current Chairman Tanaka of the Nuclear Regulatory Commission is restricting his responsibility to a narrow range of technical issues, and withdrawing from his responsibilities for the wider safety issues.

The law says, that the Nuclear Regulatory Commission “must ensure the safety of the usage of nuclear power”. Governor Izumida thinks that the current commission and it’s Chairman Tanaka is not fulfilling this obligation to ensure the overall safety, and instead focuses only on a limited range of technical issues.

Insufficient support for “defense-in-depth” recommended by the IAEA: NRC does not take responsibility for the Fifth Level of IAEA defense-in-depth

The International Atomic Energy Agency (IAEA) recommends a system of “defense-in-depth“, which includes mitigation of nuclear accidents in different levels.

IAEA levels of defense-in-depth:

  1. First level: Prevention of abnormal operation and failures
  2. Second level: Control of abnormal operation and detection of failures
  3. Third level: Control of accidents within the design basis
  4. Fourth level: Control of severe plant conditions including prevention of accident progression and mitigation of severe accident consequences
  5. Fifth level: Mitigation of radiological consequences of significant off-site releases of radioactive materials

Fifth Level response is absent – NRC needs to build fifth level response

Governor Izumida: The current Japanese Nuclear Regulatory Commission essentially does not take any responsibility at all for the fifth level of the response in depth recommended by the IAEA, and in case of the Fourth Level

Fourth Level response is insufficient – NRC needs to expand fourth level response

Governor Izumida: the current Japanese Nuclear Regulatory Commission restricts its responsibilities to hardware issues and does not touch on operations.

Insufficient support for municipalities

The communication between Japanese Nuclear Regulatory Commission (NRC) and the local authorities is totally inadequate, basically the NRC does not listen to us directly, although we – the local Government authorities – have to take care of the local population when an accident occurs.

Insufficient preparations for the case of a nuclear accident

Other countries are taking very detailed preparations for the case of nuclear accidents or melt-downs: for example European countries are requiring core catchers, and the US has centralized response forces. Governor Izumida feels that in Japan preparations are totally insufficient and need to be much improved.

“Salarymen” employees, including company Presidents, in case of a melt-down are not equipped to take necessary decisions for example to inject sea water for cooling, which is certain to destroy a US$ 5 billion investment

Current decision making processes and legal frameworks are totally insufficient for the case of nuclear accidents.

To be specific, at the time of the Fukushima Nuclear disaster on March 14th – 15th, TEPCO employees could not make the necessary decision quickly enough to pump seawater into the Fukushima nuclear power station.

“Salarymen” employees, even if they are Presidents of companies, are not equipped to take decisions which destroy equipment which represents US$ 5 billion (YEN 500 billion) investment, as injecting seawater for cooling as in the case of Fukushima Dai Ichi. We need regulations to take necessary decisions quickly.

A further problem is that when private company employees work at the nuclear accident location, they are governed by the common labor laws, so they cannot be forced to work at dangerous high-radiation locations. This also needs to be solved.

Command structure currently leads to confusion in case of nuclear accidents

With the current legal framework in Japan, in the case of a natural disaster, the State Minister in charge of disaster prevention sets up Disaster Headquarters.

In the case of a nuclear disaster however, the Head of the Nuclear Regulatory Agency sets up its own Disaster Headquarters. So if we have a natural disaster and a nuclear disaster concurrently, as in the case of Fukushima, we have two competing Disaster Headquarters, which leads to great confusion.

In the case of natural disasters, the local authorities can issues evacuation orders. However, in the case of a nuclear disaster, the Prime Minister gives the evacuation orders – again a reason for inconsistencies and confusion.

Also the provisions for people who cannot evacuate for health or other reasons is inadequate.

Many current regulatory provisions are impossible to implement

As an example, according to the standards by the NRC for nuclear accidents, the population within a 5km – 30km radius needs to be sheltered in-doors, in the case of Kashiwazaki-Kariwa this population is about 440,000 people. According to current regulations, Iodine tablets need to be distributed after the accident occurs. If venting becomes necessary 8 1/2 hours after the accident, this means that current regulation requires that Iodine tablets must be distributed to 440,000 people within 8 1/2 hours. The medical association tells us that it is impossible to distribute Iodine tablets to 440,000 people within 8 1/2 hours.

It is one thing to create regulations on paper, but Governor Izumida asks the NRC to create regulations which can actually be implemented.

Q&A

Q: How can the NRC reduce its responsibilities by itself, while these responsibilities are surely fixed by the relevant laws?
A: The law says very clearly that the NRC is responsible for ensuring the safety of nuclear power. I feel that the Chairman of the NRC Tanaka is reluctant to meet with the local authorities, and I think only recently has he started to talk to TEPCO, probably following pressure. Mr Tanaka is a teacher, a Professor of nuclear technology, so I believe that he is focusing to much on the technical issues, focusing on the nuclear technology, and that he neglects the wider issues of safeguarding the lives and assets of the people.

Q: What you are saying sounds very obvious and common sense. Why does nobody else except you speak out clearly about these issues?
A: I think there are two reasons:
1. I had first hand experience as Governor of the 2007 fire at the Kashiwazaki-Kariwa Nuclear Power Station caused by the 2007 Chuetsu Offshore earthquake,
2. As Governor of Niigata I was deeply involved from the beginning in the Fukushima Dai Ichi nuclear accident, I heard all the communication and information from the Fukushima nuclear power station, the Government and TEPCO and experts.
Therefore I have direct experience with nuclear accidents, and know which developments are likely to happen. I can imagine which sequence of events are likely to occur as a consequence of nuclear accidents. Therefore I can speak with confidence.

I should also say that some of the points raised are not just points raised by Niigata Prefecture. There is an Organization of Governors of those Prefectures where nuclear power stations are located. Many of the points I have raised are shared by all Governors of Prefectures with nuclear power stations. No-one in this
organizations has raised objections to the points I am raising.

Q: NRC Chairman Tanaka says that Japan now has the world’s strictest safety regulations. Is this true?
A: I am the Governor of Niigata Prefecture, therefore all my statements refer primarily to the safety of the Kashiwazaki-Kariwa Nuclear Power Station in my prefecture.

The new Nuclear Safety Standards of Japan do not include any provisions at all regarding the fifth level of the “defense-in-depth” recommendations of the IAEA, and in case of the fourth level they do not go deep enough at all. Therefore my conclusion is that Japan’s new Nuclear Safety Standards are not the strongest in the world.

Q: Do you think that concerns about nuclear accident mitigation plans and evacuations plans are holding back the restart of nuclear power plants in Japan?
A: My primary mission as Governor is to safeguard the safety, lives and assets of the citizens of our Prefecture. TEPCO knew from very early on that a nuclear meltdown occurred at Fukushima Dai Ichi, yet TEPCO hid this fact for more than two months. If an organization does not reveal the information about something that serious we cannot make any reasonable evacuation plans. To make evacuation plans we need to have reliable information about the actual situation. We have to ask the question whether an organization that hides the truth can even have the right to operate a nuclear power plant.
The first step needs to be to thoroughly investigate the Fukushima Disaster and to determine where the responsibilities lie. Before we have such an investigation we cannot even think about restarting nuclear power plants.

Q: Don’t you think that nuclear power has any positive points? Are you saying there are zero benefits in operating nuclear power stations?
A: My responsibility as Governor of Niigata is for the safety and lives of the citizens of Niigata, and I am speaking in my official capacity as Governor of Niigata. Therefore all my comments about restarts are limited to Kashiwazaki-Kariwa nuclear power station and TEPCO. It is not my responsibility to talk about the general issues of what Japan as a country should do about nuclear power.
Regarding Kashiwazaki-Kariwa nuclear power stations and TEPCO my position is very very clear.
However, regarding TEPCO, TEPCO hid the crucial information of the nuclear meltdown for two months. My question is whether such an organization has the right to operate nuclear power stations at all. Before this question is not addressed, I cannot enter into any discussions about restarting the Kashiwazaki-Kariwa nuclear power station.

Q: Don’t you think seven nuclear reactors in one location are too many? In Germany only two reactors are permitted at one location.
A: This question has also been raised by our population. However among experts we hear differing opinions. We need to look not only at technical issues, but also at management structures. Therefore at our Prefectural Government we have formed a committee of experts and we are investigating this and other safety questions in detail.

Hirohiko Izumida, Governor of Niigata Prefecture talks about nuclear safety – watch on YouTube:

Hirohiko Izumida, Governor of Niigata Prefecture

Nuclear safety - Governor of Niigata Prefecture Hirohiko Izumida comments on his experience with the world's largest nuclear power plant Kashiwazaki-Kariwa
Nuclear safety – Governor of Niigata Prefecture Hirohiko Izumida comments on his experience with the world’s largest nuclear power plant Kashiwazaki-Kariwa

Hirohiko Izumida (泉田裕彦) is the elected Governor of Niigata-Prefecture, elected by the people of Niigata. He assumed office on October 25, 2004, two days after the Niigata Chuetsu Earthquake.
Governor Izumida was born on September 15, 1962 in Kamo, Niigata Prefecture
March 1987, graduated from the Law Department of Kyoto University.
April 1987, entered Ministry of Economics and Industry METI, energy resources bureau
June 1994, visiting researcher at the University of British Columbia.
June 1998, Prime Minister’s Office
July 2001, Land and Transportation Ministry
November 2003, Head of the Gifu Prefecture Industrial Labor Bureau
October 2004, elected Governor of Niigata Prefecture

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Shuji Nakamura: did he invent the blue GaN LED alone and other questions. An Interview.

Interview for the Chinese Newspaper Southern Weekly about Shuji Nakamura

The Chinese Newspaper Southern Weekly interviewed me about Shuji Nakamura’s invention of the blue LED and the background to his Nobel Prize. Here some of my answers.

Read the article in Southern Weekly in Chinese language here: 【2014诺贝尔·科学】无人相信的发明

Shuji Nakamura: when he first announced his breakthrough, most people just did not believe him initially. But you are an exception. What made you believe in Dr Nakamura?

At the time when I first heard Shuji Nakamura’s results around 1992 – long before Bob Johnstone hear about these results (Bob Johnston is a friend of mine, and I know him for a long time – but Bob Johnstone is a journalist, I am a Physicist) I had worked about 18 years in physics research, at many of the best research labs in the world. So I had at that time already a very long experience in research. When I heard Shuji Nakamura’s talk at the Physics Conference in Nagoya, I could immediately judge from his talk that this was a very very important result. So I visited Shuji Nakamura at his laboratory at the company Nichia in Anan several times for discussions, he gave me copies of his papers and patents and I studied his research papers and his patents, and he also showed me the blue LEDs so I could see for myself. I had worked a long time in this field already, so I could understand that his work was true, and I could also see the working blue LEDs with my own eyes. Such blue LEDs did not exist before, so it was clear that he had succeeded in this breakthrough.

At that time I knew almost all research groups in the world working on blue LEDs, at IBM, Hitachi, SONY, and many University labs and national labs globally, and I knew the status of their research. It was obvious that Shuji Nakamura had won this race.

It is true that many people did not believe his results initially. That was because these people did not make the same effort that I made to visit Shuji Nakamura and study his results.

For example, I send a report about Shuji Nakamura’s breakthrough to the German Physical Society member’s journal for publication, and the Editor rejected my article initially, because he showed this report to German Professors in this field. They had not heard about Shuji Nakamura’s work, so they had never heard about this blue LED breakthrough and were working in their own labs on II-VI compounds which was a dead end. Because they considered themselves as the top experts in the field they rejected my report on Shuji Nakamura’s work.

I told the Editor that I am right, and the German experts are wrong, the Editor believed me and printed my report about Shuji Nakamura’s work. You can read this report online here (in German language):
http://onlinelibrary.wiley.com/doi/10.1002/phbl.19950511004/abstract

Some researchers question whether Dr Nakamura made the blue LED on his own. Why do people criticise his achievement and what is the truth? Do these rumors continue after the Nobel Prize was announced?

Every researcher “stands on the shoulder of giants”, of course now work is done in total isolation, and always rests on some previous results. Even Einstein, who did not read many scientific papers and worked out many results on his own from zero point, of course used many results of others.

Therefore Shuji Nakamura’s work of course relied on the hard work of many other researchers before him. For example he used the production technology called MOCVD (Metal Organic Chemical Vapor Deposition), which he learned in Professor Ramaswamy’s group at the University of Florida (Professor Ramaswamy was working in the office next to mine at Tokyo University for about 1 year, so I know him also very well). Shuji Nakamura also could read the published part of Professor Akasaki and Professor Amano’s excellent results on GaN compounds – Professor Akasaki and Amano’s work were also awarded the Nobel Prize at the same time as Shuji Nakamura.

Shuji Nakamura could not have done his work without the support of the Founder and Chairman at that time of the company Nichia, Mr. Nobuo Ogawa. Shuji Nakamura introduced me to his Chairman Mr Nobuo Ogawa and I had lunch with him several times and discussed how he supported Shuji Nakamura’s work financially and as the leader of Nichia. Mr Nobuo Ogawa at that time owned about 1/3 of the company Nichia, so he could take major decisions such as supporting Shuji Nakamura.

I believe that at Nichia there are two people without whom this work would not have happened:

  1. Chairman Nobuo Ogawa and
  2. Shuji Nakamura

Neither could have done the work alone, and both together were necessary to achieve this
breakthrough at Nichia. Also, when Shuji Nakamura went to Mr Nobuo Ogawa and proposed to work towards the discovery of blue GaN LEDs, at that time, Shuji Nakamura did not have a PhD, and no great research success stories behind him, although he has done successful development of red LEDs, but which were not commercially successful. Without a PhD I think there would have been almost no one except Mr Nobuo Ogawa who would have supported Shuji Nakamura’s proposal, certainly no large corporation, government supported research agency, or University, and without a PhD he would have had zero chance to win a peer-reviewed research grant from large research agencies.

Unfortunately Mr Nobuo Ogawa passed away some years ago, so he cannot enjoy the Nobel Prize celebrations.

Of course at Nichia, Shuji Nakamura could attract a number of very excellent assistant researchers, but it is very clear that Shuji Nakamura was the leader of the Blue LED research at Nichia who was leading a group of assistant researchers who essentially followed his leadership and were doing this work because of him and under Shuji Nakamura’s leadership. I am very convinced that if Shuji Nakamura would not have been working at Nichia, this invention would not have happened at Nichia. This is quite obvious to anyone who understands how science works.

Of course there are some people who envy Shuji Nakamura. Excellent people celebrate Shuji Nakamura’s success and get inspired. Mediocre people spend their time spreading rumors and talking bad about Shuji Nakamura, don’t listen to them. I have heard some of these rumors, and I have checked most of them direct with Shuji Nakamura, and I am convinced that these rumors are wrong.

Maybe some of the people who spread stupid rumors about Shuji Nakamura have failed in their own work, and don’t like someone else succeed?

About the Nobel Prize: The Nobel Prize in Physics is decided by the Nobel Prize in Physics Committee of the Swedish National Academy of Science. When I have worked in Europe, I met some of the members of this committee and I can tell you that they are all very very excellent Physicist. I am convinced that they are doing a very excellent job in checking in great detail how Shuji Nakamura achieved his results, and I am sure they have checked out all these rumors and found that they are untrue.

As a colleague of Dr Nakamura’s, could you describe a little bit about his style in research?

First of all like all excellent researchers Shuji Nakamura is extremely passionate, driven by passion for his work, and he is a maniac, working very very hard. When I was working on the book with Shuji, he was working with me on 30., 31., December, 1st of January all over the New Year period without break, exchanging emails with me in the middle of the night etc.

Secondly he is driven by intuition – he is a genius. Maybe you know that when Shuji studied at the University of Tokushima, the University did not have a Physics Department, so Shuji did not study full Physics but won the Physics Nobel Prize! I am Physicist, I have full Physics University training even to a PhD level, and I can tell you that Shuji has a very deep understanding of Physics, but he has essentially learnt this all by himself! Not through a University Physics degree!

I think his work is very intuitive. He has a very deep understanding of Nature, and follows his intuitions, his feelings, much more than anything he has learnt from the books.

More information:

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Shuji Nakamura, Isamu Akasaki, Hiroshi Amano win Nobel Prize in Physics 2014 for the blue LED

Nobel Prize in Physics 2014 for the blue GaN LED

Shuji Nakamura, Isamu Akasaki, Hiroshi Amano enabled the global lighting revolution

The Nobel Prize in Physics 2014 was awarded in equal shares to Isamu Akasaki, Hiroshi Amano and Shuji Nakamura “for the invention of efficient blue light-emitting diodes which has enabled bright and energy-saving white light sources”.

While red and green LEDs were invented long ago, efficient blue LEDs did not exist until Akasaki’s, Amano’s and Nakamura’s long series of inventions. Blue LEDs are needed to create white light.

The invention of blue GaN based LEDs enables the global lighting revolution. By replacing legacy light bulbs, fluorescent tubes etc by GaN LEDs, a big fraction of the world’s electricity can be saved, and the effect is even bigger in the developing world where still today many people use extremely expensive oil for lighting. Read a detailed analysis of the economics of lighting here.

The mainstream blue-LED scientific community was working on a dead-end: II-VI compounds

Of course the importance of blue LEDs was understood for a long time, and in the 1980s and 1990s all major industrial and University labs were working towards this holy grail – Hitachi, SONY, Philips, IBM, lots of Universities in Europe and US and elsewhere had groups working towards blue LEDs – but they all worked on II-VI compounds, which turned out to be a dead end.

The way much (not all – and thats the way towards Nobel Prize class discoveries) of mainstream established incremental research works, in most established labs, to get peer reviewed grants for research towards blue LEDs in the 1980s, this had to be II-VI work.

It needed strong willed people as Shuji, Akasaki and Amano to take a totally different approach outside the mainstream. Its to the credit of JST and other Japanese funding agencies to have supported Amano and Akasaki’s work. Shuji on the other hand ‘only’ had one person to convince: the owner and founder of Nichia Mr Nobuo Ogawa- and did I say that Shuji did not have a PhD at that time?

Which research agency would give a couple of million $ to a researcher without a PhD but with a big almost unreachable target who still has to learn the methods (MOCVD in this case) to work towards this target – other than Mr Nobuo Ogawa?

Shuji Nakamura actually introduced me to Mr Nobuo Ogawa in Anan (Tokushima-ken), and we had several curry lunches in a restaurant next to Nichia Chemical Industries Headquarters. I asked Nichia-Chairman and Founder Nobuo Ogawa how he decided at the time to fund Shuji Nakamura’s one-year stay at the University of Florida in Professor Ramaswamy’s group to learn MOCVD (by the way Professor Ramaswamy was my office-neighbour when I was Associate Professor on the NTT Telecommunications Chair at Tokyo University), and fund Shuji Nakamura’s work to the tune of many US$ million, which at that time was a large fraction of Nichia’s overall sales.

To my question how Mr Nobuo Ogawa took the decision to support Shuji Nakamura, Mr Nobuo Ogawa simply answered: “How did you chose your wife, Gerhard?”.

Shuji Nakamura, Isamu Akasaki, Hiroshi Amano worked on III-V compounds and achieved the lighting breakthrough

While the mainstream scientific blue-LED community worked with high intensity towards this dead end without knowing that they devoted their lives and their students to a dead-end, Akasaki and Amano over many years painstakingly solved one problem after another to create electronic devices based on the III-V compound semiconductor GaN and its variations.

Shuji Nakamura then built on Akasaki and Amano’s work, solved the three major and many many minor problems remaining to create commercially viable blue LEDs. But the work did not stop there: Shuji Nakamura also created white LEDs, UV LEDs, blue Lasers (e.g. for SONY’s blue-ray DVD players and displays) and a lot more. (read about Shuji Nakamura’s breakthrough work in great technical detail here: The Blue Laser Diode)

Shuji Nakamura, Nichia Kagaku Kougiyou and releasing Japan’s creative power

Shuji Nakamura was also a very diligent writer of patents and wrote a large number of very strong patents. These inventions together with patents propelled his then employer Nichia Kagaku Kougiou from a maker of phosphors (which were used for cathode ray tubes and fluorescent tubes) to one of the most important semiconductor companies. For these inventions, Nichia paid Shuji Nakamura a salary approximately on the level of a Japanese primary school teacher, plus a few US$ 100 bonus for the inventions.

Lets not go into the law suits between Nichia and Shuji Nakamura here, but let me say, that I have never found the complete story explained in the media. Most media reports give a very incomplete picture of the true story of the law suits between Nichia and Shuji Nakamura. – I guess most media just copy from each other in this case…

I noticed Shuji Nakamura’s work first around 1992 at the Japanese Applied Physics Conference in Nagoya, where Shuji gave a talk about his GaN work. I visited Shuji a couple of times in Anan (Tokushima-ken), he introduced me to the founder of Nichia, Mr Nobuo Ogawa, without who’s support Shuji’s work would have been impossible. With Nobuo Ogawa’s death, Shuji decided to move to the USA, to Santa Barbara, where he is working today. Interestingly, when Shuji was looking for a job, he had lots of offers from USA, but none from Europe and none from Japan… Why that?

Shuji developed deep insights about issues holding back Japan, and has shared his advice on many occasions, including also the Ludwig Boltzmann Forum, which I annually organize in Tokyo as a leadership platform. Read about his talk here, where Shuji passionately calls for changes – even a revolution – in Japan, to unshackle Japan’s creative energies.

To learn more about the Blue GaN LEDs and lasers, and their invention:

and of course you can also read Shuji Nakamura’s, Isamu Akasaki’s and Hiroshi Amano’s 100s or even 1000s of original scientific publications.

Shuji Nakamura talking passionately at the Ludwig Boltzmann Forum in Tokyo 2013
Shuji Nakamura talking passionately at the Ludwig Boltzmann Forum in Tokyo 2013

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Japan nuclear safety – Dr. Charles “Chuck” Casto’s view and lessons learnt

Dr Charles Casto: the Fukushima disaster changed my life. We cannot let this happen again anywhere in the world.

Dr Charles “Chuck” Casto: leader of the US Government response to the Fukushima Dai Ichi Nuclear disaster

When President Obama expanded the Operation Tomodachi to include the nuclear disaster, Dr. Charles Casto was selected to lead the US Government response.

Read also:

First time, where a first world country assists another first world country in a major crisis

We are very good at providing humanitarian support from first world countries to second or third world countries.

However, it is unprecedented for a first world country to assist another first world country in a crisis of this magnitude. The Fukushima Dai Ichi Nuclear crisis is without doubt the most serious international crisis we ever had in peace time. How do we respond to first world to first world crisis?

How do we respond in a prolonged “nat-tech” (natural – technology) disaster in a first world country?

Need for protocols and frameworks for information flow in case of large scale first world disasters

Dr Casto feels there is a need to establish international protocols and frameworks for information exchange and cooperation in the case of this kind of large scale disasters.

Time lost: It took 10 days until an understanding and a framework for the exchange of information was established

In this case there was much information missing, information was “unknowable”, since the reactors were unaccessible. Big disconnect in the availability of data.

No one engineer had all the information. Sources of information were unfamiliar. It was necessary to go high enough in the administration to understand the situation. It took about 10 days to establish an understanding

Kantai meetings started on March 21st, 2011 – about 10 days after the start of the disaster, until a framework for understanding the disaster was established and a rhythm for the exchange of information.

Speed of the response must be at least as fast as the speed of the accident evolution. Achieving sufficient speed is a challenge for Governments. Governments tend to be too slow.

Five crisis caused the Fukushima Dai Ichi accident:

  1. Earth quake
  2. Tsunami
  3. Nuclear event
  4. Societal crisis
  5. Policy crisis

To understand the Fukushima disaster and in order to solve and to respond it is necessary to analyze all these five crisis.

Fukushima Dai Ichi: A system breakdown, an organizational accident, imbalance of power.

It is necessary to understand the balance of power, the history of how the electricity industry developed over time, and how nuclear industry was established in Japan.

Most expertise rested in the hands of the 9 utilities, giving all power to the utilities. This imbalance of power is a major component of the accident.

Unless all five crisis are addressed and solved, including the societal crisis and the policy crisis, nuclear power is unlikely to start again in Japan.

Need to share responsibility.

Today most power and responsibility is with the regulator. However, it is necessary to share power and responsibility between regulator, Government, and the utilities.

It needs to be clear that the utilities are responsible for safety.

Need for national dialogue on how much risk the people of Japan are willing to accept.

Elected officials need to have a national dialogue to understand which level of risk the people of Japan are willing to accept. Only the people can decide.

The level of acceptable risk needs to be determined by the elected officials in dialogue with the people, that level of acceptable risk needs to be set in law, and then the regulator needs to regulate to this level of acceptable risk. It is not the role of a regulator to determine the level of acceptable risk.

If the national dialogue results in the result that no level of risk is acceptable, then there will be no nuclear power operating.

The Government needs to prove to the people that Fukushima Dai Ichi can be resolved.

The regulator needs to address emergency planning in dialogue with the population.

We cannot permit another accident like Fukushima Dai Ichi happen anywhere else in the world again.

When traveling through the evacuated zone around Fukushima Dai Ichi, it is clear that we cannot ever let such an accident happen anywhere else again in the world.

We have to learn about the science of nuclear energy. I want the Fukushima disaster to be treated in science books – not just in history books. We need to understand the science of nuclear power.

Q & A

Q: Do Mr Yoshida’s notes show that operating a nuclear power plant in emergency is too difficult to handle for humans?
A: We need an incident command system to be bigger than the crisis. Such an accident is too big for one single person. No one single person can have all the knowledge required for such a disaster.

Q: Are six or seven nuclear reactors at one single plant too much for one single plant manager?
A: Dr Casto worked several years on a three unit site. We should treat each reactor individually. We should have six or seven leadership structures for each reactor, and then one overall leader.

Q: Were we lucky that the disaster occurred on a working day, rather than on a weekend?
A: We need a command system that is of sufficient size. If we have more people than this its good, but we cannot have less than the sufficient size to respond to the accident.

Q: Prime Minister Naoto Kan has been under heavy criticism. Do you think if Abe and the LDP would have been in power, that the crisis management would have been better?
A: Without doubt the response would have been different with different leaders in charge. The difference I saw in Japan compared to other countries: in all other countries we have independent Government people at the site of the nuclear power station, who will be at the control room, and work independently for the Government. One of the issues of Prime Minister Kan was, that he did not have any independent source of information, he had to use other organizations, and he felt that he did not have a reliable source of information. It is necessary to flatten the organization. The people at the top need to be able to talk to the people on the location of the accident.

Q: With the reactors being US designed, did US teach Japan enough about disaster response?
A: We need to look at the evolution of nuclear technology and security over the years since the first introduction. In the US a huge amount of regulations was created since the beginning of nuclear power in response to Three-Mile-Island and other accidents. However in USA maybe we have too many layers of regulation now. Adding more and more layers of regulations does not necessarily improve safety.

Q: What could have been the worst case scenario?
A: I believe that after the first week the worst was over, when the water was cooling the cores I thought we had overcome the worst. So after March 15th maybe the worst point was overcome. Also there is not a linear relation between the number of reactors and the created damage. The radiation damage depends on wind, weather and many other factors. Overall I underestimated the severity of the accident initially.

Q: What did Japan do right?
A: Yoshida-san was absolutely right to inject sea water. Injecting sea water was key to mitigating the ultimate outcome of the disaster.

Q: What did Japan do wrong?
A: The isolation of the plant from the outside was wrong. The Fukushima Dai Ichi plant become more and more isolated as the accident progressed, and had to rely on their own resources. McArthur said – most failures in war time can be summed up in two words: “too late”. Not reacting fast enough, and not getting resources to the site in time.

Q: What have we learnt from the Fukushima disaster?
A: We learnt to make plants more resilient. We need the plants to be resilient for 72 hours, so that the national Government has time to bring in additional resources from distant locations.
In the USA we have established FLEX: two locations in the USA with massive amounts of equipment, which can be flown into the site if there is a significant problem. We have checked in advance that the equipment fits into the airplanes and can be transported properly. We need sufficient equipment available, but far enough away, so that it is not destroyed by a disaster at the site, as in the case of Fukushima.

Q: Japan’s Government says that today’s safety regulations are the highest in the world. Do you think this is true?
A: I think this is likely to be true for the technical aspects of the regulations – but I have not checked this in detail. However, the society issues and emergency planning, evacuation plants, sheltering plans are equally important. Maybe technical people are less interested in these societal aspects, but we need the policy and societal side in case the technology side fails. We cannot neglect the society and policy issues (crisis four and five above).

Q: What about the command structure?
A: I think for the initial 10 days the command structure was unclear, but was unified after the first 10 days from March 21st. Then we started the bilateral US-Japan meetings, and that also solidified the command structure.

Q: What do you think about Prime-Minister Naoto Kan’s helicopter visit to Fukushima Dai Ichi?
A: If I was in place of Prime Minister Naoto Kan, who did not feel he got reliable information, if I am the commander and don’t have anyone I trust on the site, I would also go and look.
I talked with Governor Thornberg of Three-Mile-Island: for him the lesson learnt was to “anchor the facts”. He interrogated the facts, and he interrogated the people who brought the facts. “Anchoring the facts” was why he succeeded in the Three-Mile-Island. A major leadership lesson learnt is that you need to understand the facts.

Q: How many experts did US send, and how did they help?
A: US Government brought in 150 US experts, the best 150 people we have in the USA in the nuclear industry, and we had regular meetings of about 30-40 US experts with the Japanese cabinet every day starting with March 21st, 2011.

Q: There are rumors that TEPCO wanted to withdraw completely from Fukushima Dai Ichi?
A: I don’t know the answer, maybe no-one knows. But I am sure there would have been sufficient protection and resources at Fukushima Dai Ichi to deal with the accident. Currently there is an enormous effort with large resources to deal with the accident, and there is much progress.
I believe that Yoshida-san at Fukushima Dai Ichi, and Masuda-san at Fukushima Dai Ni with their teams did an outstanding job given the situation and given the resources they had.

Q: Are you pro-nuclear?
A: I am not pro-nuclear, I am not anti-nuclear. I am pro-safety. Every human activity including nuclear energy has risk. Coal has risk. Gas has risk. The people need to decide what level risk they want to accept. If the people decide they want nuclear power, then I can help to make nuclear power safe.
Direct communication between Government, nuclear plant operator and population is required. In Three-Mile-Island the population found out about the nuclear accident because journalists overheard a walkie-talkie conversation at the plant, and the Chernobyl disaster was found out via Sweden. Why not establish a direct information link between the nuclear power plant and the population via mobile phones?

Dr. Charles “Chuck” A. Casto

Japan nuclear energy restart: former leader of US Nuclear Regulatory Commission (NRC) efforts in Japan explains lessons learnt from the Fukushima disaster
Japan nuclear energy restart: former leader of US Nuclear Regulatory Commission (NRC) efforts in Japan explains lessons learnt from the Fukushima disaster

Charles Casto was leader of the US Nuclear Regulatory Commission (NRC) delegation supporting the Japanese Government during the initial 11 months of the Fukushima nuclear disaster, and to ensure the safety of US citizens in Japan during this period. For this work he was awarded the Presidential Distinguished Services Award in 2012. He is Regional Administrator for the Region III of NRC overseeing the nuclear regulation in Iowa, Illinois, Indiana, Michigan, Minnesota, Missouri, Ohio and Wisconsin, where he has regulatory responsibility for 23 reactors and a large number of other users of radioactivity. Previously Dr Casto has served many years as certified Reactor Operator and Instructor, and in many other leadership positions in the US nuclear industry.

Dr Casto’s talk and Q&A on YouTube

Further information:

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Murata cheerleader robots: stability, sensing, synchronized dance – waiting for open innovation and APIs?

Murata cheerleader robots
Murata cheerleader robots

Murata and its robots

Murata introduced their newest Cheerleader robots in a press event on September 25, 2014 in Tokyo.
Purpose of the robots is brand building and advertising of the company’s components and capabilities.

Watch the Cheerleader robots dance synchronously here:

Murata Manufacturing (村田製作所)

While Japan’s eight electronics conglomerates stagnate in both revenues and income for the last 15 years, many of Japan’s electronic component manufacturers are thriving, as explained in detail in our report on Japan’s Electronics industries.

It is maybe not a coincidence, that many of the most successful electronics manufacturers are located in Kyoto, including Murata Manufacturing (村田製作所) – away from the politics of Tokyo.

Ceramic capacitors are at the core

At the core of the business are monolithic ceramic capacitors with a 35% market share globally. A single typical smartphone includes about 700 such ceramic capacitors, a laptop computer about 800, and a tablet computer or TV set about 600, and a car about 200.

Overcoming commoditization and maintaining pricing power by achieving overwhelming global market shares

For most manufactured electronic components, Murata is able to achieve overwhelming global market shares, e.g. 35% for monolithic ceramic capacitors, 70% for ceramic filters and resonators, 60% for radio connectivity modules and 95% for shock sensors.

Globalization

While company culture is strongly determined by Kyoto entrepreneurial traditions, Murata has 14 companies in USA, 13 companies in Europe, 27 companies in Greater China, 17 companies in the rest of Asia, and 30 companies in Japan. For our detailed analysis and comparison with other Japanese electronics companies, read our report on Japan’s Electronics industries.

Cheerleader robots highlight components and communication modules and “3S” competence: Stabilization, Sensing and Synchronization

Cheerleaders robots are a group of robots, bodies are balancing on rolling balls, and their bodies are equipped with motors to drive the balls, position and balance sensors and communication modules to synchronize the robots’ motion.

Murata “3S”: Stabilization, Sensing and Synchronization

Murata cheerleader robots dance in sync
Murata cheerleader robots dance in sync
Yuichi Kojima, Senior Vice-President and Deputy Director of Technology and Business Development Unit, and Koichi Yoshikawa, Senior Manager, Corporate Communications present the robots
Yuichi Kojima, Senior Vice-President and Deputy Director of Technology and Business Development Unit, and Koichi Yoshikawa, Senior Manager, Corporate Communications present the robots
Murata Boy, Girl and the Cheerleader robots
Murata Boy (ムラタセイサク君 = Muratseisaku-kun), the Murata Cheerleaders, and Murata Girl (ムラタセイコちゃん= Murataseiko-chan) (left to right)
Yuichi Kojima, Koichi Yoshikawa, Murata Boy, Murata Girl, and the Murata Cheerleader Robots
Yuichi Kojima (Senior Vice-President and Deputy Director of Technology and Business Development Unit) and Koichi Yoshikawa (Senior Manager, Corporate Communications) present Murata Boy (ムラタセイサク君 = Murataseisaku-kun), the Murata Cheerleaders, and Murata Girl (ムラタセイコちゃん= Murataseiko-chan) (left to right)

The bigger picture: Murata’s robots, the big wide world, and open innovation

As presented by Murata today, the cheerleader robots, Murata Boy and Murata Girl, are closed stand-alone systems, essentially for advertising and branding the company’s products.

SoftBank, on the other hand, is working to create a developer community around its Pepper robot, and SoftBank’s SPRINT subsidiary is planning to sell Pepper in the USA from 2015. Pepper has been developed for SoftBank by the company Aldebaran, founded by Bruno Maisonnier.

Google has acquired a range of robot companies, and is developing self driving cars.

In the USA, the DARPA Robotics Challenge is driving competition to develop robots.

iRobot has a program for developers.

LEGO switched from a closed “waterfall” model for developing the LEGO Mindstorms system to an open innovation model with huge success.

There is a huge contrast between these robotics programs which are community based, aim to create developer communities, develop API’s (application develop interfaces) and in some cases use open source software – and on the other hand the Murata robotics program, which seems to be a closed program creating one-off closed robot systems.

I believe that Murata’s robots could create much more global impact, if they would move from a corporate branding exercise to a platform for developer communities. In my view, Murata’s Cheerleaders – if they could talk – might shout out for being opened up. Imagine the creativity which could emerge from school classes or students programming the Cheerleaders via their APIs or SDKs.

Japan electronics industries – mono zukuri. Preview this report:

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ApplePay vs Osaifu-Keitai – CNBC interview

ApplePay is expected to start in October 2014 – Docomo’s Osaifu-keitai wallet phones started on July 10, 2004.

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file):
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In business the first-comer does not always win the game

Japan’s NTT-Docomo tested two types of wallet phones, manufactured by Panasonic and SONY with 5000 customers between December 2003 and June 2004, and introduced mobile payments and wallet phones on July 10, 2004 – over 10 years ago.

ApplePay therefore could be developed based on over 10 years of experience with mobile payments in Japan. ApplePay is expected to be introduced for the USA market in October 2014, and we can expect Apple to introduce ApplePay to other markets including Japan in due course.

It will be particularly interesting to see how ApplePay and the already established mobile payment and NFC payment ecosystems in Japan will integrate.

For detailed analysis read our reports:

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