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Japan Internet Report No. 64 Spring 2002
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In this issue:
- Doom and gloom issue
- Japan's long, slow decline
- Mobile annoyance factor reaches new heights
- Meet Mr. Yu
- More writing on Japan
Doom and gloom issue
This issue marks the beginning of the seventh year for Japan Internet
Report (www.jir.net). This particular issue has been the most difficult
since I started in February of 1996. Unlike my writer friends who can
crank it out on demand, for me writing proceeds, as Dave Barry says, at
"approximately the speed of a water buffalo passing through the
digestive system of a python."
In addition to the personal and professional issues that have slowed me
down over the past few months, I've been in a gloomy mood with respect
not only to the economy here, but to Japan itself as a nation.
When I started my Japan-specific Internet business back in 1994, I
didn't expect to get rich or set the world on fire. But I did expect
that the Internet would inevitably take off in Japan and, like the
telephone, become a taken-for-granted part of the communications
infrastructure the way it has in the U.S. and elsewhere. In this I have
been largely disappointed.
Some examples: Rather than deregulating to lower telecommunications
costs and spur Internet usage at a grass-roots level, the Japanese
government builds "cyber cities" and launches grandiose "IT revolution"
plans that are hollow symbols designed to enrich special interest groups
while obscuring its lack of commitment to substantive action.
Instead of abolishing rules and regulations and changing tax incentives
to encourage entrepreneurship, Japan's solution is to build
government-funded "incubator" facilities that are symbolic gestures
toward "invigorating the economy," but which in reality provide only
lucrative contracts for insiders and no real solutions for
entrepreneurs.
Rather than leveraging the Internet's strength as a "pull"
communications channel, Japan's broadcasters, television hardware
manufacturers, and advertising agencies conspire to convert it into a
sponsor-controlled "push" channel featuring advertorial content.
But far more important than these things is the basic, deeply-rooted
antagonism toward the disclosure of information in this country that
renders much usage of the Internet close to meaningless. Here's a quote
from Alex Kerr:
"This attitude toward information has proved to be an obstacle to
Japanese use of the Internet. Log onto the Internet home pages of
important Japanese entities and you'll find a few meager pages, as poor
in quality as in quantity, consisting mostly of slogans. From
university home pages, for example, you would never get a clue to any
serious data, such as Tokyo University's budget, Keio University's
assets, the makeup of the faculty, a cross section of the student body,
and so forth, only "What Our University Stands For." Most serious
information about these schools is secret, not available in any medium,
much less on the Internet. In the end, you would find it difficult -
perhaps even impossible - to put your hand on any practical information
about these universities... As of summer 2000, both the Tokyo and Osaka
stock exchange sites failed to offer any information of substance (for
example, the value of new or secondary listings) and did not even have
something so rudimentary as a ticker with current index levels."
Kerr has put his finger on one of the reasons for my recent sour mood.
Read more about his extraordinary book in "Japan's long, slow decline"
below.
But hey! After the doom and gloom of this Spring issue, be sure to
stick around for our "Bright and Happy Summer Issue," which will
feature, among other tidbits, a special on-the-spot report of how one
Japanese company uses advanced technology to extract money from naked
consumers in real time...
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Japan's long, slow decline
At the most basic level, what is the key driver of economic growth?
The answer, according to some people who think very hard about these
issues, is very simple: population growth.
About such things, I know little. I am but a humble value-added typist
for an Asia-focused Internet professional services firm. But the logic
makes sense to me. When there are more people, they need more food,
clothing, shelter, automobiles and cellular telephones that play "You've
Really Got Me" when they ring.
That's why projections that Japan will start experiencing negative
population growth within a few short years are worrisome. The nation's
economy has been sputtering for a dozen years, and long-term trends,
including negative population growth and the rapid aging of the
workforce, point toward more economic problems.
But there is far more to the story of Japan's decline than simple
economics. The decline I sense around me every day seems cultural and
environmental as well. When I try to put my finger on exactly what it
is, I remember the first day I landed here, back in February of 1984.
While riding the train into Utsunomiya, about 100 kilometers north of
Tokyo, I was subconsciously struck, almost to the point of nausea, by
the profound ugliness of the bleak, cemented-over urban landscape I was
witnessing for the first time.
I hadn't expected pristine temple-like homes with Zen gardens and tile
roofs, but I was completely unprepared for the tenement-like,
undifferentiated houses, jumbles of telephone wire, lack of greenery,
cemented-over river banks, and what appeared to be outdoor signage
policies that would make a U.S. strip mall look like a walkway to the
Louvre.
The terrible incongruence between what I was seeing with my own eyes and
my preconceived image of Japan as a technologically-advanced, yet
nature-loving society was so great that I probably would have been
thrown into ontological crisis had I consciously recognized the gaping
disparity between reality and my preconceptions, particularly since I
was fresh off the boat and committed to living here for at least a year.
Only slowly, over the years that followed, did I start to recognize the
malaise and decline that was evident to my unaccepting mind even on that
first day in Japan.
Since, and particularly over the last six months or so, I've been trying
to piece together exactly what this decline is, and the reasons for it.
Now comes an extraordinary, illuminating book that explains much: "Dogs
and Demons: Tales from the Dark Side of Japan" by Alex Kerr.
I strongly recommend this book to everyone who has more than a passing
interest in Japan. The content is controversial, and Kerr may overstate
some of his points, but his basic theses - among them that Japan's
economy is sustained by unnecessary, even destructive "make work"
construction projects that have literally paved the nation with cement -
are, in my view, spot on. Here's a sample:
"At 80 trillion yen, the construction market in Japan is the largest in
the world. Strange that in the dozens of books written about the
Japanese economy in the past decades, it is hard to find even a
paragraph pointing out the extent to which it depends on construction.
And even fewer observers seem to have noticed the most interesting
twist: that from an economic point of view the majority of the
civil-engineering works do not address real needs. All those dams and
bridges are built by the bureaucracy, for the bureaucracy, at public
expense. Foreign experts may be fascinated by Sony and Mitsubishi, but
construction is not a sexy topic for them, and they have largely ignored
it. Here are the statistics: In the early 1990s, construction
investment overall in Japan consumed 18.2 percent of the gross national
product, versus 12.4 percent in the United Kingdom and only 8.5 percent
in the United States. Japan spent about 8 percent of its GDP on public
works (versus 2 percent in the United States - proportionally four times
more). By 2000 it was estimated that Japan was spending about 9 percent
of its GDP on public works (versus only 1 percent in the United States):
in a decade, the share of GDP devoted to public works had risen to
nearly ten times that of the United States. What these numbers tell us
is that the construction market is drastically out of line with that of
other developed countries. The situation is completely artificial, for
government subsidy, not real infrastructure needs, has bloated the
industry to its present size."
Kerr goes on to point out the incentives that have kept this
construction machine rolling for more than 40 years:
"Construction ministry bureaucrats share in the takings at various
levels: in office, they skim profits through agencies they own, and to
which they award lucrative contracts with no bidding; after retirement
they take up sinecures in private firms whose pay packages to
ex-bureaucrats can amount to millions of dollars... The secret behind
the malaise of the Japanese economy in the 1990s is hidden in these
numbers, for the millions of jobs supported by construction are not jobs
created by real growth but "make work," paid for by government handouts.
These are filled by people who could have been employed in services,
software, and other advanced industries."
Kerr convincingly demonstrates the cultural and environmental impact of
Japan's construction-driven "modernization" and "prosperity" policies,
and the social and emotional malaise resulting there from. As Andrew
Nagorsky says, "Much of this book is provocative, and deliberately so -
but Dogs and Demons is a product of tough love."
Like Kerr, I love Japan, and this will always be my second home. It is
a place that still has much beauty. In detailing the sad reasons behind
Japan's long, slow decline, this book challenges all who care about this
country to consider what the remedies might be.
Pick up "Dogs and Demons" at larger bookstores or order online at:
http://www.powells.com/cgi-bin/biblio?inkey=62-0809039435-0
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Another way to buy books online
I highly recommend www.powells.com, the online service of the largest
physical bookstore in the world (Powell's is located in my hometown of
Portland, Oregon, and I've spent many happy hours there). Their used
book selection is unmatched, and so far every used book I've bought from
Powell's has been in excellent condition, with some indistinguishable
from new volumes. I recently ordered a dozen books delivered direct to
Tokyo, and the total cost, including World Mail express shipment, was
U.S. $180.
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Mobile annoyance factor reaches new heights
The flood of junk mail and unsolicited, automated
single-ring-and-hang-up solicitation calls ("one-giri") sweeping through
Japan's cellular market has raised the mobile annoyance factor to
unprecedented heights.
Of the 900 million messages that go through DoCoMo's servers each day,
880 million (98%) are spam, according to the company. The problem is
that, regardless of the source of the message, subscriber phones ring
(or vibrate) every time mail arrives. Nearly everyone who owns an
Internet-enabled cellular telephone has been inconvenienced as a result.
The depth of the problem was underscored by a half-page ad in the Asahi
Shimbun that recently caught my eye. One of the top carriers was
promoting the following three service benefits:
- Sleep soundly -
"You're less likely to be woken up by spam"
- Concentrate on work -
"You're less likely to be interrupted by unsolicited mail"
- Regain the thrill every time you get mail -
"Because it's less likely to be spam"
Sensing the threat to the health of Japan's mobile communications
sector, carriers and government agencies have been taking action.
Effective February 1, for example, the Ministry of Economy, Trade and
Industry (METI) made it compulsory for e-mail advertisers to clearly
identify advertising messages as such in the "subject" line of the mail.
But the result of the move was that the amount of spam jumped
noticeably, say users. The new order had the perverse effect of tacitly
approving spam as long as it is clearly labeled as "advertising,"
encouraging more spammers to get into the game, say industry insiders.
One colleague of mine was being woken up repeatedly during the night by
the increasing number of unsolicited messages. After resorting to
turning off his phone at night, he would find 20 or more spam messages
on his handset in the morning.
Meanwhile, a test conducted by Net Village and Digital Street using an
i-mode phone with an as-issued e-mail address
(telephonenumber@docomo.ne.jp) found that the handset received 857 spam
messages in August of last year, 2,898 in December last year, 2,945 in
January this year, and 2,578 in February of this year.
Like the landline Internet everywhere else, the mobile Internet in Japan
is now awash in junk mail. With e-mail transmissions accounting for 80%
of Internet-enabled mobile phone activity, and 98% of that activity
spam, we can calculate that more than three-quarters of all data-phone
activity is basically garbage.
It is also possible to calculate that if DoCoMo has 30 million
subscribers, but only 20 million non-spam e-mail messages transmitted
per day, the average user accounts for only 0.67 e-mail messages per
day. This suggests enormous concentration among a relatively few number
of users, and supports my long-standing theory that a significant number
of people who pay for these online services rarely, if ever, use them.
The difference is that, unlike the landline Internet where such content
is invisible until you seek it out (a "pull" application), the cellular
Internet enables direct intrusion into subscriber lives (a "push"
application). Not only that, with "one-giri," the practice has crossed
over into the voice channel. Progress!
Meanwhile, carriers are reduced to promoting their services as "less
annoying." I'm not a heavy cell phone user, but it used to be that on
some days I would get more "one-giri" calls than real calls. After
wondering why I was paying U.S. $40 + per month to be annoyed, I wised
up. I switched from DoCoMo to another provider, and now pay only about
U.S. $10 per month to be annoyed...
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But be of good cheer, mobile men and women! Longtime JIR reader Brent
Bossom has some great tips for reducing the mobile annoyance factor:
- Upgrade your phone
Get a new phone. Older phones weren't designed to deal with today's
spam problems. You generally aren't locked into multiyear contracts in
Japan, and upgrading your handset often costs less than getting a brand
new phone. Besides, a new phone will give you access to all the latest
services: Java games, GPS navigation, built-in cameras, MP3 players, and
full-color Web viewing.
- Use your address book and customize your phone
Put your friends' and colleagues' phone numbers and e-mail addresses
into your handset, either manually or by using one of the many available
software packages, which will also serve as an invaluable backup should
you lose your phone or upgrade. This lets you ignore incoming calls
from parties not registered in your address book by assigning a specific
ring tone to registered parties.
- Read your manual and service guides
Carriers and phone makers are working hard to fight the spam problem,
and offer many features that will limit your exposure. If you are simply
using your phone for voice communications and haven't read the manual,
then you could be missing an important spam-killing feature.
- Set up personalized e-mail address
Set up a personalized e-mail address that isn't your phone number.
Spammers use automated e-mail address-generating programs to prey on
beginning users who keep the default mail address assigned to them by
the carriers (e.g. 09044200825@docomo.ne.jp). Change your address to
something that includes letters.
- Filters
Take advantage of the filtering functions provided by the carriers.
J-Phone allows you to specify 20 "banned" addresses, while KDDI allows
you to also ban complete domains (e.g. "@address.com") and domain types
(ex. ".net")
Time invested in taking these steps is a small price to pay for
unimpeded access to the rich world of Japanese mobile Internet content -
arguably the best on the planet.
Brent Bossom
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Meet Mr. Yu
On the bright and chirpy side of things, I'm glad to report that earlier
this year I finally got to meet in person one of my favorite Hong Kong
colleagues: Frank Yu, author of our sister publication, the Asia
Internet Report www.asiainternetreport.com.
Frank talks just like he writes: fast and witty, with lots of insight.
I like Frank because he is completely out of control in a very positive
way. I really enjoyed our time together and the demonstrations of his
many and wondrous techno gadgets.
Meet Frank yourself. To get acquainted, first visit
, then take a look at his latest Asia
Internet Report at .
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International user experience insight
To receive your free copy of a recent Ion Global article entitled
"Globalizing the Web: How to refine the international user experience to
create business results," send your request to info@us.ion-global.com.
The article, recently published in the International Advertising
Association magazine, was written by Michael Hanrahan, Manager of User
Experience, and Wei-Tai Kwok, Managing Director, both of Ion Global's
San Francisco office.
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More writing on Japan
Much of the inspiration for JIR comes from Japanese language sources,
but here are some English publications related to Japan that you might
like as much as I do:
Wireless Watch by Daniel Scuka
http://www.japaninc.net/newsletters/index.html?list=ww
Daniel is probably the most prolific English language writer in Japan
today, and you can't do better for keeping up with the Japanese wireless
scene.
Our World by Bill Totten
http://www.billtotten.com/japanese/ow/
The English version of these pages seem to be unavailable at the moment,
which is a shame, since Bill's contrarian views are refreshing and
informed by 32 years of working in Japan and building and owning a
company of substantial size (Ashisuto, 1,000 + employees at peak). Our
World is currently devoted to localizing into Japanese bleeding-edge
English language Internet and technology commentary, an equally worthy
pursuit.
Tangled Webs by Tim Romero
http://www.t3y.com/tangledwebs/
Much of the time Tim writes about the Internet in general rather than
Japan in particular. I like his stuff, among other reasons, because 1)
he remains a good writer in English in spite of his many years of living
and working in Japan, 2) he has a global rather than a Japan-centric
viewpoint, and 3) he complains intelligently about Microsoft.
Keitai-L mailing list in English for those interested in Japan's
wireless scene
http://www.appelsiini.net/keitai-l/
Developer-oriented but full of good general commentary as well as good
old-fashioned flaming (do people still say that?), this is the world's
premiere source of raw English language information on Japan's
Internet-enabled cellular telephone scene.
Mobile Media Japan
http://www.mobilemediajapan.com/
A companion of sorts to the Keitai-L mailing list, Mobile Media Japan is
the world's premiere source of formatted English language information on
Japan's Internet-enabled cellular telephone scene.
So give these good pubs a read, and let me know what you think...
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Japan Internet Report is a publication of Ion Global. Entire contents
copyright 1996-2002. Reproduction in whole or in part without express
written permission is prohibited, but feel free to pass along or quote
with URL (www.jir.net).
To subscribe to JIR, please use the online form:
http://www.jir.net/subscribejir.html
To unsubscribe from JIR, just click the link below:
http://www.jir.net/unsubscribejir.html
Copyright 2002 by Ion Global. All rights reserved.
Tim Clark
Strategy Director, Japan
Voice 813.5777.3810 Fax 813.5777.3814
Ion Global <http://www.ion-global.com>
strategic e-business integration
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