Secret Silicon Valley: Deconstructing Silicon Valley While Exploding The Myths & The Memes1/10/2014 By James Santagata Principal Consultant, SiliconEdge Business Is Simply Warfare Without The Pleasantries and Veneer of the Geneva Convention
0 Comments
By James Santagata
Principal Consultant, SiliconEdge Select, develop, deploy & manage your people right & you can have the advantages of a high-tech economic center right at home. Simply hearing the words Silicon Valley can evoke an image of cutting-edge innovation advanced by an army of daring, if not slightly mad, entrepreneurs who feverishly seek to develop the world’s next technological marvels. But what exactly makes Silicon Valley so successful and, more importantly, can it be replicated? China has Zhong Guan Cun, India has Bangalore. Where is Japan's “Silicon Valley”? Japan, the third largest economy in the world, still lacks any type of large, formal tech epicenter like the one in California. Does this even matter for business success in the 21st century? Many people, including Silicon Valley industry insiders, will immediately and perhaps misguidedly say yes. A more reasoned and introspective analysis, however, demonstrates that this type of success is not about location but more importantly about talent. And even more specifically: it is not just about talent, but about how that talent is selected, developed, deployed and managed. To create a Silicon Valley atmosphere, a company needs employees who possess these three skills: 1. Business acumen to identify huge opportunities; 2. Leadership to seize those opportunities; and 3. The ability to select, develop, deploy and manage talent to quickly exploit these opportunities. Once we understand this, what then are the core skills that we should be focusing on when developing talent that can rise to and perform at the level of Silicon Valley’s? If we look closely, it’s clear that this boils down to five core skills, all of which can be readily developed in our existing employees: 1. Leadership: The ability to take risks, to develop a vision and to lead others to the successful path. This is not just for senior leaders, but for all key players so that they can learn how to lead across all levels: from senior management to their peers or to those below them. And it includes the ability to reframe what are commonly perceived as failures as mistakes and missteps with important lessons to learn. Steve Jobs had success in a variety of diverse areas and products, from the iMac, iPod, iPhone, iTunes and Pixar. This wasn’t accidental nor was it surprising, as each of these areas was ripe for a true leader to identify and then pluck the low hanging, yet massive fruit. His move into iTunes alone was pure leadership as he had to overcome the lawsuit Apple had lost to the Beatles record label prohibiting engagement in music-related businesses. His success with iPod was further made possible by Sony’s reluctance to move its Walkman franchise forward into developing solid state devices including technologies such as microprocessor chip, crystalline semiconductors and RAM. 2. Communication: The ability to clearly communicate through a variety of media ranging from one-on-one and group meetings to formal reports and presentations to business emails and video conferences. Very often, the best ideas as well as the pulse of the market comes from those closest to the customer – support engineers, sales and customer service. And yet, most often this information does not get captured and clearly communicated back to product managers and the executive staff (see also Ogushi Matrix Communication lines). 3. Influence & Persuasion: The ability to get others to want to support a project or, if they won’t actively support it, to at least make sure that they don’t actively resist it. Previously we mentioned the need to capture and clearly communicate opportunities and obstacles a company may face or is facing. Yet, there are plenty of instances where even a clearly communicated issue or opportunity falls on deaf ears, such as Kodak’s need to move from film-based to digital cameras. There are many reasons for resisting opportunities or ignoring warnings about obstacles, including that this information or proposed shift in business may benefit the company but specifically expose or harm one person’s or department’s operations, ego, status or bonuses. For this reason, clear communication is only a starting point. Beyond this, influence and persuasion must be utilized as well. 4. Negotiation: The ability to negotiate not only externally but, often more importantly, internally. This is critical during situations such as when a green light is needed for a feasibility study, to request funds and resources for product development or to get approval and buy in for the launch of a product that will potentially cannibalize an existing cash cow product. Influence and persuasion can only take us so far, and at some point it can be expected that we will need to negotiate. This requires the ability to craft a win-win solution as well as to ensure that the other party sees it that way. It is not only possible but extremely common for a win-win to be misperceived and subsequently blocked, simply because the other person has become psychologically opposed resulting in a classic “cut your nose off to spite your face” scenario. In these scenarios everyone loses including employees, managers, shareholders and customers. 5. Assertiveness: The ability and confidence to speak up and share opinions or ideas or to challenge another’s opinions or ideas in a professionally affirmative manner. Assertiveness (often confused with aggressiveness) is a critical skill that is especially important for those who may have key insights and knowledge, such as engineers or service people, but not the personality or interest in speaking out nor the title or standing within the company. Instilling this skill in a firm’s employees can unleash great productivity and opportunity while also identifying problems or obstacles before they become dangerous or expensive. By developing these 5 core skills sets and Valley Values in your existing talent you will ensure that your employees’ inherent creativity and innovative nature do not go to waste and that the people with these ideas have the tools and skills needed to bring this forth to their peers and superiors and ultimately to the market place. By James Santagata Principal Consultant, SiliconEdge Ask the average person to think of Japan and then to share with you the first thing that pops into their mind. I can guarantee you that they'll almost certainly read back from one or more of these several powerful and well-established myths and memes: 1. High-Tech Japan: A High-tech and Cyberpunk culture and society comprised of very polite albeit non-thinking and undifferentiated robots and drones all clothed similarly in their business or school uniforms and all marching off to the office or to school. Visitors find themselves amazed by the high-tech, 20-function paperless Toto toilets, the jaw-dropping variety of merchandise dispensed by ubiquitous vending machines, the automated, elevator-driven parking structures, auto-opening doors, sensor-controlled escalators and so on. 2. Old Japan: The nostalgic view of Japan found in Tom Cruise's "The Last Samurai" and other movies before which focuses on the picturesque Japan. The culture and the style. The polite, disciplined demeanor of the people. The attention to detail and quality. The lacquer ware artisan, the sword craftsman. Mount Fuji (富士山), Kyoto, Nara and Kamakura. Geisha. Sumo. Onsens. Samurai. Ninja. Swords. Shamisen. Kimono. 3. Modern Japan / Culture Japan: The exporting of top talent in baseball as well as having its players picked up by European soccer clubs. The deep stable of world-class swimmers, gymnasts, wrestlers and figure skaters. Beyond this, the delicious, healthy cuisine of Japan: sushi, sashima and various other staple dishes of Japan. Karaoke, manga, anime, video games. Modern Japan is about talent and culture. 4. WWII Japan: Banzai human waves attacks, Kamikaze pilots, rapacious invasions of civilian cities along with soldiers and civilians who would rather toss themselves off the cliffs at Saipan than surrender. 5. Basket-case Japan: 20 years of economic malaise, a deflating economy, aging population, declining birthrate, a broken self-image and the inability to create or innovate as China continues to eclipse Japan in terms of GDP all while the world waits for Japan to sink into economic obscurity and irrelevance. I've discussed and hopefully skewered a few of these myths and memes in detail, in particular: 1. Japan May Be Able To Compete Globally But Not Yet 2. Can Japan Compete? You Betcha And Here's Why 3. Japan's Problem: Severe Lack Of Leadership Not A Lack Of Innovation Or Creativity We've also discussed these topics in detail (articles and podcasts) over at FirstPoint Japan. The FirstPoint Japan Expert Interview Series may be of interest to you. The New York Times' Martin Fackler (see below) wrote a nice piece on some of the startup activity happening in Japan, however, I think it still misses some of the key points of where Japan has been, where it is, and what it needs. In a nutshell, over the last 30 years the Japanese economy has been held captive by the power wielded by ossified electronic giants such as Panasonic and others, as well as the very real monetary, career and social risk that entrepreneurs face in Japan which is only compounded by the huge amount of regulatory capture found in Japan. Surely Japan has had world class entrepreneurs before, such as Akio Morita who founded Sony, Soichiro Honda who founded Honda,Konosuke Matsushita who founded Panasonic (formerly known as Matsushita) and Kiichiro Toyoda who took his families Toyoda Loom Works and transformed them into an automotive powerhouse called Toyota. The point remains, though, that if Morita were still alive today, he wouldn't recognize Sony as it stands today, and worse, the suits currently running Sony would never, ever hire a maverick entrepreneur and genius like Morita. Akio Morita was Japan's Steve Jobs, except that he was Steve Jobs, before Steve Jobs even got out of his diapers. How aggressive and prolific was Akio Morita? Well, in terms of fights. he didn't not shy away, not only co-penning the somewhat acerbic book "The Japan That Can Say No: Why Japan Will Be First Among Equals" (and see Amazon) but also refusing to bow to arm-twisting by the US content industry that wanted to ban his Betamax recorder. Morita fought this case all the way to the US Supreme Court (Sony Corp. of America v. Universal City Studios, Inc) and won!, making this not only a victory for Morita and Sony but for all other electronic manufacturers after them and especially making this a victory for us lowly consumers. If you look closely at Japan, you'll find that it is usually during absolute or relative social or economic chaos that such dynamic entrepreneurs have risen. Mind you, this is not because "necessity is the mother of all invention" but because the chaos at had had broken or cracked the social conformity or regulatory capture just enough for a few green shoots to sneak through. These green shoots, these entrepreneurs and creators and makers, the were always there. They always had the ability to perform. But they were choked out. By a combination of social conformity and most importantly rent-seeking incumbents. In recent years, perhaps over the last three or four years, Japanese entrepreneurs and startups as well as entrepreneurs and startups in general are getting media attention (thanks in part to the visibility of Steve Jobs / Apple / iPhone and Mark Zuckerberg / Facebook among others). And with that, it has slowly become "okay" to be an entrepreneur again while at the same time the immediate financial and social risks are greatly reduced and even longer term social and career risks are lower. In other words, currently, huge momentum is building in Japan, it's under surface and it's not just Japanese entrepreneurs but foreigners as well, many of whom have relocated in Japan from tech hot spots in the US including Silicon Valley, New York and everywhere in between. These startups are critical to put further pressure on the ossified Japanese corporations to either compete and streamline their business OR die a quick, brutal death and then be composted, releasing and recycling their talent and know-how back into the pool of Japanese labor, intellectual property and financial pool. It's exactly that intra-industry competitiveness and dynamism that is a hallmark of Silicon Valley's constant success in the world technology markets (and post-tech as well) and conversely it was exactly that lack of intra-industry competitiveness and dynamism that was the death knell for Detroit's once vaunted auto industry. Japanese Start-Ups Channel Samurai Spirit
By Martin Fackler Published: December 25, 2013 TOKYO — The 20-somethings in jeans sipping espresso and tapping on laptops at this Tokyo business incubator would look more at home in Silicon Valley than in Japan, where for years the surest signs of success were the gray suits of its corporate salarymen. But for those hoping the nation’s latest economic plan will drag Japan from its long malaise, the young men and women here at Samurai Startup Island represent a crucial component: a revival of entrepreneurship. ... The signs of that comeback are still new, and tentative enough that the statistics on start-ups and initial public offerings have not caught up. But analysts and investors report that hundreds of new Internet and technology-related companies have sprung up in the last two to three years, creating an ecosystem of incubators like Samurai Startup Island and so-called accelerator new venture investment funds, which invest in early-state start-ups in hopes of cashing in. ... For years, sagging entrepreneurial spirit has been cited as a major reason for Japan’s inability to save itself from a devastating deflationary spiral. The nation that produced Sony, Toyota and Honda has created few successors. ... When he started investing in new companies six years ago, Mr. Sakakibara was lucky if two would-be entrepreneurs approached him in a week to seek financing. Now he gets two such queries a day, he said. He and others closely watching start-ups attribute the increase in interest to cultural shifts that have slowly chipped away at Japan’s famously insular culture. Having grown up immersed in an online world that stretches beyond national borders, young Japanese appear more willing to draw inspiration from foreign role models like Steve Jobs, the founder of Apple. And having seen Sony cede market share to South Korea’s Samsung, many no longer share their salarymen fathers’ belief in the permanence of established corporations or lifetime jobs. “In a world where everything is risky, it’s better to be your own boss, in charge of your own destiny,” said Yoshinori Fukushima, 25, whose year-old Internet company has grown to 14 employees. ... Some warn that Japan has a way to go to become a hotbed of break-the-boundaries venture behavior. Noriyuki Takahashi, who specializes in entrepreneurship at Tokyo’s Musashi University, pointed to comparative global surveys that place Japan at the bottom among leading Western and Asian economies in social acceptance of entrepreneurs. ... By James Santagata Principal Consultant, Silicon Edge I've had in interest in Korea for quite a long time both in cultural and business terms so you can imagine how quickly I was drawn to the article entitled, "Can Korea’s new culture of business creativity rival Silicon Valley?". It's fascinating to me for several reasons. First, I read a book on this subject back around 1990 entitled, "Is Korea the Next Japan?: Understanding the Structure, Strategy and Tactics of America's Next Competition" by T.W. Kang. Now, T.W., Kang while not a famous author by any stretch of the imagination, is extremely insightful in his writing and should be famous as he writes from a unique perspective -- a Korean raised in Japan and educated in the US (BSEE MIT / MBA Harvard). He is trilingual and as an "outsider" to all three cultures slices and dices these cultures and explains them like a boss. Apparently T.W. Kang is now Managing Director of Global Synergy Associates, a management consulting firm based in Tokyo and prior to this he was on the advisory board of advisors of a number of high tech ventures including GEM Services, Inc., Synaptics, Inc, and SiliconWave, Inc. and was a General Manager for Intel Japan. Second, around 1995, when I was working at Applied Materials (AMAT), the Japanese were still dominating chip production, primarily memory chips, and yet the Koreans were coming on fast. Not only were they pushing their R&D forward extremely aggressively, but they began mimicking and borrowing Japanese chip production techniques and technologies. For instance, on the semiconductor fabrication tools that Japanese firms would buy from Applied Materials they often had a certain configuration, in both the components they chose such as the Mass Flow Controllers (MFCs) but also in the gas panel designs -- and this "signature" look was across Japanese chip makers. And yet, by 1996, if you took a Japanese process engineer onto the floor of AMAT's manufacturing facility and showed them the gas panel of a Korean chip maker (covering up any signage or badges), the Japanese process engineer would broadly smile and say, "It's for a Japanese chip maker!". If you then told them the truth, it was for a Korean chip maker, they be, "What?! Really?!". How do I know this is true? Because I did it and experienced it with a co-worker on several ocassions. What was happening even in 1995 and 1996 is that Koreans were going in all the way to own these component markets. And even when the 1997 Asian Financial Crisis hit, they keep right on investing in component development and production tools. They also, along with Japan invested very heavily in telecom infra for their country giving them an early lead in pervasive, persistent high-bandwidth communication network all for a pittance. Third, after the dot com / dot bomb crash, the Koreans continued building and investing. But unlike the Japanese, how in modern times, shy away from getting into a scrap or lawsuit, the Koreans almost relish it. When someone like Steve Jobs / Apple sues Samsung, they are scrappy and come out fighting. And then they use other leverage they have, like the Samsung components that Apple relies for its iPhone. These Korean firms also took advantage of the labor immobility and horrible talent management policies found in Japan, such as the refusal to hire from direct competitors or to hire a mid-career executive or old engineer. Korea took them all and gave them a home. And these Japanese engineers produced. Can Korea’s new culture of business creativity rival Silicon Valley?
By Mario Gamper, VentureVillage Published on December 24, 2013 4:00 PM “This is the best time ever to start your company in Korea,” said Dreamcamp Manager Ryu Hahn. The coworking space and incubator is funded with more than $450m by 20 Korean banks who have formed the “Banks Foundation for Young Entrepreneurs”. Offering a wide range of support, from pitch clinics to funding, Dreamcamp is just one example of the structures for new business ideas that popped up in the last couple of years. ... “Korea is now the biggest startup in the world,” smiles Richard Min, cofounder of the SeoulSpace incubator and brand new Fashion Tech (FT) Accelerator. “60 per cent of all venture capital here is government-backed. In the US it’s one per cent,” said Min. This creates a unique startup ecosystem: “Korea has always been a top-down economy. The government has now decided to merge it with bottom-up creativity. We’re creating a completely new business culture, one that’s not even seen in Silicon Valley, or anywhere else,” added Min. ... In 2012 the 10 biggest conglomerates were responsible for more than 80 per cent of Korea’s GDP, more than ever before. For decades the Chaebol – a form of business conglomerate in South Korea – throttled local entrepreneurship. In its quest to create new jobs, the Korean government is finally taking the side of SMEs. And it’s telling them to take bigger risks in hopes this will lead them to bigger markets. “Before this year, almost all support was about creating a new startup. But this year they really pushed startups to go abroad,” Daniel Cho, cofounder of Step, a journaling app that used government funds to send a small team to the Plug & Play accelerator in Sunnyvale. ... “Korea used to be a Galagapos of business creativity,” said Kim. An ecosystem so specific, that ideas and solutions could be successful here, but wouldn’t make it anywhere else. “This has changed.” By James Santagata Principal Consultant, SiliconEdge Given the current media frenzy of "everything Bitcoin" (BC) you probably would've had to have been living under a rock to not have heard about it. Along with this attention there's been no shortage of proponents as well as detractors. Many detractors have pointed to some of the weaknesses or flaws they see or have purportedly been found in Bitcoin. While there are certainly many things to be sorted out regarding Bitcoin it always seems that whenever something new comes about there are immediate detractors telling you that this or that is the new shiny thing's "achilles heel" and with Bitcoin it is no different. Specifically, I'm referring to Bitcoin: What You're Not Being Told which suggests that the blockchain is BC's achille's heel. As usual, this type of doom and gloom usually never comes to pass as the world is dripping with intelligence and ingenuity. We've seen this with the Y2K situation and numerous others. This isn't to say that detractors aren't valuable, because they are. And very often it is only because of their efforts and concerns that issue or problems come to light and are addressed. So for that we are very thankful. But back to the BC's blockchain and the doom and gloom surrounding it. Once upon a time, there were any number of people telling us that the internet was doomed because of the perceived lack of bandwidth (remember those silly "conserve bandwidth" sig lines?) -- that the internet would collapse upon itself. Yet technology and the market place rode to the rescue and we now can download huge video files at the click of a mouse button or watch streaming media on our smart phones very minimal, if any, latency and all for peanuts. More analogous to the BC blockchain concerns is the limited addressable space provided by IPv4 with IPv4 being 32 bits in length and providing approximately 4.3 billion IP addresses. I first heard concerns about this back around 1995 in tech circles and perhaps in the late 1990's it began to hit the mainstream or at least business press. And yet this hasn't stopped the internet from growing even though we have more and more devices connected by the minute -- just off the top of my head, we have about 10 devices connected. Perhaps more. So what gives? Well, as a short term solution, the NAT protocol was developed and introduced as well as dynamically assigned (recycled) IP addresses. And eventually, we've come to see IPv6 being implemented as more robust solution (of course, IPv6 offers many other benefits, the massively enlarged address space being just one and perhaps the most obvious). IPv6 implementation has been slow as it's had to contend with both cost and compatibility issues (i.e., you may need something like NAT64, as IPv4 / v6 are not compatible). But it works (as far as I know -- techies, correct me if I'm wrong). Most importantly, though, IPv6 is 128 bits in length which yields about 340 trillion trillion trillion addresses. Not bad - that'll support a lot of devices and objects to be sure. So what can be done about the current and projected length and subsequent weight of blockchains? One possibility is Blockchain pruning but as there are some extremely smart people out there, certainly other solutions will arise to fill this and other needs and issues as they arise. And given other uncertainties about BC, surely this issue of "blockchain weight and length" will be seen to have been a trivial bump in the road for BC. By James Santagata
Principal Consultant, SiliconEdge As previously discussed, we focus on both the human and the strategic elements of personal and business success. We'll dig down deep and explore and unpack the official narratives as well as the myths and memes as to why particular companies, products, people and technologies have succeeded or "failed" and we'll often end up with far different conclusions than are commonly published or discussed within the business and tech communities. We'll also draw heavily upon some of the following subject matter to help make our points: 1. Evolutionary Psychology 2. Cognitive Science 3. Influence and Persuasion 4. Military History, Tactics and Strategy 5. Economics (primarily regulatory capture by rent-seeking incumbents) 6. Linguistics & Languages 7. Foreign Cultures 8. Seduction and Dating And a whole lot more... stay tuned! By James Santagata
Principal Consultant, SiliconEdge Outside of questions pertaining to SiliconEdge's training and coaching services, two of the most common questions people ask us have to do with our company name. Is there a particular meaning attached to the name? And if so, what is the philosophy behind it? Simply stated SiliconEdge represents two concepts. First, it represents the physical edge of Silicon Valley -- the millions and millions of miles of inhabited space where entrepreneurial and intrapreneurial skills and knowledge have been rapidly diffusing or have already diffused and the exciting innovation and creativity that have been taking place or are about to take place outside of the Valley as well as outside of the United States. Second, and mostly importantly, if we accept Silicon Valley to be the mecca of technology, creativity, innovation and risk taking, then this "edge" is the next step, the next evolution of this mecca; not a physical edge but a philosophical edge. To me, it's been very clear that this next evolutionary step is a philosophical shift in recognizing and optimizing the human element and the strategic element and nowhere will this become more true and more important than in the Valley which is increasing becoming a "post-tech" world although very few seem aware of this fact. This shift means that business and people will soon need to recognize that most of the problems they face are not technical or financial in nature but human (we address this in great detail). To be sure, the intrinsic importance and value of the human element is not new and it has always been of critical importance even when it has gone unrecognized. And due to a number of factors the actual importance of the human element has often been masked, misinterpreted and even when it's been recognized the response has often been to simply address it with platitudes. A common example of this is found in the expression, "Necessity is the mother of all invention". Is this really the case? We think not. To us, this human element relates to being able to most effectively and efficiently select, acquire, develop, deploy, motivate, manage and retain the right people necessary for your business to reach or exceed its objectives and goals as well as ensuring your continued competitiveness and viability in the fast moving, global business environment that is today's reality. More specifically, the concrete skill sets that now provide the largest ROI and ROL for companies (and individuals) include: 1. Leadership 2. Communication 3. Influencing 4. Persuasion 5. Negotiation 6. Assertivenesss Beyond this human element, the essence and philosophy of SiliconEdge is to always question the official narrative as to why a particular person, company, product or strategy was "successful" or "failed" and to identify and unpack the most powerful myths and memes to find the real lessons to be learned. The Global & Mail (Stuart Braun):
Japan ranked first worldwide in ‘Capacity for innovation’ on the World Economic Forum’s 2012 Global Competitiveness Report, and second in terms of Company Spending on R&D. Is this reflected in real ongoing innovation in Japan? According to the "Global Innovation Barometer" survey by General Electric Co. released in March, Japan's self-assessments were the lowest among the surveyed countries. Does this surprise you in light of the WEF competitiveness report? What is causing the dissonance in these views of Japanese competitiveness and innovation? SiliconEdge (James Santagata): For decades Japan has been churning out innovation after innovation, some of which are both very visible and "sexy", such as today's automobiles or when Japan dominated the video entertainment and portable audio player market. Many other innovations, such as those by Toray composites, are critical albeit invisible as they are industrially rather than consumer focused. Nevertheless, this innovation continues today. Paradoxically, while rest of the world recognizes Japanese prowess in regards to innovation, the Japanese themselves are much less impressed by their innovations. Partly this can be explained by Japanese tendencies towards humility and introspection. Beyond this, however, much more can be attributed to the perceived (from the Japanese perspective) if not actual lack of visible let alone "sexy" innovations, primarily in the consumer space. The Global & Mail (Stuart Braun): But some closer to home seem to less confident about Japanese competitiveness and innovation. Shinji Fukukawa, writing in the Japan Times in December, said that "Having observed trends in Japanese industries for a half century, I have never felt deeper concern about their future than at present. Many of Japan’s leading enterprises that once dominated the global market are now suffering huge losses and lagging in performance behind competitors in South Korea, China and Taiwan." Do you agree? Or is he overstating the problem? SiliconEdge (James Santagata): To hear many economists talk and even the Japanese themselves, one would begin to believe that Japan is the "'sick man of asia", rather than the world's third largest economy, having just recently been eclipsed by China, which possesses a land mass larger than the US and a population which is almost ten times larger than Japan's. Nevertheless, I do have some worries about Japan not for her lack of innovation but rather for her lack of leadership. In my opinion, too much attention is paid to "innovation" as though that is the "end all be all". It isn't. If it were, then how can we explain China rising so rapidly? What innovation is emanating from there? Innovation by itself, though mesmerizing, is worthless without productization. And productization is worthless without monetization. Innovation must be monetized to be worth anything. And that is the problem with today's Japan. Spectacular and often early innovations come out of Japan's labs and corporations such as Sony's Location Free TV, yet due to corporate constraints on monetization these innovations for fear of rocking the boat or cannibalizing some products, they allow scrappy firms, like Sling Media to come from behind and gobble up the market. It could be said, the Apple's iPod was simply the next iteration of Sony's Walkman. And I don't mean to pick on Sony as they are not alone -- the majority of the Japanese CE (Consumer Electronics) industry has been having their bento boxes eaten by the likes of Apple and Samsung among others. The US is also replete with examples like this as well with Xerox PARC as just one poster child with their lack of motivation or desire to monetize their PC and related technologies (graphics chip, ethernet, vector based graphics, etc.). To solve this, Japan needs real leaders that aren't afraid to make a hamburger from a sacred cow or break a few eggs to make an omelette. It seems evident that the current ossified incumbents won't be doing this. Normally, within a healthy ecosystem, a flurry of startups would rise up and take advantage of these missteps or opportunities, but Japan is missing much of that part of the ecosystem. Worse, the Japanese government and central bank, rather than leveraging the strong Japanese yen to encourage Japanese firms to acquire foreign firms and international talent, have succumbed to printing money, to drive the yen down in value, which is simply benefiting the incumbents in the short term, by shifting monies from Japanese savers and consumers to the producers. In the long term, even 18 months out, it will be clear it was the wrong move. Sadly, a real opportunity was lost, for had the government and industry pursued the M&A route, the purchase of foreign assets coupled with record energy imports would have drove the yen down in value while allowing Japanese firms to build non-Yen denominated assets. The only difference is that it might have taken an additional 6 months to a year for the yen to weaken to where it is today. The Global & Mail (Stuart Braun): Anything else you would like to add on these themes? SiliconEdge (James Santagata): The quickest way to jump start not only innovation but more importantly the productization and monetization of innovation would be to encourage the development of a vibrant startup community and ecosystem, which would put enormous pressure on the incumbents but also help ensure that when incumbents like Sony or Panasonic stumble, their missteps will be captured and monetized by Japanese firms rather than firms gobbled up by the likes of Apple and Samsung. In an effort to climb back to its Walkman glory days, Japan is investing heavily in R&D, especially in its technology strongholds. But the culture may not have the same appetite for risk as its competitors and may be outpaced by more aggressive countries, experts say.
When Japan exclusively developed and manufactured Walkmans, Honda hatchbacks and Nintendos, it was set to overtake the United States as the world’s largest economy. Today, Japan continues to be a world-leading high-tech innovator. Yet in commercial terms, the competition has caught up, and is often running ahead. As the Apples and Samsungs of the world outcompete Sony and Panasonic, Japanese companies are trying to revive the country’s economic miracle. “Japan is in desperate need of a new philosophy of management, a new paradigm for competitiveness, a new sense of self,” Sony founder Akio Morito warned as far back as 1992. Twenty years later, as once-omnipotent Japanese tech corporations continue to lose ground to rampant global competition, it seems some are now heeding these words. “Japan’s high tech sector is finally waking up to the need for a new management philosophy ... there is evidence of a growing sense of renewal,” wrote global management consultancy Accenture in a 2013 report. One key shift is an attempt to invest profits, and technological capital, from shrinking traditional businesses into dynamic new markets. Accenture points to the way specialized high tech firms such as Canon and Fujifilm are using established optical, printing and imaging capability to successfully break into new medical imaging and other sectors. Even so, this emerging new drive to competitiveness in Japan has some catching up to do. Between 2010-11 and 2012-13, Japan fell four places in the World Economic Forum’s (WEF) Global Competitiveness Report, from 6 to 10. Though the report ranked Japan No. 1 for business sophistication and No. 5 for capacity for innovation – Japanese companies are the world’s second highest spenders on R&D – the island nation’s raw competitiveness is in a bit of a free fall. While Denmark and the Netherlands now lead Japan in terms of global competitiveness, for the Japanese, the problem is closer to home. China, which in 2010 leapfrogged Japan to become the world’s second largest economy, now makes more cars and PCs than Japan, while South Korea outsells Japan in most TV and smartphone markets. Leading business and economic figures like Mr. Fukukawa are demanding solutions and deep reforms. “Many of Japan’s leading enterprises that once dominated the global market are now suffering huge losses and lagging in performance behind competitors in South Korea, China and Taiwan,” Mr. Fukukawa wrote in the Japan Times in December. Japan’s spending on R&D remains high but South Korea now invests more in R&D as a per cent of GDP, Mr. Fukukawa noted. And though Japan still makes the most patent applications in the world, these are in steady decline. Applications from China, by contrast, have increased exponentially in recent years. China will inevitably lead Japan in terms of this innovation indicator, Mr. Fukukawa wrote. Others argue that Japan’s declining competitiveness is less a lack of innovation than of leadership. “Innovation by itself, though mesmerizing, is worthless without productization. And productization is worthless without monetization,” says James Santagata, managing director of SiliconEdge, a Tokyo-based leadership development consultancy working with startups in Japan and the United States. Mr. Santagata describes a number of pioneering innovations emerging from Japanese corporate R&D, such as Sony’s Location Free TV. “Yet due to corporate constraints on monetization of these innovations for fear of rocking the boat, or cannibalizing some products, they allow scrappy firms like Sling Media [U.S. producer of the Slingbox Internet TV interface] to come from behind that gobble up the market,” he says. |
AboutSiliconEdge™ helps catalyze and drive the Productivity, Performance, Profitability, and Peace of Mind (4P's) of organizations, talent, and teams through our innovative, results-driven Talent Acceleration, Optimization, and Transformation programs. Archives (by date)
May 2022
Categories
All
|