Kanabo Logo
   
 
NEWSLETTER- the JAPANALYZER
     
     
What's New  May, 2005

Market Snapshot - Japan
Baseball and the Japanese Internet Industry

In the United States, it is not uncommon to have a baseball stadium named after a company- think SBC park, Coors Field, Bank One Ballpark. The stadium name has always been for sale to advertisers. But the team’s name on the other hand, has always been reserved for the City the team calls home. In Japan however, the tradition has always been the reverse: teams are named after the company that represents the team’s owner, usually a major Japanese corporation. For example, Yomiuri Giants (newspaper), Hanshin Tigers (railway), or Orix Blue Wave (lease financier). The importance of this tradition is that the corporate name, rather than the team's home location, becomes the nickname for the team. During baseball season, the company names get repeated constantly during the nightly sportscasts, and printed abundantly in the daily and weekly sports pages. Team ownership is, in a sense, a ticket to household acceptance. So it was with great fanfare that two, and almost three, key players in the Japanese Internet entered the baseball arena last year.

The first company to be successful in its bid to enter Japanese baseball was Rakuten, the Amazon of Japan. Rakuten, the largest ecommerce portal in Japan, generated extensive publicity when it applied to enter Japanese professional baseball after the merger in 2004 of two teams led to a reduction in the number of teams in the Pacific League from six to five. Rakuten took the sixth spot on the strength of its application, which emphasized its ability to breathe new life into Japanese baseball which had been suffering from lagging popularity in recent years. Rakuten hired an American, Marty Kuehnert (the first foreigner) as General Manager and named itself the Tohoku Rakuten Golden Eagles based in Sendai, Japan.

The other successful entrant was software and telecommunications powerhouse Softbank which bought the Hawks from failing retailer Daiei. Softbank is an IT-media conglomerate, renowned for its low-priced ADSL access service, which revolutionized Japan's broadband market by capturing more than a third of Japan's 12 million ADSL subscribers. Now known as the Fukuoka Softbank Hawks (notice that both Rakuten and Softbank have started adding place names to their teams in the American fashion), the team plays at the Fukuoka Dome and is also part of the Pacific League.

Yet perhaps the most interesting story of Internet companies in baseball in Japan is the unsuccessful bid to enter baseball from Livedoor who competed against Rakuten to start a team after the merger of Orix Bluewave and Kintetsu Buffalos in the Pacific League last year. Livedoor started life in Japan as an advertising sponsored ISP but gradually moved into multiple other businesses fueled by investments from the venture capital community. The company today offers online securities trading, DVD rentals, Web hosting, an Internet auction site and owns a venture-capital investment arm, an IT consulting business, and a mobile-phone-software developer. Takafumi Horie, the 32-year-old chief executive of Livedoor, shocked Japan's sports world when he announced his intent to form a baseball team. The elders who control Japanese baseball were disgusted, with one commenting that it would be impossible "to let some unknown person in."- needless to day, Livedoor didn't get the franchise.

Previous Issues

 

 

 

Archive
View content from past editions of our monthly Japanalyzer newsletter!

This Month's Bridge Builder
Featuring the real voice of IT across the Pacific

May, 2005 

Analyzing Japanese Politics in Perspective 
Professor T.J. Pempel, Director of the Institute of East Asian Studies, University of California, Berkeley

As Professor T.J. Pempel puts it, his generation of American experts on Japan was actually the third. The first was the Reischauer crowd, who gathered their knowledge of Japan in the first half of the 20th century primarily through family participation in missionary programs. The second, “the occupation crowd”, was sent to Japan in the 50’s and 60’s as part of the American military presence in Japan. Pempel and his generation were a third group—also having their experience through the military, but well after the occupation had ended. But rather than simply “stay on the base”, Professor Pempel and others like him, used the opportunity to learn about Japan- the language, the culture, and its position on the world. Professor Pempel’s stint in Japan (1963-64) was followed by an astounding career in academia in which he carved out a special niche in Japanese Studies: Comparative Politics. He has written numerous articles and books in which he examines the Japanese political system in comparative perspective. He served as a distinguished member of the faculty at Cornell University for close to 20 years. Professor Pempel joined Berkeley's Political Science Department in July 2001 and became director of the Institute of East Asian Studies in January 2002. For this month’s Bridge Builder, we interviewed Professor Pempel to explore his career in more detail and get his thoughts on today’s Japan.

Q. Please tell us more about how you got interested in Japan.

A. My first experience with Japan was with the US Marine Corps in 1963 when I was sent to Japan to be stationed at the base in Iwakuni. Most American Marines there at the time were content to stay on the base and surrounding area (there were 186 bars within a one mile radius to keep them occupied). But I was interested in doing more with my time there so I started visiting a local classical music coffee shop where I could interact with locals. That experience got me interested in Japan and Japanese so when I returned to the US and entered Columbia University, I picked Japanese for my language requirement. And when it came time to write my undergraduate honors thesis, I focused on the LDP which even further enhanced my fascination with Japanese politics. My Ph.D. went even further into the country’s politics but it was always with a question of how Japan compared to other countries. By the time I got my first job at Cornell in 1972 as a member of the Department of Government, I had become one of the few people looking at Japanese politics in a comparative context. Over the years, my research showed that the bureaucratic Japanese government albeit different from American government, is not necessarily different from some European governments. My research also focused on looking at politics through an economic lens- for example the politics of Japanese growth.

Q. Over the years, you’ve published so many books and articles that have had an impact on how Japan is viewed. Which ones are you most proud of and why?

A. In 1977 I wrote an article with Tsunekawa Keiichi, then a Cornell graduate student and now a professor at Tokyo University, entitled “Corporatism without Labor”. Corporatism is a political system in which major industrial and professional groups become players in government by being comprehensive in their representation- for example, all Labor, all Doctors, etc. Their reach also enables them to negotiate directly with each other in the face of issues. For example, during the oil shock of the 70’s , I observed that countries with heavy Corporatism managed to emerge from the crisis faster because of their ability to quickly reach comprehensive nationwide agreement on how to proceed. The article focused on how Japan’s Corporatism helped them recover quickly despite the absence of one key element usually present in Corporatist countries: Labor. Japanese Labor, I reasoned, is weak at the level of national politics and is so aligned with Management at the plant level that it simply does not have the ability to be a stumbling block when it comes to economic progress. The article was well received because of this insight and because of its theoretical application to countries other than Japan. Today, the article is still popular with many Europeans because of their practice of Corporatism, though European corporatism rarely excludes Labor.

I am also very proud of the book I wrote entitled “Uncommon Democracies: The One-Party Dominant Regimes”. The book analyzes Japan along with Israel, Sweden, and Italy trying to understand how they came to have one dominant political party, often for more than 35 years, despite being democratic.

Q. What is your perspective on today’s Japan, particularly with respect to China. Can Japan continue to benefit from the rise of China?

A. The problem for Japan, China and the rest of Asia is a lack of regionalism and a common regional agenda. During the early 90’s it looked like Asia was finally coming together through ASEAN to free up trade between countries and share the benefits of regional growth. But then the financial crisis of 1997-1998 struck, making it apparent that countries in the region were still not formally aligned enough to prevent such problems. The rise of China can be a win/win for both China and Japan but only through close economic and institutional ties between the two. The benchmark would be France’s relationship with Germany. The two countries overcame a history of conflict to establish close ties particularly within the Steel industry- both countries ultimately benefited from the partnership.

Japan also has to improve its policies towards foreign direct investment. China is getting the lion’s share of foreign investment these days often at the expense of Japan. This “Japan-passing” phenomenon will only get worse without some reform in Japan. 


Previous Interviews

Upcoming Events,

IP Telephony & Cellular Phone Solution 2005
May 19-20, 2005, Sunshine City Convention Center Tokyo
An exhibition of IP telephone, cellular phone, related products, etc.

LinuxWorld Expo/Tokyo 2005 (11th)
June 1-3, 2005, Tokyo Big Sight (Tokyo International Exhibition Center)
The fastest growing show in Japan, dedicated to Linux products. The show focuses on expanding usage of Linux products at enterprise in Japan and tries to introduce the hottest topics and business models of Linux products.


HOME | ABOUT US | SERVICES | NEWSLETTER | CONTACT US | JAPANESE

Copyright © 2005, Kanabo Consulting, Inc. All rights reserved.