May, 2005 |
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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.
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This
Month's Bridge Builder
Featuring
the real voice of IT across the Pacific
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May, 2005
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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.
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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.
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