Why Apple Isn’t Japanese

Christian Caryl has an excellent article in Newsweek, Why Apple Isn’t Japanese, looking at the challenges Japanese businesses (specifically in manufacturing and high-tech) in the coming decades. I talk about these trends often and Caryl’s article provides a great overview of Japan’s weaknesses in global markets that they used to dominate (current exceptions being Toyota and Nintendo.) The last two paragraphs sum up the article for me.

At this point, it is worth taking another look at the cautionary tale of DoCoMo. Today it is trapped in a domestic market with a diminishing population, watching as its nimbler rivals at home grab an ever-bigger piece of the shrinking mobile pie. Its only hope for decisive growth would have been to leapfrog into the global market. But it didn’t happen, thanks mainly to the company’s limited cultural horizons and unimaginative management. Just three years ago the value of DoCoMo’s shares amounted to about 10 times that of Nokia’s. Today Nokia (based in Finland, with a population of 5 million versus Japan’s 127 million) has a market capitalization more than double that of DoCoMo’s. That puts Nokia in the realm of other global giants like Apple, Google and Vodafone. And just look at who tops the list: China Mobile.
This drives home the point that the lesson for “them” (the Japanese) isn’t necessarily that they should be more like “us” (the Americans). It’s merely to warn that some serious adjustments might be in order. Over the next century, disruptive innovations won’t be coming only from countries like the United States. They’ll also be emerging from dynamic, hungry, rising economies that offer plenty of room for risk-taking, flights of fancy and cross-border synthesis. If the Japanese want to be a part of that club, they’ll have to revamp not only how they think about technology, but how they think about themselves.

Caryl’s article references James Mok’s “How the Japanese IT Industry Destroys Talent” which is a two-part series, the first part being “My struggle at the Frontline of Japanese Enterprise IT“, published in Japan Inc. Mok has some interesting insights about how Japan’s strength in manufacturing could not lend lessons to their IT industry, but in the end, enterprise IT is basically all non-Japanese. How could any Japanese business excel at enterprise IT when no Japanese business builds any kind of successful enterprise software? It’s no wonder enterprise IT is more widely adopted in the nations where it is developed. Mok’s point is moot- Japan has no place at the enterprise IT software market because Japan has no significant software development industry outside of game software and embedded systems. And if you say “oh what about mobile?” remember that all of Japan’s mobile manufacturers together only make up 5% of the global market for mobile.
p.s. I haven’t had time to update my weblog software so my comments are still broken. Please bear with me until I have enough time to deal with this. Thanks!

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