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 AOYAMA VIEW

WATER AS FUEL, LED LAMPS AND NOBELS - JAPAN TECH STILL AT TOP OF THE WORLD
Jules Verne foresaw many fantastic technologies in his books that have later become true. In "Mysterious Island", written in 1874, one character says that one day water will be used as fuel. It has taken a long time for this one, but next spring Toyota will bring its fuel-cell propelled FCV car to the market. Will it be as big global success as the hybrid technology that the same company introduced to the world with Prius 17 years ago? Or will it get snagged by the lack of infrastructure for filling stations like Nissan's all-electronic Leaf EV? Time will tell, but at least Japan government will be giving it strong support: price subsidy JPY 2 million for each car that cost otherwise JPY 5-7 million and JPY 200 million for each filling station that are expected to cost JPY 400-500 million to build. Toyota's initial sales estimate is just 1000 cars and maybe 100 filling stations to be built, but it's still a lot of public money. Of course, much more has been spent by the giant corporation from Nagoya.

Beyond the fuel-cell car, Japan already sees a wide-spread hydrogen technology revolution for all energy use from homes and offices to power plants for electricity and heat. Call it "hydrogen society", a commercial market estimated worth JPY 8 trillion (USD 80 billion) by 2050.

The new outlook is promising for a country struggling with its energy import bill, obstacles to restart nuclear plants and to get the recent wave of investment into renewable energy in full use. Hydrogen based domestic energy would give Japan big savings and security in energy, help industrial competiveness and reduce the carbon emissions remarkably. In the best case hydrogen would be produced locally from water using renewable energy from solar, wind, geo, bio etc. Yet, hydrogen already has met opposition, too.

Speaking last week at opening of international Science and Technology in Society Forum in front of 1000 participants from 80 countries, Prime Minister Abe emphasized that, in Japan, it's not technology or money, but public regulations and vested interests that have held back all kinds of new development. In fuel cell case, it has been concern for public safety with high pressure tanks driving around the town or even bigger ones at filling stations located next to homes. Yet, for this one, Abe emphasized, the government has managed to push through to change regulations. In other words, naturally for an astute politician that he is, the PM took himself part of the credits for the introduction of this revolutionary technology and reminded us that his claimed deregulation policies have not ended out totally empty handed.

Meanwhile, all of us who have followed Japan's corporate progress close-by, agree that what he says is basically true. There is no doubt that Japanese companies have plenty money and legions of technical talent, while excessive government regulations, all kinds of special rights and old-fashioned attitudes are quoted again and again as the No.1 obstacle to better business. Examples of Japan's technological proudness have kept coming in multiple examples past two weeks.

First of all, of course, there was the physics Nobel Prize awarded to three Japanese scientists for developing the blue LED light and the way to its mass production. When 25% of all electricity production in the world goes to lighting and LED gives us much brighter light at much lower cost than the traditional electric light bulb, this invention is truly important for the whole world and the award well deserved. We Finns can be proud that our own Science Academy recognized the value of Dr. Shuji Nakamura's work with its Millenium already three years ago.

Dr. Nakamura, who has been working big part of his life in California, has actually changed his passport to American one, but he did the crucial part of his work at Nichia, a small company in Tokushima. It is a well-known story that while the company made a huge profit from his invention, its award bonus to Nakamura was only JPY 20,000 (USD 200) and when Nakamura sued Nichia for better share, this was considered inappropriate in Japan and he became "persona non-grata" in public. Hence, there was very few news about Finland's Millenium-award in the local media at the time. Happily, the Nobel prize today is too big to be hushed any more, and moreover, he is now American and shared the prize with two Japanese professors. Meanwhile, LED lighting has become big business and its use is spreading rapidly around the world. Thanks to LED, our mobile phone batteries last twice as long as before and we can afford thousands of beautiful lights on Xmas streets, even a few in our own garden.

In fact, Nobel prizes in various natural sciences to Japan are such an annual event, that recently special expectations have focused on literature prize, especially to Haruki Murakami, who has become one of the most popular novelists around the world. Already twice his fans have been disappointed as the Nobel committee has managed to find writers from Europe, even China, who are known only to specialists outside their country. (Well, the Chinese writer became famous as the Communist Party put their long coveted first Nobel Prize winner to prison.) Sure enough, the committee managed to snub Murakami again with a French writer, whose books have not exactly set the world on fire. Maybe the fourth time then, say the Murakami fans.

The most anxious Nobel-watchers here expected Japan to score this time even on peace prize following a national name collection proposing the award to Japan's unique war-denouncing Constitution Paragraph No.9 that has kept the nation officially pacifistic for over 60 years. The proposers considered such attention was especially important now that it is being tinkered down to "more normal" by the Abe government. A Nobel Peace Prize at this moment would have been rather embarrassing for Abe and a sigh of relief was heard through the LDP quarters when the committee chose instead the young girl from Pakistan, who almost lost her life in a terror attack campaigning for girls' right for education. That was a dramatic event and a worthy cause, I thought, even if not directly related to world peace. Why the committee had to water it down by finding an Indian man to share it, is beyond my understanding.

Another big tech event last week showing the trends to come was CEATEC or Combined Exhibition of Advanced Technologies, which featured over 500 hi-tech companies, most of them Japanese. Their displays ranged from 4K televisions and FCV cars to many kinds of wearable devices that are supposed to make our lives easier. 4K is a new step up in high resolution tv-picture, about four times sharper than the old standard high-resolution television that came on the market just a few years ago. Yet, it counts already for 22% of the Japanese big-screen tv-market from 50 inches up. For audio fans, Sony is launching a new "high-resolution" Walkman that gives four times better sound than CD and many more times better than the standard MP3 that has become the mainstay music player around the world. As for "wearables" Seiko Epson introduced smart glasses which allow the wearer to watch movies or games, Hitachi glasses that display street navigation guidance to get the wearer back home. The latter must be good after too many drinks in pub.

In fact, putting inventions into practical use is as important as "just" inventing them. According to Asian Development Bank study that was also published last week, Japan ranks as world No.1 for this. The study covers only Asian countries and ranks Korea as No.3 and China as No.11, but includes two countries outside the region for comparison, namely Finland that ranks No.2 and USA that ranks No.4. According the news, measurements for this ranking are based on a varied field of markers from top universities, urbanization, R&D spending, patents, medical diagnoses, architecture, books and films, so it seems to include as much "soft" ideas as cold technical gizmos.

Japan should work to publish and promote this kind of information much more as it seems its many recent achievements remain unknown outside the country. For instance Apple's new Pay Phone that was launched together with IPhone 6, was received by media as something new, yet it comes 15 years after Docomo's Felica payphone, that is today in widespread use through Japan. In fact, 25 million such phones or almost every fourth phone in Japan, is used daily to pay for trains and shopping and Sony's Felica NFC technology is further used in over 500 million cards such as metropolitan commuting passes and countless other customer cards. Personally, could not imagine life without my Pasmo train card as it makes travel across the town so easy. Yet, London subway system had never heard of it when they looked for similar solution some time ago and rather chose to re-invent a "wheel of their own". If you are interested in Japan's in this subject and others analysis of Japanese technology, I urge you to read reports by my friend Gerhard at his home page eurotechnology.com.

Another news relating to big corporate move that went without due reference to Japan in global media was the recent New York IPO of Ali Baba, the Chinese e-trade giant. It was widely reported in western media how much richer its founder and main owner Jack Ma became instantly and how much money the struggling US Yahoo got from its 10% shareholding. However, could not trace any mention that Japan's Softbank is actually the biggest corporate shareholder in Ali Baba with its 30% share and made the biggest scoop after the founder. Softbank's involvement comes from the old times when Jack Ma and Masayoshi Son were close partners and the former asked the latter to help him out to get started. The share cost Son then just USD 20 million, now it is rated at USD 30 billion. Talk about shrewd investment! Then again that is what we are used to with Son.

To finish this story, let us cast eyes up to the skies. Japan has been taking new steps in space as well, all practical and not show-off vanities like trying to put a man on moon – after all that was done already 46 years ago. A new better weather satellite was sent to orbit last week to give more accurate information of changes in atmosphere and approaching storms, something highly useful especially during this season when numerous typhoons are testing us time and again. A better satellite for global surveillance is being planned, too, mainly to check upon North Korea's missile developments it is said. The one used today can recognize as small details as trucks and cars from each other, the new one will be able to tell the brand name, too, claim the developers.

Another move reported this week is Japan taking share in constructing world's biggest telescope at cost of USD 1,5 billion on top of mountain Mauna Kea in Hawaii. It will be 13 times more capable than the previous best called Subaru that was put in same place 15 years ago. It will enable scientists to see further into space beyond our solar system. It is said that, if employed horizontally, it could identify a one yen coin at distance from Tokyo to Osaka.

At the end, despite all this show of technical prowess displayed over the last two weeks, we stand reminded of the overpowering strength of nature. All the gadgets spread out to Japanfs numerous volcanos for constant monitoring and rapid warning system in case of any threat of eruption or quake, did not help on Mt.Ontake, when it erupted suddenly with dramatic consequence of more than 50 unsuspecting hikers on the mountain dead in poison gas, under ash and boulders. Furthermore, typhoon No.18 that arrived soon after, prevented the rescue work for days. No.19 just one week later made things even worse. Coming so soon after the Hiroshima landslide with over 70 people dead, the accident in Nagano served us another grim reminder that Mother Nature is still stronger than all technology and science put together.
Timo Varhama  
October 14, 2014  


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21 May 2014
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21 February 2014
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About the Columnist

The columnist is a Japan veteran among Finnish business, our Chamber ex-president and today Member of the Board of Trustees.
After running a major Finnish industry company's Japan business for over 20 years, he is now Senior Associate in a strategic consulting company.

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