Terrie's Take

Terrie's Take 398 -- Outsourcing and JTP, ebiz news from Japan

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

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+++ WHAT'S NEW

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On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

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The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

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- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

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You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

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=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

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Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

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NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

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+++ ABOUT US

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STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
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ADVERTISING INFORMATION
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Copyright 2006 Japan Inc. Communications Inc.

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Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

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+++ WHAT'S NEW

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On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

<>

<>

+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

<>

<>

+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

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+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

<>

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+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

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+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

<>

<>

+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

<>

<>

+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

<>

<>

+++ WHAT'S NEW

back

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

General Edition Sunday, November 5, 2006 Issue No. 398

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

---

On June 22nd a rather unique if small outsourcing company, called Japan Third Party (JTP), listed on the JASDAQ.
Although at first glance the business looks like a pretty standard operation, the company is special in that a full 95% of its business comes from foreign technology firms (not end users). The remaining 5% is with Japanese firms needing some form of assistance leveraged by JTP's international operations. In a country where most SI firms are challenged to simply communicate with foreigners, JTP really shines.

According to MIC Research Institute Limited, the overall IT outsourcing market in Japan for 2005 was worth about JPY2.45trn (US$2bn), being split up roughly into the following categories: Data Centers at 40%, contracted data processing at 30%, and the remainder being in-house manpower and general IT services and support. The market has been stagnant since the implosion of the dotcom sector in 2001, an event that had repercussions on data centers in particular, and grew only 1.5% year-on-year to 2005.
However, thanks to the recent economic improvement, things are looking up again, and MIC reckons that this year, 2006, the overall market will be worth JPY2.61trn (US$2.21bn), up 6.5%. As one could expect, the biggest area of growth is expected to be data centers, which are likely to expand by about 8.7% annually through 2010.

The largest player in the conventional third party outsourcing sector is IBM Japan. The company blew past its competition, both local and foreign, back in 1999, when it announced that it had signed a 10-year deal with auto maker Mazda Motor Corp., for a reported JPY55bn (US$480m) for the full period. The deal involved IBM Japan taking over the development, operation and maintenance of Mazda's host computers, supercomputers, 10,000 personal computers, and most of its network links. While outsourcing deals had been hitting the news on a regular basis before this one, the Mazda contract was sufficiently massive and independent that it served as a wake-up call to IBM's domestic SI competitors, and touched off what has since become an outsourcing war.

In the intervening 7 years since the Mazda deal, IBM's competitors have been retaliating and putting together their own deals. Among these was a landmark JPY250bn
(US$2.12bn) 10-year deal between Hitachi and UFJ Bank in 2002. The two companies in typical Japanese style formed a joint venture - an indication of how closely Japanese firms want to keep their outsourcing partners -- and which is called UFJ-Hitachi systems.

Ironically, with the merger of UFJ into the Bank of Tokyo Mitsubishi at the beginning of this year, the final outsourcing victor over the next two years will actually be IBM Japan, who in 2003 formed an outsourcing joint venture with Bank of Tokyo-Mitsubishi. IBM is doing really well in the sector and is now rumored to be tying up with Resona to supply a core banking system to Japan Post, the world's largest savings bank.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

+++ NEWS

back

- New Indian software centre for Japan
- Oricon overwhelmed by iTunes
- Softbank subject of Fair Trade Complaint
- Income gap increasing, now 12th among OECD
- Condo developer ramping up property purchases

-> New Indian software centre for Japan

Although a slightly dated news item, we thought this fits well with today's editorial about outsourcing. Tata Consultancy Services (TCS) announced in October that it has opened a new software development centre in Kolkata that will supply services to about 35 Japanese Systems Integrator and end-user customers. The new center will have 100 staff to begin with, expanding to several thousand over the next 2 years. ***Ed: Considering all the other software centers being formed in India by Japanese and Japan-related companies, clearly there is something of a boom going on right now. We have heard that one catalyst for the latest burst of activity is the upsurge of Indian engineers learning Japanese in their own country, especially now that it is harder to get a work visa and jobs in the USA.**
(Source: TT commentary from reuters.com, Oct 18, 2006)

http://tinyurl.com/u5mh6

->Oricon overwhelmed by iTunes

Oricon, Japan's largest publisher of music hit charts (kind of like Billboard in the USA) has announced that it will pull out of the online music business after sparse customer traffic to its website, caused, it says, by the overwhelming popularity of Apple's iTunes music store.
Significantly, an Oricon spokesman said, "The iPod has outrun us all." Oricon will refocus its energies on mobile phone music downloads, which is still a viable market.
(Source: TT commentary from silicon.com, Nov 1, 2006)

http://networks.silicon.com/webwatch/0,39024667,39163745,00.htm

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061101D3ZJKN07.htm

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Back to JTP, the company was started in 1987 by CEO Kazuaki Mori. He got into the outsourcing business, so the story goes, after attending a Rotarian conference in Austin, Texas in 1982. Mori worked in the Field Service division of Omron, and was trying to learn more about how to support Omron's ATM business in the USA. As one of the few non-Americans in the room, he quickly struck up a conversation with the gentleman sitting next to him and mentioned how he was struggling with how to support his ATM business. The man asked him why Omron, an ATM maker, was trying to be a field service company. "Surely," he said, "You would want someone with an already established third party service network to do the work?"

Mori was astonished. The solution seemed too easy, especially when compared to the millions of dollars being proposed internally for a purpose-built service network.
The concept and the term "Third Party" stuck with Mori, and he decided to go check out several such vendors. He was impressed with their professional capabilities and yet their ability to control costs. Heading back to Japan, he floated the idea that Omron, too, should go into the third party maintenance business in Japan. The idea met with favor and a team was formed.

However, neither Mori nor Omron had counted on the revaluation of the Japanese yen in the mid-1980's and the resulting loss of manufacturing competitiveness here in Japan. Omron decided to get out of the outsourcing business in 1987 and Mori, having decided that he had found his calling, resigned to start up Japan Third Party.

Fast forward 19 years, and today Mori's company is doing about JPY5.08bn (US$43.05m) in sales, with an operating profit of JPY230m (US$1.949m). Modest numbers to be sure, but given that the company is growing in an environment where most of the world's majors have failed, shows that its basic business proposition has legs. Right now most of JTP's revenue comes from business-to-business (not end-user customers yet unfortunately) dealings with foreign firms already in Japan. It has a blue chip client list, which includes such companies as Sun Microsystems Japan, SAP, Symantec, Nokia, Acer, and Hewlett Packard Japan.

Analysts say that while the company may be doing well, its exposure with 40% of its business coming from just two customers, Sun Micro and HP Japan, means that it needs to expand and diversify. Indeed, that is exactly what Mori's team is doing. JTP has been aggressively investing in a regional presence in such countries as China, Korea, and the USA -- taking advantage of its bilingual and sometimes trilingual staff. In the USA in particular, Mori reckons that about 500 venture capital deals are done in Silicon Valley every year, and that about 10% of these companies are interested in setting up in Japan. His Santa Clara office is intended to tap in to this flow.

On the day of the IPO, JTP's stock closed at a pretty good price of JPY360,000 per share, almost double the IPO price of JPY200,000. But once the day traders had taken their toll, the stock has settled down to around JPY190,000, and now looks relatively cheap. One reason we think the stock has come down is that the market doesn't really understand the value of JTP's foreign client base. His clients are multi-billion dollar companies with a commitment to Japan, and Mori keeps finding ways for them to do business with him. The latest is engineer training. JTP educated a surprisingly large 12,000 engineers last year, and in August 2006 inked deals with EMC, the storage maker, and Caplan, the Itochu-related temporary staffing company, to conduct training on the behalf of both companies.

There will be a full article on JTP in the December issue of Japan Inc. magazine. We'll let readers know when it is due out.

Wrapping up today's newsletter, and on a completely different note, we'd like to point out the two CEO positions featured in the Job Section below. These positions are with companies that Japan Inc.'s advisory consulting business is working with. The key point about these vacancies is that both companies are looking for Japanese-speaking foreigners to run their Japan operations. It is refreshing to see foreign firms who value local foreign top staff. Interested parties should contact [email protected] for more information.

...The information janitors/

---

The Ingenium Group is Recruiting The Ingenium Group, a leading executive search firm in Japan,is expanding and currently accepting applications for Executive Search Consultants who want to play key roles in the following areas: Accounting, Human Resources, Technology, Semiconductors, Financial Services, and Consumer Products. You are encouraged to consider joining our growing team if you're ambitious, organized, self-confident and have strong client presentation and client service skills. For more information: Web:  http://www.ingeniumgroup.com/inside/ing-careers.html    Email: [email protected]

Century 21 SKY Realty Century 21 SKY Realty has been the leader in Tokyo's real estate market for more than 20 years. We offer a wide selection of rental and sales properties for residential living and commercial use. Our bilingual agents are skilled at helping people find the ideal location to accommodate their lifestyle. We also help businesses find room to work, with our vast computerized inventory of commercial and office space, not only in central Tokyo but also throughout most of Japan. Visit our website for up-to-date listings and more features: http://www.c21sky.com/c2/

-> New Indian software centre for Japan

->Oricon overwhelmed by iTunes

->Softbank subject of Fair Trade Complaint

KDDI has filed a complaint with the Fair Trade Commission (FTC), claiming that Softbank Mobile has been running misleading ads in local newspapers. At the center of the controversy is a series of ads which claim zero fees for calls and e-mails between Softbank Mobile users. But on reading the small print there are a large number of conditions that make it unlikely the average consumer will be able to take advantage of the offer. The ads also offer a "reduced" price to newly signed subscribers, over the "regular" price of JPY9,600. KDDI claims that there has never been a regular price at this rate, and that this is just an effort by Softbank marketers to hype the apparently low cost of the service. (Source: TT commentary from nikkei.co.jp, Nov 3, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFF02.htm

->Income gap increasing, now 12th among OECD

Whether you buy into the opposition parties' claims that Koizumi's market deregulatory policies are the cause of growing income disparity, the fact is that a government survey done by the Ministry of Internal Affairs shows that indeed the disparity gap not only exists, it is increasing.
Apparently, Japan's income disparity is now 12th among OECD countries, about the same as France but greater than that of Germany and Sweden, and lower than that for the UK and USA. ***Ed: A separate July OECD report showed that Japan's relativepoverty rate, that is the number of people earning less than half the national median income, is the second worst in the OECD, after that of the USA.**  (Source: TT commentary from nikkei.co.jp, Nov 2, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061102D02JFN02.htm

->  Condo developer ramping up property purchases

In anticipation of a strong increase in property values in urban areas of Japan, Japan's largest property developer, Mitsui Fudosan, has said that it is increasing investments into special-purpose companies (SPCs) as well as purchasing property for condominium development. The new strategy was announced as a follow-up to the company's half-yearly results last week, when it disclosed that group operating profit soared 42% to JPY64.2bn (US$525m) for the first half of FY2006. The surge in profits came from property investment and the sales of condos. (Source: TT commentary from nikkei.co.jp, Nov 1, 2006)

->Income gap increasing, now 12th among OECD

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

=> Two Japan Inc. Communications advisory consulting clients are actively searching for CEOs for Japan. These positions are both open to non-Japanese with relevant prior experience and language skills.

Position One:
- CEO for established Japan operation, electronics industry
- Local office of European multinational
- Managing 70+ employees
- Must have strong electronics/sales background
- Must have strong bilingual language skills
- At least 5 years recent work experience in Japan
- References will be required
- Position to be filled by year-end

Position Two:
- CEO for new operation to be established in 2007
- Green-field manufacturing facility, to grow to 40 people
   in two years
- Parent company is one of fastest growing
   technology/manufacturing companies in USA
- Radical new manufacturing process that in trial research
   indicated company will revolutionize the market segment
- Strong leadership and bilingual communication skills
- Initial work is planning and executing the start-up
- Then moving to sales and market leadership
- At least 5 years in product manufacturing in Japan
- References will be required
- Position to be filled by March 2007

* Interested parties may make initial contact in confidence
   to [email protected].

---------------------------------------------------------------------------------------------------------------------------------------------      

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

NZ Ball The NZ Ball is a charity event, raising money for Cure Kids (www.curekids.org.nz). Enjoy a great evening of entertainment, food and wine, and help future generations of NZers. Date: Friday 17th November, 2006 Where: Grand Hyatt Tokyo, Roppongi Hills - 3rd Floor Ballroom Time: 7pm until very......late Attire: Black tie event (Men - jackets with ties are fine also). Tickets: Purchase through [email protected], or go online to www.nzball.com

Tokyo PC Users Group The oldest English-speaking PC club joins users of all stripes. Discuss new technology, software & hardware at monthly evening meetings on the first Thursday, held at the Tokyo Union Church. Over 30 open mailing lists and newsgroups -- ask questions or read along. Free hands-on PC help desk at meetings. All welcome! See www.tokyopc.org for details.

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 397. We highlighted the changes in the attitudes by
the courts as companies seek to adjust employee's salaries according to performance rather than seniority. A recent law allowed a Kanagawa company to signficantly reduce the salaries of some seniors after they could not perform to the specifications of their job description.

*** Reader response
This could trigger a wholesale gutting of the wage system and make a lot of older workers vulnerable. Is that such a good thing in a country whose income gap is already getting growing?

*** We respond
What would you rather have? A flexible work force in a competitive world, or drivers and gardeners on JPY12m or more annually because they have been with the company for 40 years? We really do know of drivers who make this amount and more. The reality is that Japan can't afford to build its social welfare net into the companies themselves.
Instead, if people need help, it should be broken out into a government-supplied line item. We believe skilled young people should earn more, based on merit, and older people getting left behind should try reskilling themselves, or better still, go into business for themselves and hire a bunch more talented young people...

...The information janitors/
>>>>--------------------------------------------------<

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while offering more features. Call us to find out more. http://www.denphone.com   Tel: 03-5545-4638

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24960 as of November 5, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

Terrie's Take 397 -- 500 yen pay rises, ebiz news from Japan

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

ADAPT Expat Insurance How Much of Your Money has Your Health Insurance Company Given Back to You During the Past 4 Years? ADAPT customers have received total Cash Back averaging $3,241 each, while enjoying the benefits of full coverage, tailored to their individual needs. You can too. http://www.expathealthassurance.com email: [email protected], Tel. 0120-63-4419

---

<>

<>

+++ WHAT'S NEW

back

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

General Edition Sunday, October 29, 2006 Issue No. 397

+++ INDEX
- What's new
- News
- Candidate roundup
- Upcoming events
- News credits

---

About five years ago, we wrote about the phenomenon of Japanese bedrock manufacturing companies firing thousands of people. One after another, companies such as Matsushita, Nissan and others broke the bad news to employees aged 50 or over that their days were numbered. Among many others, we were stunned to witness that apparent death of a unique corporate culture that saw protecting the welfare of employees as being more important than making profits.
During that intense 18-month period of lay-offs, only Toyota and a few other cash-rich companies were able to keep the faith.

Of course the mass firings were just the tip of an iceberg's worth of bad news. The fact was that long before people were losing their jobs, the companies involved were all under huge pressure to simply survive. Over the previous few years, they had cut costs to the bone and employee rosters were simply the last straw. For those remaining, base salaries, allowances, bonuses, and all-important overtime were either frozen or cut, and of course as a result nationwide consumer spending dropped dramatically.

Even as recently as 2004, we were still reading news reports that the average salary of a factory worker, before overtime, had a drop in average income of almost 2% over the same period a year earlier.

So it was with great interest that we read in the news this week, that Nippon Steel and JFE Steel have both decided to award their employees pay rises for the first time in 6 years. Not huge raises mind you, just a scant JPY1,500 extra a month for JFE employees, but nevertheless, with corresponding big ramp ups in overtime -- a much more important source of extra cash to the average salaryman -- the result is that regular employees are now starting to enjoy some of the trickle down from the profits that their companies have been making for 2-3 years now.

[Continued below.]

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

+++ NEWS

back

- Battery recall hurts Sony
- Recovering trace gold from sea water
- IBM Japan combines 6 firms into one
- Japan online ad spending strong
- Aozora IPO likely to be biggest for 2006

-> Battery recall hurts Sony

The global recall of 9.6m lithium-ion batteries, coupled with losses from the video game business, has severely reduced Sony's profits in Q2 of this year. The group's net profit for July-September plummeted 94% to just JPY1.7bn (US$14.4m), down from JPY28.5bn (US$241m) for the same quarter in 2005. Apparently the battery recall will cost Sony about JPY51bn (US$432m), more than double the original estimate when the Dell-related recall of 6m batteries was announced. ***Ed: As we've already mentioned, this is also before any class action or personal injury lawsuits.**
(Source: TT commentary from newsday.com, Oct 26, 2006)

http://tinyurl.com/y6lgwk

->Recovering trace gold from sea water

Almost smacking of alchemy, a Kyoto University research group has created a nano-compound which can recover even trace amounts of gold from solutions used in the recovery of precious metals from old electronics circuit boards. The compound is apparently extremely efficient and can recover gold in solution with a concentration of just one part per billion. Perhaps most interestingly, the research team head said that they can also use the compound to extract trace gold from ordinary sea water! ***Ed: Now, that, we'd like to see.** (Source: TT commentary from nikkei.co.jp, Oct 26,
2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061025D25JSN02.htm

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

http://tinyurl.com/v8akr

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

+++ CANDIDATE ROUND UP/VACANCIES

back

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

Corporate Translation Does your translator have 15 years' experience? Professional translator Michael House does. Michael House can take your Japanese documents and translate them into clear, concise and accurate English. With special expertise in the IT, business and insurance sectors, Michael's 15 years' translating means you get top quality. Why go through an agent when you can go direct? Email Michael now for competitive rates and dates. Email: [email protected]

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.

Tokyo Monthly 21 Furnished apartments in Tokyo Are you planning to visit Tokyo and looking for an apartment for a short trip or an extended stay? We, Tokyo Monthly 21, provide comfortable living at our fully-furnished apartments. Book through us with confidence and rent an apartment for a week, month, or year for your next business or vacation visit. http://www.furnished-apartment-tokyo.com/

[Article continues]

Perhaps in any other country, if the workers knew that their company had just made a consolidated profit increase of 41%, as Matsushita achieved in Q1 of this year, they would probably be talking about striking rather than meekly accepting the rather paltry JPY500 monthly base salary raise actually offered by the company. But then, with Matsushita hitting the news as being the best company in the country to work for (really), clearly Matsushita has managed to convince its unions that the company needs more economic breathing space before it can start sharing more of the profits with the staff. The message to the workers is, "We're not out of the woods yet."

Perhaps another reason why Matsushita's and other companies' workers are not complaining is because they get most of their windfall benefits from bonuses and overtime, not by base pay increases anyway. The Nippon Keidanren (The Japan Business Federation) announced recently that winter bonuses at major Japanese companies are expected to rise 2.75% to an average of JPY878,071 per worker, an all-time high since statistics were first kept back in 1959. This makes it the second year in a row for record bonuses, and the result is sure to be a strong increase in consumer spending over the coming 6-12 months.

Several other reasons why pay raises are becoming fewer and further between are to do with changing social circumstances. Firstly, the unions appear to be losing their ability to negotiate on an industry-wide basis, as some companies are doing a lot better than others. Just take a look at the recent differences in profit between highly profitable firms such as Canon and Toyota versus profit-challenged ones such as Sony and NEC. Thus, the members of Rengo, the umbrella organization of Japanese trade unions, are finding that they can't go after sector-wide pay rise demands through holding street rallies in Kasumigaseki any more. Instead, they have to engage in cumbersome negotiations on a company-by-company base -- something they really haven't figured out how to do yet.

Secondly, as many as 60% of Japan's major companies are already deep into their restructuring of pay scales, dropping seniority-based pay in favor of merit-based pay.
Merit-based pay is a relatively new phenomenon, really only taking root in the last 5 years in tandem with the wave of lay-offs. Given the origins of merit or performance-based pay, it is only natural that most people have thought of the whole system as a smoke screen to allow companies to cut their labor costs. While there may be an element of truth in that idea, the whole concept of pay for performance has nevertheless just been given a huge shot in the arm by the courts.

On June 22, the Tokyo High Court overruled a lower court decision and allowed a Kanagawa-based electronics

manufacturer to demote a number of employees who couldn't perform to their respective salary levels. The company introduced its merit-based pay system in 2001, and caused a number of people aged between 44 and 53 to lose their management positions as well as to receive a pay drop of up to JPY75,000. We think such court rulings represent a fundamental change in thinking on salaries and pay negotiations. It also sets the foundation for even more radical changes over the next few years, as Japan seeks to find ways to become competitive again.

The Mizuho Research Institute says that the current wage increases, while small, when combined with bonuses and performance pay are expected to be significant enough to stimulate households to consume more. The think tank says that consumer spending may rise by 1% next fiscal year and that employers' wage bills will increase by more than JPY8trn (US$67bn).

While the public's focus is primarily on employee salaries, another mini-revolution is going on in the board room. Many companies pay their directors a flat monthly or yearly fee, regardless of whether they ever show up to board meetings or not. Recently, however, companies are looking to their boards to take on more responsiblity -- particularly the executive directors. Namco Bandai Holdings just recently introduced stock options for their executive directors, to directly connect their wealth to the results of the company. The 8 internal directors will each receive around 2,100 shares, worth about JPY32.5m, and at the same time take a 20% decrease in base salary.

We suspect that if more companies used this kind of system for their top people, overall company results would improve considerably. Pay-for-performance is still a radical idea in Japan, but it is an idea whose time has come.

...The information janitors/

---

DENPHONE Full-featured Office PBX Business Telephony Solutions and PBXs Denphone is a leading corporate provider of business telephony solutions including PBXs, telephones, call centers, CTI/IVR automated voice menu systems, call recording and voicemail. See how our office telephony systems and hosted solutions are lower cost while feature filled. Call us to find out more.  http://www.denphone.com  Tel: 03-5545-4638

-> Battery recall hurts Sony

->Recovering trace gold from sea water

->IBM Japan combines 6 firms into one

In what appears to be a major shake-up so as to address the burgeoning financial sector, IBM Japan has decided to combine from next year 6 of its subsidiary companies into a new firm. The 6 firms are to be combined by January 1st, 2007, and will include the IBM Japan Advanced Solutions Company, IBM Global Services Japan Central Solutions Company. The new firm will have about 2,300 employees, and sales of around JPY60bn (US$508m). (Source: TT commentary from nikkei.co.jp, Oct 26, 2006)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20061026D26HH715.htm

->Japan online ad spending strong

The Nielsen/NetRatings service has announced that its AdRelevance online advertising measurement service is now available in Japan. The service has collated data for September 2006, showing that there were 1,254 advertisers running 3,000 online display advertising campaigns, consisting of almost 6,500 banners. The advertisers spent about JPY19.2bn (US$160m) to create about 29.5bn ad impressions. The ad spend in Japan is now around 20% that of the USA and 300% more than spent in China. (Source: TT commentary from multilingual-search.com, Oct 26, 2006)

http://www.netratings.com/pr/pr_061016_japan.pdf

->  Aozora IPO likely to be biggest for 2006

Aozora Bank, formerly the Nippon Credit Bank and subsequently bought out and restructured by US Private Equity fund Cerberus Partners, will list on the Tokyo Stock Exchange on November 14th. The company is expected to be valued at JPY406.63bn (US$3.44bn) and thus will be the largest IPO in Japan for 2006. In fact, it will be the biggest IPO since the 1998 offering by NTT DoCoMo. (Source:
TT commentary from marketwatch.com, Oct 25, 2006)

->Japan online ad spending strong

NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

---

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

You're Vending What? Japan is home to the highest density of vending machines in the world, with about 5.6m machines, or one for every 23 people. You can buy almost anything, and the Japanese do, with about JPY6.67trn (US$56bn) being spent every year. Yet, apart from the obvious players such as major soft drinks companies, there have been no foreign owners of this massive direct sales medium - until now. Market Pioneer Japan is proud to announce that as of October, 2006, it has built a network of 1,000 vending machines placed nationwide, selling stickers and print logos. We invite owners of licenceable characters to contact us with a view to distributing your IP assets into the Japanese market. Web: www.japaninc.com/mpj,  email: [email protected]

LINC Media BiOS has immediate positions available for bilingual engineers and sales staff in the systems integration and software industries.

=> Windows Server Administrators
(to work in Osaka following initial training in Tokyo)

Responsibilities include:
* Technical server support
* System application monitoring and capacity planning
* Provide cross training to other engineers
* Train on new platforms as required.
* Solve systems/application outages and networking issues
* Business Analysis (liaise between architects, apps team)
* Project planning and delivery
* Create installation documentation & training materials

Qualifications Required
* Position open to bilingual engineers
* Must be flexible, able to work as part of team
* Experience working in a large-size IT environment
* Communication in spoken and written English
* Ability to converse in Japanese with vendors
* 3-4 years of experience as Windows System Server Admin.
* Knowledge of HP/Dell server hardware
* Demonstrate thorough understanding of system implementation lifecycle (SILC) and change control process
* Experience in server patching
* Basic scripting skills or programming/coding experience
* Experience with Voice-related equipment
  (Nice/Avaya/PBX/Ultra)
* Certified training a plus - (MCP, MSCA, MCSE, CCNA)

For more information or to submit your resume, please email [email protected]

---------------------------------------------------------------------------------------------------------------------------------------------      

+++ UPCOMING EVENTS/ANNOUNCEMENTS

back

Entrepreneur Assoc. of Tokyo Events Speaker: Atsuko Morimoto, Founder of AM Associates Presentation Title: "Learning from Innovative Marketers" In EA-Tokyo's upcoming seminar, Morimoto-san will be sharing her insights into successful marketing tactics taken by several successful Japanese companies she has worked with. Her company, AM Associates is a consulting company specialized in Marketing & Communications. It offers services in IMC (Integrated Marketing Communications), including Acquisition, Customer Relationship & Loyalty Marketing and Branding. Current clients are skin-care and publishing companies. Date/Time: November 1st 7:00 pm Location: City Club of Tokyo - Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected]

Tokyo Career Fair 2006 Tokyo Career Fair 2006, November 1, 5.30 - 8.40 pm Tokyo Career Fair 2006 is an exciting, evening career event offering mid career candidates informative seminars and the chance to meet with quality companies. Registration is now open and limited to 300 people. Full details and pre-registration at: http://www.tokyocareerfair.com

IT events announcements are priced at JPY50,000 per week. For more information, contact [email protected]

+++ CORRECTIONS/FEEDBACK




In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to [email protected].

-> TT 394. We covered the fundamental change of the
Japanese government in connection to the raising of taxes, and how PM Abe is planning to pump private industry by reducing corporate taxes, in an effort to improve the overall tax take.

*** Reader response
This Adam (Abe) Smith piece is a gem, which should be remembered as being representative of your achievements in contributing to the understanding of Japan -- with your advice as an "outsider within".

*** We respond
Indeed, after 23 years, we think we qualify as the outsider inside. Re the actual column, this tax position by Abe and Co. is such a radical difference on the whole subject of tax that we are surprised that the Japanese media haven't made more of a fuss about it.

...The information janitors/
>>>>--------------------------------------------------<

Logistics: The So-Fast Corporation Seeing is believing: see our company in action So Fast Corporation, an innovative logistics company, is offering tours of its Heiwajima warehouse. See why 8 of 10 foreign company presidents choose So Fast after a visit. Read in the autumn issue of J@pan Inc Magazine why SNOVA Corporation selected So Fast and are glad they did. For details or appointment, contact Katsuhiko Kakuchiyama. Phone: 03-5753-3101 Email: [email protected] Logistics warehouse Dates: Sep 1 - Oct 31 Time: 8:45a.m. - noon http://www.so-fast.co.jp/en/index.html

END

SUBSCRIBERS: 24,959 as of October 29, 2006
(We purge our list regularly.)

---

+++ ABOUT US

back

STAFF
Written by: Terrie Lloyd[email protected].


HELP: E-mail [email protected]
with the word 'help' in the subject or body (dont include the quotes), and you will get back a message with instructions.


FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to [email protected].


ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact [email protected].


SUSCRIBE
Get Terrie's Take by giving your name and email address athttp://www.terrie.com/subscribe.html.
BACK ISSUES
http://mailman.lincmedia.co.jp/pipermail/terrie/.

Copyright 2006 Japan Inc. Communications Inc.

_______________Japan Inc is worth every penny!_______________

Don't forget you can get deeper analysis on Japan's hottest new businesses and technology from the quarterly edition of J@pan Inc. 1-year subscription for JPY3,600(Japan). It's so cost effective you can even get your company to pay for it!
Go to: www.japaninc.net/mag/subs.html for details.