By James Santagata
Principal Consultant, SiliconEdge


That Japan like any country, be it developing or developed, has her share of problems is not in the least bit surprising or at least it shouldn't be.

However, what has surprised me over the years is how many foreign "Japan watchers" and "Japan pundits" always seem to miss the crux of what's really going on on the ground in Japan and more importantly what's going on in the mind of the Japanese.

When articles are written or comments made about the supposed dearth of Japanese startups, the author or speaker almost always boils this down to several factors such as Japan's Shima-guni mentality (Island Nation / 島国), the so-called Galapagos Effect (which as I've continually pointed out is really just a misnomer for an industry or marketplace rife with ossified, rent-seeking incumbents and regulatory capture), Japan's supposed lack of talent, Japan's supposed lack of diversity and Japan supposed lack of creativity.
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With that said,  there is another popular myth and meme that comes up regarding the lack of Japanese startups and that is the idea that the Japanese have an almost in-born fear of failure.

I'm not here to argue that Japanese don't have a fear of failure because they do. We all do. Just as most other peoples around the world do, including those in the US and even including those working in Silicon Valley.

People fear failure. 

But to hear the pundits tell it, "Japanese need to get over failure and embrace it". These pundits act like the fear of failure in Japan is simple a psychological construct* like it is in parts of the West like in the US.

As we've been predicting for some time now, China's robot sector has exploded.

This isn't surprising as the continually rising cost of Chinese labor had been pegged in some quarters as being 25% to 33% more expensive than Mexican labor -- which is a huge difference when one also factors in time zones, shipping costs and local control.

As such, many American and Canadian firms have moved their manufacturing, especially higher-end manufacturing (think Cisco Systems) to Mexico over the last 3 to 4 years.

In response, China has moved heavily into Factory Automation, including robotics. This helps hold the labor wages down...but at what cost?

Currently in China there are huge wage gaps and wealth inequality and now fully mechanization is coming on while a true middle class has never had a chance to arise.

This is much different from what was seen / has been seen in the maturation of both Japan, Korea, Taiwan and the major Western economics.

According to International Federation of Robotics, nearly 180,000 industrial robots were sold worldwide in 2013, with a fifth of those sales being in China.

In 2013, China surpassed Japan for the first time to become the world’s biggest and fastest-growing robot market with sales of about 37,000 industrial robots .

Experts predict that China’s robot market will grow to be more than one trillion yuan in a year or two.

The Lucrative industry has attracted many investors who’re diving in. In Shanghai, a robot industrial park is currently under constructionan that’s expected to generate and send out around 60 billion yuan worth of products. Parks of the same scale are also being built in the cities of Shenyang, Qingdao and the municipality of Chongqing.

While this signals trouble and bumps ahead for many workers, it also shows how fast the Chinese economy is maturing and developing and will certainly lead to many consulting and coaching opportunities now and in the very near future.

Industrial robots, whose market in China is showing promising signs as workers get replaced due to higher labor costs. A lot of domestic robot manufacturers want to join the party and slice a piece of cake with foreign competitors. But they seem to be facing a tough road ahead.

It’s a common scene in many Chinese factories.

"Before the robots took over, there were seven workers working in this assembly line," Li Guolin, vice president of Air Conditioner Department, Midea Group, said.

Efficient, working 24-7, no need to talk, eat, or drink, and best of all, you don’t have to pay them.
There are more benefits to having robots working for you. They don’t get hurt.

"The injury problems are solved, and efficiency is improved," Sun Zhiqiang, president of Guangzhou Ruisong Technology, said.

And they take care of the labour shortage.

"It’s very hard to recruit workers in a hard working environment such as the chemical and steel industries, so there’s a lot of space for industrial robots," Zhou Chaosen, deputy secretary of Guangzhou Federation Of Robotics, said.

All of these reasons explain why the robot industry in China is seeing a great increase in recent years.

According to International Federation of Robotics, nearly 180,000 industrial robots were sold worldwide in 2013, with a fifth of those sales being in China.

In 2013, China surpassed Japan for the first time to become the world’s biggest and fastest-growing robot market with sales of about 37,000 industrial robots .

Experts predict that China’s robot market will grow to be more than one trillion yuan in a year or two.

The Lucrative industry has attracted many investors who’re diving in. In Shanghai, a robot industrial park is currently under constructionan that’s expected to generate and send out around 60 billion yuan worth of products. Parks of the same scale are also being built in the cities of Shenyang, Qingdao and the municipality of Chongqing.

It’s not all good news though. According to International Federation of Robotics, more than 90% of the industrial robot market in China is dominated by foreign companies, and the key parts of robots for the rest less than 10% of the domestic market are made outside of China. For domestic robot manufacturers, they face a lot of challenges such as lacking key technologies and competition from foreign businesses. There is a lot to do to take up the lucrative, young market in China.

By Mike Rogers, MarketingJapan, Universal Vision Ltd., and Smart Research 
& James Santagata, Executive Director APCA, Principal Consultant, SiliconEdge

I met the boss of the biggest international television network in the world the other day. He is a Canadian. He travels all over the world and, because he is in the TV business, he told me that one of his favorite things to do in every country was to judge by TV commercials what things were important to that particular society. 

Japan's TV commercials? Insurance for this or that; home sales; automobiles; financial instruments and plans; candy, cosmetics, fast food... Companies like Zurich, Sekisui, Kanebo.... Japanese commercials that soft sell and are emotive commercials.

I think that's right. 

He also told me that he was "astounded" by just how many over the counter drug medication commercials there were on US TV all the time. US TV commercials? Drugs, Cholesterol, Machismo ("my ding-a-ling is bigger than yours" commercials); fast food; commercials to make your dick hard, make it soft, put you to sleep, keep you awake, lower blood pressure, lose weight; not to mention commercials galore for people with extreme anxiety and panic attacks.

Oh, and don't forget the side effects disclaimers! Cholesterol, etc.

By James Santagata
Principal Consultant, SiliconEdge / Executive Director, Asia-Pacific Coaching Alliance


If it seems that we're under a constant barrage of the Western Media Myth (WMM) that (a) Japan is "failing" and that (b) this "failure" is primarily due to Japan's "talent problem" don't fret because we are.

Further, we are told that Japan's supposed "lack of talent" has manifested itself in such as way as to be responsible for Japan's supposed "lack of creativity" and "lack of innovation"".

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As I have argued for over a decade now, these claims and even statistical comparisons by the Western Media are not only useless but downright dangerous (to those that want to fully understand Japan) as they ignore the real root causes of Japan's underperformance.

By Martin Fackler
Published: December 25, 2013

TOKYO — The 20-somethings in jeans sipping espresso and tapping on laptops at this Tokyo business incubator would look more at home in Silicon Valley than in Japan, where for years the surest signs of success were the gray suits of its corporate salarymen. But for those hoping the nation’s latest economic plan will drag Japan from its long malaise, the young men and women here at Samurai Startup Island represent a crucial component: a revival of entrepreneurship.

The signs of that comeback are still new, and tentative enough that the statistics on start-ups and initial public offerings have not caught up. But analysts and investors report that hundreds of new Internet and technology-related companies have sprung up in the last two to three years, creating an ecosystem of incubators like Samurai Startup Island and so-called accelerator new venture investment funds, which invest in early-state start-ups in hopes of cashing in.

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For years, sagging entrepreneurial spirit has been cited as a major reason for Japan’s inability to save itself from a devastating deflationary spiral. The nation that produced Sony, Toyota and Honda has created few successors.

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Although Japan has a long tradition of entrepreneurship in blue-collar trades like manufacturing, it has had only limited success in extending that to more knowledge-based industries like software or computing, at the forefront of the digital age and where competitors like South Korea have sped ahead.

Published December 24, 2013 4:00 PM 
By Mario Gamper, VentureVillage

It may be time to say goodbye to a well-trodden cliche. Young entrepreneurs are proving that Korea can do more than copy. The number of tech startups has surged by 80 per cent since 2011. The number of accelerators went from one to more than 50. Here marketing consultant Mario Gamper, who has worked for Platoon Kunsthalle in Berlin and Seoul, gives us a glimpse of  how Korea is building a new culture of business creativity – that apparently rivals Silicon Valley.

There’s no need to look for suburban garages — the next generation of Korean businesses is born downtown. Many startups are home in the now-famous Gangnam district, a landscape of 400 ft glass towers, expensive suits, and women with fashionable noses. Some of the startups, like online deal siteCoupang, have already succeeded in sticking their own logo on an office tower. But even young hopefuls who are still demoing enjoy prime real estate. In brand new coworking space Dreamcamp, teams polishing PowerPoints look out over a beautifully landscaped park.

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In 2012 the 10 biggest conglomerates were responsible for more than 80 per cent of Korea’s GDP, more than ever before. For decades the Chaebol – a form of business conglomerate in South Korea – throttled local entrepreneurship. In its quest to create new jobs, the Korean government is finally taking the side of SMEs. And it’s telling them to take bigger risks in hopes this will lead them to bigger markets.

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“Korea used to be a Galagapos of business creativity,” said Kim. An ecosystem so specific, that ideas and solutions could be successful here, but wouldn’t make it anywhere else. “This has changed.”