BBC has an excellent analysis of Japan’s decline in consumer electronics title, “What happened to Japan’s electronic giants?”
According to Tokyo-based economist Gerhard Fasol, “the Japanese giants were overtaken by the digital revolution. The Japanese giants actually built their empires on making complex electrical machines – colour televisions, radios, cassette players, refrigerators, washing machines. Yes, they contained electronic components, but they were basically mechanical devices.”
“But then came the digital revolution, and the world changed. The Sony Walkman is a classic example. It has no software in it. It is purely mechanical. Today you need to have software business models that are completely different.”
Having worked for several Japanese companies over the past decade both in the USA and Japan, I saw first-hand their failure to develop and commercialize two entire generations of software: first shrink-wrap consumer software, and then Internet-scale services.
Some observations I made that illustrate failure milestones:
- failure to export their early world-leading smartphones, based on CHTML
- large-scale corporate purchases of Microsoft and Adobe suites, instead of developing local products
- insular Open Source participation, until recently limited to forking projects into dead-end Japanese localizations. Matt Assay says it’s improved (Ruby being one example.)
- corporate reluctance to embrace Open Source projects like linux and MySQL, in favor of non-financially scalable products like SunOS and Oracle, for years after the rest of the world
- Sony’s fetish with DRM and non-standard consumer storage formats, like the Memory Stick line
- ongoing cultural disdain for actual startup companies and entrepreneurs, doubly so for immigrants
- airtight campus network firewalls, allowing only ports 25, 80 and 443.
“Digital Convergence” in practice equals “Internet-enabled”, which means software.
In summary, Japan’s aversion to consumer software development doomed their largest companies to the last millennium.
I asked Guy Kawasaki 5 years ago about Japan’s virtual disappearance in consumer technology. To paraphrase, he replied, “From my viewpoint it’s incompetence.”
If a Japanese executive asked for my opinion on how to improve, here’s my roadmap:
- design your products to be Internet-connected or Internet-enhanced
- in your HQ, dedicate an entire floor to an Advanced Software Group with a 2-year mission to be at the leading edge of Open Source software and a 20-year mission to stay there with the following teams: linux kernel, linux applications, MySQL, Postgres, NoSQL, SMTP, HTTP, cloud, Internet security. Do not penalize experimentation or risk-taking by employees.
- develop a large-scale paying, online business with ongoing feedback from #2. Do not penalize experimentation or risk-taking by employees
- study and get involved in the “maker” prosumer tools (CNC, 3D printing, etc.) trend.
Ironically, I learned computer programming on the Sharp PC-1211, as well as a lot of other programmers. The PC-1211 looked so advanced that I wondered if it was from outer space. Sharp has since declined so much that they may not be an independent company in 2014.