The American Consulate General, Osaka

Building Bridges to Japan

There are several U.S. Consulate offices throughout Japan, one in each of the major regions: Tokyo (Kanto Region), Osaka (Kansai Region), Nagoya, Sapporo, Naha, and Fukuoka. They provide services to U.S. citizens, such as passport and visa services, but also to U.S. businesses who want to develop Japanese markets.

Consul Frederic (Fritz) Maerkle, introduced us to the general economic picture of Japan towards the end of this century. He described the perception of the West, perceiving Japan as a “sinking Titanic”, as exaggerated. He agreed that the state of the Japanese economy was in dire difficulties, but far from being hopelessly lost. Fundamental changes in the way individuals and their employers interact are the necessary for recovery, and changes in progress currently affect consumer behavior and consumer spending.

Japanese Ministries and the Internet

Fritz Maerkle provided some interesting insights into the workings of Japanese “Ministries”, e.g. MITI and the Ministry of Post and Telecommunications. These ministries are the agencies who actually control large industries, such as the computer and telecom industries. And in the case of Internet development, these two ministries seem to be battling out conflicts of interest, MITI representing the computer industry and the data networking world, and the MPT representing the incumbent telecom providers and PSTN infrastructure.

With the convergence of data and voice, these ministries protect their members’ interests, but more importantly, they protect their own “raisons d’être”. Decision-makers in these ministries seem to have a prime concern: how to protect their careers five, ten, or fifteen years down the road!

Ministry officials plan their lifetime careers within their Ministry. Therefore, they are extremely resistant to change and structural convergence that might endanger their current career path. In the case of the data and voice convergence, why should the MPT-official be interested in promoting the intrusion of data technologies (such as VoIP, VoN) into the traditional PSTN market space, if these leads to an erosion of his Ministry’s control over the telecom markets?

Ministries favor the status quo, and while they have been effective in the post-war economic period in resurrecting Japanese competitiveness, the system is now a major impediment to change.

The system of ministries is not conducive to startups and innovation, as they favor large incumbent structures. While the Matsushita’s and Fujitsu’s and NEC’s may capitalize on their lobbying, innovative startups, domestic or foreign, have no spokesperson in the Ministry structure.

What worked for Japanese competitiveness in the past, fails to work in the Internet Age. Japanese core competencies, such as miniaturization and manufacturing, seem to become less valuable in the age of virtual commerce and electronic products.