Why Japan fell behind in the tech industry
Hey everyone, how's it going? My name is Mayuko. So a big theme for me, my content, my channel, is about staying in touch with my Japanese roots. So I've made videos like these before. But being both Japanese and American and a software engineer, one such thing that I've started to explore more recently is the intersection between Japan and technology. Because in my life, those two circles have only barely just overlapped before. You see, I've never like,
lived nor worked in Japan for like a meaningful enough amount of time. But I often wonder what would have happened if I did, because there's totally a universe in which I did. Like maybe I want to go work in Japan after college or my parents just like, move back to Japan after they had me. Either way, I am who I am now. I spent the majority of my life in America and I'm pretty familiar with what it's like to work as a software engineer in Silicon Valley. But this alternate universe, this like, life that I could have had left me thinking, what is the Japanese tech scene like? I think most people think that people in Japan, and like Japan itself, is a country that like lives in the future. And that might be because a lot of us remember what the world was like in the 80s and 90s, when Japan dominated technology and electronics with things like Walkmans and TVs and DVD players and Honda cars. But what happened? It just feels
like there's this huge gap between technology from Japan in like the 80s and 90s to now in 2021. How did Japan fall behind? And what challenges does a face currently? And what are they doing right now to address it? And you know, being a YouTuber, I was kind of like, maybe I should make a video about this. Soooo here we go. Oh, quick note. By the way, a lot of the comparisons that I'm going to make in this video are between Silicon Valley in Japan because Silicon Valley is what I know. So this isn't meant to be like an objective analysis of what happened. I'm just sharing what I learned from talking to some folks and reading articles and stuff and so I will link those articles in the description box down below if you'd like to learn more. I also want to note that I'm not judging like any person or company or country or anything like that, like I don't think there's like a good or bad, I just wanted to know what IS. So yeah, I'm just telling you my very subjective thoughts, and with that PSA out of the way, now we can go! So, What's your impression of Silicon Valley? Mayuko: And what's your impression of the Japanese tech industry? Yuka: What Japanese tech meant to me it was definitely like hardware so like Sony, Panasonic, Toshiba. All those
companies were like, really cool. And I really liked like, audio stuff or like TVs and those were always Japanese brands when I was growing up. Now I think a lot of Japanese tech companies are definitely looking at companies in Silicon Valley to learn from Mayuko: So in order to start talking about this, we always got to start with taking a little look back into history and in this case, Japanese history. Okay, but Japan's history is LONG. So this is going to be one of the most like, shortened versions of it based on the
things that I found on the internet. Before World War Two, Japan was going through an era called the Meiji Restoration. This united the country under the Emperor Meiji with strengthened it through its unification and basically started Japan's Industrial Revolution. Before this era, Japan was in a period called "sakoku" or like, closed borders. So they didn't trade or talk to really any foreign countries, except for a very small few. And so just like, foreign influence just didn't happen in Japan for many, many years. So because they weren't receiving any influence, they were just like, behind in many aspects compared to the rest of the world. Mind you. This is like the 1800s. So it really wasn't that long ago. Well, this industrialization led to militarization of Japan, which then led to World War Two,
which then they of course lost. After a period in which they needed to rebuild their nation, they experienced just like such a huge economic boom, which basically got them to have one of the highest GDP per capita in the world. And this is after the Japanese economy shifted its focus from things like agriculture and mining, to telecommunications and computers. This was when Japan had his technological revolution, in my opinion. So much so, that in 1990, six of the world's top 10, semiconductor companies were Japanese. Intel actually ranked fourth between Japanese companies NEC,
Toshiba, and Hitachi. So yeah, Japan basically had like huge ups and downs to ride in the 18th and 19th century. But now when we think about the 21st century, when we think about like, what technologies and tech companies are changing the world, we often think about Silicon Valley and FAANG. And in the meanwhile, there's many headlines about how Japan is falling behind, especially in technology. So what happened?
So based on what I knew about Japan, I had a few guesses. Firstly, I realized that the whole like Japan's living in the future thing was not rooted in anything actually technologically revolutionary. It instead was rooted in convenience, and sharing a common set of values because of how homogenous society was. So things like pristine
convenience stores and on time trains. And, like, you know, when you go up an escalator in Japan, everybody stands on one side together to allow the passer bys to go up. I think all of that is the whole living in the future thing, but it's just convenience. So then I thought about the working culture, there's tons of videos and articles that talk about
the intensity of the work culture in Japan, one that kind of like, even puts American Hustle culture to shame. (Not that anyone should like have that title, or that's something to like, fight for her or anything like that). But things like overtime, poor work life balance, and a really rigid hierarchical structure are things that I've heard about time and time again. They were all in the context of Japanese cultural values. So things like "meiwaku wo kakenai", like
don't burden others, to being afraid of failure, as well as risk aversion. Now, I'm not like a sociologist, or an anthropologist, by any means. So I don't know where these values came from. But these are ones that I've seen in my own life, and I've seen echoed by other Japanese people that I know. And I can totally see how all that impacts Japanese working culture. So was that it? Was it the working culture? Was that why ever since software and the internet started dominating the world, Japanese products and services have become increasingly absent from our lives? Well, what I learned is that Japan just didn't adapt to software as well as other places had, because Japan thought of software as second class. Okay, this one blew my mind because like, software engineers are like the new doctors and lawyers like the 2010s and 2020s.
Eric: Like in America, there's like a lot of prestige that comes with being a software engineer, like software development is not really super respected as a career, it's more like something that's meant to be outsourced. And that you do for kind of a few years before becoming a manager, like a product manager or consultant or something like that. It doesn't have like the prestige we have in the US, I would say, in the US, you know, when you say you're a software developer, people are like oh, wow, cool, you know what I mean? Here (Japan), it's like, Oh... I see... there's still that image, it's like this blue collar job. At a lot of places where again, the goal is to kind of do it for a
little while, and then go on to something better. And you kind of like pay your dues as a programmer. Mayuko: Because Japanese manufacturers still held power in Japan over the last 30 years. There is this bias that hardware is first class. Because unlike software, it was something that you could see and touch. Kenji: My main point is that Japanese big companies were putting the software people in the second class, the first class people are hardware. Those who are doing "monozukuri", or those who are creating actual things, not bits. It's
tangible. Those things have to be tangible. Mayuko: For a country that's still very true to like its craftsmanship roots, this made a ton of sense to me. Japan still prides itself in its handmade and multi generational crafts. Like in America, like stationery stores and bookstores are like all the disappearing. And that's kind of true Japan as well, but like they still sell lots of paper calendars at the stationery store. And I think that's part of this bias towards like analog products and like paper. And I mean, like regardless of if you're Japanese or not, concepts that are ambiguous, like the ones that you can't like engage all of your senses in like you can't see and touch and smell it and stuff can be difficult to grasp. So
this bias against software basically led to low salaries and poor stock options in tech companies. And adjacent to that are labor laws in Japan. They make it really hard for companies to fire or lay off its employees, which you know, is great for job security, like Silicon Valley definitely can't offer that level of job security to anyone. But that basically creates a lack of a pool of senior talent. And so companies aren't even really like trying to like hire like great people, I guess. So they're not going to offer things like better benefits or like better projects, because most
of the hiring that they're doing is straight out of college. And so as a result of all of this, like Eric mentioned, software is something that is seen to be outsourced to someone else because of its second class state. Of course, while all this is happening in Japan, and companies like Google, Apple and Facebook, were taking the world by storm in America. Silicon Valley charged forward in creating products and services and companies and technologies that would basically define how technology is made. And at this point, I think Japan kind of knew that was
like, on the downhill, you know, like birth rates are declining, and the population is aging. And there wasn't anybody who could compete with any of these big Silicon Valley tech giants. But in the middle of this, there was one company that everybody I talked to said change the game in terms of technology in Japan, that company was mercari, or merukari. Mercari is a marketplace app where you can buy and sell your own belongings. And it was Japan's very first tech unicorn. And that basically means it was the first company that was valued at over $1 billion. They actually IPO'd in
2018. And it went really well. And so because they were the very first tech unicorn, this was a huge deal. From the folks that I've ever talked to about Mercari, they think that one of the things that really helped them to be successful was that it did its business in kind of an unconventional way, compared to Japanese business standards. Specifically, a lot of their culture and policies emulated Silicon Valley startups. So things like better pay and better stock options, and even like a mixed language environment. So you can speak either English or Japanese anywhere. And so from what I can tell, the tech industry in Japan really kind of started there. After Mercari, a ton of
new startups started sprouting up in Japan, specifically in the Tokyo area that also emulated Silicon Valley companies that allowed for a more flexible working environment. And this only happened like three years ago. So I think it just took Japan a little bit of time to figure out what worked for them. But of course, challenges still lie ahead for Japan's tech economy. While there's more new tech startups in Tokyo than ever before, and high schoolers and middle schoolers in Japan want to be a software engineer more than anything else, that's just not the whole picture. There's still a big part
of the industry that follows the old practices of treating software as second class. So until there's just like a large enough shift towards more equitable and flexible working conditions, it just doesn't breed a ground for innovation. Eric: Just as a career, it's not as established. But that's starting to change, I think. And that also goes back to the
education as well, like the CS programs are generally not really up to the level that you would expect in the US and other places, unfortunately. I think that's starting to change. There's more talk of like helping, you know, younger kids learn about programming and that kind of thing, really, just in the past couple of years. Mayuko: And the other thing that every person that I talked to said is a challenge for Japan, in many different ways is diversity. Kenji: They have to look like you or me to be accepted as a normal citizen. And that kind of unification, or a lack of diversity in general, in Japan, is the one of the reasons why we failed to adapt.
Yuka: In the beginning where people were talking about diversity. They're like, are we lowering the bar? When we try to hire for diversity and those kind of like, FAQ stuff, which is already debunked in the US. There's like proof that that is not the right questions to ask is still being asked in Japan. Mayuko: I mean, Japan is, let's just say it, a pretty homogenous society. Japan's always had difficulty in accepting and celebrating people from all different backgrounds. And there's definitely like a bias towards like domestic products and services in Japan than international ones. But Japan does want to globalize and participate in
the global tech economy. And so in participating in a global economy, you know, in places like Silicon Valley, which definitely has its own issues with diversity and inclusion, we just know that diversity is a key ingredient to innovation. I just think that like new perspectives and ideas and thoughts that come from lots of different kinds of people from different genders and races and many more dimensions is exactly what will help Japan to figure out how it will play a part in the global economy. So how might they address this with regard paving the road for other it and
tech startups to thrive? What can Japan do? Mind you, change takes a long time to happen in Japan, like way longer than America. Like we could wait for attitudes about software and diversity to change in a meaningful way across the country. But I just don't think Japan works that way in the same way that America does. But Japan is fully committed to doing something about it. On Japan's official website, they commit to... So what can they do to invite new ideas and boldly go
where they haven't gone before? Well, Japan's Ministry of Internal Affairs and communications got involved, they partnered with a Japanese Think Tank company called KADOKAWA ASCII Research Lab Incorporated to figure something out. And I partnered with them on this very video to talk about the INNO-vation program. They've been doing this program for like eight years now. And last year, they went global. So now they invite anyone from anywhere in the world to participate.
Okay, so I was ecstatic when they reached out to me, because I felt like this is a really good opportunity to really explore what's happening in technology in Japan. And also, I think this is genuinely such a unique kind of program that really responds to all the things that we were talking about: it invites new voices in, and it promotes people to not be afraid of failure and to take risks. And by making it like very big official thing, it gives software and technology the sense of prestige that it needs, which thereby raises the status of people in technology in Japan.
Every year, the program hosts different challenges that are aimed at bringing forth different kinds of ideas. The first is the Disruptive Challenge. It invites anyone to submit their ideas to get funding for their inventions. Kind of like if you wanted to like make a thing, you have a great idea, but you want to get funding for it to make it a real thing. winners of this challenge get up to 3 million yen, or that's about $30,000 in support to work on their idea. And
graduates from this program, one year later, could get things like exhibitions, patents and media promotions and stuff. The Generation Award similarly invites new ideas and technologies and techniques that help humanity to take a leap forward in unexpected ways. This one gets evaluated by corporate partners of the program, who then match with you to make your idea a reality. Both of these challenges don't require you to have like already made something because what
they're doing is investing in the potential of your idea, which I think is so cool. Also, the judges for this program are really cool. There's like the founder or Ruby, the programming language on the panel, as well as many other really influential people in technology in Japan, all really wanting to help kickstart Japan's tech economy. They also have the INNO-network hub, which is a network of cooperative partners in 53 locations globally. This hub connects institutions to support innovative ideas happening in and outside Japan. So it's meant for businesses, enterprises, and institutions who are looking to get involved. But yeah, Japan, through this program, really is putting in the money,
time, and effort where they need to, and they're looking for people from everywhere to help them boldly go where they haven't go ne before. So yeah, if you're interested in the program, or any of the challenges, then all the links are in the description box down below so you can find out more. I genuinely think it's such a cool opportunity to get to be a part of something so big like this, and have the opportunity to work with people in and outside of Japan to figure out what comes next in technology. So anyway, thank you so much for watching today's video. I genuinely had such a fun time, like learning and researching and talking to all different kinds of people to learn about the tech industry in Japan. And honestly, I'm just like really excited to see what happens. I just think like between the rising startup scene in Japan and Tokyo and things like the INNO-vation program, we can really only expect great things to happen. So thank
you so much to the folks that I interviewed for this video, and thank you so much for watching, I typically don't make these kinds of videos, but if you like it then let me know in the comments down below and what topic you'd like to see me cover. Don't forget to subscribe to this channel because I'm almost half a million subscribers, and it'd be really cool to get there. And if you're already subscribed, thank you and if you're not, subscribe! Alright everybody, I'll see you next time. Take care. Bye!!!