From the Editor

Relax, we're not going to start lecturing about gloomy macroeconomic indicators and forecasts that tell you nothing about what's actually going on here. Looking at the papers that focus on such things, you'd think Japan was downright impoverished. Don't believe it. This country is drowning in money, and Japan has what is by most standards a coddled, even spoiled, population.

But there's one group in particular that we believe has a right to feel short-changed: the innovators. On page 16, we introduce you to one of them. Shuji Nakamura invented a hugely significant breakthrough in mass data storage: the blue laser (which, among other things, made the DVD possible). The Nakamura story, though a personal one, is an indication of what's wrong with Japan on a much broader level.

Also in this issue is the latest Daniel Scuka wireless masterpiece. Editor at Large Scuka (who also writes the Wireless Watch weekly email newsletter -- see www.japaninc.com) helped put J@pan Inc on the map with his first two big features on the subject: first in June 2000 with "Unwired: Japan Has the Future in Its Pocket," and then in November 2000 with "Supplying New Ideas: Wireless Lights Up." In this issue Scuka gives us "Hard Cell," which shows how the global ambitions of Japan's emerging cellphone giants could be thwarted by the challenges of software integration and internationalization. The piece also has two excellent sidebars: one on Japan's handset prowess, the other on the microbrowser wars. It all starts on page 24.

The third feature story, on page 32, takes a playful romp through the Inter-Cross Creative Center (the ICC) up in Sapporo. It's a fun look at an incubation center that provides creative types the support and networking opportunities they need to thrive -- and it's a nice antidote to the frustrated tone of this month's cover piece.

While we're all for incubation centers like the ICC, can there be too much of a good thing? A taxpayer-funded "business innovation center" in Osaka has us wondering. See page 4 for more.

In the same section, we introduce a game called Dwango that boasts one of the coolest innovations we've seen this year: the integration of real-time weather data into a multiplayer game designed for Java-based i-mode handsets. This kind of thing you'll find nowhere but in Japan, and it has all kinds of implications for mobile content businesses around the world.

Speaking of games, Hudson Soft up in Hokkaido, the 25-year-old game developer behind such game console hits as Bomberman and Momotaro (together selling over 20 million copies), is moving into cellphone game development. You've probably never heard of this firm, despite its past success -- a lack of international recognition is just one of the many challenges it faces. Another is profits drying up as the console industry matures. For more, see page 55 in the Investor section.

Also in Investor, we profile a US firm called Cellport Systems that's trying to break into the highly advanced telematics -- in-car voice, data, and Net services -- market in Japan. See page 58.

This month's Art Department is especially interesting when you realize that the exhibit pictured is not miniature, but about twice the size of a human. The creativity of Japan's modern artists continue to amaze and, at times, bewilder us. That's their role.

Enjoy this month's issue, and thanks for reading JI.

-- Steve Mollman (steve@japaninc.com)

CORRECTIONS:
•ImaHima founder Neeraj Jhanji was an analyst with Arthur Andersen, not Goldman Sachs (page 62, June 2001).

•The Flap and Mobile7 from NEC are advanced models not meant for the market (page 44 and 45, May 2001).