Blue About Japan

Shuji Nakamura invented the blue laser. That was big. If you've got a DVD player, thank this guy. But Nakamura, profoundly disillusioned by his treatment from corporate Japan, saw the light and fled to California.

ENTREPRENEUR CHEMIST AND AVID alpinist Nobuo Ogawa founded Nichia Chemical Industries (now Nichia Corporation) in rural Tokushima prefecture in 1956. The firm grew to be one of the largest makers of phosphors, compounds coated on the inside of fluorescent lamps and TV screens that emit light of various colors (the company motto is: "Ever reaching for a brighter world"). Today, it is the leading LED (light-emitting diode) manufacturer in the world thanks to Nakamura's break-through efforts, with 2,250 staff in Japan and seven locations worldwide (in Asia, Europe, and the US). Ogawa hired Nakamura in 1979 and strongly supported him throughout his 14-year quest to develop the blue laser; in retrospect, it's clear that Nakamura, a driven, free-thinking individualist, never really did fit in. Nichia probably never understood the true nature of its No. 1 research genius, and there's little doubt that Nakamura's invention outclassed anything that Nichia could adequately reward. Now, the company has lost the Goose that laid its Golden Egg.

That Nakamura's blue LED and laser inventions were absolutely world-class is without doubt. His are some of the most frequently cited research papers published in Japan, and he has picked up a fistful of awards and accolades both domestically and internationally. He chose gallium nitride as the basis for his research for one simple reason: No one else was working with the material at the time. Gallium nitride was universally eschewed by scientists as having little promise with regard to the blue laser, but Nakamura created a successful semiconductor device that reliably emitted blue light as brightly as existing red and green lasers. Blue-light-emitting semiconductors have applications in CD-ROM drives, DVD players, optical networking, computer displays, and future-technology optical storage systems, as well as such mundane gadgets as light bulbs and outdoor display signs. As the wavelength of blue light emitted from such semiconductors becomes shorter (i.e. bluer), the storage capacity on a CD-ROM or DVD increases, for example, from one to nine full music albums: in other words, the bluer, the better. Nakamura, a Shikoku native lacking a PhD degree, succeeded where the combined R&D brains and brawn of the likes of GE, 3M, and RCA had failed. (He has since obtained a PhD from Tokushima University.)

After little more than a year of lecturing at UCSB, Nakamura has published a book (Break Through With Anger, Shueisha, April 2001) in which he explains the evolution of his thinking over the past few years. His anger and frustration, while sparked by Nichia, pertain to a much wider disenchantment with Japanese society, education, and corporate exploitation of a bovine workforce. He laments the fact that the social and economic environment in Japan suppresses any hint of inspiration or free thinking, and he charges that Japan is sadly lacking in intellectual freedom, openness, and diversity, all vital for fostering innovative research. His outward struggle to spark life into blue-light-emitting semiconductors closely parallels his inner struggle to shed the "company loyalty" mindset, a reflex deeply ingrained, he says, in the genes of most Japanese corporate drones. In particular, he condemns the Japanese education system and the phenomenon of the entrance examination, which is "the root of all evil, as it suppresses students' freedom to explore their own interests and molds them into sheepish salaried workers." He urges the elimination of the college entrance examination system as the best way to foster creativity and innovation on these shores.

Nakamura also turns his critical attention to Japan's world-renowned manufacturing industry, which, he asserts, faces a gloomy future unless it can cultivate cutting-edge intellectual property in areas of new technology. While he doesn't explicitly hold up America as a model to emulate, he clearly admires that country's open embrace of the entrepreneurial culture.

Although his determination not to return to Japan for work is unlikely to change anytime soon (he's got a US green card), this curious man with clear, intensely focused eyes and a mellow local dialect expresses serious concern over the future of his motherland and its continuing economic stagnation. That motherland would be wise to heed Nakamura's honest, heartfelt, and sage advice ...

The excerpts below follow the format: our introduction in regular font; extracts from his book, Break Though With Anger, in blue; and quotes from our interview with him in italic.

ON JAPAN'S EDUCATION SYSTEM
Nakamura experienced a coming of age of sorts upon entering Shikoku's Tokushima University. He was severely disappointed to find that, as a freshman, he would not be permitted to focus his studies on his favorite topics -- physics and math -- as his high school teachers had promised him. Herein lay the kernel of his doubts about Japan's educational system. His teachers urged the common wisdom upon him: going to a good school, then working for a good company, was the ticket to a life well-lived. The young undergrad started to doubt their veracity, and, indeed, harbors resentment to this day.

If I were to relive my life, I would like to become a physicist or mathematician, as I'm fond of theory and logic. I regret I gave up the dream, because my high school teacher talked me into choosing an engineering major and not science for the sake of finding a job. My high school teachers told me that once I entered university, I could study whatever subject I wanted. But the reality was completely different. I was so shocked and disappointed that I felt like I was falling into hell from heaven. I asked myself, What have I been doing for the past 18 years? I've come to condemn the entrance examination system.

Since students are forced to study hard for college entrance examinations, passing the exam itself becomes their goal. That's why, once they enter college, they stop studying. Therefore, many Japanese college students have no dreams or ambitions.

The Japanese education system has traits resembling the brain-washing mechanisms observed in communist countries. By going through this system, people are molded into a sheepish, salaryman mentality to obey orders from company and boss.

Japan is a good country to live in for those with no ambition.

ON WORKING FOR NICHIA CORPORATION
It was Nakamura's choice to work for Nichia Corporation. His early marriage during college influenced him to stay in Shikoku for the sake of family and home (his wife worked in the local area) instead of taking a job offer from electronics giant Kyocera. True to character, he sacrificed future opportunity at a major company for his family. Ironically, it turned out that Nichia, a small, family-owned venture company, gave him a much freer hand to pursue research of his own choosing than any large company ever would have. Conventional wisdom in the international research community held that gallium nitride was useless as an LED material. Typical LED semiconductors exhibit less than 100,000 dislocations -- defects in the crystal structure -- per square centimeter. No one had made a gallium nitride substrate that had fewer than 10 billion dislocations per square centimeter.

Twenty years ago, Nichia Corporation was a small, local company with only 200 employees. I had more freedom in my research work there in comparison with a big company because the firm didn't enforce company rules or orders strictly. That's why I could take up the challenge of gallium nitride instead of having to work with zinc selenide or silicon carbide, the materials recommended by all the textbooks.

I was lucky, because I didn't have a boss well-equipped with knowledge in the field of semiconductor manufacturing. If so, he wouldn't have let me proceed with my choice. If I had worked for a big company or university, my proposal would have been voted out in a meeting. However, I was able to make this kind of bold decision since I was working all by myself. Meetings are useless for epoch-making research. They might be even harmful, because a breakthrough requires destruction of common sense. But at most Japanese companies in the manufacturing industry, meetings are mandatory.

In the beginning, the company kept rejecting my proposals. However, after six years of working for Nichia, I had figured out that going directly to the top was the best approach. I asked then-president Nobuo Ogawa for permission [to investigate gallium nitride]. Surprisingly, he agreed right away.

In March, 1992, my blue LED shined quite unexpectedly. The color was close to purple rather than blue, and it was a weak light. I left it on, and then went home for the day. Next morning, I felt my heart beating like a drum as I opened the door to the lab. The LED was still shining -- for more than 10 hours at that point. That was the first time I felt a strong sense of achievement. It continued to shine for the rest of the day and the next. I reported directly to [then-chairman] Ogawa. He came to my lab and said, 'Is this something to be excited about? The light looks too dim.' I realized I was still a long way from making a practical, bright blue LED device.

ON COMPANY LOYALTY
In his early days with the company, Nakamura exuded company loyalty -- more than any corporate overseer could wish for. But this started to ebb as his frustration with the lack of professional (or social) recognition began to mount. He knew he was doing world-class stuff, and yet the company continued in its paternalistic treatment, as at many Japanese companies, where individuals aren't recognized (but the department is), and where it's still highly unusual to be promoted ahead of a more senior co-worker. Nichia, a small, independent manufacturer, was always faced with the threat of competition by larger conglomerates. To survive, it relied on trade secrets, limited patents, and playing its cards very close to its chest. As a result, researchers were prohibited from attending academic conferences or publishing in technical journals. While this could be justified on the grounds of survival, none of the engineering staff, including Nakamura, gained any recognition from peers in the industry. Further, Nakamura asserts that such policies enabled worker exploitation, since any recognition that did come came only from within the company, and researchers weren't necessarily treated fairly. The company, meanwhile, was the sole beneficiary of the research.

I was very loyal to the company when I was young. I worked extremely hard to come up with innovative products, so that the company wouldn't go bankrupt. During the first 10 years after joining Nichia [1979-1989], I worked hard under very tight budgets. I had to get approval from my section chief even for purchasing a single pencil. But it didn't bother me too much at that time, as I was too busy with my work.

At least once a month, an explosion occurred in my laboratory. Every time, the whole room shook and filled with smoke from burning phosphorus -- quartz pieces would fly around in the air. The sound of explosions became a famous ritual of the company. However, the company didn't pay enough attention to safety measures for employees, even though they were overly cautious about budget spending. It led me to think the company did not care for employees that much.

Nichia's personnel system was not so good. I was frustrated with the company, as I felt I didn't receive fair treatment due to the lack of clear promotion standards. For example, the company appointed a new head for the R&D department to take over the product manufacturing line after I had developed a new product. As a result, he ended up receiving credit for the subsequent product sales instead of me. I couldn't stand the fact that a person who had just entered the division and had not made any contribution was promoted to be my boss.

It is common in Japan that individual researchers get hardly any reward for innovations from their companies. The only way researchers receive credit is to earn patent revenues, but the company prohibited us from applying for patents.

The company wanted to keep everything a secret, and didn't allow applying for licenses, publishing papers, or attending academic conferences. During the early years, I couldn't even imagine breaking company rules.

ON BREAKING WITH THE COMPANY
Nakamura gradually went through a subtle yet fundamental transformation that liberated his thinking from that of a "company slave," which he sees as parallel to the relationship between the ruling classes and the ruled during Japan's feudal period. In 1989, he had his first exposure to the United States (a year-long work-study term at the University of Florida to research metal-oxide chemical vapor deposition -- or MOCVD -- techniques), drastically changing his attitude toward Nichia. He started to ignore company meetings, orders, and even phone calls. It was about this time that his research on the blue LED began in earnest. His relationship with president Eiji Ogawa fell apart, and he poured his energy into his lab work.

Before, I was a typical corporate warrior, obeying every order issued by the company. But I concluded this kind of thinking was the root of all evil. The products I developed according to the company's orders didn't sell, so I came to the conclusion that I should be the decision maker. As I was already thinking about quitting, it wouldn't be too late to do what I wanted to do. Even if I failed, it would give me a good excuse to leave. The bigger the goal, the better. Developing a bright blue LED was a perfect target.

"The company prohibited me from publishing research papers. I eventually started to ignore this rule."

I chose gallium nitride over zinc selenide. I had started thinking about this before going to Florida and made up my mind right before heading back to Japan. Of course, I heard that zinc selenide had better possibilities for success at every conference I attended in the States, so why did I chose gallium nitride? Because I had made up my mind to trust my own decision -- not the company's. I didn't trust perceived common sense or research papers written by others. Ever since entering Nichia, I had not thought on my own or made my own judgments. I was too loyal to the company.

The company prohibited me from publishing research papers. I eventually started to ignore this rule. In 1989, I spent a year in Florida as a research fellow. Even though my knowledge and experience in the field was much deeper than that of my colleagues, I was treated like a technician, because I had neither a PhD nor had I published reports.

Upon returning from Florida in 1989, my attitude changed 180 degrees. After that, I ignored every order coming from my boss and stopped answering phones, attending meetings, or helping the sales staff.

Right before I invented the two-flow method using MOCVD, Nichia's new president, Eiji Ogawa, brought a rival semiconductor researcher into my lab without any warning and discovered what I was actually doing -- trying to develop a bright blue LED using gallium nitride instead of zinc selenide. The president's face turned pale, and he sent me a written order to start working on high electron mobility transistors instead of the blue LED. I totally ignored his order. For a two-month period, I threw away all written orders the company gave me.

[To achieve a pure, bright blue LED], I had to synthesize a double hetero structure device, the final step needed to be able to manufacture the blue LED. President Ogawa heard I succeeded in creating a blue-purple version of the LED, but he ordered me to help with manufacturing the device, rather than developing a double hetero structure LED. He was very insistent, but I kept ignoring his order. If this had happened before launching the blue LED study, I would have listened to his order. But this time, I put my job at stake. I had been successful because I didn't listen to company orders and trusted my own judgment. I went ahead with my plan to develop iridium gallium nitride, which is necessary to create the double hetero structure. From this time on, my relationship with the company got worse. I often told my subordinates that the enemy resides within the company, not outside.

Starting around 1994, I was invited to numerous international conferences and exchanged information about salaries with American scholars and researchers. They started calling me "slave Nakamura," because my salary and position didn't match with the amount of work I had done for the company. These experiences made me seriously question what I was getting from work.

ON LEAVING NICHIA CORPORATION
The time had finally come to leave Nichia. Nakamura felt that the company had grown too big for him to fit in. Besides, his long-time supporter, Nobuo Ogawa, was about to retire. As news of his invention spread, more than a dozen job offers poured in from American companies and universities. Not a single Japanese company or university made a similar move. His three daughters urged him to accept a position in the States, land of Hollywood, pop culture, and all things cool. Nonetheless, the decision to leave was tough. Nakamura himself spoke only basic English; his wife, none. Since he refused to sign a non-competition agreement for Nichia, the company withheld his retirement payment, so the move was financially risky. After moving to the States, Nakamura supplemented his teaching income by providing consulting services to a subsidiary of long-time Nichia competitor Cree; Nichia promptly sued for violation of trade secrets, and the case is now under litigation. In April this year, Nichia lost the first round of a related case in Tokyo, where it had sued the importer of Cree-produced semiconductor devices, claiming they infringed Nichia's Japan patent. Nakamura is now persona non grata at Nichia -- a bitter irony for the man who sweated for the better part of two decades for the company -- and Anan, the coastal city where he made his technological breakthrough, has become the most difficult place in the world for him to visit.

After I gained a respectable position within the company, I started feeling a sense of loss and fear that I might go downhill from there. I was already 45 in 1999. I couldn't expect much from the company, even if I had stayed on. You need challenges in order to stay productive. It was no easy job to shed the deeply embedded "company loyalty" mindset, but you don't miss it at all once you break out of the mold. I wish I had left Nichia much earlier. I ask myself what I did to myself in the past 20 years.

Because I didn't sign the non-compete, I received no retirement money. My wife did, as she was a nursery school teacher for more than 20 years. As we were leaving [for the US], we calculated our total income over the past years for each of us. It turned out we each earned almost the same amount. This is why I think Japan is a country with a communist streak. Now, I can't make any contact with Nichia at all, due to the [legal proceedings]. I anticipate the lawsuit will continue for the next 10 or 15 years. At the present lab experiment level, Cree and other companies publish papers on LED research two or three times more than Nichia. So I'm afraid it could lose its competitive edge four or five years from now.

ON WHAT'S WRONG WITH JAPAN
Japan's fabled education system is one of the key factors that helped the country recover from last century's wartime devastation and rise to become the world's No. 2 economy. But this system is geared towards producing workers suited to manufacturing and fails to provide the kind of education the country needs to cultivate creativity and innovation. In its 2001 report ranking nations by their provision of an environment that fosters competitiveness, Switzerland's International Institute for Management and Development (IMD) ranked Japan only midway among 49 countries. Japan's placing of 26 represented a drop from 24 in the 2000 survey, and 17 in the 1997 report. Nakamura particularly condemns Japan's education and politics, and the risk-averse environment that discourages gifted researchers and entrepreneurs from sticking their necks out. He points to amakudari, the practice of retired bureaucrats taking cushy posts in companies that they previously supervised, thus ensuring business as usual and tight relations between government and industry, as one of the continuing flaws in Japan's democracy.

There are many reasons why I left Japan for the States, but one firm reason is my strong disappointment and frustration with Japanese politics, the social system, and ingrained customs, [particularly] the education system, the old and sterile corporate world, and academe. The Japanese system never changes, no matter what you do. My feelings of anger toward the system remain strong, even after having left Japan. I keep hearing the same old stories from research-ers working for companies and universities in Japan: The nail that sticks up gets pounded down. The seniority system remains dominant among major institutions.

If you are only interested in being an academic, and don't want to make money, you could stay in Japan. But if you want to become rich and successful, you should move to the States. The reason why I didn't switch to a Japanese institution is because no company or university tried to scout me. Recently, one Japanese university held a committee meeting among professors to discuss hiring me. They voted me out. In Japan, big names are important. I graduated from a not-so-well-known local university and worked for a small company whose name nobody had heard of.

Did you know that with LED-based traffic signal lights, you can save considerable money on electricity and maintenance fees compared with traditional, non-LED signals? While the US, Sweden, and other countries have swiftly adapted LED traffic signals, Japan is very slow in adapting them. In Japan, five major companies monopolize the traffic signal business. But amakudari for ex-members of the National Police Agency ensures that the current traffic signaling system continues. It now costs ¥30,000 per year per signal to maintain. The total cost amounts to several billion yen per prefecture annually. It is obvious that you can save this maintenance expense by switching to LED lights. The only reason this isn't done is to protect vested interests, and amakudari ensures this won't change.

Since the Meiji restoration, Japan has been playing the role of subcontractor to the developed countries in a relationship resembling that between large conglomerates and SMEs [small and medium enterprises] in Japan. Japan has managed to make profits by manufacturing improved products developed by those other countries. Improving products requires a hundred smart brains, but no great genius. Companies prefer to hire smart and cooperative people rather than a genius with a strong personality. In my opinion, the Japanese education system -- including the notorious entrance examination system -- was formed to meet the needs of industry, which are for a hundred smart people instead of a genius, and many obedient workers at average levels. Japan is advanced in the area of optoelectronics, solar batteries, lasers, and LEDs. But these technologies are relatively simple, because they are just improved implementations of basic theories developed in the States. In other words, most of the industrial products made in Japan originated in the States or Europe. Any country can catch up with Japan's manufacturing industry once they put their mind to it and build basic infrastructure. Japan's future depends on whether it can produce new theories and basic technologies. This kind of work requires the spark of genius.

Eliminating college and university entrance examinations is my answer. That way, students would enjoy learning whatever subjects interest them, and the system would foster creative energy and talent. These are essential factors for innovation and venture businesses.

ON VENTURE COMPANIES
Nakamura's heart lies with venture companies; that's where his innovative talent has flourished. He would have joined an American venture company (he received offers from several including large salaries and benefits), but was afraid Nichia would dog him with additional lawsuits if he did. His views on venture companies and their future in Japan are not so optimistic.

The most important factor for innovative research is freedom, not pressure. Venture companies can provide the freedom that big companies cannot. This is true in the States as well. In order to create an environment for innovative research work under limited budgets, facilities, and human resources, it's important to have strong connections with universities.

In the United States, most engineering or science professors work for venture companies as consultants. The Japanese government wants to encourage university professors to start venture companies, but I doubt if they are able to handle it. Neither professors nor students in Japan have been exposed to market competition. I'm not so optimistic about the prospect of Japan catching up with the States in this regard.

My subordinates and I discussed the possibility of going independent after I succeeded in developing the bright blue LED. But we didn't come to any conclusion, because we couldn't figure out how to collect seed money. Even now it is not easy to start up venture business in this country, as it's hard to get funding unless you have solid ties with banks. For an ordinary salaryman, it's too risky to go independent. I wasn't ready to take risks because of my family.

The Japanese system has become too rigid for venture companies to succeed. Small and mid-sized companies have financial difficulty in starting new projects to compete against big companies. Unlike the States, people here don't think of making investment in people and ideas. As a result, most SMEs suffer from shortages of money and talent and have no choice but to work for big companies as subcontractors.

ON FUTURE PLANS
I will return to Japan when I get too old to work, [but not before] since I don't want to continue my research in a country with such a communist streak. Once you're exposed to a country of freedom, you lose interest in going back. I've been working a lot harder [in the US] than I used to in Japan. I work all weekdays and weekends. But I'm very happy to be in the States, because of the greater degree of freedom for my research work.

In four or five years, I'm thinking about getting involved with a new venture company which deals with a new material totally unrelated to my past work. As a professor cannot become CEO, I hope one of my students will head the company ...