TT-758 -- Master Plans to Move Japan into Soft Engineering. E-biz news from Japan.

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

General Edition Sunday, June 01, 2014, Issue No. 758

+++ INDEX

- What's New -- Master Plans to Move Japan into Soft Engineering
- News -- Someone is making money, foreign assets hit a record
- Web Content/Tech Job Vacancies -- PHP Zend engineer
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Camping in Saga, Tansu in Fukui
- News Credits

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+++ WHAT'S NEW

Anyone else get the feeling that the Japanese government is embarking
on more than one ambitious master plan? Most of us are focused on
Abenomics and efforts of the government to devalue the currency while
shifting the tax burden onto the retired, which is providing plenty of
commentary but not so much action. Deeper in the planning rooms of
Kasumigaseki, though, there appear to be other projects going on which
really might change the way people live and work here. We're referring
specifically to Cool Japan, a collection of subsidies, targeted
support activities, and capital fundings, as well as some major new
initiatives in the Science field -- ranging from a significant
increase in budget allocated to the Cabinet Office (the PM's office)
to a classic "Japan Inc" program in regenerative medicine.

With the advent of these two sectoral programs, it appears that the
Japanese government has somewhat accepted the country's inevitable
decline in manufacturing of products, and it is now plotting a future
course based on software/content and soft (tissue) engineering. If
this trend is really happening, it will create all kinds of
opportunities for start-ups both local and inbound, in the arts and
sciences spaces. Everyone from vendors of lab equipment to recruiters
of bilingual designers will see a pick up in business as commercial
spin offs occur. The question of course is whether the government is
capable of coordinating such innovation or whether this will be
another case of wishful thinking and mis-use of public funds. Well, at
least it is better than yet another bridge to nowhere.

We've covered Cool Japan in previous Takes, and hopefully if you
allocate JPY25m in each project subsidy and award that amount to
hundreds of companies a year, then some of the projects proposed will
actually take hold and grow. Japan needs more success stories like
Gumi and Gungho. One big problem, though, is that the subsidies are
only for short term use and on a collaborative basis (with other
companies), meaning that no one is trying to develop deep in-house
capability nor time-consuming best-of-class content and solutions.
This short-termist thinking, caused by the bureaucrats' obsession with
keeping budgets to one-year cycles, is the archilles heel of Japanese
pump-priming efforts.

But that weakness aside, what caught our attention this week was an
announcement in the Nikkei that the government (led by METI) is going
to join forces with companies and universities to develop the
regenerative medicine sector into a major new industrial powerhouse
for Japan. We've mentioned previously how stem cell maestro Shinya
Yamanaka is translating his know-how into profits by spinning off
different techniques and technologies as different companies. A good
example is macular degeneration treatment, which is getting close to
commercialization. In January (TT-739) we reported that the government
has earmarked up to JPY118bn to help him build his new business
empire.

While this activity shows that Japan's favorite Nobel prize winner is
both academically and business gifted, his plans alone will not
support a declining nation economically. Instead the country needs a
whole sector of companies profiting from stem cells. And so it is that
the government has decided to push out a program that will bind in
other groups and share the R&D risks and subsequent spoils around.
This may or may not hurt Yamanaka and his plans, but at least it will
ensure that there will be competition and therefore rapid improvement
in technologies and pricing. The hope seems to be that although other
countries (e.g., China) are moving rapidly into this space as well,
the life-or-death nature of medicine will ensure that the "Made in
Japan" premium can be preserved.

[Continued below...]

------------ Japan Travel Seed Round Funding --------------

www.japantravel.com has become the largest content creator for inbound
travel content in Japan and the second largest for traffic. The Japan
Travel KK company now about to start its first outside round of
funding and invites expressions of interest from qualified early-stage
investors. Per Japanese law, Japan Travel KK will only accept the
first 50 applications and will contact each potential investor
individually to discuss the opportunity further.

Interested parties should contact: terrie@japantravel.com
-----------------------------------------------------------

[...Article continues]

The other interesting thing to see from the announcement last week is
that the government has decided that regenerative medicine can be
translated into manufacturing, not just labs and academia. To make
this happen, the government has to (and appears to be getting ready
to) break down a lot of the barriers that have previously stood in the
way of young Japanese firms that want to break into the regenerative
business. Apparently next year there will be a new organization
formed, which will provide both the investment focus and
cross-discipline awareness needed in the modern medical sector --
things which the current separated Education, Health, and Economy
ministries are incapable of and instead they have been regulatorily
suffocating the sector. Interesting report on these changes from a
budgetary point of view at http://www.nsftokyo.org/rm14-02.pdf.

There is also a very good report on the current blockages to science
start-ups in Japan by Dr. Maki Umemura, which you can find at
http://bit.ly/1m3566q. It points out that the regulatory and financial
barriers are sufficiently high that only one regenerative medicine
company has been able to get its products officially approved and
brought to market so far -- Japan Tissue Engineering, which makes
artificial skin, cartilage, and corneal tissue for lab testing. The
company is still losing scads of money, but it's interesting to see
how fast its new cartilage business is creating sales.

The METI plan involves four consortiums of companies and colleges:
1. Fujifilm and ten other companies, along with Kyoto and Keio
Universities, will focus on cardiac and nerve tissue regeneration.
2. Nikon and eight other companies, along with Osaka University and
four other colleges, will focus on liver and retina regeneration.
3. Taiyo Nippon Sanso and seven other companies will join up with
Tokyo University and others to focus on cartilage regeneration.
4. Clio, Tohoku University, and others will focus on muse cells and
their application in treating heart disease

The cartilage project is looking especially promising from a
commercial point of view, so perhaps it's no wonder that Todai snagged
this piece. It has already been clinically proven that cartilage can
be restored through the administration of stem cells, and given the
extent of the first world's aging population, the potential for
repairing worn hip joints with a series of injections rather than
expensive artificial joints and surgery is highly attractive. Indeed,
a recent study of stem cell treatment for arthritis sufferers
(arthritis being the pain produced by worn cartilage on bone joints)
points out that arthritis costs the US economy about US$120bn a year.

*******************

Next, a piece of news about our sister company, Japan Travel KK. The
company put out a press release last week announcing that it had just
published its 10,000th article, proving that travel writing is a
keeper with the foreign community (the biggest contributors) in Japan.
With its December rebranding, www.japantravel.com is now being
published in 7 languages, with French being turned on mid-May, and is
producing between 20-50 articles per day. That kind of output is great
for SEO, and as a result of some Google love, the site recorded more
than 2.2MM page views for the month of May, up 25% over April. This
puts www.japantravel.com in the No. 2 spot for Japan inbound travel
portals.

Lastly, lest we forget, the nuclear fuel assemblies transfer work at
Fukushima Daiichi Unit 4 reactor storage pool has reached the half way
mark -- and we're all still here to talk about it. TEPCO has said that
it has removed 814 assemblies, and has 539 unused and 180 unused ones
to go. The company is using two secure containers to move the
assemblies in batches out of the spent fuel tank and over to a safer
shared storage location. Although the operation was feared to be
risky, due to stuck assemblies coming apart and the possibility of new
aftershocks, so far, so good. Of course transferring these assemblies
does not represent a particularly notable milestone in the overall
cleanup to-do list, especially when one considers the main work of
dealing with the melted down reactors is still to come. How long will
that clean up take? Hundreds of years perhaps?

...The information janitors/

***------------------------****-------------------------***

----------------- Tour Operator in Japan- -----------------

www.japantravel.com is now Japan's largest inbound travel portal by
content volume and second largest for traffic, and continues to grow
rapidly. The company is now soliciting interest from travel operators
around Japan who would like to become charter members of our new
tours-and-travel-experiences marketplace, due to open soon. Unlike our
existing advertising-based media offerings, companies in the
marketplace will do business with the Japantravel.com portal on a
commission basis. Preference will be given to those operators able to
create unique and visually attractive travel experiences to our
250,000+ unique visitors a month.

For more information, contact info@japantravel.com.

www.japantravel.com
-----------------------------------------------------------

***------------------------****-------------------------***

+++ NEWS

- Self-provisioned cloud services from NTT
- Adobe Flash vulnerability opens financial data to attack
- Retail sales data show tax impact is severe
- Someone is making money, foreign assets hit a record
- Butter imports to rise

=> Self-provisioned cloud services from NTT

NTT Communications has announced that it has launched the first
user-provisioned instant-on cloud network service. The new service
allows users to modify their cloud network resources on the fly, as
they launch new projects or experience rapid uptakes on resource
utilization. The service is built on Virtela technology acquired when
NTT bought the company in January 2014 for approximately US$525m.
***Ed: Relatively fast work by NTT to adopt and start reselling the
Virtela platform and capabilities.** (Source: TT commentary from
businesswire.com, May 29, 2014)

http://bit.ly/1rxpwwR

=> Adobe Flash vulnerability opens financial data to attack

There has been a massive attack on Japanese web users running Adobe
Flash software on their PCs. The attack sought access to PC user data
by redirecting users from legitimate sites to rogue copies that then
tried to receive payment information. Over 14,000 instances of the
attack were recorded by Symantec and they said that 94% of instances
were in Japan. The sites that were compromised and caused redirection
included a travel agency, a blog service, and a video sharing site.
***Ed: The fact is that Japanese awareness of cybersecurity is
spectacularly low -- at all three levels: the users, who operate in a
normally comfortably insular environment; the service providers, who
are perpetually short of funds and engineering resources; and the
authorities, who still find it difficult to grasp that it is not just
"things" which get stolen. Japan had great success over the promotion
of the Privacy Mark some years ago among online service providers. It
now needs a similar initiative for data security.** (Source: TT
commentary from pcworld.com, May 29, 2014)

http://bit.ly/1ogVQhL

=> Retail sales data show tax impact is severe

While we are of the opinion that the set back to retail sales caused
by the increase in consumption tax is only temporary, the question
that most people are asking is "how long is 'temporary'?" It appears
that for the time being the impact of the increased consumption tax is
more than most experts counted on. Retail sales in April, the first
full month since the increase, sank 13.7% over March (but only 4.4%
down over the same period in 2013), the biggest fall since data was
initially recorded in 2002 but understandable given the big ramp up in
spending before the tax took effect. The fall was most notable in
consumer durables such as cars and home electronics. While data for
May is not yet available, preliminary numbers seem to suggest that
sales down 20% over the same period last year -- something which is
more worrying. (Source: TT commentary from wsj.com, May 28, 2014)

http://on.wsj.com/1jJqNHa

=> Someone is making money, foreign assets hit a record

While the average small- to medium-sized domestic company is still
under a lot of economic pressure, the bigger firms, and particularly
those exporting, are socking away tons of cash, as is the Japanese
government and its various financial institutions. Collectively,
Japan's net external assets hit a record JPY325trn at the end of 2013,
causing Japan to be the largest creditor nation for the 23rd year in a
row. Japan's net external assets remain 150% higher than those of
China, which holds JPY207trn in assets. (Source: TT commentary from
reuters.com, May 26, 2014)

http://reut.rs/1u46GuZ

=> Butter imports to rise

The Ministry of Agriculture has decided that it will allow the import
of an extra 7,000 tons of frozen butter for commercial use, primarily
for Christmas cakes, due to the poor production figures by Japan's
domestic dairy industry last year. Production suffered due to an
excessively hot summer in 2013 as well as a notable fall in the number
of dairy farmers because of retirements. Japan has a trade agreement
through the WTO to import 137,000 tons of butter, and produces 72,000
tons itself domestically. ***Ed: If you want to see the ugly
self-interest of Japan's agriculture sector, look no further than
butter, a sector which is highly protected even though there doesn't
seem to be any real logic as to why. Butter is subject to both volume
limits and to an insane tax rate of 35% PLUS JPY1,159/kilo, which for
a dairy producing country like Australia would mean an effective tax
rate of about 250%.** (Source: TT commentary from capitalpress.com,
May 27, 2014)

http://bit.ly/T3puxc

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

***------------------------****-------------------------***

+++ WEB CONTENT/TECH VACANCIES

=> Are you in web content, sales, or engineering- If so, this section
is for you.

** HIGHLIGHTED POSITION

- Senior PHP Zend Software Engineer

If you have more than 5 years professional experience developing web
and mobile applications and know PHP Zend to an advanced level, then
we are interested in talking to you. MetroWorks seeks a senior
developer or someone with advanced development and conceptual skills,
to work on its Tokyo team. We will accept suitable applicants from any
location and provide visa and moving assistance if required.
MetroWorks is delivering crowdsourced applications to web portal
partners in a number of sectors, and as this business expands we need
skilled developers to assist in creating new tools and functionality
on our core ACQ platform. Salary will depend on experience, but will
be competitive with other development shops in Japan. Friendly team
and working environment, based in the center of Roppongi, Tokyo.
Please send your resume to jobs@metroworks.co.jp.

** OTHER MEDIA POSITIONS VACANT

- Bilingual account manager for major tourism portal
(www.japantourist.jp), JPY3M - JPY5M
- Bilingual sales trainee for web media properties, JPY2.5M-JPY3M +
10% commission

Interested individuals may e-mail resumes to: jobs@metroworks.co.jp.

-----------------------------------------------------------

***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------------ ICA Event - June 19th ------------------

Speaker: Jason Hurst, Representative Director, Tokyo Japan,
International Solution Group
Title: "CONGRATULATIONS! 2013 Japanese Taxes are finished, we made it!"

Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, June 19th, 2014
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No
sign ups at the door!!!!!!!
RSVP: By 4pm on Friday 13th June 2014
Venue is The Foreign Correspondents' Club of Japan

http://www.fccj.or.jp/about/access.html
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***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

=> No corrections or feedback this week.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

=> Ochozu Falls Campsite, Saga
Pitch your tent along a forest river trail

Ochozu Falls is the main attraction on this hiking trail just outside
of the city of Tosu in Saga, and is an easy but scenic walk through
the woods for a family outing. But what is better is that if you're
wanting to spend the day leisurely looking around, or want to spend a
night in the forest without traveling far from the city, the
campground here is a good choice.

It's a simple place, nothing fancy as it is maintained by the city --
but quite beautiful. Tent sites include raised wooden platforms above
the uneven forest floor. There are bathrooms, lights, and cooking
areas. Both day camping (10-5 pm) and overnight camping (3 pm to 10
am) are allowed, although by reservation only (please call the day
before or on Friday if staying during the weekend). The campsite is
available for use from mid-July through until the end of August.

http://bit.ly/1kefGMh

=> Echizen traditional tansu craft, Fukui
A small city holding some big treasures

First recorded in the Genroku era of the Edo period, tansu are a form
of traditional heavy but movable cabinetry that is indigenous to
Japan. Tansuyas (tansu craftsmen) would utilize both hard and
softwoods to fashion these amazing cabinets. Antique tansus are highly
prized by collectors, and can be worth astronomical sums. Due to that
fact, many tansu workshops now produce imitation pieces to satisfy
demand, using the same kind of wood and metallic fittings and giving
their products such an authentic look that often the only way to tell
them apart is through careful documentation and personal physical
examination by experts.

Echizen city is famous for its tansu history, and I had the
opportunity to visit an expert in the preservation and refurbishment
of antique tansus, Mr Naito Yoshio. A collector of many tansu pieces
around Echizen city and in Japan, his shop houses a huge collection of
these cabinets, ranging from pieces used as wardrobes, storage for
kimonos, and even one which features both a climbing apparatus and
storage space at the same time. Mr Yoshio explained that one of the
ways to tell whether a tansu was made in Echizen city is to look at
its metallic fittings. A real Echizen product has the city's signature
of two hearts facing sideways embossed on it. His impressive
collection of antique cabinets all bear this important identifier,
making his collection worth a fortune.

http://bit.ly/1jJr5ho

***------------------------****-------------------------***

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+++ ABOUT US

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Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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