<<<< Japan High-Tech Update>>>>
A monthly review of the latest developments in Japan’s IT, telecom, and life sciences sectors

July 2005 - Volume VIII, Issue VII

Triangle Technologies is the leading Japan Israel business development and investment advisory firm
www.triangletech.com

Dan's Desk

From Triangle's CEO

Hello everybody!

I talked the other day with Makoto (Mac) Naito, a close friend of mine for many years, a Triangle Technologies advisor, and former executive at Sony, COO of Akamai Japan, CEO of Candle Software Japan, and currently an executive in the software division of IBM Japan (following IBM's purchase of Candle). I asked Mac to give his perspective and advice re: high tech companies wishing to establish business in Japan.

"Don't think just of the short time financial return but of the longer term relationship of working together. Think globally act locally. Globally means everyone can communicate and share and work together. Locally means to be a citizen of the country you are in, in this case Japan. If you want a big success, you need to think of the win-win, joint success and joint work. Even for small, short-term-cash-oriented start ups, they can set up a joint venture, or enter into a co-licensing agreement.

"IP is one of the big assets of the small company, if you want to work in certain markets in Japan you cannot do it by yourself, the market can only be developed by the Japanese company, so the source code should be shared. I do not see any risk of the source code being stolen. On the contrary, the Japanese customers and partners may give you ideas for new features for free. It is natural to hide the IP, but big portion of the Japanese market will not be open if you keep closed.

"I think that majority of Americans are quite domestic in outlook and attitude, and they think the US is the center of the world. They appear arrogant at times. America has the beauty of democracy and openness, but this is not a global standard. Europeans have a much deeper understanding of that.

"For the first time executive visit to Japan, Japanese counterparts can understand US culture - there is no need to imitate the Japanese customs. You can behave as is natural to you, but you still need a "spirit" to understand the global culture, and this will lead to mutual respect, and success.

"My advice to US execs in the early stages of penetrating Japan - visit the end customer first, not the channel partner. There is a need to grasp how the service or technology is used at the end. Sometimes you will see customers using your product differently in order to add value. You also will need to understand the importance of quality or commitment to service - this is so great in Japan."

Good luck out there!

Dan

***TRIANGLE TECHNOLOGIES NEWS***

Not this time

ISRAEL-JAPAN NEWS

No news.

***BUSINESS NEWS***

+SALARYMAN INCOME IS DOWN

(Ministry of Internal Affairs and Communications, July 1st) - Statistics Bureau has published that the average May 2005 monthly income per household for salarymen dropped to JPY438,629, a decline of 1.9% in real terms. As a result, expenditure on living costs also dropped, about 2%, to JPY317,010 per month. For more details take a look at www.stat.go.jp/english/data/kakei/156b.htm

+INBOUND FOREIGN INVESTMENT HITS RECORD

(financialexpress.com, Jun 30)Finance Ministry data shows that foreign direct investment into Japan hit a record high this fiscal year, with JPY4.03trn (US$36.7bn) flowing into the country. This was the first time that inbound investment has surpassed outbound investment since the early 1950's. The inflow of funds is mainly a result of US-led M&As as well as property and other asset acquisitions.

+BANKRUPTCIES RISE AGAIN

(mercurynews.com, Jul 14th)- Although the economy is improving, according to the BoJ, bankruptcies still rose 29.3% from May to June, with 794 companies going bust. The Teikoku Databank reckons that the increase is mainly from the construction and retail industries, reflecting the ongoing lack of consumer spending as well as over-confidence and over-expansion. Total debts from the bankruptcies were 24.8% lower, however, at JPY439.5bn ($3.9bn).

+8.63 MIL CASES OF PERSONAL DATA LOSS FOUND

(Kyodo, July 23rd) - A total of 8.63 million cases of missing personal data have been found at 424 financial institutions in Japan, the Financial Services Agency said .The 424 financial institutions account for about 40% of the 1,069 financial institutions subject to the Financial Services Agency's call for checks on the management of customer information.

+DATA LEAKAGE AT RAKYTEN

(Kyodo, July 23rd) - Personal data of 123 people who shopped at Japan's largest online shopping mall Rakuten Ichiba were leaked. According to Rakuten Inc, the leaked data included credit card numbers, names, postal addresses, phone numbers, birth dates and items they bought at AMC, one of the stores in the Internet mall that sells imported merchandise. So far, there have been no reports of illegal use of credit cards.

***TECHNOLOGY NEWS***

+CELL PHONE FIRMS DEVISE BOOSTER FOR UNDERGROUND SERVICES

(Kyodo , June 23)-Four mobile phone operators jointly developed a booster that makes their services possible underground. NTT DoCoMo, KDDI, Vodafone KK and Tu-Ka Cellular Tokyo Inc currently have separate boosters for underground cellphone communication. The joint booster, which is 380 by 250 by 300 millimeters and weighs 26 kilograms, sends radio waves from an underground antenna to an aboveground antenna and vice versa. It requires some 700,000 yen for installation in underground restaurants and other facilities.

+ FUEL GAS GENERATOR THAT USES SEWAGE SLUDGE

(JCN, July 26) - Kobelco Eco Solutions, a Kobe Steel group company has developed a fuel gas generator in collaboration with the city government of Kobe. The new device can produce fuel gas from sewage sludge, namely methane gas generated through the sewage treatment process. Since last year gas was supplied to buses and trash collector trucks running in Kobe City on a trial basis.

+PRIVACY PRESERVING AUTHENTICATION SCHEME AGAINST INFORMATION LEAKS

(JCN Newswire, July 22) - NEC Corporation has developed the world's most efficient privacy preserving authentication scheme (or group signature scheme - A technology that enables a user to prove that he/she belongs to a group without identifying himself; with special authority (administrator) that can identify actual signers in case of dispute) NEC's authentication scheme realizes the world's shortest authentication data length through the development of a new, original algorithm.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+NEW ALLERGY-TESTING BIOCHIP

(nikkei.co.jp, Jul 8)- Riken, previously the Institute of Physical and Chemical Research, has announced that it has developed a blood analysis chip that quickly test up to 50 allergy causes at the same time. The tests, which usually take about 2-3 days each, can now be performed simultaneously in about 20 minutes. Riken's breakthrough has been to develop a resin polymer which can bind multiple types of allergy-causing proteins on to one substrate, and compare each protein with the blood sample from the patient.

+NUTRITIONAL SUPPLEMENTS

(Japan Inc., July 17th) - Consultants Paul Yamaguchi & Associates say that Japan is now the largest per capita consumer of nutritional supplements and functional foods -- $166 versus $136 for the USA, and $92 for Europe. Certainly, those in the health food retail industry are enjoying the results, with web site Kenko.com getting 100,000 visits a day, and Takara Bio's mushroom business expected to jump 54% in sales this year.

+HANGOVER ENZYME IDENTIFIED

(www.rednova.com via Japan Inc., Jul 14, 2005) Yokoyama and Ishii, researchers at the Mitsukoshi Health and Welfare Foundation claim to have identified an enzyme which is inactive in 45% of Japanese and which through its absence causes hangovers. The enzyme is aldehyde dehydrogenase (ALDH2), which normally eliminates alcohol-induced acetaldehyde levels in the bloodstream. Apparently a mutant form of the enzyme, ALDH2*2 is present in many Japanese, and cannot process acetaldehyde thereby leaving the toxin in the bloodstream long after drinking. The researchers also found that people with the mutant enzyme can improve their tolerance for alcohol by continued heavy drinking!

+COSMO OIL TO COMMERCIALIZE HAIR GROWTH TONIC

(Kyodo, July 24th) - Cosmo Oil Co and a group of researchers they are jointly working to commercialize a hair growth tonic made of a type of amino acid. Their prospective product would contain 5-aminolevulinic acid, which the oil distributor has sold as a plant fertilizer since 1999. The company said combining the amino acid, which can be found in plants and animals, with iron and other substances, can increase its effectiveness as a hair-growth catalyst.