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November 2004 - Volume VII, Issue XI

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

Dan's Desk

From Triangle's CEO

Trainspotting - December, 2004

Okay, I confess!! I am a social psychologist. More than an entrepreneur, more than a businessman, more than a (former) venture capitalist. A Social Psychologist. Not a closet social psychologist, but a real, bona fide, true believing, card carrying, social psychologist. Now that it is out, I feel much better. In fact, I have 2 graduate degrees in social psychology. Social psychology is not just an academic discipline or a profession; it is a way of life and a way of thinking. A weltanschauung (hah! Impressive, huh? Look it up. http://dictionary.reference.com/search?q=weltanschauung .) At the very core of social psychology is the belief that human behavior can only be understood, predicted, and changed by understanding and intervening in how individuals are shaped by and interact with situations, the most pervasive of which are composed of other people. For example, you are more likely to be friendly if you are sitting next to a person at a 90 degree angle, than if you are sitting across the table from the person. Or if someone jumps up and yells at you, all else being equal, you are more likely to be/become an unfriendly person, and by the way, your assailant will view you as unfriendly as well, if not before, then certainly after the attack. You deserved it. From 1976-1981 at Harvard I studied these interactions at the feet of one of the world's great social psychologists, the late Robert Freed Bales http://www.symlog.com/internet/what_is_symlog/what_is_symlog-01a.htm who sadly died this year.

In Japan, people are orderly, considerate, and in general what we (that is, we "social psychologists", you know, the guys with the weltanshauung) call "other-directed", to an extreme. A lovely little manifestation - when people leave an elevator in Japan, it is common for them to press the "close door" button as they get off at their floor. People (sometimes beautiful people) wear ugly white surgical masks in order not to infect other people with their cold germs. Trains are also great places to see this. In all the 1000's of kilometers I have ridden on Japanese trains, only once did I encounter a long haired, ear-ringed, red-sneakered, baggy-pantsed teenager playing obnoxious loud music that you could hear through his earphones, and even in this case, someone got up and asked him to cool it, and instead of whipping out his knife, he apologized and turned down the music. Only twice I have seen people eating on trains (once it was a foreigner). People move to the inner part of the train to allow others to board. I have often thought that the other-directedness of Japanese society drives HMI (human machine interface) design, it is so incredibly user friendly. The semiotics (there I go again - semiotics is a philosophy of signs) is fabulous. You just can't get lost in a subway in Tokyo, these guys really know what makes it easy for millions of people to get around. And the trains have great displays, clear descriptions of where you are, they are designed to hold lots of people yet still optimize the numbers of people who can sit down.

I took a train in Israel 2 days ago, it had been a long time. With the Japan train experience so ingrained in my mind, I was immediately struck by how user-hostile the Israel train experience was, even though we are talking about a modern, double-decked, clean and colorful, carpeted and upholstered train that required a huge investment and a source of pride to the train authority. The user unfriendliness started at the entrance to the train station where there were only two machines for buying tickets. Of course, there was a long line of impatient people afraid of missing their train. The machines themselves are huge, about 3 times the size of similar more effective machines in Japan. At the turnstile, the tickets could only be inserted in one direction, again causing delays. And they were processed slowly, causing the passenger to stop and wait. In Japan, the ticket goes in one side of the turnstile and comes out the other side at a speed that allows a person to keep walking at a fast pace. Once inside, I looked for a sign informing me which of the trains stopped at the platform was travelling north, and which was going south. There was no sign (the display monitors were all facing in the opposite direction so I had to move around to see). Again, I had to stop, look around, and figure things out.

In Japan, there are floor markings where the door of the train will open, and where to stand to let disembarking passengers get out. In Israel, there is a free-for-all, and the faces of the disembarking passengers reflecting a mix of anger and panic at the stampeded of embarking passengers. Inside the train, the two-facing-two seating is designed for long intercity trips with limited numbers of passengers, not short, commuter runs for the masses travelling a few stops. The passengers frequently put their bags on the empty seat next to them, making it uncomfortable for alighting passengers to sit down (there is almost no space in the baggage racks to put a bag or a briefcase - the roof of the train is curved). And the 2x2 seating encourages people to put their feet up when the opposite seat is empty, or to keep it empty - why not?

In Japan, there is a "manner" button on mobile phones, so when passengers see the signs on trains not to use their mobile phones, they press the "manner" button which turns off the ringer and turns on the message storage. On Israeli trains, everyone is talking on their mobile, although this is getting better.

So, are Israelis aggressive, inconsiderate, noisy, and individualistic, whereas Japanese are quiet, polite, thoughtful, and cooperative? Or are Japanese trains (and other institutions) conducive to such behaviors? Or, are the designers of Japanese trains (institutions) unconsciously promulgating a view of society in which people should be cooperative, quiet, and considerate? And the Israeli "designers", the opposite?

Anyway, thanks for your patience in this long Dan's Desk, and good luck.

Dan

***TRIANGLE TECHNOLOGIES NEWS***

No ready to published news during November. We hope to get the green light to publish one or two over December.

ISRAEL-JAPAN NEWS

+ISRAEL IS ANNOUNCED AS A SAFER PLACE BY THE JAPANESE GOVERNMENT

The Japanese foreign affairs ministry, known as “Gaimusho”, updated the Israeli counterparts that the Japanese visitors to Israel will receive the following recommendation:

The areas around Judea, Samaria, Gaza-Strip, Jerusalem and the Lebanese border remain as areas to which Japanese are recommended not to enter.

All other areas are “upgraded” to level-two which means that the Gaimushu recommends visitors to consider whether visiting there is important.

Triangle’s people who had meetings on Friday December 3rd noticed that Japanese executives read about it and indicated that it is an important change.

***BUSINESS NEWS***

+TOYOTA TO BEGIN VEHICLE PRODUCTION IN RUSSIA IN 2006

(Kyodo, November 27) - Toyota Motor Corp intends to build a vehicle factory in St Petersburg that will probably start production in 2006. Toyota, which would be the first Japanese automaker to make vehicles in Russia, is considering turning out tens of thousands of passenger cars per year such as Corolla small passenger cars.

+DOCOMO TO ABOLISH 2ND-GENERATION SERVICES BY 2012

(Kyodo, November 26) NTT DoCoMo Inc will stop offering its second-generation cell phone services by 2012, President Masao Nakamura said. The plan will affect some 40 million users of the company's "mova" second-generation handsets, accounting for 85% of the company's cell phone users, forcing many to switch to the third-generation services by 2012.

+MACHINE TOOL ORDERS HIT 7-YEAR HIGH

(Kyodo, November 25) Japan's machine tool orders in the first 10 months of this year exceeded 1 trillion yen for the first time in seven years on the strength of robust global demand for vehicles and digital home appliances, an industry body said. The January-October orders expanded 44.3% from the same period a year earlier to 1,006.1 billion yen, the highest since 1,130.6 billion yen in the same period of 1997.

+IRAN WANTS CHINA TO REPLACE JAPAN AS TOP OIL IMPORTER

(JST, November 8) — Iranian Oil Minister Bijan Namdar Zanganeh said that the Islamic republic wants China to replace Japan as its biggest importer of oil and gas. "Japan is our No. 1 energy importer due to historical reasons, but we would like to give preference to exports to China," Zanganeh was quoted as saying the China Business Weekly magazine.

***GENERAL TECHNOLOGY NEWS***

+HITACHI DEVELOPS NEW BUILDING SECURITY VIDEO SURVEILLANCE SYSTEM

(JCNN, November 25) - Hitachi has unveiled its latest security surveillance system that can automatically distinguish and track individuals based on the color of their clothes captured with surveillance video cameras. The new technology eliminates a good deal of tiresome and time consuming personal authentication procedures widely used at corporate buildings.

+TOYOTA, DAIHATSU DEVELOP ECO-FRIENDLY PAINT

(Kyodo, November 4) Toyota Motor Corp and its affiliate Daihatsu Motor Co said they have developed a new environment-friendly water painting technology in collaboration with Kansai Paint Co. The technology will be able to simultaneously reduce emissions of volatile organic compounds and carbon dioxide by 70 percent and 15 percent, respectively, the two automakers said.

+NEW TECHNOLOGY CUTS NANOTUBES COST BY 90%

(nikkei.co.jp, Nov 19)Japan's National Institute of Advanced Industrial Science and Technology (AIST) has announced a new technique for growing carbon nanotubes of high purity both faster and much cheaper than existing techniques. Apparently the organization has figured out how to gasify and deposit the nanotube materials at high temperature, creating nanotubes on substrates up to 3,000 times quicker than now, and for less than 1% of the current cost of JPY100,000/gram.

+UNIVERSITY SPIN-OFFS TO TOP 1,000

(nikkei.co.jp, Nov 5)According to surveys by the universities of Tsukuba and Yokohama, by the end of FY2004 (ending March 31, 2005), there will be over 1,000 start-up companies founded by researchers from institutions across the country. 115 companies having been set up in just the last 6 months. Waseda led the way, with 65 new companies, followed by 46 at Osaka University and 43 at Keio University. Biotech and Life Sciences are becoming more popular, and barely trail IT as the leading business category.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+FUJITSU TO OPEN WORLD'S FASTEST DNA DATABASE

(Kyodo, November 25) Fujitsu Ltd and the National Institute of Genetics have developed a DNA database Fujitsu claims has the world's fastest search function, and will open it later this year. The database has been built with the use of Fujitsu's Shunsaku database engine and is an upgraded version of the DNA Databank of Japan operated in the genetic institute in Mishima, Shizuoka Prefecture.

+KAO CONFIRMS ENHANCED CHOLESTEROL-LOWERING EFFECTS OF PLANT STEROL-ENRICHED DIACYLGLYCEROL OIL

(JCNN, November 25) - Kao Corporation's Health Care Products Research Laboratories has announced the results of a study on plant sterol-enriched diacylglycerol oil. The study confirmed that by replacing conventional cooking oil for home use with diacylglycerol (DAG) oil enriched with 4% plant sterols (PS/DAG), blood cholesterol levels of hypercholesterolemic patients taking pravastatin further decreased without increasing pravastatin dosage. Study results were reported at the 77th Annual Scientific Session of the American Heart Association (AHA) held from November 7 to 10, 2004, in New Orleans, U.S., as a joint study report conducted by the Mitsukoshi Health and Welfare Foundation, the National Defense Medical College, Nippon Medical School Chiba Hokusoh Hospital and Nikko Memorial Hospital.

+NEW HYDROPONICS SYSTEM

(nikkei.co.jp, Nov 26) Mebiol, a start-up using Waseda University technology, has created a new hydroponic system which uses polymer film as a base media to grow the plants on. Apparently, using the system, Mebiol can produce red-leaf lettuce and cherry tomatoes just as nutritious as those grown in soil, but with about twice the sugar content for the tomatoes and up to 16 times the sugar content for the lettuce. The plants don't actually penetrate the media, but rather grow along the top, drawing nutrients from the surface. Mebiol says that the system reduces bacteria and thus plant diseases. The company plans to commercialize the new method by 2007.

+DEMOGRAPHIC TRENDS AND THEIR CONSEQUENCES

(The Economist, November 11) The projections vary, but most experts believe that Japan's population, now 127.6m and barely growing, will peak some time between next year and 2007, and then begin a long, steady slide that will last several decades at least. Japan's Institute of Population and Social Security Research (IPSS) forecasts that the population will fall to somewhere between 92m and 108m by mid-century.
Even though Japanese lifespans continue to lengthen, the country will not have enough young people to maintain its population. The fertility rate (the number of children per woman during her lifetime) fell below 1.3 last year, down from 3.65 in 1950. Although Japan's bureaucrats have launched a drive to promote childbirth—including tax breaks and rules helping parents take more leave—the fertility rate is expected to stay low for at least a few decades. By 2050 the proportion of children under 15 will fall to less than 11% of the population (see chart), from 16% in 1995. The average Japanese will then be over 53 years old, 12 years older than now.
This will affect everything from work and family life to foreign policy and national security. Japan will probably have to let more workers immigrate, though public unease will no doubt lead it to delay and minimise this shift as much as possible. A smaller population may also mean slower economic growth; that will take its toll on spending categories, like defence, whose clout depends more on total economic weight than on income per person.
One obvious consequence will be pressure on the social-insurance system, including health care and pensions, as the working-age population shrinks dramatically. The IPSS reckons that there will be 31m fewer Japanese between 15 and 64 years old in 2050, and that this group will shrink from two-thirds of the population now to just over half. The ruling Liberal Democratic Party lost ground in the elections for the upper house this summer, partly by forcing through benefit cuts and higher premiums on pensions. But more will have to follow.