Friday, June 17, 2005

Japan in crisis?

A friend of mine, and a guy to whose company my company does business with, stopped by my desk the other day, and we were talking, actually he was waiting for someone more important than me to get off the phone so that he could talk to him (it was, after all, the middle of the day, and he has a job to do, which involves selling stuff to us). We talked about Darylls move to Tata (see my last post), and moved on to other topics, the main one being Japan being passed by in another three or four years, if they don't pull their thumb out. To put this in context, we were talking about China and India, and the incredible growth both of those places are experiencing, and the incredible malaise in Japan.
A friend of his manages a large company that does chip fabrication. They take orders and build chips. Basically he said that the quality of the engineers, and some of the amazing stuff these guys are coming up with are literally two generations ahead of anything currently being produced. Nano-memory chips was one thing he mentioned. The number of engineering graduates in China is something like twenty times that of Japan or the U.S.
My feeling is that in developing countries students are hungry. There is a clear path to success, and the price of failure is poverty, a kind of poverty that those of who grew up in the U.S. have not known since the 30's. Those who have the talent and hunger to get ahead, can. India has something like twenty technical universities of a quality similar to M.I.T., at least in the students it graduates. Japan has a huge amount of saved capital, and has used that capital to build some very competitive export companies, but those company's build a good portion of their products in China, Southeast Asia, Taiwan, Brazil, and other places where the labour is cheaper, higher skilled, and where the local bureaucracy doesn't kill initiative, which is definitely something that does happen here. So, when Japan hollows out, and their best companies find more to like outside than inside Japan, what is going to happen?

I had a talk with a Japanese network engineer who I am aquainted with today. He manages a piece of network that I need for some projects I am doing. The network is based on a technology called an Internet VPN, which basically uses the Internet for a private connection. The advantage is that the Internet is substantially cheaper than a leased line. The disadvantage is that it is less reliable. When I say less reliable, I am speaking in terms of being able to guarantee the speed of a connection. Actually, the Internet is *very* reliable in terms of availability: 100% as a whole, since the whole Internet has not failed, to my knowledge, since probably the early 70's.
I actually have a point here, which I need to get to soon, I understand: We have a reasonable connection, but we have an issue called latency, which means the time it physically takes for data to reach it's destination. It is a reality, and one that we have to live with. My network engineer colleague, though, sees it as completely unacceptable, and would rather not even have the network if it had any chance of imperfection. He is a perfectionist. And I realised: All of these anal people who want things perfect, they are all perfectionists! And there are lots of them in Japan. Tons. For certain things this is probably a good trait, but in the fast-moving business I am in, it is death. There will never be perfection, so the trick is to figure out what level of imperfection is acceptable, and work at achieving that level.
The real irony is that I am a recovered perfectionist, and know the deeply unhappy and depressed road perfectionism leads to, for the simple reason that there is no sane world where perfection is achievable. I'm not sure why it has taken me 12 years to identify this in Japan. Not everyone is a perfectionist by any means, but organisational and social beliefs tend to suggest that they should be: Witness all of the whinging on
2 channel; witness the utter shock and outrage that a jumbo jet blew two tires. No one was killed in the plane accident, not even really hurt, a couple of cases of whiplash. Many of the things that are talked about on 2 channel are just gripes about poor service, about China and Korea's unfairly targetting Japan, as well as a whole slew of mostly complaints, and posts by disgruntled workers, customers, and others. This, it should be pointed out, the most influential and popular web site in Japan.
It is ironic: Japan became successful specifically because of their attention to detail, and their perfectionism. Now, in a more complex world, where there are exponentially more things that can go wrong, these traits, or at least the practises used to support these traits, are crippling Japanese companies and their employee's ability to act, to innovate, and to move ahead.
Take this as an example: You hire
someone to do some work for you. They do a complex piece of work that takes 6 months, including internal testing. When they hand over the work to you, you say 'we would like you to run the test cases for us: We just want to make sure they are accurate." "Alright," says the vendor, "just tell me which ones you would like to run." "All 1900 of them," you answer. "But that would take another 4 months!" said the vendor. "That's right, and we don't intend to pay you until we are done," say you.
This is a real example, actually. Think of the additional cost because of your perfectionism. And think of the additional work, schedule impact, and the rest. It is this kind of stuff that makes my aquaintance so down on Japan. Crazy...


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