November 03, 2015

"The pace of development is glacial."

BBC "Japanese companies generally lag foreign companies by roughly five-to-10 years in adoption of modern IT practices, particularly those specific to the software industry," says Patrick McKenzie, boss of Starfighter, a software company with operations in Tokyo and Chicago. By Michael Fitzpatrick

'It's a curiosity for any observer of a country that developed the world's first contactless payments system; the Bullet train; and the Sony Walkman. You can pay for things with your phone in Japan, but nobody really uses their e-wallets here; ditto for Skype in the office, or other now-ubiquitous cloud storage tools, such as Dropbox. Yet Japan has some of the best internet infrastructure in the world.

'Yoji Otokozawa, president of Tokyo-based IT consultants Interarrows, says Japan Inc. is poor in digital literacy because small businesses, not multinationals, rule the country. "The hub of the matter is that you have to understand how SMEs [small and medium-sized enterprises] dominate the Japanese business landscape," he says.

'SMEs account for 99.7% of Japan's 4.2 million companies, according to Japan's Ministry of Economy, Trade and Industry. So the world's third biggest economy is driven by minor establishments, not the giants everybody knows outside of Japan. These SMEs are often conservative, if not downright Luddite, says Mr Otokozawa. "They usually use postal mail, or fax for their communications. We sometimes receive a fax, written by hand which means such firms don't even use word processing software like Word."

'But even some bigger, modern global firms seem mired in digital backwardness, although finding people willing to go on the record about the phenomenon is difficult in a culture where devotion to one's employer is the norm. "Eventually you accept that a company whose pride is its cutting-edge tech image makes employees use an email service that looks circa 1997," goes a recent anonymous tweet from an employee of a well-known blue chip Japanese technology firm.'

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