» Archive for March, 2001

Book Review: Can Japan Compete?

Friday, March 16th, 2001 by Steven Morgan Friedman

Can Japan Compete?
Michael E. Porter, Hirotaka Takeuchi, and Mariko Sakakibara

By Daniel Gabai

Can Japan Compete?, by Harvard Business School Professor Michael Porter and his colleagues, Hirotaka Takeuchi and Mariko Sakakibara, seeks to explain the reasons for the market failure that Japan experienced in the mid-1990s.  The book analyzes Japan’s economic system from the end of World War 2 until the present.  It attempts to explain how the Japanese model – an economic system that was historically more egalitarian and more efficient than the capitalism of the West – did not actually achieve success through its practices of total quality, continuous improvement, and “just-in-time” inventory.  Rather, these practices, coupled with Japan’s “government-as-active-economic-director”, were responsible for many Japanese companies reaching a point of zero-sum-competition, where no participants were able to achieve profitability.

Can Japan Compete? shows how the Japanese government has had a surprisingly small role in many of its nation’s most internationally competitive industries: cars, video recorders, robotics, cameras, and video games.  Conversely, the book shows how there was extensive government intervention in the uncompetitive industries of chemicals, software, aircraft, and financial services.

Porter and company attempt to illustrate how the United States learned the wrong lessons from Japan about government policy.  Through its thorough review of the Japanese economic system the book offers a word of caution to American corporations, so they perhaps can avoid a similar fate of economic decline.  Can Japan Compete? concludes with Japan’s attempts to fix its economic mistakes, and thus ensure a successful position in future economic markets.

Can Japan Compete? is a well argued and successful plea to businessmen everywhere not to make the same managerial and structural mistakes that were made by Japanese businessmen.  Additionally, it proves to be a thought provoking and enjoyable history of the world’s second largest economy.

You can order this book on line right now.

The Next Big Thing

Thursday, March 1st, 2001 by Jonathan Spira

It’s a bird.  It’s a plane.  It’s the latest and most amazing.

It is truly comforting to imagine that one’s work will last throughout the generations.  However, in a world where “The Next Big Thing” of one day is relegated to a cold, dank basement by the time the next “Next Big Thing” is announced the following week, it is hard to discern scientific advancement from a flight of fancy.

This is especially true for those who labor in the digital economy.  Here, the latest thing eclipses the newest almost instantaneously.

There are some industries where the phrase “tried and true” stands for something far more important than “new and improved.”  Take clocks, for instance.  Despite the proliferation of digital timepieces, there haven’t been major changes in clock technology for at least 300 years.  But the clock industry spawned other important businesses; one of the most famous makers of clocks was International Time Recording, one of three companies merged together in 1911 to form the Computing Tabulating Recording Company, which changed its name to International Business Machines in 1924.

Recently, Dean Kamen’s mysterious new invention – code-named “Ginger” and commonly known as “IT” – became the titleholder of “The Next Big Thing.”  Is it an antigravity machine? A new energy source?  An extraordinary amount of hyperbole?  The media made much ado about a device that has yet to be unveiled to the general public.

This imaginative exercise led me to wonder, What really might be The Next Big Thing, or “TNBT”?  So I conducted an unscientific survey of what others proclaim to be TNBT.  Witness:

PC Magazine [Feb. 6, 2001] proclaims the Samsung SPH-X2000, a palm-size cellular handset that lets users watch streaming video content, to be TNBT.  In December 2000, the Pittsburgh Post-Gazette promises that “interactive clothing” will be TNBT.  At the International Housewares show, Digital Cookware’s programmable skillet – the pan’s removable control module regulates temperature, beeping when the preset temperature is reached or the food is overcooking – was proclaimed to be TNBT.   Mazda’s new deployment of “suicide doors” on its four-door RX-8 was hailed as TNBT at the Detroit Auto Show.  And British shoe designer Oliver Sweeny, who says “You’ve got to make it modern,” was also hailed as TNBT.

I have my own list of TSTBTNBTBNWs (Things Supposed to Be the Next Big Thing but Never Were): free Internet access;  push technology; Y2K; Priceline; artificial intelligence; advertising-supported content; and, according to the NASDAQ, anything Internet.

Clearly, there are some brilliant and innovative products coming down the pike.  With luck, none of these will be encumbered with the TNBT label, and they might even escape the flash-in-a-(digital)-pan syndrome.  One potential example is mobile access to the Internet, with voice navigation and speech-to-text input.  (Clearly, the concept of gluing a keyboard onto a phone is proving unsuccessful.)

There is a growing belief that the tech world will split into two camps: One believes that The Next Big Thing is PC-centric, one believes that it’s Net-centric.  Players on both sides have begun to emerge, proclaiming that theirs is TNBT.

But don’t worry about all that.  I can promise you this: The Next Big Thing is really just around the corner.

Jonathan B. Spira is CEO and Chief Analyst at Basex.