JIN-151 -- Nakatani and Japan's ivory towers

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J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the week's business and technology news
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Issue No. 151
Wednesday, October 3, 2001
Tokyo

CONTENTS

Viewpoint: Nakatani and Japan's ivory towers
Noteworthy news
- Roger Boisvert killed in Los Angeles robbery
- Ripple effect: IPO blues in Japan since Sept. 11
- Ripple effect 2: Forecasts turn decidedly bleaker
Events

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VIEWPOINT: Nakatani and Japan's Ivory Towers

Remember back in 1999 when Iwao Nakatani resigned from Hitotsubashi
University because the university wouldn't let him sit on the Sony
board? His resignation sparked change, some say, and as of April 2000
professors at national universities were allowed to take part in
private enterprises. (We covered this and other changes in the
academic world in our August 2001 issue. See URL below.)

Well, Nakatani's fight with Japan's conservative academic world
didn't stop there. He has since become the president of Tama
University and opened a Renaissance Center in Tokyo's Shibuya
district that connects with SunBridge's Venture Habitat. That means
his students will be mingling with software start-ups, venture
capitalists and other industry folk. No ivory tower here. There's
even a rumor floating around that the center's MBA degrees will stand
for master's of business alliances -- not administration -- to better
reflect the skills needed in today's business world.

The center, which opened on October 1, will kick off with a 12-week
course analyzing Prime Minister Junichiro Koizumi's reforms. There's
also a program for entrepreneurs in the works.

We say, good for Nakatani-san. Japan's academia has bent over
backwards to stress the benefits of research without a profit motive,
and that certainly has its place. But Japan's lesser known
universities -- including Tama -- are about to get a slap in the face
from reality. Japan is aging faster than any other industrially
developed country, and there will soon be too few students to sustain
the country's 1,000-plus universities and junior colleges. The junior
colleges are already in trouble, but enrollment at the 4-year
universities -- more than 2.7 million students as of 2001 -- hasn't
peaked yet. When it does and the inevitable decline starts, the
second-tier schools that have had the foresight to innovate and
experiment with different models will survive. The others may end up
being turned into retirement homes.

Tama University plans to use its Renaissance Center to get more
people in mid-career to enroll in its courses. Nakatani's approach is
not only practical; it's interesting. It almost makes you want to go
back to school.

-- Bruce Rutledge

Tama University's Renaissance Center website:
http://renaissance.tama.ac.jp/

Japan Information Network educational statistics:
http://jin.jcic.or.jp/stat/category_16.html

Report from August issue of J@pan Inc. on technology licensing
offices:
http://www.japaninc.com/mag/comp/2001/08/aug01_investor_tlo2.html

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NOTEWORTHY NEWS
(Long URLs may break across two lines.)

** Roger Boisvert killed in Los Angeles robbery

We have some very sad news to report. According to CTR Ventures, a
Tokyo-based venture capital company, its founder Roger Boisvert was
shot and killed in a robbery in Los Angeles in the early hours of
Sunday morning. It seems that someone approached Boisvert while he
was driving, pointed a gun at him, demanded his money and cell phone,
then shot him. The L.A. police say he died instantly.

Boisvert, a native of St. Catherine's in Ontario, Canada, had spent
20 years in Japan. He is best known for founding Internet provider
Global OnLine, which he sold to Exodus in 1999. He shared the first
cover of J@pan Inc. with Rakuten's Hiroshi Mikitani back in November
1999.

Later, Boisvert formed CTR Ventures. He was in L.A. to meet with
other venture capitalists and entrepreneurs.

Boisvert, who was 50, leaves behind his wife Yuriko and two sons,
Christopher, 21, and Steven, 18. Funeral arrangements have yet to be
announced.

** Ripple effect: IPO blues in Japan since Sept. 11

Extract: Japan has seen a series of planned IPOs cancelled since the
Sept. 11 attacks on New York and Washington D.C. The biggest one was
Nomura Research Institute, one of the largest research institutes in
Japan and widely seen as one of the hottest IPOs of the year. The
company was scheduled to go public on October 2 on the Tokyo Stock
Exchange (TSE), but those plans were put on hold.

Arnest One Corp., a real estate firm, held an extraordinary board
meeting on September 12, one night after the attack on the United
States, and decided to cancel its IPO, which had just been approved
on September 10. A venture incubator, Dream Incubate, also cancelled
its plans to list on Mothers. At least 10 other companies have
cancelled plans to go public since September 11.

Nonetheless, a few companies have braved the storm. At least 12
companies have gone ahead with their initial IPOs since the attacks
(see the list below). One of the hottest is Starbucks Coffee Japan,
scheduled to go public on Nasdaq on October 11. The company plans to
raise about 14 billion yen.

Companies that have gone public since September 11, IPO price, market
and date of listing:

Tascosystem 2709 JAQ 09/21
J-Stream 4308 MTH 09/21
Amuse 4301 NASJ 09/20
Backs Group 4306 JAQ 09/19
Estore 4304 NASJ 09/19
CS Loginet 2710 NASJ 09/19
CSK Communications 4303 NASJ 09/18
IMJ 4305 NASJ 09/18
Himacs 4299 JAQ 09/17
Open Interface 4302 NASJ 09/13
Kuze 2708 JAQ 09/12
Proto Corporation 4298 JAQ 09/12

Commentary: "The New York attack was bad news for Japan's IPO
business. These companies are the ones who couldn't really afford to
wait until the market recovers," a fund manager told us. "Nomura
could afford to postpone, but not Starbucks, which is planning to
open a large number of new stores."

In most IPOs since September 12, initial share prices sank below
offering prices.

-- Sumie Kawakami

Ripple effect 2: Forecasts turn decidedly bleaker

Extract: Several large Japanese electronics and telecommunications
companies revised downward their fiscal-year forecasts in the wake of
the Sept. 11 attacks on the United States. Sony, NEC, Oki Electric
Industry and KDDI all came out with bleaker forecasts in the past
week, adding to the list of companies that have announced smaller
profit or larger losses since the hijacked planes smashed into the
World Trade Center towers and the Pentagon.

Sony revised its profit projection for the year through next March
from 250 billion yen to 120 billion yen. Teruhisa Tokunaka, the
company's chief financial officer, said the revision wasn't solely
based on the attacks, but that they have made everything worse.

Oki Electric said it expected a loss of 8.5 billion yen because of
the attacks; earlier forecasts were for a profit of around 9 billion
yen.

KDDI chopped its profit expectations for the year through next March
from 64 billion yen to 35 billion yen. It blamed the depressed mobile
communications market and did not mention the attacks.

Finally, NEC announced last Friday that its bottom line for the year
through March would plunge from an expected profit of 65 billion yen
to a loss of 150 billion yen. "Expectations for a quick recovery of
the US economy are receding following the September 11 terrorist
attacks," the company said.

Commentary: Not a lot of good news out there these days. But Allen
Miner, CEO of SunBridge, recently showed us an interesting graph that
tracks when publicly traded companies were formed. The graph has a
big spike upwards right after World War II. In other words, more
currently listed companies were being formed during some of Japan's
hardest economic times. Sony, Honda, Nintendo and Omron are all
names from that era. Perhaps the future leaders of Japan have yet
to rise out of the mire? We think so.

-- Bruce Rutledge

Graph of
http://www.nikkei.co.jp/money1/column_allen.html

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STAFF
Written by Bruce Rutledge (bruce@japaninc.net)
and Sumie Kawakami (sumie@japaninc.com)

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