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
Issue No. 197
Wednesday, September 18, 2002
++ Viewpoint: How Much is an Innovative Engineer Worth?
++ Noteworthy News
- Intage, Yahoo to Form Net Research Venture, Slash Prices
- Seiyu, Wal-Mart to Sell Cheap Chinese Goods
- Tokyo Cheapest When It Comes to Broadband
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++ Viewpoint: How Much is an Innovative Engineer Worth?
Around the J@pan Inc office, Shuji Nakamura is something of a folk
hero. The former Nichia Chemical Industries engineer created the blue
light-emitting diode (LED) in 1993. Nichia quickly dominated the
market for blue LEDs and has made something north of 80 billion yen on
the innovation so far. Nakamura's compensation? Twenty thousand yen.
That didn't sit well with the engineer, and he decided to take his
case to the media and, eventually, the courts. (We furthered his cause
with a cover story in July 2001, and since then, he's appeared in all
sorts of media, including a Uniqlo commercial in which he was bathed
in blue light as he posed in the maker's clothes.) This Thursday the
Tokyo District Court is set to issue a ruling on his claim that he
never gave away his patent rights. If he loses, he plans to sue Nichia
for 2 billion yen in compensation.
This comes as an Ajinomoto employee is suing his company for
2 billion yen in compensation for his role in developing an artificial
sweetener that has proven very lucrative for the company. Suddenly
patent rights and employee compensation issues are coming to the fore.
You would think that engineers would be rooting for Nakamura to take
Nichia to the cleaners, but you'd be wrong -- at least partially so.
A year ago, I brought up Nakamura's case with a class of about 20
first-year engineering students at the University of Tokyo, and I
quoted the former Nichia engineer as saying, "The best engineers
should be paid like Ichiro." I expected a strong majority to be on
Nakamura's side; after all, these were the very people who would some
day reap the benefits of improved compensation for lucrative patents.
But the class was about equally split, and the side that
disagreed with Nakamura was far more vociferous. They argued that
compensating engineers too much for innovations would destroy
teamwork. They also disliked what they saw as Nakamura's abrasive
These were bright kids with promising futures -- perhaps when they
start paying the bills, they'll change their tune, but I think their
resistance to Nakamura's approach is more widespread than the mass
media is letting on. If Nakamura wins his case tomorrow, it will be
hailed as a watershed ruling in employee compensation. But a favorable
ruling really would be a simple indictment of Nichia's sloppy and
short-sighted handling of the case, nothing more.
The idea that the sky is the limit for employee compensation is still
an alien one in Japan. And the next generation of Nakamuras may have
to follow Shuji overseas (he now works in Santa Barbara) to find
the riches they crave.
-- Bruce Rutledge
"Attend the Tokyo MBA fair on September 19, 2002 at the Tokyo Hilton
in Shinjuku from 6-9PM and meet admissions directors from leading
international MBA programs including Cornell, Duke, and MIT/Sloan
School of Management. This is an event that serious MBA candidates
should not miss. For more information or to register in advance,
visit us on-line at www.thembatour.com/fairs/tokyo.shtml"
++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)
** Intage, Yahoo to Form Net Research Venture, Slash Prices
In Brief: Market research firm Intage and Net portal Yahoo Japan have
announced that they will set up an Internet-based market research
company on Oct. 1, the Nikkei reported Tuesday. The new firm, Intage
Interactive, will be Japan's largest Net-based researcher and it plans
to quickly throw its weight around by slashing rates for basic
research projects. The Nikkei reports that a standard 1,000-response
project spanning five days would cost 1.2 million yen with Intage and
about 2.5 million yen with most competitors.
Yahoo Japan will own 49 percent of the company and Intage will own 51
From the Nikkei (password protected)
J@PAN INC magazine -- the premier journal of business, technology and
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** Seiyu, Wal-Mart to Sell Cheap Chinese Goods
In Brief: Supermarket chain Seiyu and Wal-Mart, the world's biggest
retailer, are planning to sell cheap goods from China in Seiyu stores
in Japan, according to press reports. This is the first concrete news
to come from Wal-Mart and Seiyu since the US retailer decided to take
an equity stake in Seiyu. The retailers plan to sell the goods in
10 or 15 Seiyu stores and monitor performance.
Commentary: This puts to rest -- at least temporarily -- rumors that
Wal-Mart was searching for another, stronger partner to make its foray
into the Japanese market. Wal-Mart has the option of purchasing
two-thirds of the Japanese supermarket chain but it has seemed a
little wary of Seiyu's ability to reach the ever-fickle Japanese
From the Forbes Web site via Reuters wire
"Martha, Wal-Mart and the next American Invasion" from the July 2002
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** Tokyo Cheapest When It Comes to Broadband
In Brief: Tokyo offers the cheapest broadband connections among major
international cities, according to the Ministry of Public Management,
Home Affairs, Posts and Telecommunications. For example, Flets ADSL in
Tokyo charges 4,850 yen per month while Verizon Communications
(Verizon Online DSL) charges about 5,979 yen and BT Broadband charges
4,477 yen in London. Prices for cable TV Internet connections in Tokyo
are also cheaper than in New York, London and Paris. But when it comes
to cellular phone prices, Tokyo is the most expensive of all.
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