TT-473 -- Mubadala Takes the Plunge, ebiz news in Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, June 15, 2008 Issue No. 473

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:
http://mailman.japaninc.com/mailman/listinfo/terrie

BACK ISSUES
http://www.japaninc.com/terries_take, or,
http://mailman.japaninc.com/pipermail/terrie/

---------- MOVING? USE PBXL IN YOUR NEW OFFICE ------------

PBXL has proven experience in multilingual installations
and project management.
We take care of all your telecom needs:

Phone infrastructure
Management of your entire telecom system
Low-cost carrier services*

*PBXL is a Type II telecom carrier in Japan:
License # A-18-8866

Join us at our monthly seminar at Cisco Headquarters:
http://www.pbxl.jp/seminarstt

Contact us today!
03-4550-2557
info@pbxl.jp
-----------------------------------------------------------

+++ WHAT'S NEW

We've heard a lot in the news over the last 6 months about
Middle Eastern and emerging country foreign sovereign
funds. These are investment funds with massive amounts of
cash and which are owned and controlled by foreign
governments. Not only are they potential movers and shakers
in the world of finance, they can also be used for
tremendous political clout. Indeed, as a result of the
Chinese forming their own US$200bn fund last September, the
Japanese have been talking about setting up a sovereign
fund of their own.

The only trouble is, large Japanese government-related
funds have in the past been singularly unsuccessful at
producing worthwhile returns, largely because the
appointees to manage such funds are either political, or
because the minders are far too conservative to do much
more than invest in Japanese government bonds -- the
earnings from which barely pay the funds' administration
costs.

Yes, there have been smaller successful government-run
international funds, most notably MOFA's Overseas
Development Assistance (ODA) fund, which has run for
decades. But with even untied loans resulting in business
being recycled back to Japanese companies and now a new
focus on "combating terrorism" through financial
assistance, it is hard to not be a little bit cynical about
Japan's ODA. A good but slightly dated (2006) analysis of
recent Japanese ODA trends can be found at
http://tinyurl.com/4s4dv4.

The interesting thing about the rising sovereign funds is
that many of them are from countries which are becoming
increasingly unhappy with U.S. foreign policy. In our
opinion, these funds will look for opportunities that, in
order: a) pull technology and assets into their growing or
changing economies -- and in such cases they'll invest
where necessary in U.S. companies, b) look for alternate
means (other than the U.S.) to sustain and grow those
technologies and assets once transferred, c) focus on
acquiring continued leadership in such industries through
training of their local R&D staff, and d) look for
long-term returns that help fulfill the public concept of
the funds' activities -- i.e., to make a profit.

[Continued below...]

--------------- IT Services at Reduced Costs --------------

As you grow your business…

* Lower your system development costs
* Lower your IT operating costs

We help clients achieve just that through our Japan office
and offshore development center.
We offer Website Development services, Help Desk support,
Office Relocation services, Managed Hardware delivery and
setup, and Managed IT services such as O/S and equipment
upgrades, IT Setup and maintenance.

In addition to Japan we also have the capability to deliver
our services at Singapore and Australia.

For more information, please contact us at:

http://www.toptechinfo.com/
e-Mail: Info@toptechinfo.com
Phone: +81 (03) 6909-4441

------------------ Offshore Development -------------------

[...Article continues]

The emergence of possibly U.S.-averse capital could be a
good thing for Japan, since in many parts of the world the
Japanese are considered mercantilist rather driven by
ulterior motives, and thus they're somewhat safe to invest
in. Secondly, Japan is one of the few countries in the
world that has not only the technology but also the means
to produce it, and thus any deal done with the Japanese
comprises convenient one-stop shopping. From auto
manufacturing and food production to medical procedures and
water purification, the Japanese have home-grown technology
which when sold for cash is both untied and accessible. The
only real exception here is where the technologies in
question are on a list of weapons technologies that are
forbidden from export due to U.S. pressure.

So here we are entering an age of massive national
investment funds, and Japan can certainly be considered one
of the prime shopping targets. The power of the sovereign
funds was well demonstrated the last week, Abu Dhabi's
Mubadala Development fund announced that it would invest
JPY10bn (US$93.4m) into a new hospital yet to be built in
Kobe. Apparently the fund decided to go into business with
the Kobe International Frontier Medical Center (KIFMEC)
after high level discussions between the governments of
both countries earlier this year. That is, this deal is
most likely a case of good old fashioned back scratching
-- despite the fund manager's protestations earlier this
year that his team was all about financial returns.

What's our justification for saying KIFMEC is a cosy deal?
Well, the premise for the investment was that KIFMEC will
create a medical facility focusing on organ transplants,
tissue engineering, and advanced medical services -- then
by way of training of Abu Dhabi doctors, help transfer this
know-how back to Abu Dhabi.

But think about this for a moment. If you were going to
invest in a country's medical sector, wouldn't you pick a
country with a vibrant and proven ability to package and
transfer know-how? In this case, and outside of the USA, it
would have made a lot more sense for Mubadala to invest in
Singapore, Thailand, or even India, where medical tourism
is well established, doctors are well trained and
plentiful, and where the hospitals are eagerly looking for
tie-ups and opportunities to turn their businesses into
international suppliers.

By contrast, and with very few sexy exceptions in the
regenerative medicine and research fields, Japan's medical
sector is very inward looking and financially troubled.
There is very little faith in Japan's medical sector by
domestic investors because most money men here feel that
the nation is plagued with short-sighted rules arranged by
and between the LDP and the Japan Medical Association, and
which favor doctors over patients. Rules such as mandating
Physician-owned hospitals -- for-profit corporations may
only be financial partners, the "addiction" of hospitals to
public funding through medicine reimbursements, and the
lack of medical practitioner accountability and retraining
requirements, all mean that medicine in Japan is inflexible
and quality control is inconsistent. Botched operations and
death through hospital infections are all too common.

The media reports we have seen say that although the KIFMEC
project managers were hoping to establish their hospital as
a base for surgery for visitors around the region, flown
in via the new Kobe airport. But, as of early this year,
they were still struggling to find local funding for their
hospital -- basically because no one was interested. Then,
suddenly, not only did they have a lifeline of
international funding, but also a partner who could provide
them with an entire project life cycle of asset aggregation
and knowledge transfer. This had to have been a god-send
to the KIFMEC organizers and was an inspired introduction
by whichever Ministry was responsible for it.

Mubadala is certainly an impressive fund to kick off a
politically motivated Japan investment with. It is one of
two major Abu Dhabi funds, and known as the "active" side
of the asset management business for the nation-state. It
has assets of around US$17bn (approx. JPY1.8trn) and until
now it has typically invested in energy and
telecommunications projects.

We wonder if Mubadala has really thought through the
business model that KIFMEC is putting forward --
particularly their idea that medical tourists will flock to
the center. For this to happen, KIFMEC would have to
compete both on service quality and pricing with India,
Singapore, and Thailand, where hundreds of thousands of
people already go to have surgery. In India, medical
tourists receive treatment at just 30% of the cost of
equivalent services in the USA, and an estimated 100,000
patient-visitors spend around US$330m annually there. In
Singapore, there are about 410,000 patient-visitors a
year, and over 40 hospitals cater to virtually any type of
surgery known. Some of these hospitals even have Japanese
language interpreters. Does KIFMEC really think they can
compete against such pricing and proven quality of
services?

Further, if Mubadala really is investing into Japan because
they believe there is value to be unlocked here, then they
have many other investment opportunities here to look at,
also in the hospital services sector. Right now, there are
approximately 9,000 hospitals (versus clinics) in Japan,
and an increasing number of these are in financial trouble.
In 2007, 17 hospitals went bankrupt, an increase of 240%
over 2006 each year. Teikoku Databank reckons that this
number will accelerate following the FY2006 government
medical charging changes which have knocked almost 20% off
hospitals' profit margins. Mubadala should just set up an
acquisition fund and start doing a roll-up of institutions
around the country, with a view to modernizing,
internationalizing, and making them profitable. For
operational expertise, they should turn to an experienced
and internationally competitive private hospital operator
in Japan, such as Kameda Hospital out in Chiba. See more
about Kameda at
http://www.japaninc.com/mgz_summer_2006_hospital_guide.

In our opinion this would make a lot more sense than a
pie-in-the-sky international "medi-port" for rich
foreigners wanting heart surgery in Kobe. But then, using
commonsense wouldn't increase visitor traffic through Kobe
airport, would it?

...The information janitors/

***------------------------****-------------------------***

------ IronKey - The World's Most Secure Flash Drive ------

* Available in Japan, exclusively through LINC Media BiOS *

The IronKey - more than just a USB flash drive.
Rather, a skillfully-crafted collection of security
technologies assembled to protect your valuable
information, your identity and all aspects of your digital
life, whether you are online or on-the-go.

IronKey's designers are experts in information security,
with years of experience fighting online fraud and identity
theft. Now their industry-leading flash drive is quickly
becoming a staple in governments and corporations
throughout the world, where protecting the confidentiality
and integrity of digital content is important.

With the IronKey you can be absolutely sure that your
company's confidential information is kept secure no matter
where you are.

Options:
(Starting at JPY11,088 plus Shipping)
* 1GB, 2GB, 4GB and 8GB
* Personal, Basic and Enterprise

To learn more, visit www.biosjp.com/ironkey.html
or contact us at ironkey@biosjp.com for a quotation.
-----------------------------------------------------------

+++ NEWS

- Tokyo office vacancies rise
- New 108-inch LCD TV hits the market
- Consumer loans at just 6.8% p.a.
- 10mn more foreigners by 2058?
- Microbubble shower to replace dog shampoo

-> Tokyo office vacancies rise

Realtor Miki Shoji has just issued office occupancy data
for Tokyo, and has said that office vacancies rose from
3.03% in April to 3.29% in May. Although only a 0.26%
increase, the figure represents some thousands of newly
vacant offices throughout Tokyo. The average rent rates
within the Yamanote line were JPY22,826/tsubo (3.3 sq. m.),
up from JPY22,687, but showing a clear slowing of the
market. This trend is in line with the fact that corporate
profits fell by the greatest amount in FY2007 for 6 years.
(Source: TT commentary from bloomberg.com, Jun 12, 2008)

http://tinyurl.com/6rqqs3

-> New 108-inch LCD TV hits the market

Sharp has put on sale the world's largest LCD TV, and
possibly the largest to be released by that company for the
next few years. The 108-inch LCD TV sells for JPY11m
(US$102,000) and offers full HD resolution, although some
of the specs, such as contrast ratio, are not as high spec
as existing home theater units. The new LCD unit is the
largest that Sharp can produce on its new Kameyama
production line, and so unless they build another factory
(takes 3-4 years), it represents the maximum size possible
from Sharp. (Source: TT commentary from digitaltrends.com,
Jun 13, 2008)

http://tinyurl.com/5672xw

-> Consumer loans at just 6.8% p.a.

In what seems to be an inevitable migration to the realties
of the market, the money lenders are finally becoming
competitive. Aiful has just launched a new category of
unsecured personal loan which starts with an annual
interest rate of 6.8% per annum, about half that of their
existing loan rates, and also about half that charged by
your average credit card company. Aiful is screening
lenders for creditworthiness and is keeping loans to around
JPY500K or less. ***Ed: You can expect a lot more
competition between the lenders as they realize that they
can still make money so long as they are more
discriminating about who they lend to. Yes, this impacts
high-risk lenders, but perhaps now those people will be
more encouraged to go find professional help.** (Source:
TT commentary from nikkei.co.jp, Jun 13, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080612D12JFA02.htm

-> 10m more foreigners by 2058?

As improbable as it seems, a group of LDP politicians is
having the difficult discussion about what to do as Japan's
population drops over the next 40 years. Top of their list
of solutions is to increase the number of foreign residents
to 10% of the anticipated overall population in 2050, or
around 10m people. Among the recommendations are: increase
the number of exchange students to 1m a year, ban racial
discrimination, establish a new immigration agency and give
the head of that agency a cabinet post, make it easier to
get permanent residence, and make it easier to get Japanese
nationality. The recommendations of the group go to PM
Fukuda this coming week. **Ed: On the nationality side of
things, Japan would get a lot more takers if they allowed
people to have multiple nationalities.** (Source: TT
commentary from nikkei.co.jp, Jun 12, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080612D12JFN04.htm

-> Microbubble shower to replace dog shampoo

Many dog owners worry about whether dog shampoo is safe for
their animals. Now there is an alternative from IDEC, which
has modified an industrial wastewater machine into a dog
washing device. The unit creates a wave of
ion-saturated microbubbles which are gentle to the skin but
remove dirt and grease clinging to the animal hair.
At JPY600,000-JPY700,000, the new washers are expensive and
are targeted at pet stores, but we think it won't be long
before home versions become available. (Source: TT
commentary from nikkei.co.jp, Jun 12, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080611D11JSN07.htm

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

--------NEW GADGET BLOG: TEKRONOMICON.COM------------------

In collaboration with Gadget Watch, Gadget blog
Tekronomicon offers a detailed look at select gadgets -
shiny and strange, from gizmo ground zero in Tokyo. See the
gadgets introduced in Gadget Watch, with photos and more
at: www.tekronomicon.com
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan, as well as other
employers of bilinguals.

** HIGHLIGHTED POSITION(S)

BiOS has just begun accepting applications for an
experienced CRM pre-sales manager position with a company
that is now looking to inject some energy into its recently
revived Japan sales operation. Our client is looking for a
candidate with great organizational skills and who is not
afraid to get out in front of potential new customers, in
addition to managing the pre-sales operation.

Applicants with experience with "Pivotal" products are in
particular encouraged to apply, as are those with more
experience in other brand CRM products. This is a role with
very good career possibilities, as should a successful
candidate prove themselves in this role, openings into
higher level roles such as Services Director, for example,
are possible. This is a great opportunity for someone
looking for a long term career with real prospects for
advancement.

Remuneration is JPY8m - JPY10m per year.

** POSITIONS VACANT

- CRM System Web Application Developer, JPY8m - JPY10m
- Data Center Operatives, JPY3.5m – JPY5m
- Japan Technical Support Manager, JPY8m – JPY10m
- Unix Engineer, JPY4.5m – JPY6m.
- Level 1 and 2 Helpdesk, JPY3.5m – JPY5m

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email stuart.gibson@biosjp.com.

Interested individuals may e-mail resumes to:
steven.martin@biosjp.com

-----------------------------------------------------------

+++ UPCOMING EVENTS/ANNOUNCEMENTS

-------------------- ICA Event - June 25 ------------------

Speaker: Henry Ng, Head of Professional Security Services
-Asia, Verizon Business

Topic: Bridging the Security Management Gap:
How to Move from Point Solutions to Process

Details: Complete event details at http://www.icajapan.jp/
(RSVP Required)
Date: Thursday, June 25, 2008
Time: 6:30 Doors open includes light buffet
Cost: 4,000 yen (members), 6,000 yen (non-members)
Open to all. Venue is Foreign Correspondents' Club of Japan

http://www.fccj.or.jp/aboutus/map
-----------------------------------------------------------

---------- Entrepreneur Association of Tokyo --------------

Fifth Anniversary - Monday, June 16th

Title: 'Secrets of Entrepreneurial Success'
Speaker: Mr. Allen Miner - Founder and Chairman
and Group CEO of SunBridge Corporation Group

After being EA-Tokyo's first speaker in June 2003, Mr.
Miner will return to share his secrets of entrepreneurial
success.

After joining Oracle in 1986, Mr. Miner was dispatched to
Japan where he founded Oracle Japan. After successfully
growing Oracle's business and taking the company public he
left in 1999 to establish SunBridge Corporation, a company
that provides a variety of growth-enabling services to
start-ups and global enterprises.

Please sign up early while seats are available.

Date/Time: Monday, June 16th, 7:00 pm
Location: Foreign Correspondents' Club of Japan
Language: English
Website: http://www.ea-tokyo.com
-----------------------------------------------------------

______________________________________________________
Events announcements are priced at JPY50,000 per week.
For more information, contact sales at japaninc.com

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

-> In TT472 we implied that Talbots, a clothing company
taken over by Aeon, was British in origin. In fact, while
the turn around in earnings was reported for the British
operation, Talbots is in fact a U.S. company
established in 1947 in Hingham, Massachusetts. We
apologize for the error. Our thanks to the reader who
pointed this out.

-------- Essential Business References in English ---------

Do you need to understand Japanese Law, and wish you could
get the legal code written in English?

We have the solution - the Japan Online Collection!!!

The Japan Online Collection provides you with comprehensive
and reliable information on Japanese Accounting, Tax,
Business/Corporation Law and Employment Law.
Used by professionals around Japan.

As a limited offer we are offering readers a 2-week FREE
trial. For more information, please contact:
support@cch.co.jp, or call (03)3265-1161
www.cch-japan.jp

-----------------------------------------------------------

***********************************************************
END

SUBSCRIBERS: 11,811 as of June 15, 2008
(We purge our list regularly.

+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

HELP: E-mail Terrie-request@mailman.japaninc.com
with the word 'help' in the subject or body (don't include
the quotes), and you will get back a message with
instructions.

FEEDBACK
Send letters (Feedback, Inquiries & Information) to the
editor to terrie.lloyd@japaninc.com.

ADVERTISING INFORMATION
For more information on advertising in this newsletter,
Contact ads@japaninc.com.

SUBSCRIBE
Get Terrie's Take by giving your name and email address at
http://www.japaninc.com/newsletters/free_sign_up, or go
straight to Mailman at:
http://mailman.japaninc.com/mailman/listinfo/terrie

BACK ISSUES
http://www.japaninc.com/terries_take
or, http://mailman.japaninc.com/pipermail/terrie/

Copyright 2008 Japan Inc. Communications Inc.

________________Japan Inc is worth every penny!____________

J@pan Inc is Japan's only English-language business magazine.
Authoritatively chronicling business trends in Japan, each
beautifully designed full-color issue brings you in-depth
analysis of business, people and technology in the world's
second largest economy. Don't miss another issue! JPY 3,600
for 1 year (six issues) JPY 6,000 for 2 years (twelve issues)
Visit http://www.japaninc.com/mgz_subscriptions to subscribe.
===========================================================

Newsletter:

business