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Japan to go adrift between this side of the Net (China) and the other side (America)

This is further to our Jan. 8 story titled "Education reform cannot be substituted for reform in real world." As we pointed out in that piece, the 2003 results of the comparative surveys by the OECD (PISA) and the IEA (TIMSS) confirmed a consistent decline in mathematical literacy and other academic abilities of students in Japanese primary and secondary schools, relative to their counterparts in other participating countries, and there are little signs that the Ministry of Education, Culture, Sports, Science and Technology or any other education expert will come up with a valid and specific prescription anytime soon to stem the decline, let alone reverse it.

Here's some addition to the possible consequences of this trend:


In its editorial, the January 10 issue of the Sankei Shimbun warns that according to the Ministry of Health, Labor and Welfare, there are half a million NEETs and more than 2 million frii-ta (free arbeiter) in today's Japan. As usual the editorial doesn't offer any specific suggestion on how to turn around the situation, but it also fails to point out the far-reaching effects the sharp increase in frii-ta and NEET population will have on this nation when on the other hand, birthrate is on a continued decline.

In the same edition of the daily, however, Mochio Umeda, founder and president of Muse Associates, Palo Alto, California, argues that Japanese businesses seem to be destined for an ultimate consequence where they fall far behind the U.S. and China in the not-too-distant future. Mochida cites the IBM's recent sale of its PC division to China's Lenovo Group and the Google's IPO (initial public offering) that also took place last year. The point he wants to make here is Lenovo bought the IBM's US$ 12 billion (2003) PC division at a bargain price of US$ 1.75 billion whereas the total IPO price for the US$ 961.8 million (2003) Google was almost US$ 50 billion. The president of Muse Associates goes on to argue that the huge disparity between the two deals can only be explained by the fact that a sea change in the IT industry has been causing a "power shift" from "this side" (i.e. users' side) of the Internet to the "other side." To underline his argument about the power shift, Umeda adds that the combined market values for Toshiba, Fujitsu and NEC are exceeded by the total market value of Google, alone. Google is a 6-year-old company with a mere 2,700 employees worldwide. Obviously he is not talking about the "Internet Bubble" which already burst one dog year ago.

Of course business opportunities on "this side" will still keep growing despite the power shift. That means the savvy Chinese can still reap tons of hard currency by dominating this side of the market. On the other hand, Japanese businesses are so preoccupied with the cheap labor available in the "world's factory" and their own big appetite toward the world's most populous marketplace that they haven't noticed the ongoing dramatic "power shift", as Umeda laments. All they can do is to tell Prime Minister Junichiro Koizumi to refrain from visiting the Yasukuni Shrine. Given this situation, we must admit the most likely scenario now is a world where China dominates this side and the U.S. does the other side.

The root problem for Japan is, again, that real innovative, insightful and foresighted people, like Mochio Umeda, are rare species here, and that we are reproducing, though at a lower fertility rate, the same old group-oriented horde of people who can get a B+ when compliance with someone else's demand is at issue. Indeed, "a change in education system is vital to the nation's future," as the Jan. 5 Daily Yomiuri editorialized.
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