Wired For Progress

Dec. 21, 2004
Internet fuels Tokyo's rapid change.

More than 30 million of Japan's 120-million-plus people live in Tokyo and Osaka, the birthplaces of hundreds - even thousands - of world-famous brands and products. Pokmon and Internet-enabled cell phones are just some of the latest. Clearly, both cities are evolving at warp speed. It is Tokyo, though, where the most astounding changes are to be seen. Japan's computer literati are jumping at the chance to bring new products and services to market. Young CEOs - many in their 20s - are in the media spotlight as their start-ups grab market share. Aside from well-known firms such as Softbank Corp. and Hikari Tsushin Inc., dozens of new dot.coms are springing up all over Tokyo, many of them located between Shibuya and Otemachi, Japan's youth center and business district respectively, an area nicknamed Bit Valley, or Japan's Silicon Alley. Hiroshi Mikitani, an outgoing man in his mid-30s, is the founder of Japan's biggest online retailer - Rakuten Inc. He believes that "2000 is the year of the Internet in Japan." Japan's online market was worth 8.7 trillion yen (US$83 billion) in 1998 (up from several billion yen in 1995) according to the Ministry of International Trade and Industry, which projects sales via the Internet will hit 72 trillion yen (US$686 billion) in 2003. All of Tokyo's big electronics firms have taken note. Tokyo-based Fujitsu Ltd. has declared that every one of its divisions must focus on Internet potential. Its rival, Tokyo-based NEC Corp., is forecasting $5 billion in revenues from Internet sales over the next five years. Tokyo companies also are innovating in mobile communications products. Not only are many of their cell phones the smallest on the market, but many of the units include e-mail and Internet access. Tokyo-based NTT DoCoMo's i-mode phone allows users to access (slightly modified) Web pages and send and receive e-mail via data packets. Moreover, the company has developed a viable content business model that is racking up the yen for some 1,200 companies. Over 4 million units have been sold since the phone first went on the market in February 1999. The i-mode is leading a revolution in the way Japan goes online. "Cell phones in Japan are the 'pet rock' that talks," says Tim Clark of TK Associates International Inc., an e-commerce firm. "More people will be accessing the Internet through cell phones than will be through personal computers within a year." Share buyers agree. NTT DoCoMo now ranks No. 1 in terms of share value on the Nikkei stock index (even above Toyota Motor Corp.). As manufacturers capitalize on the Internet, one thing is certain: The lightning-speed evolution of manufacturing in Tokyo promises to continue.

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