An Insider's comments on Japan's high tech business world

* * * * * * * * TERRIE’S TAKE – BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.

General Edition Sunday, Apr 01, 2018, Issue No. 938

– What’s New — Japanese Recruiting in India Ramps Up, With Side
Benefits for the Rest of Us
– News — Softbank intrigue at an epic scale
– Upcoming Events
– Corrections/Feedback
– Travel Picks — Waterfalls in Yamanashi, Luxury Onsen in Setouchi
– News Credits

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It’s hard to say whether there is a slackening in the rate of economic
investment as international tensions increase, or if companies are
simply taking a breather. Either way, the Ministry of Internal Affairs
and Communications announced that job availability fell slightly, from
1.59 in January to 1.58 in February – meaning that there were 158 job
openings for every 100 job seekers. It could just be a pause, though,
since the availability of workers is still extremely tight, being the
lowest since 1993.

As we’ve mentioned in previous Takes, we believe that there are a
number of causes for the short supply of workers:
1. The departure of about 8m older skilled workers (the so-called
“Sedai Dankai”) due to retirement over the last 5 years.
2. The overall aging of society and thus less younger workers to take
the places of those leaving or dying.
3. A continuing preference by Japanese moms to stay at home and look
after the kids, at least until they start elementary school. Then
after 10 years away from work, they find it difficult to resume their
4. The jobs themselves are moving “upstream” and are becoming more
specialized and complex.

The first two problems are intractable so long as Japanese young
people don’t marry and have more kids. Nor will they improve while
Japan is stuck in the Catch-22 of singles not having the earnings to
start a family, and then there are not enough kids to top up the
working population. We believe however, that over the next 5 years,
presuming the global economy stays reasonably stable, that local wages
will inevitably start moving up, and it will be led by the
technology/professional sector – those employees whose complicated
jobs modern companies can’t do without: programmers, security people,
international salespeople and traders, lawyers, data analysts,
corporate scientists, etc.

Already, we are seeing pressure of competition to recruit this skilled
group start to drive normally very domestic companies overseas. They
are headed for science-rich countries such as China, India, Vietnam,
and the Philippines. This is great timing, in fact, given that Trump’s
America has decided it wants local steel workers and coal miners more
than it does Chinese or Indian data scientists.

——— From Veggie Burgers to Carrot Cake ————–

Our commitment at Alishan Organics is to give our customers the best
of western organic foods, but prepared with a Japanese twist. That’s
why our menus cover such a broad range of styles and tastes. If you’re
just getting to know us, why not visit our cafe by the river in
Saitama? That way you can try out a variety of dishes and decide for
yourself. Choose from an Amy’s organic pizza straight from the oven, a
mouthwatering veggie burger packed with seasonal greens and reds, or
if you’re feeling chilly, a filling vegetable curry with rice. And
although we’re healthy minded, we don’t skimp on desserts. Favorites
include Jack’s scrumptious carrot cake, vegan brownies (of course with
vegan icecream), and baked banana cheese cake.

Our Cafe:
Our new online store:

[…Article continues]

Looking at India, we see a perfect microcosm of the trend. Not only is
the Japanese government plowing huge amounts of money into loans for
infrastructure projects, but companies like Hitachi are sending
hundreds of staff to live there, to both internationalize their
Japanese staff at relatively low cost, and also to “bind the roots”
with their Indian employees as well. It is no longer unusual to come
across Japanese families who call India home. There are two Japanese
schools (i.e., for Japanese kids), one each in Mumbai and New Delhi,
and a sub-school in Chennai. We even had a job application from an
Indian-only citizen whose both parents are full Japanese. (Think about
that for a moment!)

One of the hot beds of Japanese learning and thus Japanese corporate
recruiting is Pune. The city is the second largest (5m population) in
the state of Maharashtra and is located about 150km to the south-east
of Mumbai. Once called the “Oxford of the East”, Pune has 9
universities and has long been a favorite location for local IT firms
to hire fresh graduates. Education has deep roots there, and the
College of Engineering Pune was founded in 1854 – making it the third
oldest engineering college in Asia. While Pune has the talent, another
advantage is that wages are about 20% lower than the internationalized
centers of Mumbai, Delhi, and Bangalore, because wages escalation
caused by foreign competition hasn’t reached the city yet. But we
think that will change soon.

Pune is reputedly the largest center for Japanese learning in India,
with hundreds, if not thousands, of engineers independently doing
night classes, and hundreds more attending day classes for their
Japanese employers. The frenzy of activity to acquire Japanese is both
stimulated by the recent frequent announcements of Japanese
government-to-government loans for infrastructure projects, which
typically bind in Japanese suppliers (and thus they need bilingual
employees), and also by the fact that Japan is still hiring even as
the USA closes its borders. Hey, thanks President Trump!

Japanese firms active in and around India (and recruiting in Pune)
include: Hitachi, Yamaha Motor, IHI, Konica Minolta, Kao, Shimadzu,
Sumitomo Electric, Yokogawa Electric, Rakuten, Mitsubishi Electric,
and many others. These firms are actively searching for local
technologists, as well as people to send to their (mostly
software-driven) R&D labs and project management positions in Japan
and elsewhere in SE Asia.

Servicing these blue-chip companies are a number of education, HR, and
outsourcing companies. One of the most interesting of these is a firm
called Asia-to-Japan (A2J). This smallish company (capitalized at just
JPY10MM), has created a curious niche for itself by sending
as-yet-unhired Indian job candidates to do face-to-face interviews
with Japanese blue chip firms back in Japan. The candidates come in on
visitor visas, and if successful, they head back home to get their
work visa documentation, then return to Japan some months later.
What’s unusual about A2J is that they carry ALL costs for the
candidates, betting that they will get most of them jobs. This is a
very attractive value proposition for the candidates themselves, and
the local Pune tech community is buzzing about the offer.

A2J’s method is to target fresh graduates – under 26 years old – who
have mechanical, electrical, or IT engineering backgrounds. Their
offer to the candidates is:

* Preparation and support to land a job in Japan
* Traveling expenses to Japan (travel and accommodation fees are fully covered}
* Continual support until the applicant gets employed

To apply for this very low-risk entry path into Japan, A2J requires
you either have conversational Japanese, or business Japanese (N2
level or better). If you have either of these qualifications, then you
can apply. The company is apparently taking on 35-40 students this
calendar year, and rumor has it that they will be looking for hundreds
of candidates in 2019.

…So, if you’re looking for an engineer or two, how do you tap into
the labor markets in South and SE Asia for candidates? The very first
step is to ascertain whether your team is ready for a foreign staff
member. Shacho might be ready, but are the other employees? We’ve seen
many talented foreign arrivals quickly become demotivated by
petty-minded or xenophobic employees, in larger and more traditional
firms. Make sure you’ve done company-wide awareness training.

Our recommendations for target cities to search for tech candidates
are: HCMC in Vietnam, Pune in India, and Manila in the Philippines. In
these locations, we use Linked In, software (not HR) companies
advertising on the web and to whom we offer cash per person recruited,
and of course local recruiting websites. In terms of successful
in-person interviews, we rely on two main resources: our own senior
engineers who we trust implicitly, and friendly local company owners
in the IT sector, who we pay to do a second local interview for us. In
this way, we can check language and tech skills from our point of
view, as well as getting a local employer’s opinion on the candidate’s
personality and values.

Most smaller foreign owned/run operations in Japan don’t need to be
told that bringing in staff from another culture is fraught with
problems, not only with unpleasant local staff, but also with the
candidate themselves. We need to remember that many overseas skilled
staff will be coming from societies that place a high value on family
time, and they can quickly get lonely. This loneliness can overwhelm
the need for income, causing them them to head back home after a few
months, despite your best efforts to keep them. The solution to
loneliness is to have a senior “buddy” with a similar personal
background to help acclimatize them to Japan – showing them how to
shop and socialize. Also, set an ambitious schedule that will keep
them busy and motivated until they are ready to make the annual trip
back home.

Unfortunately, many of the Japanese firms now bringing in foreign
staff don’t realize this, and after making the large investment on
language and local training, it’s likely that many of these newcomers
will become disillusioned with Japanese corporate bureaucracy and
office politics, and will start looking to either return home or to
jump to another foreigner-friendly firm – especially a foreign-owned
company. This is a bit of a bonus for smaller firms like our’s and to
a certain extent we are already starting to see candidates following
this pathway. We expect these numbers to increase significantly as
firms such as A2J ramp up their hiring to hundreds of candidates a

…The information janitors/


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+++ NEWS

– Big gold smuggling bust
– Record 2.56m foreign residents in 2017
– Shoko Chukin Bank loans scandal deepens
– Softbank intrigue at an epic scale
– One of Japan’s most boring companies doing well

=> Big gold smuggling bust

Interesting to see a court decision that allowed a Chinese smuggler of
JPY930m of gold bullion to go free with a suspended sentence, while 8
Japanese involved in the consumption tax evasion scam appear to be
heading to prison (the ring leader, for 2 years). After impounding the
bullion, the authorities not only levied harsh fines on the smugglers,
but confiscated the gold bullion as well. This follows a productive
2017 for Customs, when they caught 467 smugglers. ***Ed: A lot of
trouble for smugglers, over an 8% profit margin… Interesting, also,
to see that the route into Japan was a simple cargo transfer from a
(probably) Chinese vessel to a Japanese one, on the high seas, then in
to port in Saga. If you ever wanted to get in or out of Japan
undetected, this is also how you would do it.** (Source: TT commentary
from, Mar 21, 2018)

=> Record 2.56m foreign residents in 2017

The number of foreign residents continues to climb, as it becomes
clear that Japan’s unofficial path of immigration is through graduates
from its higher education institutions. The Justice Ministry has
released data showing that the legal population of foreign residents
rose by 7.5% in 2017, to reach a record 2,561,848 people. According to
the ministry, this mostly came from a big increase (30%) in Vietnamese
residents. Illegals also rose slightly, by 1.9%, to 66,498 people.
***Ed: Many Vietnamese are coming to Japan through universities such
as Ritsumeikan (hundreds a year), learning Japanese, graduating, and
being absorbed into the economy.** (Source: TT commentary from, Mar 27, 2018)

=> Shoko Chukin Bank loans scandal deepens

Readers will recall the government-banked lender to small- and
medium-sized companies, the Shoko Chukin Bank, being at the center of
a fake loans scandal last year. The bank was found to have made about
JPY265bn in shady loans, where 444 employees (pretty much the whole
bank) had falsified loan applications to help out zombie companies.
Now, the bank has been found to have made another 577 doubtful loans,
bringing the total to well over 5,500 loans. ***Ed: Although this
sounds pretty bad, Japan has such harsh bankruptcy laws that owners of
failing companies will do anything to stay in business, or they commit
suicide. Failing businesses should be allowed to go under gracefully
and not require the seizure of the founder’s home and family assets.**
( Source: TT commentary from, Mar 28, 2018)

=> Softbank intrigue at an epic scale

While Japanese companies are controlled by Japanese only, scandals are
usually “managed” in this country. However, once a firm gets large
enough to have a strong foreign staff or foreign shareholder
representation, then things can unravel and become messy very quickly.
Such appears to be the case with Softbank and the high profile
departures of two of its senior foreign executives last year. The
first departure was Nikesh Arora, who was rumored to have invested
Softbank’s funds into companies he directly or indirectly had a stake
in. The second was Alok Sama, also accused by shareholders of
conflicts of interest. Now it appears that the allegations may have
been cooked up against the two by a Swiss investor and an “insider”
still at Softbank. As a result, Softbank has said it will launch an
internal investigation to get to the bottom of the matter. ***Ed:
Notably, this investigation appears to have been prompted by requests
for comment by the Wall Street Journal. Forget so-called Fake News.
For healthy business we need a healthy press.** (Source: TT commentary
from, Mar 28, 2018)

=> One of Japan’s most boring companies doing well

Among one of Japan’s most boring companies is accounting software
maker OBIC. The company has reported that it will enjoy its 24th
straight year of earnings increase, with a 15% jump to JPY32bn for
this fiscal year ending March 31st. Sales rose 8% to JPY66bn. The
company has expanded from accounting to ERP solutions, and it this
integration capability that is driving the profits. ***Ed: With
margins like these, it tells you firstly that there is currently a
lack of competition in the mid-tier ERP space, and secondly that
Japanese corporate customers are finally starting to understand the
value of monitoring and controlling their operations in real-time.**
(Source: TT commentary from, Mar 29, 2018)

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



*** Picnic, Onsen experience at Hitachi Seaside Park

One of the most scenic parks on the coast of Ibaraki Prefecture,
Hitachi Seaside Park is famous for a variety of flowers that bloom
during different seasons. For this trip, Japan Travel takes you on a
picnic amidst seemingly never ending fields of baby blue eyes and
other colorful late spring flowers. You will also have the chance to
explore the attractions of this huge and fun park! After that, head to
an onsen before we head back to Tokyo!

Date: Sat Apr 28th 2018
Shop the experience here:



*** No corrections this week.


———- Bilingual vet clinic opens in Azabu ————

PetLife Veterinary Clinic is opening its doors in central Tokyo from
March, providing bilingual (Japanese/English) services for both the
domestic and international communities. The clinic provides
experienced veterinarians with many years of experience serving
families and their pets using the latest technology. They have a
compassionate and welcome approach and aim to nurture close bonds
within the local community.

The official opening is March 6. Pet owners are welcome to come visit
and check out the new center.

1F. Daiichi Bldg., 2-3-5 Higashi Azabu, Minato-ku, Tokyo 106-0044.
TEL:03-6807-4058 Website:


=> Yamanashi’s Nishizawa Valley
The power and beauty of water

Located deep within Yamanashi Prefecture’s mountainous interior lies
the picturesque Nishizawa Valley. Sitting at the foot of Mount
Kobushi-ga-take, this natural wilderness consists of a network of deep
canyons, gorges, and waterfalls formed by the mighty Fueki River.
Unsurprisingly, with its natural beauty, the Nishizawa Valley has
become one of Yamanashi’s top attractions for both hikers and casual
day trippers alike.

In total, the valley comprises around 8 large waterfalls, each with
amazing and unique features. The crown in the jewel is, without doubt,
the largest set of falls known as Nanatsugama-Goden, ranked among one
of the top 100 within Japan.

The first major waterfall you will encounter is Sanjyu-no-taki. The
sound of gushing water is everywhere and will accompany you for the
next hour of walking. Within this dramatic and rocky landscape you can
really feel close to nature. Depending on the angle, the water’s color
changes from emerald green to crystal blue. At times you can get very
close to the falls. As you continue on, you will approach the larger
Nanatsugama-Goden waterfall – which is even more spectacular.

=> Luxury Resorts and Hot Spring Experiences in Setouchi
Eat, experience and relax in Japanese style

Japanese hotels and ryokans are the ultimate luxury accommodation,
attractive for their distinct facilities and amenities such as tatami
flooring, outdoor baths, and crisp cotton yukata (robes). Tourists may
initially be a bit hesitant to try new things such as public bath
houses, but with this Setouchi top onsens list there is nothing to
fear, as each resort has rooms with its own private outdoor bath.

At the top of our list of onsen is Bettei Otozure, a wonderful
location nestled in the mountains directly overlooking a beautiful
river cutting through the Hot Springs village. Bettei Otozure is
overwhelming in its hospitality and comfort, and the owner, Otani-san,
speaks great English. Within the hotel grounds is an enchanting garden
and open air seating area, library, and museum with display of
world-renowned ceramic arts from nearby Hagi. It is not hard to see
why Prime Minister Abe-san chose this location to host Russian leader
Vladimir Putin on a state visit.

For more listings, see here:



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