| BUSINESSWEEK ONLINE : MAY 31, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
'We Have the Intelligence to Succeed' A talk with Kyoto's unofficial historian Norio Yanagihara is a management professor at Kyoto Industrial University who has written extensively about the region's startups. He also acts as an adviser to many companies and teaches courses on entrepreneurship. Possessing a deep understanding of Kyoto's history, he often appears as a guest commentator on television and radio programs, and is a tireless promoter of small, innovative businesses. Business Week Tokyo Correspondent Irene Kunii recently spoke with Yanagihara about how Kyoto came to be what it is today and where it's going. Here are edited excerpts of their conversation: Q: For centuries, Kyoto has been the cultural center of Japan, and few associate it with high tech. What is the connection? A: It's a town that has always valued tradition and innovation. Amazingly, it's always been able to merge these two seemingly conflicting aspects. In its glory days during the Heian Period (794-1185 AD), Kyoto readily adopted Chinese influences to create a new economy, new technologies, and even a new form of government. Kyoto was the capital [for 1,200 years] and home to the Emperor and his court. Since there was much demand for fine crafts, Kyoto attracted the best craftsman and technicians in the country. They came here to create wonderful ceramics, lacquerware, silk textiles, and fine art. So for hundreds of years, Kyoto was center of innovation, and business flourished as a result. A year after the Meiji Restoration [in 1868], the Emperor was moved to Tokyo by the new government, and much of the local industry followed him there. Until then, Osaka had handled all the commerce, while Kyoto served as the center of imperial power and business. All of a sudden, it had lost its prominence. So, in the late 19th century, the new Tokyo government began directing aid to Kyoto to help it build new industry. As a result, Kyoto became the first city in Japan to build an electric power generator, a sewer system, and other modern infrastructure. While the rest of the country remained backward, Kyoto became very European. Q: Yet looking at Japan's early period of modernization, Kyoto has never figured very highly. Why is this the case? A: It's true that Kyoto did go into a decline between Meiji Period [1868-1912] and the Pacific War [1941-45]. The only major business it had was Shimadzu Corp. [a leading maker of measurement instruments]. However, it did have its craftsmen. There were the silk weavers of Nishijin [a district in Kyoto where all the weavers are based], the potters of Kiyomizu [a ceramics area], the laquerware makers, and many others. They worked in small workshops and not in large companies. What is important is that they learned how to add value. They could take a craft that costs 1,000 yen [$8] to make and sell it for 5,000 yen [$40]. By making it beautiful, they made it more valuable. They were very enterprising. During the war, the silk weavers stayed in business by making silk parachutes. The ceramic makers switched from tableware to more useful [electrical] parts. Q: Weren't these workshops destroyed during the wartime bombing of Japan, and what happened after the war? A: Out of Japan's six biggest cities, only Kyoto escaped the bombing. So its temples, gardens, homes, and small businesses were left intact. After the war, Japanese refugees from Manchuria and other parts of occupied Asia came back in droves and desperately searched for work. Kyoto became a magnet for many because it was able to resume production the day after Japan's surrender [in August 1945]. The big factories around Tokyo needed capital to rebuild, and it would take them a few years before they could resume production. But in Kyoto, they could choose from among the most skilled workers and start production right away. So Kyoto began to prosper as its weavers made cloth for Japanese who were sick of their rags, and its potters crafted tableware for those who had lost all their belongings. Q: How did venture businesses in Kyoto like Kyocera get their start after the war? A: Kyoto attracted the entrepreneurial types with fighting spirit, the kind who wanted to get ahead despite the tough times. Among them was Kazuo Inamori, founder of Kyocera. The city had quite a few "angels," mostly descendants of the old traditional businesses who weren't free to launch their own ventures but were keen to invest in promising new ventures. That's how Inamori of Kyocera got started, with a no-interest loan [of $10,000] from a local businessman. And there were many others like him. Kyoto was a like a field, made fertile by nutrients like traditional crafts. Q: Is there a pattern to the development of ventures in Kyoto after the war? A: Kyocera and Omron were the first generation of post-war success stories. The second wave, which began rising to prominence in the 1970s and 80s, were very much influenced by the U.S. These are companies like Rohm, Murata Manufacturing, [and Nidec]. In the case of Murata and several other Kyoto firms, the sons of the founders were educated in the U.S. at a time when Silicon Valley was rising to prominence. They realized early on that the age of information technology, both hardware and software, was taking shape. So they knew they had to diversify into related technology. That's why Murata is doing so well. We know that we need a third wave, so a lot is being done to revitalize the region. The Kyoto city government and the Chamber of Commerce & Industry are playing a large role in encouraging new businesses. A group of university professors, including myself, are working with a number of student ventures. There are nine universities in the area that have joined together to offer venture business courses to nurture a generation of ventures capable of contributing to the Internet Age. Q: What are Kyoto's future prospects? A: There are many ventures here, and the universities are offering strong support. I think in the next five or six years, Kyoto will give birth to a new wave of ventures. Tokyo has many shortcomings such as crowded living and working conditions. Of course, in this age of virtual businesses, there is no need to set up a business in Kyoto. But as far as locations go, this is the best there is in Japan. We have beautiful temples, many residential areas, and a good transportation system. More important, we have the intelligence to succeed. A new age is emerging, a global one centered on the Internet. Kyoto is now looking for ways to harness its traditions while making a place for itself in this new world. We've done it at different times in history, and we can do it again. So, if any place in Japan has a chance of succeeding, it's Kyoto. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 Japan's High-Tech Hope (int'l edition) ASIAN COVER IMAGE: Japan's High-Tech Hope MAP: Kyoto TABLE: A City Rich in History and Legend (int'l edition) End Run Around Japan Inc. (int'l edition) ONLINE ORIGINAL: ``I Intend to Become the Intel of Motors'' ONLINE ORIGINAL: ``We Have the Intelligence to Succeed'' INTERACT E-Mail to Business Week Online | |||
