After Sudoku, What's Next?

Globalization is usually thought of as the worldwide spread of Western—particularly American—popular culture. Yet if one nation stands out in the pop culture in Asia, it is Japan. When I was in high school, millions of Chinese citizens of all ages were amazed by Japanese TV dramas such as Tokyo Love Story and Long Vacation. Now that I’m in America, it is not hard to meet Americans who fancy Kimono, Hello Kitty, anime, pop music, television dramas—I don’t mean it in a negative way. My point is that the export of Japanese media and culture is big business ever since the country’s economic took off.

An article in the New York Times further proves the spreading of Japanese culture in the age of globalization. “Few Americans had ever thought of Japan as a source for puzzles until a little more than two years ago, when sudoku suddenly took the nation by storm, flooding airport gift shops, and even rivaling crosswords in popularity. Now Nikoli, which publishes puzzle magazines and books, is widely regarded as the world's most prolific wellspring of logic games and brainteasers.” The “godfather” of sudoku Mr. Kaji believes that the world is hungry for more Japanese puzzles. This is probably true. I see people in the O’Hare airport, waiting patiently for their flights, while doing sudoku. In the meantime, Mr. Kaji’s business is doing exceptionally well. Mr. Kaji says his private company, with just 20 employees, had annual sales of about $4 million.

Another interesting point in this article is that no one controlled sudoku's intellectual property rights. Mr. Kaji is in favor of an “open culture”. This is an important factor that let the game's popularity grow unfettered. Oftentimes, business suffers when being loose on intellectual property rights. It is worth pondering why the sudoku case indicates the opposite. Can we promote the most of a culture by being totally open to the outside world?

The sudoku godfather is ready for another puzzle. In general, we can probably say that the Japanese culture is well-received in most of the countries. Thus I’ll conclude, in Japan’s case, globalization has strengthened its culture.

Outsourcing Japan

For American companies, a big incentive of outsourcing is that exporting labor-intensive jobs abroad may help American companies grow, thus creating better paying jobs. For Japanese companies, which have not started outsourcing until recent years, the rationale behind Japanese outsourcing is slightly different than that of Americans’. They not only want to cut spending but create new workforce elsewhere. Japanese companies realized that information is so specialized now that they can no longer do everything they need to do, so they have to go outside to another source. In the example of this article, they found a source in India. At the same time, it is not a secret that Japan is outsourcing auto industry, in the form of foreign direct investment, in the United States. Such “insourcing” to the United States is increasingly regarded as a source of new jobs, production, and exports.

The whole story suggests that free trade is not the one-way street that critics make it out to be. When Japan started outsourcing in India and the United States, many more jobs were created and insourced jobs tended to be technology-based, higher paying, and more stable than the ones moving out of the country. A bold statement is that were it not for foreign companies buying American companies, many of those jobs would have vanished. Rather than spending time worrying about the debate over the global ebbs and flows of jobs and money, companies are more interested in training new workers, meeting the booming demand for new business, and preparing for market expansion. We cannot expect a business man to try to make both ends meet like politicians do.

Toyota Drove To the Bank In a Ford

Economists have explained that Japan has an absolute advantage and a comparative advantage over the US in terms of automobile productions. An interesting article in The New York Times shows that it is not only lower input and labor wages that made the Japanese car makers better off.

Japanese car makers are in a much better position than the Americans. Toyota upset Ford for second place in the American market in July, 2006 and reported a huge rise in profits for the quarter. Also, studies show that the Japanese sell over $ 1 billion more in the United States than the Americans sell in Japan.

Why do the Japanese do it better?

Three decades ago, American automakers insisted that the Japanese build their factories in the United States. The Japanese did. It turned out to be the Japanese auto industry’s accelerator. Now the American car manufacturers are pushing measure in Congress to limit each Japanese company to just 200,000 sales a year in the United States. Will protectionism win over free trade? I doubt it. I’d rather believe that Japan wins because up until now, they have been playing the open market game better. In terms of productivity and branding, no auto manufacturer has ever been able to match Toyota’s amazing manufacturing methodology. Japanese companies like Toyota and Honda learn a different culture fast and they always keep up with research and development.

The Americans are in a worse position because of the decline in the overall competitiveness of US auto makers. The lack of style among GM’s lineup has been ridiculed for years. Now with gas price at almost $6 dollars a gallon in Japan, GM is going to sell SUVs there. How can they compete with the stylish and compact Japanese cars? They probably need a better strategy of developing and manufacturing cars. Simply depending on cutting company health care cost and opening-up market in Japan is flawed to the core.

Overall, many factors contributed to the changing scenarios of Japan’s comparative advantage over the US in automobile industry. In today’s market, large R&D funding to bring the world-class quality of vehicles and the global standard manufacturing process is an important issue. Analysts predicted that Toyota will overtake first-place General Motors in global sales in 2007. It seems that the Japan era in auto industry is coming and coming strong.

Are we ready for that?

why Kreider?

The first memorable econ class I took was with Prof Emil Kreider...actually this would probably piss Emily off since I took intro micro with her...but anyways, it was because of Kreider that I decided to take more courses in econ.

So I name this blog after him. I think he's a legend in our distinguished econ department. Seth may be the next one if he stays.

Emil Kreider is still alive and sound. I saw him playing noon basketball in the gym sometimes.

Other pros are lovely too. Jerry is incredibly nice. And Bob...he's character is beyond words.