On October 31, I joined the Technical Strategic Design Conference at the Embassy of Spain in Tokyo to introduce Erretres to the Japanese audience and share our project, ‘Japanese Technology Meets Spanish Design.’ The conference hall was completely full, which indicated that the interest in solution-giving designs has increased in Japan.
As I have explained in the previous article, “Why Do Technology Companies Need Design Today?” many companies in Japan are keen on finding solutions to accelerate innovations in order to survive and compete in the global market. Unfortunately, the presence of Japanese companies has decreased over the last decade, and Japan is no longer the number one when it comes to innovation.
Excellent Technology Lacking Intangible Value
Interestingly, numerous Japanese companies are at the top in regards to quality and standard of technologies. The problem Japanese companies face today is not about improving the technology but more so about how to apply their existing technologies to products and services, and furthermore, add intangible value to the technological values.
For example, many small parts used in the iPhone are actually produced at small factories in Japan. When the first iPhone came out, Japanese companies were already producing mobile phones that had TV, digital camera, and wallet-like functions. Another example is the difference in the market values between Nissan GT-R and Ferrari 458 Italia. Some performance indicators suggest that Nissan GT-R is better than a Ferrari, however, the market price of Ferrari 458 Italia is twice as much higher than that of the Nissan.
Functionality to Experience
In general, Japanese companies are product and market-driven, so they try to improve the functionalities of the current products in the market based on the customers’ feedbacks. During the 20th century, this cycle — companies collecting customers’ feedbacks from the market, improving the functions of their products, and putting new products in the market — was the biggest competitive advantage that the Japanese companies had. Boston Consulting Group called this the “Time-Based Competition.”
However, in the 21st century, a lot of companies are capable of this ‘speed’, and it is no longer an advantage for Japanese companies. Moreover, the global market today is not driven by customers’ feedbacks and the ability to improve the functionality of the existing products, but rather, is driven by visionary companies that can show consumers the future of different services and products. Leading companies in innovation today are those who can show people the new ways of life — experience. Experience is the new factor that consumers appreciate much more than simple facts and functions, and experience also creates an emotional bond between companies and consumers.
Even in Japan, consumers are used to having a global standard user experience from using products and services produced and designed by global companies such as Apple, Amazon, Google, and Facebook. Surprisingly, the market share of iOS in Japan is almost 70%, whereas, in the US, it is less than 50%. It means that Japanese consumers’ expectations on user experience for product and service have heightened unconsciously.
Despite this, in Japan, there are not many people and companies that can design user experience physically and digitally, which can meet the global standards nowadays. This is because the Japanese market has been product-driven, and there is no one in Japan who has designed an experience that is used by millions and millions of people around the world. In sum, Japanese companies lack the know-how when it comes to designing an experience.
Intangible Values and Success
Furthermore, many companies in Japan are still unaware of the importance of investing in intangible values such as branding and user experience because sometimes it is difficult to see the direct correlation between intangible values and revenue. My advice for Japanese companies is, to redesign their global website and update their digital user experience to meet the global standard. Today, without a doubt, corporate websites can be the first touch point for consumers that can define the impression and image of the companies.
In Japan, people give so much importance to first impressions from bowing, business attire, and business card exchange ritual. Thus, it does not make any sense to leave the corporate website outdated. It can, unintentionally, deliver a message to the world that the company does not care about the consumers and their experience. Hence, it is extremely important to develop a new user experience with international agencies and people with experience. It might just be the first step, but it will definitely be a huge step for Japanese companies to catch up to the global trend, meet the global standards, and survive in the global competition.
It was a good surprise that over 100 people attended this conference organized by ICEX and the Embassy of Spain. This means that Japanese companies are now more open to new ideas and approaches from Spain. 2018 is the 150-year diplomatic anniversary between Spain and Japan. I’m so happy to see this positive sign and interest in the Spanish design in this memorable year.
Masaaki Hasegawa is Business Advisor of Erretres.