Bits in Japan

The Economist

“A SAMURAI would never write software!” barked a senior executive at one of Japan’s biggest electronics firms, as drinks flowed at a dinner party. His view is widely held in Japan. Monozukuri (making things) is macho. From sword-forging in feudal times to machines and microchips today, real men toil tirelessly to make things you can see. [..] But [..] such attitudes are looking increasingly out of date. Writing business software is now a growing business in Japan. The country’s large electronics companies are buying into the sector [..]

Software firms typically make fatter profit margins than hardware firms. The best ones easily hit 30%; electronics firms struggle to reach 5%. The software business needs fewer people and less capital; handy for a country with a shrinking population and tight-fisted banks. Jobs at big electronics firms are scarce, and the work is sometimes boring [..].

Japanese code has tended to be inferior, says William Saito, an entrepreneur who sold his software company to Microsoft years ago. This is because it mirrored the shortcomings of Japan’s business culture: it was written in a hierarchical way that outsiders would have trouble building on, when the trend in America and Europe was exactly the opposite. A transition is under way, however.