close this bookVolume 3: No. 03
View the documentIndustry news
View the documentInternational markets
View the documentJob opportunities
View the documentDiscussion lists and information services
View the documentComputist -- Randy Calistri-Yeh
View the documentSoftware patents

The Netherlands claims to be a great place for European headquarters. More than 160M Europeans, 46% of the EC market, are within 300 miles of Amsterdam. Now that border controls are dropping, the EC is the world's biggest economy -- in 1/3 the area of the US. [Ronald Deutsch, SJM, 1/18.]

The East-West Education Development Foundation (Boston) helps get software and reconditioned computers to needy groups in Eastern Europe and to life-supporting charities in the US. Microsoft recently donated 4K copies of MS Works. [Grant Buckler, Clarinet, 12/25. Steve Goldstein.] A good way to build market share, at a cost of a few dollars per user.

China has experienced 9%/year economic growth since 1978 -- exceeding the postwar boom in Japan -- with 13%/year in Guandong. Foreign trade has increased 12%/year and rural industrial growth has been 30%/year over the past decade (to 19M "town and village" enterprises employing 96M). Exports reached $15B in 1991, and economic growth last year was 12%. 20K foreign ventures have invested $22B, including $3.5B in 1991. Over 27K new joint ventures were approved in 1992, aided by some 3,700 new local trading companies. 180M more workers (and consumers) will enter the workforce by the year 2000. China will have the world's largest economy by 2012 if these trends continue. There will be turmoil when Deng Xiaoping dies, but economic freedom can no longer be suppressed. [The Economist. Tom Peters, SJM, 1/18.] (Can infrastructure keep pace? It's hard to manufacture and export without materials, power, and transportation.)

India's leading software maker, Tata Consultancy Services, has sold 11K copies of its $140 accounting program -- illustrating the existence of a domestic software market. (80% of Indian software is said to be pirated.) The market grew by 42% last year, to $112M. Exports from India's 500 software houses jumped 67%, to $144M, and may reach $350M by 1995. Government incentives give multinationals more reason to invest, and India's 20K CS graduates and 12K computer trade school graduates may find work in their own country. A World Bank survey last year rated India's programmers ahead of those in Ireland, Israel, Mexico, and Singapore. Average pay for a skilled programmer is $3K. [Sunita Wadekar Bhargava, BW, 1/18.]

US vendors control almost 50% of the Japanese software market, which is expected to grow tenfold over the next decade. Major vendors include Microsoft, Lotus, Apple, Borland, Autodesk, and Novell. Ichitaro, from Justsystems, is the leading word processor, but US vendors have just launched their own Japanese versions -- and the US software runs under Windows. Windows already has a 15%-20% market share (even though NEC's leading PC 98 computers can't support it), and will allow programmers to write and document for a single platform instead of six. Macintosh is also popular, with a 10% share. Only 5%-10% of computers are networked (vs. 40% in the US), and US LAN software will likely dominate. Increasing foreign dominance is attributed partly to Japanese protectionist policies that shielded underpowered computers and proprietary systems for too long. Now hardware prices are tumbling as US and Taiwanese companies flood the market with DOS/V IBM-clone systems needing new applications software. Localizing US software is much easier than writing Japanese software from scratch. Besides, the Japanese have few venture capitalists and little infrastructure to support software ventures. Education and culture may also be responsible for poor creative skills or difficulty in recruiting talented programmers. Ken Krugler of Transpac Software says "In Japan you either get artists or engineers; you seldom get a blend of the two." [Andrew Tanzer, Forbes, 12/21, p. 300.]

Software companies in Japan are firing staff, as are real estate companies and all but the largest manufacturers. Honda and a few other companies are moving away from seniority-based pay and promotion, and lifetime employment is eroding. Male employees at blue-chip companies are especially vulnerable, and non-sales work for middle-aged men is hard to find. Large companies are offering transfers, early retirements, and placements with affiliated companies, but lifetime employment may die once the publicity barrier is broken by any large company. Companies can legally lay off workers only as a last resort, but expectations are changing. Even now, refusal to leave voluntarily can cost a manager his job title, dignity, and 25% of pay. If better jobs were available, some 75% of under-30 workers would switch, vs. only 44% of the full workforce. Unemployment is only 2.3%, but applicants outnumber positions for the first time in three years. [Karen Lowrey Miller, BW, 1/11.]

(Oseibo is the year-end time of obligatory gift-giving in Japan, but the Japanese have been giving fewer and less-costly gifts this year. Corporations are giving only to essential customers, employee bonuses are no higher than last year, and department-store oseibo sales are off 50%. People are favoring 3J gifts -- jimi (simple), jisuyoteki (practical), and juryo (heavy) -- such as smoked hams, canned goods, and soy sauce. [Lewis M. Simons, SJM, 12/30.])

Mitsubishi Electric will establish four new software and systems divisions in April. It will abandon mainframe computer development, but will continue to sell its EX-8000 and EX-9000. [Tim Finin, 1/12.]

Technoalliance Inc. (San Jose) is Mike Kamimura's new company supporting relationships between US and Japanese high-tech companies (via a sister organization in Tokyo). (408) 452-0754. [SJM, 1/18.]