Shop at Amazon.com and one automatically receives recommendations on books and other items based on previous queries and purchases. Similarly, checking a Facebook entry causes ads for local products and services to pop up.
These automatic ads and messages are the product of “big data,” an industry that collects and analyzes personal information ranging from email, social media posts and other data culled from the Internet.
The allure of big data and the power it offers to those who possess it has been making headlines, thanks to Edward Snowden, the whistle-blowing U.S. computer technician once employed by a National Security Agency contractor who recently revealed that the United States government is spying on its own people by secretly sucking up their personal data from U.S. Internet companies — ostensibly to defend America from foreign threats.
In Japan, companies are cashing in on big data as well, with the government offering support to foster what appears to be a potential tool and growth industry.
What exactly does big data encompass?
The term refers to the endless electronic stream of names, addresses and transaction records — an immense volume of data that can now be analyzed quickly and cheaply, thanks to the spread of online services and technologies.
Research firm International Data Corporation Japan offers a narrower definition: “data amounting to 100 terabytes or more,” “streaming data, including voice, music and images,” or “data whose amount grows by 60 percent or more every year.”
Are many Japanese firms using big data as a business tool?
Companies are increasingly investing to utilize big data. In Japan, spending on big data is expected to grow by an average of 39.9 percent each year until 2016, when it is expected to reach ¥76.5 billion, IDC Japan said in a report released last October.
But the report also said that only 2.6 percent of the 1,050 Japanese companies surveyed had the equipment needed to do so in 2011. Some 13.6 percent of the firms surveyed were in the process of acquiring such systems.
“The number of Japanese companies that are actually using the data is still small,” said Kazuhiko Hayashi, research manager at IDC Japan.
“They are still thinking about how they can employ the data. And there are not many examples in which companies are logging better sales or promotions,” he said.
Why isn’t the industry taking off in Japan?
The leaders are all concentrated in North America, including Google, Facebook and Twitter. These companies have more experience and knowledge about the advantages of leveraging big data in business.
Japanese companies started adopting big data analysis just a few years ago, when Google began marketing new software that allowed large lots of unformatted data to be processed and analyzed quickly and cheaply, Hayashi said.
Who are the biggest Japanese players?
Softbank Corp. has been amassing big data to improve mobile communications in different areas and time slots throughout the country since last year to help it decide where to build wireless base stations.
It also analyzed about 82 million Twitter comments mentioning the firm between March 2012 and March 2013 to compare the number of positive and negative comments in connection with new services or policies it adopts. It also analyzed 50 billion monthly page views from Yahoo! Japan to identify specific and effective ad targets.
Toyota Motor Corp. on June 3 started accepting applications from regional governments and companies in need of big data services related to transportation information. The automaker can display traffic volumes and other information on a map derived by data collected from each of its vehicles. The data, which includes driving locations, speeds and conditions, is all acquired via Toyota’s Telematics Internet service.
The T-point discount card developed by Culture Convenience Club Co. is another product derived from big data. The operator of the Tsutaya video rental chain has been amassing customer data via the card for 10 years.
Other firms potentially involved in that line of big data collection might include the Japan Railway Group, home of the Suica card, and mobile phone companies offering “electronic wallet” services, which allow phones to be used as train passes or for instant cashless vending machine purchases.
T-card holders accumulate discount points when they rent or buy Tsutaya products. These can be exchanged for services from Tsutaya or its partner firms. Meanwhile, companies in the T-point alliance can gather information on the purchases these customers make and examine them to improve their own services. The T-point card is held by 45.6 million people and involves 100 partner firms.
What opportunities do tech firms see in big data?
Tech companies see great market potential.
For example, electronics conglomerate Hitachi Ltd. set up the Hitachi global center for innovative analytics on June 1 to boost global cooperation among its big data analysts, system engineers and sales staff in Japan, the United States, Europe and elsewhere in Asia.
It wants to increase its big data specialists to 500 in 2015, from 300 at present. About 100 of them will be analysts.
The company aims to log ¥150 billion in sales related from its big data business in the year to March 2016, said spokesman Yuichi Izumisawa. It plans to focus on clients in the health care, media, energy, transport and heavy machinery sectors.
Hitachi signed a contract with Britain’s national health service in April to process medical information on its 60 million patients and analyze their electronic medical records.
How is the government responding to public-sector interest in big data?
To stimulate the economy, the Council for Regulatory Reform called on the government June 5 to set up guidelines Japanese companies can use to further use big data without breaching privacy laws.
“Economic vitalization by using big data is expected in the future,” its report, released the same day, said. “Some (experts) point out that companies are hesitating to use private data, feeling this may turn consumers off,” it said.
Thanks to privacy laws, companies cannot use customers’ personal data for business without approval. The panel says the government needs to set up guidelines in the first half of 2015 stating how much anonymity private data will require for companies to exploit it without the owners’ approval.
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