While it may appear that the United States is far ahead of Japan and the rest of the world in embracing e-business, the U.S. itself is a newcomer to the field, and tremendous challenges lie ahead, a U.S. business school educator told a symposium organized by Keizai Koho Center.
“This is not a world that we know of. It’s not a world in which we’ve done business. So we are all just learning,” said Daniel E. Costello, dean of Colorado State University.
Costello and 10 other educators at U.S. business schools took part in the symposium, which focused on e-commerce and Japanese and U.S. management styles, on the final day of a 10-day exchange program with Japanese business executives and government officials. The program included visits to the headquarters of NTT DoCoMo, Toyota Motor Corp., Matsushita Electric Industrial Co. and other leading firms.
Costello said that e-business involves the “application of new technologies and processes that enhance, evolve and often replace traditional ways of doing business.” He said the new technology would erase traditional boundaries of time and geography and create new virtual communities as suppliers meet customers’ demands for new products and services.
The shift to the new, information-driven economy is already taking place in Japan. Costello noted that in 1990, almost all of the 43 Japanese firms considered to be in the world’s top 500 companies were in the financial sector. In 2000, however, most of the 77 Japanese firms on the same list were from the IT sector.
By 2003, Costello said the gap between Japan and the U.S. in the business-to-business market will not be as large as the gap between the two countries in the business-to-consumer area. He predicted that the business-to-consumer market in Japan would be worth 3.2 trillion yen in 2003 — around one-seventh of the 21.3 trillion yen expected in the U.S. The business-to-business market, however, is expected to reach 68.4 trillion yen in Japan compared to the 165.3 trillion yen forecast for the U.S.
Another symposium panelist, Teruyasu Murakami, managing director of Nomura Research Institute, said e-business in Japan has grown steadily since the mid-1990s.
Since the first e-business shops in Japan — an “udon” noodle shop and a florist — made their debut in cyberspace in October 1994, the number of such businesses has continued to increase rapidly despite the economic downturn. Murakami said between 500 and 800 shops continue to open each month.
While most Japanese e-business ventures are based on their U.S. counterparts, Murakami said some initiatives unique to Japan are emerging. One example is 7dream.com — a venture established recently by Seven-Eleven Japan and several other firms. The new firm combines the Internet’s inherent advantage in displaying mass quantities of commodities on the computer screen with convenience stores’ established procedures for distribution and financial settlement. Murakami said 7dream.com would only be possible in Japan, where convenience stores are within walking distance from most anywhere.
Murakami also pointed to NTT DoCoMo’s popular i-mode cellular phone-based Internet service and a project that links car navigation systems to the Net in stressing that Japan’s efforts to become a contender in e-business are gradually starting to bear fruit.
Costello stressed that the new economy requires an e-business way of thinking. “The new business environment puts a premium on creativity and innovation more than ever before. We have to think outside the boundaries of current practices, products, services, organizations and industries,” he said.
“There needs to be more value placed on entrepreneurship, an infrastructure to help people develop new ideas, obtain venture capital and have an opportunity to try these new ideas on the marketplace,” Costello said, adding that these are challenges faced equally by players in the U.S., Japan and Europe.
And this necessity for a new set of values in the e-business era will also require a new type of education, especially for business school students.
“The challenge that the new business environment provides us with is . . . that past successes may not necessarily be the best indicator of the future success of a business,” Costello said.
“Maybe the most important thing that we can do for students in the future is to prepare them to be good problem solvers, to be flexible and adaptive and to be able to respond to changing times and think intelligently.
“That calls for a different type of education paradigm, one in which a student works in a group. A student must be challenged by a faculty member who isn’t lecturing but is helping to facilitate and to design a learning environment that will create the kind of understanding and knowledge necessary for that student.”