Terrie's Take 725 -- The Real Cost of a Tokyo Olympics, e-biz news from Japan

Sun Sep 8 21:54:46 JST 2013

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, Sep 08, 2013, Issue No. 725

+++ INDEX

- What's New -- The Real Cost of a Tokyo Olympics
- News -- UK's Fraud Office to take Olympus to court
- Web Content/Tech Job Vacancies
- Upcoming Events
- Corrections/Feedback -- Number of Japanese singles at 50
- Travel Picks -- Songs on Iwate river, rustic restaurant in Hirafu
- News Credits

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+++ WHAT'S NEW

Dragging ourselves out of bed at 03:00am this morning, we made our way
to an entrepreneur get together at the Wired Cafe in Roppongi Hills.
Three o'clock was when the announcement ceremony started for the
decision of the International Olympic Committee on where the 2020
games would be held. As is now common knowledge, Tokyo is the "winner"
and there were certainly scenes of jubilation across the capital
earlier today as people felt that Tokyo's turn had come.

The entrepreneurs, led by Globis' Yoshihito Hori, gathered partly
because of a growing pride in their nation, encouraged by PM Shinzo
Abe's own vision for a resurgent Japan. And partly because as
entrepreneurs they know that this could be the chance to build
business and get past the tight market of the last 5 years. Their
general expectation is that the Olympics and the civic, national, and
private investment that will go into them will heighten those animal
spirits that Abe keeps referring to, even though he seems to be
speaking to a nation of basically happy herbivores.

Watching the announcement ceremony and the jubilation of our Japanese
colleagues this morning, we were struck by the fact that Tokyo, by
good fortune and hard work won the 2020 games. It was the least bad
choice of the three candidates, although the Fukushima radiation leaks
caused some concerns at the IOC. The Japanese like the word "gaman"
(perseverance, patience) and certainly winning these games was a
matter of gaman. This is the second straight time Tokyo had bid for
the games, with all the expenses and stress that come with such bids,
and it's the fourth time overall for the nation. Previously Nagoya bid
for the 1988 games and Osaka for the 2008 ones. The first two failed
for a number of geopolitical reasons, but the previous Tokyo bid was
sunk partly because it was too close to the China Olympic games and
partly because more than half the population opposed the idea --
something which was picked up on by the IOC when they visited during
the selection process. If we recall correctly, the committee members
were greeted by people demonstrating on the streets against the games,
a rare sight in Japan.

[Continued below...]

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[...Article continues]

But this time around has been completely different. While there are
still many people who object to the massive spending that the Olympics
will entail, the fact that PM Abe's government is so solidly
controlling media attention means that any opposition is easily
drowned out by a chorus of more "patriotic" voices. Perhaps this is
conditioned by the fact that everyone pretty much knows that with the
onset of higher consumption taxes, morale is going to tank. So an
Olympic games is just what the doctor ordered. And, anyway, the cost
of the games will be less than two day's spending by the Japanese
government.

The Tokyo government says that it has already set aside a fund of
about JPY400bn which is expected to pretty much cover the JPY380bn
construction cost of the games. They say this is possible due to the
efficient reuse of existing facilities and this argument was certainly
better received than were Istanbul's estimated US$19bn construction
cost or Madrid's dubious financial credibility.

But we wonder if JPY400bn is all the games will cost? Looking at
previous Olympics, it is uncertain whether even those that say they
turned a profit (the Los Angeles Olympics, for example) really did.
Various post-games reviews appear to show that organizers took
advantage of off-the-books government grants and corporate largesse,
which while reducing red ink for the Olympics themselves also diverted
funds from some other use in the community. For example, in London,
the loss of funds to the Olympics is now being contested in the public
arena by a number of major charities.

Then, those Olympics that were officially in the red, such as the 1976
Montreal Olympics, are well documented and show that this huge event
can have huge implications for the city holding it. We came across a
handy list of before-and-after cost estimates for Olympic cities since
2002, and it appears that none of them came in on budget:
1. 2002, Salt Lake City: 250% over budget. US$800m -> US2bn
2. 2004, Athens: 240% over budget. US$6.3bn -> US$15bn
3. 2006, Turin: 170% over budget. US$2.1bn -> US$3.6bn
4. 2008, Beijing: budget unknown -> final cost US$40bn
5. 2010, Vancouver: 420% over budget. US$600m -> US$2.5bn+
6. 2012, London: 370% over budget. US$4.3bn -> US$16.6bn

Given this, we see no reason to think that the Japanese will be any
more competent in managing costs than, say, Canada and the UK. Indeed,
given the history of the Tokyo Metropolitan Government and its ability
to vaporize large amounts of money without accountability (e.g.,
Ishihara's Shinginko, which took tax payers for billions of dollars),
we'd hazard a guess that the Tokyo Olympics will eventually run to at
least 3x-4x over budget. This will be on direct operations and won't
include the costs to the nation such as extra police, security
measures, hosting visiting dignitaries, etc. Indeed, you could also
add in the JPY47bn that Abe pledged as national assistance to clean up
Fukushima, since it is unlikely the government would have moved on
this if their international prestige wasn't at stake.

If you want to take a look at the hidden costs of an Olympics event,
take a look at this very entertaining account about London, written by
journalist Mike Wells. You can read it at
http://www.gamesmonitor.org.uk/node/2020. We include the following
snippet because it has echoes of how things here could be perceived as
well.

"...The organizational model of the London 2012 games is the same our
government uses to manage the nation - a foundation of compacted BS
which provides a platform on which a network of well-connected
vampires schmooze, positioning themselves to pick up lucrative
government contracts. The mainstream mass media, up to its neck in the
same compacted BS, almost completely fails in its duty to monitor,
investigate, and inform, whilst a merry-go-round of
self-congratulations and industry awards is backed up with knighthoods
for the worst offenders..."

Well, we did say he was entertaining...

Besides the "It won't cost that much" argument of cities bidding for
the right to host the games, another selling point often used in bids
is how the Olympic venues will contribute to the development of sport
well after the 28-day blow-out. Generally the hope is that nice
stadiums will inspire young hopefuls to greater efforts. Sounds nice
in theory, but in fact there was a study done in the UK which found
that there is NO evidence to suggest that hosting an Olympic games
leads to an increase in the participation of physical or sporting
activities by the citizens of that country. Instead, those who were
already playing sports enjoyed the improved facilities post-games,
while those who watched the games continued to watch.

Our take is that although the 2020 games will be much more expensive
for Tokyo and its tax payers than initially estimated. But the mere
fact that the world will be looking our way will galvanize the
government into providing something of value and help turn the 2020
games into something that all Japanese can be proud of. This probably
will have a salutary effect on the economy -- just in time to help us
recover from the hit of the increased consumption tax. As a timeline,
historically other Olympic cities have experienced their peak economic
benefits 3-4 years before the games, which for Tokyo means 2016 and
2017. This is when real estate is being purchased, buildings and other
infrastructure are being built, and expectations are not yet being
impacted by reality. We suppose it's better for this construction
spending to happen in the capital rather than way out in the boondocks
on bridges to nowhere as it is now.

However, once the games get underway, if the lessons of London are
anything to go by, then there will not only be a depressed market for
tourism and domestic consumption in the 1-2 years after the games, but
possibly during them as well. Apparently about one third of London's
hotels had empty rooms during the Olympics, mainly due to price
gouging turning travelers off and partly because the London Organising
Committee for the Olympic Games (LOCOG) block booked 40,000 rooms for
officials and their families, only to dump a large number back on the
market again shortly before the games started. Tokyo has about 95,000
hotel rooms compared to London's 101,000 -- so the London experience
will be quite pertinent for Tokyo.

For the time being, though, we're happy for our Japanese colleagues,
and hope that the Tokyo Metropolitan Government hires some good
project managers so as to try to bring the Olympics in for at least no
more than JPY750bn, and without hemorrhaging that cash into the wrong
pockets as allegedly happened with Shinginko. We also fervently hope
that they will leave the green spaces of Yoyogi Park, including the
athletics oval next to NHK, out of the building plans. Readers may
recall that we sounded the alert on this once before when the Ishihara
government was planning to build over that oval as part of their 2016
games bid.

...The information janitors/

***------------------------****-------------------------***

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-----------------------------------------------------------

+++ NEWS

- Factories starting to produce functional veges
- Taxi forget-me-not system
- Spring Air to fly domestically from Narita
- UK's Fraud Office to take Olympus to court
- Japan and U.S. to share fingerprints

=> Factories starting to produce functional veges

Maybe not a new concept, but it seems that the Japanese are making
great strides in creating medicinally functional vegetables in those
hundreds of vegetable factories they've been building around the
country. This is a rather interesting article about a Fukushima
factory that is churning out low-potassium lettuces for people with
kidney disease and thus potassium intolerance. Normally lettuces won't
grow without potassium, so hydroculture company Aizufujikako has come
up with a way to simulate potassium without actually using the
nutrient. Worth a read. (Source: TT commentary from e.nikkei.com, Sep
4, 2013)

http://e.nikkei.com/e/ac/tnks/Nni20130904D03HH028.htm

=> Taxi forget-me-not system

Taxi company KM Holdings and software developer Ideacross have created
a system that can automatically tell if customers have left something
behind when they get out. In an ingenious system, they use 4 cameras
to survey the passenger seat before and after the passenger is there,
and use image comparison algorithms to confirm if there are extra
objects in the field of vision that weren't there before. ***Ed:
Probably not perfect, but four cameras should be able to see most
spaces in the passenger compartment.** (Source: TT commentary from
e.nikkei.com, Sep 3, 2013)

http://e.nikkei.com/e/ac/tnks/Nni20130903D03EE979.htm

=> Spring Air to fly domestically from Narita

China's Spring Airlines made headlines when it started offering
JPY5,000 one-way airfares to Shanghai from Ibaraki. As they've found,
though, Ibaraki is just far enough away that not many people want to
take advantage of the amazing deals. Luckily, they are now going to
start flying domestically, out of Narita. Granted, Narita is far away
as well, but at least budget travelers are used to the idea of going
there thanks to JetStar and others. Spring Airlines Japan will service
three as-yet undisclosed domestic locations. The company will operate
737 aircraft and start operations in 2014. ***Ed: While AirAsia is
temporarily out of Japan after its breakup with ANA, we see a number
of other competitors including Spring ready to come in and take their
place. Scoot Air is another one that comes to mind.** (Source: TT
commentary from bloomberg.com, Sep 5, 2013)

http://bloom.bg/13rBvOP

=> UK's Fraud Office to take Olympus to court

After no doubt hoping that the window dressing scandal was behind
them, Olympus has been hit with another serious challenge, this time
in the form of a prosecution that will be brought by the UK's Serious
Fraud Office. The SFO has advised that it will go after both Olympus
and its Gyrus subsidiary, for falsifying financial statements, actions
that can be prosecuted under the UK Companies Act. There is no
indication of what the penalties could be, but given that the people
at the center of the scandal got off with slaps on the wrist and
suspended sentences here in Japan, the expectation is that the UK
authorities will attempt to redress some of that imbalance. (Source:
TT commentary from nytimes.com, Sep 5, 2013)

http://nyti.ms/18CodPf

=> Japan and U.S. to share fingerprints

Continuing the growing interconnection of security systems between
Japan and the USA, the two countries have agreed to sign an agreement
which will give the authorities of both countries access to
fingerprint data of the other. On the basis of a positive match, they
will then trade additional personal data as well. Japan's NPA has a
fingerprint database of 10.2m people, while the USA has 74m people on
the FBI's database and another 21m people a year on the Department of
Homeland Security's database. ***Ed: We guess that it will be the
Japanese who will most benefit from this exchange.** (Source: TT
commentary from japantimes.co.jp, Sep 06, 2013)

http://bit.ly/17HZ973

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

***------------------------****-------------------------***

+++ WEB CONTENT/TECH VACANCIES

=> Are you in web content or engineering? If so, this section is for you.

** HIGHLIGHTED POSITION

Sales/Business Development

Japan Inc. Holdings is looking for a Salesperson or Business
Development Manager to work in its new team managing a major
Japanese-language pets portal. The opportunity involves getting
involved at ground level in developing a line of services and media
offerings for Japanese fans, retailers, and professionals in the
sector. The portal is at www.doglovers.jp, and thanks to a
crowdsourcing business model is on track to become Japan's largest
pets portal in the next 6-12 months.

Friendly team, contact with partners and prospects all over Japan, and
a leadership role are all part of the opportunity.

You should be outgoing, bilingual, good at developing new ideas,
energetic, and be interested in helping improve the lives of pets,
especially dogs, in Japan. Ideally we are looking for a native
Japanese person, however fluent bilingual non-Japanese applicants will
also be considered. Salary commensurate with experience. We prefer
applicants with 3-5 years experience in web business development and
marketing OR someone straight out of college who is willing to be
trained and mentored. Please send your resume to
jobs at metroworks.co.jp.

** OTHER MEDIA POSITIONS VACANT

- Bilingual account manager for major tourism portal
(www.japantourist.jp), JPY3M - JPY5M
- Japanese language senior editor, bilingual, JPY4M - JPY5.5M
- Bilingual web designer, for mostly Japanese-language websites for
foreign firms, JPY4M - JPY5M
- English-only experienced PHP Zend software developer, 5 years
experience, JPY3.5M - JPY5M
- IT Engineer to support 40 users in web media sector, 1-3 years
experience, limited Japanese OK, JPY3M - JPY4.5M

Interested individuals may e-mail resumes to: jobs at metroworks.co.jp.

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***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------- Free Legal/Accounting Advice?! --------------

Yes, that's right... Metropolis is offering free professional advice
by English speaking lawyers, accountants, and visa support officers to
any reader wanting help. Any problem related to legal matters, taxes,
company start-up, visa issues, etc., can be covered and the first
no-strings-attached consultation is totally free.

Date: Saturday, September 21 from 1pm to 5pm
Address: OG building 4F, 1-3-4 Nishiazabu, Minato-ku, Tokyo

* Each one-to-one consultation is limited to 30 minutes, and is
available between 1pm and 5pm. By appointment only. Email:
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-----------------------------------------------------------

-----------------ICA Event - September 19th----------------

Panel Discussion featuring key speakers: Ayako Takemoto, Annie Chang,
Xinmei Cai and Ery Blackstone of Women in Technology Japan (WITJ)

Title: "High Achieving Women Balancing Work and Lifestyle"
Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, September 19th, 2013
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members). Open to all. No
sign ups at the door!!!!!!!
RSVP: RSVP by 10am on Tuesday 17th September
Venue is The Foreign Correspondents' Club of Japan,
http://www.fccj.or.jp/aboutus/map
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

=> In Terrie's Take 724 we carried an article about the number of
Japanese singles aged 50 or more, and several readers pointed out that
we got our math wrong.

*** Reader: Note that the math in the following phrase doesn't seem
right. The percent of the in married population (combined men and
women) should be somewhere in between that for men and for women.
Perhaps 15%. This is in regard to the comment, "Apparently about 30%
of the population has never been married by the age of 50 (20% of men
and 11% of women)..."

Perhaps more to the point, having had a child in Japan with a working
wife, we found that child care (hoikuen) was crucial. More low-cost
child care in Japan is the key to more children being born *and* a
larger workforce (women) -- not more marriages. Or perhaps more of
that 11% of unmarried women would consider marriage if they felt
confident they could continue working?

***------------------------****-------------------------***

---------------- Help Still Needed in Tohoku --------------

The Japan Emergency Team, operator of Japan`s only Disaster Relief
Vehicle is asking for help to keep the Disaster Relief Vehicle
running. The DRV, a 30 foot converted Motorhome sleeps up to ten, has
shower, cooking, facilities and is still on site in Tohoku where it
assisted in providing showers, food and emergency assistance as it
still does. In addition it has a mobile `convenience store` which
provides necessities to those in temporary housing.

The Japan Emergency Team was formed in 1989 when 38 students from Chuo
University went to assist in the San Francisco Earthquake making
history as the first overseas disaster assistance from Japan. When
there is not an ongoing disaster in progress the DRV visits schools,
government and other events to promote disaster awareness and is as
much in demand when there is a disaster as when there is not.

Sponsorship includes a logo on the side of the DRV,  participation in
regular disaster awareness events and more. Those able to help are
asked to contact team at jhelp.com for a sponsorship packet or to invite
the DRV to an event.

-----------------------------------------------------------

+++ TRAVEL DESTINATIONS PICKS

=> Geibikei Gorge Boatcruise
The fish and songs of Iwate's largest gorge

Take a cruise down the Geibikei Gorge in South Iwate in a traditional
boat pushed by a guide who tells stories and sings songs of the river.
Pick up some fish food for 50 yen to feed the large gold and red fish
which follow the boat down the stream. The water is shallow and these
glorious fish are highly visible for the entire one hour trip. When
you reach the gorge, test your luck by seeing if you can throw a rock
from the bank into a small crevice on the rocky cliffside. [Ed: You
really have to listen to this boat lady sing. She could be in a folk
song contest on TV. All while poling a bunch of tourists down a
picturesque river in the mountains. Very memorable.]

http://en.japantourist.jp/view/geibikei-gorge-boatcruise

=> Restaurant Yo, Hokkaido
A Hidden Gem in Hirafu Village

Restaurant Yo is considered one of the best traditional Japanese
restaurants in Hirafu. The family run restaurant, located in lower
Hirafu Village, has been serving traditional Japanese cuisine in one
of the most intimate settings for the past 12 years.

Yo is a little different than most other restaurants in town due to
its set menu policy. Instead of Izakaya or A La Carte style dining,
there is a choice of six set courses which you must decide upon at
time of booking: Irori BBQ, Meat, Seafood, Shabu-Shabu, Vegetarian and
Kids course, each of which contain many different dishes and leaves a
little element of surprise as to exactly what you are going to get. Yo
is unique in that it sources all of its food it serves the day it
serves it, ensuring only the freshest ingredients are used.

The Irori course contains a selection of meat, seafood and vegetables
that customers cook themselves over a Japanese BBQ and is set aside in
an exclusive room, which is reserved for the Irori course only, and as
such, all of your group members must have the Irori course. If you
would like to try one of the meat, seafood, shabu-shabu, vegetarian or
kids courses, you will be seated in a separate, equally magnificent
section of the restaurant and each member of your group can enjoy
different courses.

http://en.japantourist.jp/view/restaurant-yp

***------------------------****-------------------------***

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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