Automation promises big opportunities for quality software

Abenomics has been highly criticized in the past few months, but we have come across many leaders here in Japan who seem to be very happy about it. What is your perspective on Abenomics; has it made Japan more competitive in terms of your sector? Has it had a positive effect?

Japan has been struggling since the collapse of the IT bubble, the Lehman shock and the East Japan Earthquake in 2011. We call it the “lost two decades” and people thought Japan would never be able to revitalize again. In this tough period, the Japanese government changed from the Democratic Party to the Liberal Democratic Party with the establishment of the Abe cabinet.

Abenomics was inaugurated to revitalize the Japanese economy. It is constructed with the three main arrow strategies of “Flexible Monetary Policy”, “Bold Fiscal Policy”, and “Growth Strategy”. I believe the growth strategy arrow has not yet been facilitated enough since the state has not led to economic growth.

Although the growth strategy has struggled to be inaugurated, the Japanese economy is steadily improving and I believe Abenomics is still in the middle of the execution stage. If the growth strategy can be attained, I believe the economy will improve tremendously. The full effect of Abenomics is yet to come, but the establishment of the reforms has immensely changed the mindset of the Japanese. The country’s economy was drastically falling due to the big damage that the Lehman shock and the East Japan Earthquake had on Japanese corporations. However, when Abenomics was put in place in these dark times, it helped many corporate leaders to strive for revitalization. Many companies may be satisfied with the results of the reforms; however, as for CEC, we are not yet in the situation to be satisfied, but we are expecting a positive outcome down the line.

In retrospect, the Japanese government has gone through a lot of changes and many of the visions and policies were set on a short-term outlook. Compared to the past administrations, the Abe cabinet has been achieving stable regime management, which has led to a sense of relief from the corporates’ side.

What are your expectations of the TPP in terms of how you believe it will affect your sector?

Our company is involved in the IT industry, so in terms of the idea of free trade, the TPP will not have a direct impact on CEC. Also, as the Japanese IT industry is overwhelmed by the US, the effect would not be great. However, the TPP will influence export businesses such as the automotive, hardware and robotics industry, and from that, we can expect indirect benefits.

With the facilitation of businesses, the demands for IT services will increase, which will eventually lead to sales of our products and services. For example, there is a genre in the US called “Industrial Internet”, or the so-called fourth industrial revolution. This genre will increase the global competitiveness of the manufacturing sector and that will lead to more opportunities to utilize IT.

Moving onto CEC, in two years you will celebrate your 50th anniversary. That is quite a milestone already. From your own perspective, what do you consider have been the key milestones that have allowed CEC to evolve in this successful way and get where you are today?

In my personal opinion, CEC is still in the stage of growth, and it has not yet developed to the point where I am satisfied.

As for the company’s turning point, as I mentioned earlier, our company was jeopardized by negative events such as the collapse of the IT bubble, the Lehman shock and the East Japan Earthquake. We were able to revitalize the company by striving to come up with products and solutions to confront these predicaments. I believe this is one of the reasons why we were able to sustain the company for such a long time. Since manufacturing plays an essential role for the economy, we want to offer our manufacturing clients IT products and services to boost efficiency of production procedures.

Japan is currently facing a population decrease and low birth rate, which leads to the declining of the labor force. In order for our manufacturing clients to maintain and expand their global competitiveness, it is essential for them to fully utilize IT technology to boost production rates.

In Japan, there will be a very particular challenge in terms of developing the IT sector, because very soon automation will have to replace tasks that human labor force historically has been doing. Cashiers, parking lots, banks – there will be a strong demand for IT to solve those problems when the demographic problems are getting closer. How do you see the future in terms of the IT sector?

This will definitely be a big opportunity for Japanese IT companies. The software industry is led by US companies such as Apple, Microsoft, and Oracle, but mainly with basic software and middleware business.

In the world of application, we believe we can provide service that relates to the characteristics of Japan but that can also contribute to the world. In that sense, we are referring to the manufacturing sector. Japan has a competitiveness in the global market in terms of exportation just like it is represented in the automobile industry. Fast, precise, and high quality production can be applied to any manufacturing business. If we can offer software that can contribute to manufacturing operations, the market will expand not only in Japan, but globally.

Obsession towards quality can be said as one of the characteristics of Japan and it is also a national uniqueness. If we can offer high quality software that meets with the demand of the manufacturing business, it will eventually be utilized in foreign countries.

How are you looking forward to the next five to 10 years in terms of evolving and taking the company to the next level?

Our mission is not merely expansion of the company. Our goal is to become a good company. Regardless of the size, we strive to establish a well-balanced company that can meet the demands of our employees, clients and stakeholders and by maintaining that, we will strive for gradual growth.

Do you believe that the IT sector has the potential to become one of the first sources of employment in Japan?

I believe the IT industry offers big employment opportunities. There has been a lack of IT engineers in Japan in recent years and the demands will increase. With the trend of the fourth industrial revolution, AI technology and automatic driving for instance, there will be an immense demand in IT engineers and it is the market that is expected for further growth. In my personal opinion, foreign opinions on the Japanese employment environment are quite superficial. Japan is an affluent country with many job opportunities. However, there is a tendency for people to seek better jobs. If you look at the complete unemployment rate, it is around 3% and it is close to the state of full employment. Therefore, it is unfair to say that Japan is failing in terms of its employment environment.

There is an issue regarding the employment of full-time and part-time workers, but this issue can be solved in the matter of time. As you may have noticed, there are a lot of foreigners and foreign students working at Japanese convenient stores, shopping malls and even bars. This is not because employers do not want Japanese employees; it has to do with the fact that Japanese people are looking for better job opportunities.

The fourth industrial revolution is more about understanding technology and putting it at the service of people, rather than innovating the next big thing. From your perspective in software development, taking all these developments into the practical use, what do you think is your role in enhancing production, in enhancing processes, and what do you think is the future in terms of this?

Our company’s concept is the utilization of virtual reality. It is utilized by conducting prior examination to find the optimum way of production by carrying out simulation by virtual reality in an actual factory. By applying the results to production systems in an actual factory and repetitively conducting simulation by the virtual system, we believe we can increase the efficiency of high production activities. We are striving to offer a software line-up that can make this happen.

Also, I believe there is a necessity to inherit the technology and know-how of skilled workers with the power of IT. Many of the skilled workers are facing retirement and we are developing software that can learn and practice the same skills the same way that artisans do.

We are moving into an era where machines are building things, and at the end of the day, machines are just pieces of metal with cables. The mind of the machine is in the software. How can we preserve the “monozukuri” spirit, this obsession for perfection, when the ethical codes now have to be in the software?

Monozukuri relates to Japanese identity, tradition and culture. It is not something that can be maintained consciously. It is something that is rooted deeply in the Japanese ideology, and something people are proud of. I believe this traditional spirit can be maintained. In Japan, there is a word called Omotenashi, which means having compassion to others. Manufacturing is about making consumers happy by creating products.

When Americans open home parties, they have similar spirit of that of Japanese. However, Japanese apply this spirit in the business environment and that is one of the traditions of Japanese.

Looking to the future, how would you like to be remembered by your clients and the people working at Computer Engineering and Consulting? How would you like your company to be positioned in the next 50 years?

50 years is quite a long time. I do not specifically have an objective towards the next 50 years but as I mentioned before, the IT industry is led by the US companies and I believe Japanese hardware will be disseminating in the global market first. I have a similar philosophy to that of Sony’s, but I want this company to create “Made in Japan” software products that can be used worldwide.

Since Japan is an island country, there might be things that may not be accepted due to the difference of culture and characteristics. However, Japan has a strong foundation in terms of its manufacturing sector, which has a high competitiveness abroad. If CEC can create software that can be applied in the manufacturing sector, it will be accepted broadly. As for my personal goal, I want to build this company to produce products that are used worldwide.