5 reasons Japan is a tech leader

12/15/2014

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A country that often seems to move to its beat, Japan has long been an innovator in digital technology.

People were surfing the internet, taking photos, and paying for content on their mobile phones in Japan long before anyone had begun calling phones "smart."

The truth is Japan is futuristic.

That said, not all of its tech has transitioned smoothly to markets beyond its shores.

Let's discover five great examples of its pioneering spirit.

#1. Mobile internet in Japan as soon as 1999

NTT DoCoMo, Japan's biggest mobile carrier, launched its i-mode mobile internet platform back in February 1999, when it was the most advanced system of its kind in the world.

This was swiftly followed by rival platforms from competitors au and J-Phone (what is now SoftBank), and mobile internet was the perfect companion to the long train commutes that are normal in Japan's major cities.

However, DoCoMo's i-mode platform failed to catch on overseas.

"DoCoMo had made this beautiful world and tried to take it outside Japan, but it didn't work," says Gerhard Fasol, CEO of consultancy Eurotechnology Japan and veteran analyst of the domestic telecom industry.

Operators elsewhere also tried this "walled garden" model, but ultimately, operator-controlled portals have been replaced by app stores.

#2. Where is the biggest market for apps?

Another early-adopted habit that has helped shape the digital landscape in Japan is paying for content.

Customers have been willing to spend their hard-earned yen on everything from ringtones and games to emoticons and serialized novellas.

The result?

With the spread of smartphones - which was a little slow in Japan, due to the advanced functionality of the existing feature phones - the market for apps has exploded.

Japan became the biggest app market in the world as soon as 2013, despite having a population a little more than a third of the size of the US.

Yes, you read that right.

Japan displaced the US from the top spot.

Most of this is driven by games, and one title in particular: Puzzle & Dragons.

The role-playing and puzzle hybrid generate millions of dollars a day in revenue for publisher GungHo, using the "freemium" model that encourages the user to purchase special in-game items.

#3. Contactless payment

The contactless revolution is spreading rapidly around the world. Still, it's long been prominent in Japan, driven by public transit cards such as Suica and Pasmo, both based on the Sony FeliCa technology used in Hong Kong's Octopus system.

The use of the cards has spread from train station kiosks, vending machines, and convenience stores to taxis, supermarkets, and restaurants.

While early issues with compatibility meant, for example, that travelers between Osaka and Tokyo found their transit cards didn't work, these were primarily resolved in March 2013 when the seven most frequently used systems were all made interoperable.

#4. M2M on the roads of Japan

Nissan's Leaf electric vehicle can communicate with mobile handsets.

Leaf drivers can remotely activate functions such as charging and air-conditioning, receive and answer texts in audio form, search for shops and restaurants, and automatically send out emergency messages if they are in an accident or run out of power.

At the heavier end of the vehicle spectrum, M2M applications have been deployed in the Komatsu firm's construction and mining machines, which are sold worldwide.

The data sent from the machines, including information on everything from battery health to oil levels, helps prevent delays in construction and road repairs due to machines breaking down.

The big data sent back to Komatsu also created an unexpected by-product: an up-to-the-minute, frontline picture of the activity in crucial industrial sectors, through measures such as the number of hours the machines are active.

#5. An NFC ecosystem for a cashless society

As Tokyo works toward hosting the 2020 Olympics (now to be held in 2021), there are many initiatives underway.

One, in particular, is to create an infrastructure that will allow the seamless use of NFC technology from around the globe at railway stations, airports, ATMs, taxis, and shops in the city where the technology first took root.

Passengers on JAL, the country's biggest airline, are already checking in and boarding flights using their mobile phones, the first service of its kind in the world.

With this extensive digital network, coupled with its citizens' unflinching devotion to their mobile devices and a cashless culture, Japan should continue to be one of the world's leading digital innovators.