Joi Ito's Web

Joi Ito's conversation with the living web.

I first started to work with China when we invested in a company that was trying to get a wireless permit in China and I had the opportunity to meet many Chinese officials. Some told me that they thought I made a mistake spending time in the US for the last 18 years and that I should focus on China which will obviously have more influence over Japan than the US. On the other hand, it's not too late.

So, this is a result of many long discussions with Leonard Liu...

First of all, Taiwan will become part of China eventually and we should look at how Taiwan Inc. operates. They bootstrap. They first make displays for calculators, then they made calculators, then PC's and now Quanta makes more laptops (designs them too) than any other company in the world. DVD's because of the popularity of DVD's caused by the lack of copyright regulation in China are mostly produced in China. DVD's are one of the most profitable components of the living room appliance suite. Japan is working hard on high end things like video cameras and might end up in a similar situation to the Americans who invented the TV, but didn't benefit from the business. China will probably make most of the DVD's and TV's and make all of the money.

The risk here for Japan is that Japan is 5 years behind the US and have not been able to take the "shallowing" strategy that US companies such as Compaq and Dell have been able to take. This strategy is to shallow the products and not give up market share. They now outsource almost everything to Taiwan. Japn is going down the deadly path that IBM and GM went down. Japan is trying to go high end. You can't buy a Japan PC under $1200.

On the other hand, Japan is losing competitiveness in manufacturing. Taiwan has 12 inch wafer fabs, Japan doesn't. So Japanese cell phones have cool applications, but deep down inside, they are not that smart and may not be able to compete long term with phones designed by Taiwanese with access to the most advanced semiconductors.

It is obvious that China will learn the Taiwan Inc. business model and will start from the bottom and bootstrap up and take over much of manufacturing from Japan. Japan needs to assume that they will lose manufacturing to China and focus on services, IT and bio, all sectors where we currently suck.

We need to purge the system of banking and government relationships that are causing Japan to be focused on the sector at extreme risk from the Chinese.

So my Brainscan (the 3 minute blurb that we give in front of everyone) was something like the following:

I'm the only Japanese at this conference of over 100 people. I guess it is an acknowledgement to the 2nd largest economy but a sign that everyone is saying, "call us when you figure it out." I'm on the China panel today so maybe that means that everyone thinks Japan is soon going to be part of China. Anyway...

The Japanese economic problem is based on the dysfunctional market and the lack of a working democracy. At this conference everyone has been blaming the US for stuff so I'll do that too. The US left the gangsters and the bureaucrats in power to fend of communism. If Japan had been allowed to become a democracy, we may have become a communist nation so maybe that made sense. Anyway, we need help transforming our Japan into a true democracy.

The Internet is an incredible tool and an incredible risk.

The printing press created public opinion that forces politicians and corporations to be accountable. Blogs, personal publishing, instant messaging and other Internet tools could transform the public into a much more active force.

On the other hand, privacy technology is essential to protect the right of people to transact, communicate and not be profiled. Privacy underpins democracy. Without privacy, there is no public debate, there is no dissent, there are no revolutions. Privacy is about data structures and architectures which are extremely political. The US will work to protect the privacy of its own citizens, but they are not incentivized to protect the privacy of citizens of other nations. All nations must focus on and cause privacy to be protected since privacy will not be driven by purely market forces at this stage and once privacy is lost, it is impossible to un-do disclosure of your personal information.

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Was all ready to go with my 3 minute brainscan, but got bumped because the schedule got out of control... Oh well. I guess I'm supposed to do it today. My China panel is also today.

Yesterday we had cocktails at a house in the mountains of Aspen. It was huge and beautiful. The view from the deck was amazing. No wonder everyone dreams of having a home in Aspen.

Later, we had dinner at an Italian resetaurant near the hotel. I missed the first bus and showed up after Paul, Ned and Stewart had almost finished eating...

Afterwards, we went to the bar at the hotel where Bill Clinton and Shimon Peres were have a dialog over drinks. My jet lag was catching up and I was full of wine and pasta so I couldn't "get into it" for too long, but it was a frank dialog. Including his remarks during the day session, I was extremely impressed with Bill and his intelligent comments. He had very thoughtful comments on the global ecology, the Middle East, the HIV problem and many other things. I wonder why he didn't share more of his thoughts on these important issues when he was in office. I guess he couldn't afford to do it politically.

I didn't really get to hear very clearly what Shimon Peres was saying, but he will be making a more formal presentation during the day today so I will get a chance to hear him again...

John Gage set up 802.11 in the main room of the conference so I'm online live now. Cool. The king of Jordan is talking now and I'm sitting between Stewart Brand and Paul Saffo. Shimon Peres and his bodyguard are sitting next to Paul. We're all sitting in Herman Miller Aeron chairs sponsored by Herman Miller. (The Levis of the new economy.)

The King of Jordan just said, "We find ourselves between Iraq and a hard place." ;-)

The King was incredibly articulate and impressive. He said that it was the Americans who supported Islamic extremism in the region because they used them to fight their wars. The war on terrorism is a war between fundamentalism and modern Islam and it was the rest of the world joining this struggle, not the other way around.

Many people ask my what Neoteny (my company's name) means. It means the retention of childlike attributes in adulthood. I first heard it from Timothy Leary when we were working on a book together. (It was called "The New Breed" about the techno youth culture. We never finished it, but I still have a pile of notes. Maybe I should get around to publishing some of it someday...) Tim loved the word. He used it to mean all of the great things that you often lose in adulthood such as curiosity, playfulness, imagination, joy, humor, wonder, etc. It is a biology term that the people in evolutionary theory use to when discussing traits that we retain in adulthood like lack of body hair, etc. There is a good web site about Neoteny at www.neoteny.org.

Adulthood in the past meant that you finished learning most of what you needed to learn and you switched to production mode and started focusing on repeating tasks and narrowing your focus. I think that with the amount of change in the world today, it is impossible to "grow up" and finish your learning. I think Neoteny will become more and more of a survival trait in the future.

On the other hand, Neoteny means some strange things as well. It is sometimes used in the context of sexual preferences, stunted growth and other problems. When Jun was joining Neoteny and he asked a high school student whether they knew what Neoteny was and the student said, "Giant tadpoles". So, there are pros and cons.

When I say Neoteny on the phone, it is often mistaken for New Otani. There was a company callled Neonagy (ne is roots, onaji means "same" so they meant "our roots are all the same" in Japanese.) and many people make mistakes and call us Neotony. But, I think that as the world starts to focus on biotech, I'm glad I picked this name instead of e-blahblahblah, i-blahblahblah, Netblahblahblah, blahblahblah.com or blahblahblah incubator. ;-)

NEOTENY, AND THE FUTURE OF HOMO SAPIENS A short contribution from Victor Serebriakoff

Neoteny describes the fact of evolution, that the new species emerge from the form of the young of the evolving species. The hominids arose from the Bonono or chimpanzee stage because their young stayed young longer, they remained experimental, playful whimsical longer and longer. There is, with homo sapiens, a developmental pause at the age of three which continues until the sudden changes of puberty. Homo has the longest period of immaturity of any creature on Earth. It is almost two decades from the stage of an almost helpless, senseless and completely dependent baby until the fully developed adult.

And this tendency appears to continue. We may notice that while most of humanity stop play and begin to work most of the daytime in their early twenties and play only in their spare time, there is a significant minority who continue to play all the time. They are usually the most gifted and talented, they become scholars, students and artists and occupy themselves with tasks for which their is no immediate substantial gain for themselves, intellectual tasks in fact. This is a continuation of childish behaviour and that minority contains all the intelligentsia. With the development of automation, the increase of prosperity and the availability of unlimited energy - see later contribution - the proportion of the neotenous minority will increase until it become a majority, I believe.
Victor Serebriakoff.

An article called "Awakening genius in the classroom"