Galápagos syndrome

Galápagos syndrome (ガラパゴス化, Garapagosu-ka, / Galápagos effect) is a term of Japanese origin, which refers to an isolated development branch of a globally available product. The term is used as an analogy to a part of Charles Darwin Origin of Species. Darwin encountered in the Galápagos Islands isolated flora and fauna, which led to evolutionary changes. This phenomenon was a key to the development of Evolutionary Theory.^[1] Darwin stated that in the biological isolation species have evolved to develop different characteristics, allowing adaptation making them more viable in the local environment.^[2] Similarly, a development of goods "in relative isolation from the rest of the world because of a focus on the local market"^[3] can lead to similarly differing products.

The term 'Galápagos syndrome' has been used as a metaphor outside the field of economic terminology. Other related terminology is 'Galápagosization', referring to the process of the isolation of Japanese culture. 'Galápagos-thinking' links this process to the Japanese island-mentality.^[4][5]

Examples of the Japanese Gálapagos Syndrome

The Japanese Tech Industry

Mobile phones

The term 'Galápagos syndrome' was originally coined to refer to Japanese 3G mobile phones, which had developed a large number of specialized features and dominated Japan, but were unsuccessful abroad.^[6][7] Whilst the original usage of the term was to describe highly advanced phones that had no use outside Japan, as the mobile phone industry underwent drastic changes globally, the term was used to emphasize the associated anxiety about how the development of Japanese mobile phones and those in the worldwide economy went along different paths. A derived term is Gara-phone (ガラケー, gara-kei), blending with "mobile phone" (携帯, keitai), used to refer to Japanese feature phones, by contrast with newer smart phones.

• "Japan’s cellphones are like the endemic species that Darwin encountered on the Galápagos Islands — fantastically evolved and divergent from their mainland cousins — explains Takeshi Natsuno,professor at Tokyo’s Keio University."^[1] "Japanese phones suffer from 'Galapagos Syndrome' — are too complex to survive abroad.^[8]

• The term has since been used for similar phenomena in other markets

Cash machines

Across Japan, the majority of the 190,000 ATM's do not accept bank and credit cards that have been issued outside of the country. Currently, only about 20,000 post offices and convenience stores allow to retrieve cash using non-Japanese bank cards. Due to pressure from the Japanese government concerning this issue, by 2020 the number of ATM's that accept cards that have been issued outside Japan is estimated to increase from 48,000 to 80,000.^[9] Despite increasing numbers of international tourists in Japan, the country still attracts relatively few tourists according to the United Nations World Tourism Organisation, which ranked Japan 27th in the list of most visited countries 2013.^[10]

Wallet phone

In 2004 the wallet phone was introduced in Japan as a mean that allows mobile payment alongside numerous other applications. In some ways the wallet phone can be seen as a predecessor of mobile payment tools that are to be released on the global market such as Apple Pay or Google Wallet.^[11] The complete integration of multiple tools served to make the classical wallet redundant as the phone allows all types of payments, having train tickets or other everyday-needs to be organized on the phone. In many ways the Japanese contactless infrastructure has been and is superior as compared to the current state in rest of the world.^[12]

The Japanese Car market

Kei cars (軽自動車)

Kei Cars ("light cars") are small four wheeled vehicles/cars that have an engine of less than 660cc and enjoy preferential treatment in terms of tax advantages and insurance cost. The Japanese government encourages the use of those "light cars". This category of cars features a number of different car types including sport cars, Minivans or commercial vehicles. However, Kei cars are not seen as profitable in export markets and therefore are only part of the Japanese automobile market.^[13] Despite no significant global success, major Japanese car manufacturers such as Suzuki, Mitsubishi, Daihatsu and Honda still produce models belonging into the Kei car category.^[14]

Handling the Japanese Galápagos syndrome

There are many associated issues with the inability to compete on the international export market. In order to revive the parts of the Japanese economy that have suffered from the 'Galápagosization', affected businesses had to find the reasons responsible for the development.

"The Galápagosization of Japan continues. According to a survey released today, a shocking two-thirds of the country’s white-collar workers said they didn’t want to work abroad…ever."^[15]

Reasons for the issue and associated implications for businesses

Furthermore, this has led a number of Japanese companies to adapt their business strategies. Hiroshi Mikitani, Japanese business man, sees the exclusive use of Japanese in workplaces at the centre of the problem. Following his belief that "a language will open your eyes to the ‘global’, and you will break free from this conventional wisdom of a pure Japan",^[16] the co-founder and CEO of Rakuten made English the main language to be spoken in the company. Dr. Gerhard Fasol, working for Euro Technology Japan and only European member of the 'Galapagos study group', stated that another reason for the non-success of some innovative Japanese products is Europe's conservative standpoint when it comes to certain standards.^[17] In the belief that it will improve international competitiveness Tadashi Yanai, the founder and president of Fast Retailing, has decided to change the way the firm works against classical Japanese business methods. A shift of the production of some textiles out of Japan to Southeast Asia was a move to the low-wage-labour market, that aimed to enable to price compete on the international textile market.^[18] Another factor which McKinsey & Company points out is the need for Japanese companies to adapt to stronger competition when entering global markets. This should be done by accepting to think in "new and unfamiliar ways about organization, marketing, and strategy", whilst the traditional practices that helped the companies to become a big player in the Japanese market shall be discontinued.^[19] Despite the fact that companies have started to address the issue, which could have a link to the over the past five years increasing total value of exports, there are concerns about the future galápagosization of Japan.^[20]

Future threats

With the aging and shrinking Japanese population, the fact that less and less students study abroad to acquire a more internationally oriented university education is reason for concerns over the future of the Japanese economy. Furthermore, there is a conception that the younger generation could enhance the Galápagos effect due to a lack of interest in international education and work placements.^[21] Kiyoshi Takeuchi, sociology professor at the Sophia university, describes the young generation to have less "ambition and motivation" as a result from the fear that a wrong move could have negative effects.^[22]

Usage of the term referring to instances outside Japan

The United States of America

• The United States' outdated usage of magnetic stripe for credit cards can also be considered a form of the Galapagos Syndrome as everywhere else has moved onto using EMV smart cards. "In the Americas, the more mature, out-dated magstripe cards are the dominant if not exclusive technology for swiping a payment. In Europe and Asia -- virtually everywhere else, they use a smart chip technology which is a little, gold square on the front of every debit and credit card which you insert, not swipe. This is also known as "EMV" (Europay, MasterCard, Visa)." ^[23]
• "It has been claimed that the indigenous American automotive industry has suffered from the Galapagos Syndrome – its products have evolved separately from the rest of the world."^[24]

Europe

• "Europe might now be facing its own 'Galápagos moment.' ... It may be that Europe’s postmodern order has become so advanced and particular to its environment that it is impossible for others to follow. It evolved in a protective ecosystem, shielded from the more muscular, “modern” world where most people live." - Mark Leonard (director) describes threats of how, against the predictions he made in 2005 in his book Why Europe Will Run the 21st Century, the political development of the European Union happened isolated and differently than in any other political system in the world.^[25]

China

• "China has made the development of indigenous technology standards ...a core component of its industrial development strategy." ... "But, by using indigenous rather than global technology standards for ICT products, China risks engendering a 'Galapagos Island' effect that isolates Chinese ICT products, technologies, and markets"^[26] - Stephen Ezell and Robert D. Atkinson describe a similar phenomenon pointing out associated threats this could mean for the Chinese economy. The selling of a product in China could become more expensive for foreign producers due to the fact that they now have to incorporate the Chinese technology standards into their firm. In theory, this could be beneficial for domestic producers. However, this could also lead to an isolation of the respective domestic producers due to less international competitiveness.^[27]

See also

• Exceptionalism
• Big in Japan (phrase)
• Island gigantism

References

External links

• Slowing Japan's Galapagos Syndrome article from Huffington Post.
• Japan’s Under-used Economic Engine — The Internet?