Now that the cherry blossoms of spring have fallen, Tokyo and the eastern side of Japan (Kanto) are getting ready for a long hot summer. The challenge of rebuilding the devastated Tohoku region would be enough. But it must be done under the dual challenges of a 25% reduction in Tokyo Electric Power Company’s supply due to the earthquake and tsunami damaged energy grid, and the ongoing uncertainty about the timing and resolution of the still leaking Fukushima Daiichi nuclear facility. Summer is of course the hottest season in Japan, and those who have visited Tokyo know that its residents depend on air conditioning in their homes and offices, as well as in trains, stores, schools, etc.
An article posted on last month’s Nikkei.com stated that the current plan to cope with the shortage is for a mandatory 15% reduction of electricity use for businesses from July through September, 10 am to 9 pm, the peak hours for demand (Nikkei April 26, 2011, “Government Mulls Exceptions from Summer Power Restrictions”). The article continued by stating that the Japanese government was considering some exceptions to the planned restrictions on electricity use, including hospitals, rail, air traffic control, water, and sewage treatment facilities. It does seem difficult to limit hospital use of electronic medical equipment, and also hard on recovering patients to suffer the discomfort of hot stuffy rooms due to lack of air conditioning. Trains are essential for people to go to and from work. Reducing the number of trains is difficult, as they are already very crowded during rush hour. Some company employees will likely be asked to work from home, or commute during non-peak hours, as they were immediately after the earthquake and tsunami. And of course, air traffic control, water, and sewage treatment all seem essential. Businesses are now actively planning how to implement these cuts.
More recently, Prime Minister Kan asked a second utility, Chubu Electric Power Company, to shut down its Hamaoka nuclear power plant (Bloomberg May 9, 2011, “Chubu Electric to Shut Nuclear Plant; Boost Tsunami Defenses”). This facility is less than 120 miles to the south of Tokyo (Fukushima Daiichi is about 160 miles north), next to a fault line where experts have predicted a magnitude 8.0 quake to strike sometime in the next thirty years. Like the Fukushima Daiichi facility, Hamaoka is on the coast, and has an inadequate sea wall. The Prime Minister has asked that the utility keep the plant closed until a larger sea wall can be built, which will take approximately two years. The five reactors at the site generate 11% of Chubu Electric’s capacity.
What should those with work to do in Japan think about all this? From the healthcare business perspective, now is not the time to slow down business development activities. Japan is still the second largest healthcare market in the world. It is also facing difficult healthcare challenges due to its rapidly aging population. These two facts make it a logical high priority target for pharmaceutical, medical device, IT, and all innovative new health support technologies. Companies in Japan are anxious to return to normal, and the economy needs it. However, when you go to do business in Tokyo this summer, be prepared for hotter hotels and conference rooms, fewer and more crowded trains, less lighting in the Ginza, and perhaps slightly frayed nerves combined with shorter tempers. Bring your patience together with your short-sleeved shirts; I think it will be safe to leave the suits and ties at home this summer.
Gregg L. Mayer, PhD is a management consultant focusing on the healthcare markets in the US and Japan. For more information on this post or doing business in the healthcare field in Japan, contact Gregg Mayer at gregglmayer@mac.com