Getting on Track
The year 1964 was a watershed year in Japan’s postwar history. Tokyo hosted the Olympic Games, and the country was keen to show the world its immense technological and industrial progress achieved during the early postwar years.
The brand-new Shinkansen bullet train had just been rolled out. Ready, too, for the Olympics was the Tokyo Monorail, the space-age-looking elevated rail system that shuttled foreign visitors into downtown from Haneda airport.
But the monorail wasn’t actually an indigenous product. Rather, it had been designed in Germany by a now-defunct company called ALWEG and built in Japan under licence. So the first encounter by many overseas visitors with Japan’s impressive civil engineering was actually with something designed in Europe.
Nearly half a century later, however, the monorail remains one of very few vestiges of European involvement in Japan’s railway industry. Foreign rail manufacturers have failed to make the slightest dent in the Japanese market. Even upgrades to the monorail have been made by Japanese manufacturers.
Asked to cite current market share figures held by European rail manufacturers in Japan, Kai Taylor, chairman of the EBC’s newly formed Railway Committee, says: “Without having firm data, I think it’s fair to say European manufacturers have less than 1%.”
Fellow committee member Kurt Sieber points out that only about 200km out of the total 32,000km of track in Japan is partly equipped with European products.
Europe has some of the world’s best train technology. France’s TGV is, after all, the fastest regular train service on the planet. At the same time, Japan is a massive and lucrative market. Fully 68,000 train carriages run along the nation’s rail network. Each year, about 2,500 new cars are manufactured.
So why hasn’t some of the world’s best train technology managed to make contact with one of the world’s most developed and extensive markets?
In answer, the committee points to the very structure and habits of Japan’s rail industry. In a nutshell, since 1987, this vast industry market has been dominated by the Japan Railways Group, successor to state-owned Japan National Railways. JR companies now operate about 70% of Japan’s rail network. The rest of the network is run by 85 private companies.
Although Japan and Europe arguably have the world’s best railway infrastructure and railway manufacturers, there is no common approach to standards between them. This is further complicated by Japan’s use of a safety clause allowing Japan to exclude non-Japanese manufacturers from government procurement contracts. This issue is at the crux of the committee’s grievances.
“There’s an almost invisible pressure to follow the JR way, even if you’re not a JR company,” says Taylor.
The situation in Japan contrasts sharply with overseas, where manufacturers are free to develop their own trains and systems, which they then market to rail operators. Such arrangements allow the creation of increasingly open, non-propriety rail systems, based on industry-wide technical standards. In Japan, on the other hand, any specifications tend to be the ones dictated by JR.
“JR wants systems developed according to their own recipes,” says Sieber. “It doesn’t matter whether or not these systems are the best in the world, and that leads to the lack of a competitive position for railway systems overall on the world market.”
The other practice the committee would like to see end is the use of recommendations – rather than binding directives – by government regulatory authorities. This often leads to the prolonged use of obsolete systems which can have harmful environmental effects, such as when operators refuse to install anti-noise or anti-vibration technologies unless they’re forced to.
“[When] there’s only a recommendation, no one is going to follow it if it’s going to cost them money or make their life a little more complicated,” Taylor says.
The committee, formed in September, aims to promote standards that span Europe, Japan, and if all goes well, beyond. The idea is not merely for the benefit of European companies eager to crack the Japanese market; potentially, the adoption of standards could spur collaboration between Japanese and foreign companies, and open international markets for Japanese companies.
“If you have the ability to cooperate and work together on a level playing field, you can create new business, new ideas, new possibilities and more efficient technology. Whereas, if you lock things out by default, where is the incentive?” Taylor says.
Still, the committee faces an uphill task to shake up a cozy, protected system. At the same time, change may come anyway, given the powerful external forces of globalisation, argues Sieber, who cites the case of the ill-fated development by state broadcaster NHK of a high-definition TV system still using analog technology.
“Ultimately, Japan had to give in and had to admit to itself that, yes, the rest of the world was going digital, and that it couldn’t just go it alone with analog,” he points out. “Japan will have to adjust its standards to the rest of the world, and it’s a process that will continue with globalisation.”