Corporate e-learning in Japan: a new multibillion-yen business

Japan, Inc., Feb, 2005 by Jeff Schnack

Hidekuni Komatsu, Director of Standards Research at NTT Learning Systems as well as Chairman of the e-Learning Consortium, identifies a more specific issue affecting the growth of the e-learning market in Japan; specifically, the country's lack of trained multi-media instructional designers and other specialists. "Japan's personnel system emphasizes job rotation, leading to development of generalists. When such managers take over an HR training function, it is hard for them to see the real strategic advantages that e-learning can offer. I sometimes meet professionals from corporate America that hold joint titles such as Chief Information Officer and Chief Technology Officer--these are the type of specialists that can really help to transform a company because of their ability to see e-learning as an information technology system. But unfortunately, we have not trained many of these professionals here in Japan."

Others disagree with this assessment. Toru Kishida, President of Net-Learning, Inc., believes that user needs are simply not being met by current players. "There are perhaps 500 or 600 companies providing e-learning systems and services here in Japan. But only a handful of these are ventures, like us. Most are large companies that got into e-learning just to sell their existing systems or other products." This leads to an overemphasis on hardware and complex IT systems, which client companies purchase but then have a hard time in using properly. "As one of my customers put it," continues Kishida, "I go out to buy books and everybody is trying to sell me bookshelves instead."

Kishida, who worked in new business development at SECOM before founding Net-Learning in 1998, takes a different approach, concentrating exclusively on his mission to create Japan's leading purveyor of "total e-learning solutions." Net-Learning offers over 550 separate "catalog" courses, ranging from basic skills training in Java and TOEIC preparation to privacy law compliance, sexual harassment awareness, and corporate social responsibility. But their strength is in customizing an out-sourced package of unique services for each client--including custom program development, LMS platform operations, usage administration and completion reporting. And it seems to be working: since their establishment in 1998, Net-Learning claims to have e-trained more than 667,000 persons--the most in Japan--while achieving an average completion rate of 90 percent in comparison to an industry average of less than 30 percent.

The evolution of mobile phone technology is another area of interest to content and service vendors such as Net-Learning. As content availability becomes "ubiquitous," more and more employees, hobbyists, and part-time students will be catching up on their e-learning during their daily commutes on the train. Net-Learning recently launched one such program for retail sales staff at Kanebo's cosmetics division. Designed as a follow-up to classroom teaching, content made available on the mobile phone platform includes text summaries that have been simplified considerably to facilitate easy navigation from a mobile phone keyboard, and quizzes that are limited to short multiple-choice or yes/no questions. The project will begin with 2,000 employees, with Net-Learning earning 200-300 yen in content licensing fees each time a user initiates a new session. Net-Learning expects sales of 50 million yen for this service in their first year of operation.