Japanese Ventures & the Future of the Economy 2Enjoying Work Can Leadto an Innovative Economy
Author Naoyuki Haraoka

By Naoyuki Haraoka

Introduction
The city of Nagoya, the fourth largest in Japan after Tokyo, Osaka,and Yokohama, is the capital of Aichi Prefecture. It was the host city
for the World Exposition in 2005 and the original manufacturinghome of several gigantic Japanese multinational corporations, suchas Toyota and Sony.
Ms. Asako Katsuragi, featured in this article, told me that people inNagoya are proud of their industries and also of their agriculture as
one of the largest producers of vegetables in Japan. They are alsoproud of three historic heroes — Oda Nobunaga, Toyotomi
Hideyoshi and Tokugawa Ieyasu — feudal lords from the Nagoya
area in the 16th century who were successful in reuniting a country
that was divided at that time into many local fiefs ruled by hundredsof feudal lords. All of them are well-known figures in Japanese
school history textbooks.
Ms. Katsuragi was born in Kyoto but moved to Nagoya around six
years ago while working for Sanken Corporation, a company
engaged in expanding the application of carbon fiber. She has twochildren, one at elementary school and the other in kindergarten, andseems to be enjoying her life in Nagoya, though she finds people
there a little reserved.

Asako Katsuragi working for Sanken Corporation in Nagoya

https://www.jef.or.jp/journal/Carbon Fiber: Amazing Material
for a Wide Range of Uses
Carbon fiber is an amazing material that can be used in manyindustries and products, ranging from golf shafts to airplanes andspace satellites. According to the website of the Japan Carbon Fiber
Manufacturing Association, carbon fiber is a fibrous carbon material
with a micro graphite crystal structure made by fibrillation of acrylic
resin, a well-known textile material, or from oil/coal pitch, and thengiven a certain heat treatment. Ms. Katsuragi told me that carbon
fibers could now be largely classified into two categories — thosebased on Polyacrylonitrile (PAN) and those based on pitch. PANbased fibers are the mainstream and are produced from acrylic resinand pitch-based ones are made from by-products of coal oil and coaltar. PAN-based carbon fiber is, in short, light, strong and hard. Its
specific gravity is one-fourth of steel’s and its strength is 10 times
higher than steel’s. Whereas another strong fiber called aramid does
not have conductivity and cannot be cut, PAN-based carbon fibers
have conductivity and can be cut. They are also heat-resistant andthus cannot be incinerated under normal conditions. As it has
conductivity, one of the major uses of carbon fiber is in personal
computers.
By taking advantage of such characteristics, carbon fiber
reinforced plastic (CFRP) is used for a wide range of industrialproducts such as golf shafts, fishing rods and other goods for sports
and also in aircraft, automobiles and PCs. As CFRP is used for somany industrial goods and is heat-resistant, in disposing of suchproducts it is necessary to bury them underground. Japan began
production of both PAN-based and pitch-based carbon fibers in theearly 1970s and is now the No. 1 producer of carbon fiber in theworld.
I asked Ms. Katsuragi why carbon fibers do not seem to be somuch in use at this time, even though there is such a wide range ofusages for them. She told me that one of the reasons could be theirhigh price. A lighter made using carbon fiber is very expensive andcould cost tens of thousands of yen. But she also mentioned somenew uses of carbon fiber recently developed. One is for the rotor
blades on a wind turbine and another is for small heater systems forrailways. They produce sheets of heating elements from carbon fiberand use them in small heaters. People living in a cold climate would
Japan SPOTLIGHT • January / February 201959

Japanese Ventures & the Future of the Economy 2find these heaters very convenient.
She also talked about the importance of recycling. CFRP is a
mixture of carbon fiber and resin and it is necessary to extract thecarbon fiber from the resin to reuse it. But the technology developed
so far for recycling is expensive and unlikely to prevail as a commontechnology. Only a few companies have started it on a commercial
base and most of the industrial waste containing CFRP is still buried
underground. But if this can be achieved at a reasonable cost and ona larger scale, we could see a more expansive use of carbon fiber byrecycling it. With more recycled carbon fiber, we could save large
amounts in energy consumption and thus make a significant
contribution to a better global environment.

Expanding Uses of Carbon Fiber
Ms. Katsuragi previously worked for a telecommunications
venture immediately after graduating from university. She took time
off after getting married to raise two children, but when her second
child turned nine months old she began working part-time again andthen joined Sanken, where she is now in charge of PR andmarketing.
Sanken was founded on Feb. 16, 2011 in Nagoya with a patented
civil engineering technology for a carbon fiber-based nonwoven mat.
As Sanken’s founding members were originally working in theconstruction business, the company has been closely working on
infrastructure construction. Its patented technology using carbon
fiber was helpful in the rebuilding of infrastructure. For example, withthis mat, repairing old buried pipes was easier and less costly thanconventional methods and thus the life of those pipes wasprolonged. In October 2013, Sanken was awarded the Nagoya City
Industrial Technology Grand Prix, as well as the Prize of theChairman of the Industry Promotion Corporation of Nagoya. It wasprovided with a subsidy from METI’s Small and Medium Enterprises
Agency in 2013, 2016 and 2017. In April 2016, Sanken built a factoryin Mizunami city in Gifu Prefecture, around 40 kilometers northeastof Nagoya, and in March 2017 it separated its manufacturing section
from the headquarters and founded a subsidiary for manufacturing
there called Sankentech. In August 2017, it transferred theheadquarters office to a business incubation facility called Creation
Core Nagoya provided by the Organization for Small and MediumEnterprises and Regional Innovation, a public independent agency
affiliated to METI.
“We created a new composite material from recycled carbon fiberand ceramics in 2017,” said Ms. Katsuragi. “This provides thermal
insulation and our tile made with this composite material will be
useful as a fire-resistant building material. If this tile’s utility iscorrectly perceived by many people and we find a good market for it,
we could contribute to establishing a recycle system for CFRP. First60 Japan SPOTLIGHT • January / February 2019of all, we would be happy to see our new material contributing to thelocal economy and environment. We are now looking for a market
for this and still exploring sales routes in the hope that we can startmass production as soon as possible. The more widely this tile isknown, the larger the market will be, as there will be a wide range ofusages for it. So the key to our business success will be ourpromotional activities.”
Nagoya is certainly an appropriate place to develop thistechnology, given that the automobile and aircraft industries are themain locomotives of the region’s economy. There is also a big
traditional art and craft ceramics industry in this area, with wellknown brands of pottery such as Minoyaki, Setoyaki andTokonameyaki, which would be excellent gifts for inbound tourists inJapan to buy. They can take advantage of the traditional techniqueused for making Minoyaki to produce the tile. The tile has alreadybeen authorized by the Japanese Ministry of Land, Infrastructure,
Transport and Tourism as a “noncombustible material”, as it met theministry’s qualification requirement during experiments. Therequirement is to be noncombustible for two hours at a temperatureof 1,050 Celsius. Sanken purchases CFRP materials with 85% ofresin removed and extracts almost pure carbon fiber by dissolving itwith their original technology. In collaborating with the Ceramic
Technology Institute in Mizunami, Sanken developed a ceramicmaterial that will not shrink even when being fired, and used thismaterial to coat the tile made of recycled carbon fiber (Photo 1).
Gypsum board is generally used for such fire-resistant materials. But
this newly invented tile could meet such needs with only one-third of
the thickness of gypsum board, and it is also a light material.
Therefore, although the carbon fiber recycle technology is still costly,
we could reduce the amount of wood used in construction andoverall it could have the same price competitiveness as gypsum

Photo 1: Sanken Corporation

Hybrid carbon fiber tile

Japanese Ventures & the Future of the Economy 2

Photo 2: Sanken Corporation

Incubation officeboard has. Sanken’s factory in Mizunami already has a production
capacity of 1,000 30-centimeter-square tiles per month, but thecompany is still looking for a market large enough to pay for the costof production, and then hopes to launch a mass production incollaboration with other companies.
Sanken also recently developed a new product from composite
fired material of ceramics and graphite in collaboration with Chukyo
University. This was perceived to decolorize sewage after livestock
manure processing, and would be beneficial in agriculture.
Ms. Katsuragi hopes to see a rising perception of these newproducts in the industrial community and to launch mass production
soon. Sanken’s activities, as already noted, involve a network ofinstitutes and organizations such as the Organization for Small andMedium Enterprises and Regional Innovation (Photo 2), the Ceramic
Technology Institute in Mizunami, Chukyo University and some othersupporters of public organizations in Nagoya. Any venture’scontribution to the social economy would be greatly encouraged bysuch a broad network among business, public organizations andacademic institutes. No nation or local region has ever beensuccessful in achieving a massive commercial use of recycled
carbon fiber. If Sanken is successful, it would be a great contribution
not only to Nagoya’s local community but also to the global
environment overall.

Incentives for Employees Key to Business SuccessMs. Katsuragi believes the Nagoya city administration, with thehelp of the central government, has been working hard to improvethe business environment for new ventures. For example, it has been
implementing a “Project for the Creation of SME Innovation” since2016. The project consists of the three study groups — one on“application of IoT and other new technologies”, one on “maximumutilization of design” and one on “business for women”. Each study
group supports startups of new business as well as development ofnew goods and services. The “business for women” group invites
distinguished business people active in the Nagoya area to givepresentations on their work experiences and their strategy forstarting new businesses. Participants then engaged in group work on
the basis of specific examples and think about how to develop new
products or new services and commercialize them by themselves,
and at the final stage they organize a presentation session for eachgroup about their own startup strategy.
Ms. Katsuragi herself is not an entrepreneur but in the light ofsuch efforts by Nagoya she believes that business support for
ventures should be reinforced. She also notes that social
entrepreneurship today is attracting more people’s attention, citing
the example of a female certified accountant who started a daycare
facility in a company. While it is still believed that in Japan
entrepreneurship is a rather low-key activity, the businessenvironment around ventures seems to be changing in favor of them.
Ms. Katsuragi is enjoying her work for a carbon fiber venture. As
the PR and marketing section chief of Sanken, she is working hardbut on flexible time. Her working performance matters, but how
many hours she is in her office does not matter. This flexible working
style provides her with a further working incentive. As she is wellrespected as an individual by her boss, the CEO of Sanken, she has astrong incentive to contribute to achieving the company’s goal,
which is to commercialize their unique fire-resistant tiles.
I asked her whether she thinks flexible working hours could boost
anybody’s incentive and working performance. She answered, “No, I
do not think so. What is important in raising a person’s working
incentive is to find the best working environment for each person.
Somebody may like a flexible working style, but somebody else may
not and prefer working to a rigorously scheduled timetable.
Management should know best about each employee’s preference.
Applying a single rule or criterion for working to all employees could
result in many complaints from them. Respecting an individual’svalues and treating each employee differently would make them all
happy with their job and they would then have an incentive to work
hard. And thus eventually your company would achieve success.”Innovative ventures should start with management treating theemployees in accordance with their personal situations and thinking,while respecting their individual values.

Naoyuki Haraoka is editor-in-chief of Japan SPOTLIGHT & executive managing
director of the Japan Economic Foundation (JEF).

Japan SPOTLIGHT • January / February 201961