Voices from Paju

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A book featuring research papers from GMBA students.

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Voices from Paju

  1. 1. 2012Voices From Paju Research and Reflections on the Global Economy
  2. 2. Voices From PajuTable of ContentsAbout the Authors ...................................................................................................................................... 3How the Recent Paradigm Shift in Electricity Affects the Global Economyby Kenzo Sakamoto and Jongkwon Ham ................................................................................................ 4Effects of Fair Trade Coffee on the Global EconomyBy Katsuya Ishigaki and Hojaee Lee........................................................................................................ 9The Effect of Chinese Taste ChangeBy Toshiharu Kamada and Jongmin Kim .............................................................................................. 13Camu Camu FruitBy Hiroyuki Kaji and Hisami Natsume................................................................................................. 17The Possible Impact of Speech Recognition TechnologyBy Toshiharu Kamada and Hensu Jang ................................................................................................. 22The Costs and Benefits of London Olympics 2012By Jeongwoo Lee and So Kogahara ........................................................................................................ 28Which One is More Proper in Korea and Japan, Big Mac Index or Starbucks Indexby Seunghyun Kim and Toru Yamashita ................................................................................................ 35Why did “Occupy Wall Street” Demonstrators Show Up?By Siyung Jo and Woojin Yang ................................................................................................................ 39The Effect of Animation Outsourcing on Japan’s EconomyBy Takahiro Aoki and Lee Woo Chan .................................................................................................... 44Aging Population: Impact on the World EconomyBy Jung Jaeyoon and Shoichiro Kitano.................................................................................................. 51Chinese Luxury ShoppingBy Jaewoo Kwon and Emi Yamazaki..................................................................................................... 59How the Chinese Economy Recovered Quickly After the Financial CrisisBy Yoshiyuki Suimon and Richie Hsieh ................................................................................................. 66The Effect of China’s Foreign Exchange Reserves on the World EconomyBy Sachiyo Urashima and Sangjae Lee.................................................................................................. 71Free Trade AgreementsBy Youngguo Seo and Ryuhei Oh ............................................................................................................ 75The Reason why Korean Women Undergo Plastic SurgeryBy Yosuke Suzuki, Youngwan Kim, and Sungmin Kim........................................................................ 82 2
  3. 3. Voices From Paju About the Authors On a cold winter morning in early February 2012, business professionals from Korea,Japan, and Taiwan descended on Gyeonggi English Village in Paju, South Korea. The 31writers featured in this collection come from a variety of industries—electronics to automotive,ship-building to financial—but are all among the leaders in their fields. They were accepted tothe University of Michigan’s Ross Business School Global MBA program, and have committed ayear and a half to their studies. Their three weeks at English Village was the first step in this journey, a last chance tofine-tune their English skills—writing, reading, speaking, and listening—before beginning anintensive business-focused curriculum. The essays in this book represent the culmination oftheir writing classes. Most of the writers—though highly intelligent and good Englishspeakers–came in with limited experience in writing English, especially academic papers. Thequality of the essays they were able to produce is a testament to their talent and hard work. Ona personal note and speaking as one of their teachers, they were the most energetic, focused, andintellectually curious group I’ve seen pass through English Village. They will be missed.-Alex Diamond, Paju, February 27, 2012 3
  4. 4. Voices From Paju How the recent paradigm shift in electricity affects the global economy by Kenzo Sakamoto and Jongkwon HamIntroduction A Massive 9 magnitude degree earthquake struck off Japan’s northeastern area on March 11,2011. Because of this big earthquake, Fukushima nuclear power plant was severely damaged.After the tragedy accident, the Japanese government implemented a variety of electricity savingplans. On September 15, 2011, a freak blackout plunged Korea into darkness. The suddenpower outage affected offices, baseball stadiums, and shopping malls. Korea faces a constantthreat of major power outages in the next four to five years1. I. Saving electricityA. Black out in Korea1. Detail explain of Black out accident The blackout paralyzed the entire country of Korea. The sudden power outage beganaround 3 p.m. and the national emergency management agency reported 944 phone calls frompeople who were trapped in elevators. Traffic lights went out and mobile phone services werehalted after power was cut from base stations in Korea2. It happened because of the suddendemand expansion. The Ministry of Knowledge Economy in Korea put the blame of the massiveblackout on a false report by KEPCO (Korea Electric Power Corporation) about the country’selectricity reserve level.2. Japan Government’s policy Tokyo electric power lost a third of its generating capacity when the earthquake struck andpower stations automatically shut down. Japan’s chief cabinet secretary said the government1 KBS special documentary film “2011 The warning of winter blackout” broadcasted by KBS on Dec. 11.2011.2 http://english.chosun.com / “Freak Blackout plunge Korea into darkness” Sep. 16. 2011. 4
  5. 5. Voices From Pajuwould look at the option of a power cut by rotation. The lights in office buildings and hospitalsturned off and commuter subway trains stopped. However, the Japanese public overcame the unprecedented disaster with amazingorderliness. The source of orderliness appears to be a deep-rooted trust in the Japanesegovernment. Japanese people still have confidence in what the government tells them.B. The Cause of Power Shortage 1. Seasonal demand expanding From 1990 to 2000 because of air conditioner supply, there was an increase in summerelectricity demands. However, recently more demand increase is due to heating systemtranslated from gas to electricity. In addition, the average low temperatures during winter timeare another reason3.2. Commercial demand Due to the industry structure changes, the service industry has an important role in therecent global economy, and commercial demand of electricity is highly expanded. The weight ofservice industry among the industrial products in Japan is almost over 38%4. Commercialdemand’s range of fluctuation is so wide that a stable supply plan is hard to establish.3. Continuous occurrence of new power demand The increasing demand for a convenient and comfortable life increases the use of manyhome networks and well being home appliances, which also need a lot of electricity. It willcontinue to expand in the future. For example, the home appliance market in Korea grew anannual average 58.2% from 2006 to 20105. From now on society will transition an information-oriented and environment-friendly society, and new power demand will increase.4. Insufficiency of power plant supply plan The power plant is lacking because government established a long-term power supply plan3SERI (Samsung Economic Research Institute) CEO Information_2012.1.18: No.838 “The Cause and countermeasures ofpower shortage in winter time” page 54SERI (Samsung Economic Research Institute) CEO Information_2012.1.18: No.838 “The Cause and countermeasures ofpower shortage in winter time” page 65 Op. cit. page 7 5
  6. 6. Voices From Pajuon the base of demand forecasting, but the real supply demand exceeded the prediction.Expected demand growth in recent 3 years was about 2%, but actual demand was 5.2%6.5. Delay of planned power plant The disruption occurred to the planned plant because of complaints, environmental policy,transmission line connection, etc. Until 2009, the fulfillment of the power plant establish plan isjust only 80%7.C. Countermeasures 1. Reinforcement of seasonal demand management The government should manage the growing demand for air conditioning and heating, sothey can secure the stable power reserve level especially for the peak time of summer and winter.2. Systemize the response of crisis The government should improve the power load management system in case of climatechange or power plant breakdown.3. Expansion of basis power plant The underlying lack of power capacity serves as a cause of power shortages and risingelectricity rates, so the expansion of basis power plants needs to avoid such a disruption of theplan.4. Modernization of power plant infra through technical innovation There is a need to build a smart grid which is a fusion of IT technology and powernetworks. We should take advantage of technology innovation and power grid expansion as anopportunity for economic revitalization. II. Electric Vehicles A. Recent trends of Electric Vehicles The Electric Vehicles (EVs) are automobiles which are propelled by electric motors, using6Op. cit. page 8Op.cit. page 97 6
  7. 7. Voices From Pajuelectrical energy stored in batteries or another energy storage device. Recently, to overcome thehigh oil prices and the emission of the greenhouse gasses, the research and the production of theEVs are gradually increasing. EVs, including hybrid cars, could represent as much as 15% of thenew car market by 2020.8 In this report, the analysis of the impact of the EVs on global economyis described in terms of household impact, smart grid, and reduction of emission.B. Impacts on the Households The spread of the EVs would have huge impact on the car operating costs in households.Given the average household uses a car for 50miles, the increase of the electricity cost would be$40, and the decrease of the gasoline cost would be $180. Totally, the introduction of EVs wouldbe cost-effective to most of households even if the battery maintenance costs were included.9C. Impact on the Electric Grids 1. About Electric Grids Current electric grids were established in the 19th century. These days, the smart grid, theconcept of next generation electric grids which improve the efficiency and reliability of theelectric grid by digital and autonomiccontrol, is becoming prevalent.The smart grid is receivingplenty of attention as the key technology to realize the expansion of the EVs as well as therenewable energy.102. How it affects Electric Industry and Economy For the prevalence of the smart grid, the comprehensive introduction of devices, such as a8“Recharging electric cars: Bidding for volts,” The Economist online, September 6,2011,http://www.economist.com/node/21528507, accessed February 16, 20129Ulrich Decher, “Economic and Emissions Impacts of Electric Vehicles,” The Energy Collective, February 15, 2011,http://theenergycollective.com/ansorg/51761/economic-and-emissions-impacts-electric-vehicles, accessed February 16,201210 Center for Entrepreneurship & Technology (CET) University of California, Berkeley, “Impact of Widespread ElectricVehicle Adoption on the Electrical UtilityBusiness – Threats and Opportunities,” August 31, 2009,http://cet.berkeley.edu/dl/Utilities_Final_8-31-09.pdf, accessed February 16, 2012 7
  8. 8. Voices From Pajusmart meter, is necessary. In this process, not only manufacturers of power system equipment,but also other related industries, including car makers or manufacturers of digitalcommunication equipment, are expected to find new markets, and this trend would have a hugeimpact on global economy.D. The Impact of the Reduction of Emission1. How the EVs reduce the Emission The amount of emission gases would not basically change by the introduction of EVsaccording to the law of the conservation of energy, but the emissions caused by the combustionof the oil would transfer from car engines to power plants, which reduce the effects of theemissions to urban area.3. The Economic Effect of the Reduction of Emissions To reduce the emissions, the power system should be changed dramatically:one is smartgrid to enable all households to charge EVs at night, and the other is the shift of energy resourcesfrom fossil fuels to nuclear power or renewable energy sources, such as solar, tide, and windpowers. As the expansion of the nuclear power plants is becoming impractical after the 2011.3.11earthquake in Japan and following nuclear accidents, mainly the shift to renewable energywould be promoted. The renewable energies are expected to be cheaper resources for the futureand boost the creation of new jobs, stimulating the global economy. III. Conclusion In conclusion, the trend of saving electricity and introduction of EVs is becomingdominant, and would be more accelerated in the future. The shift of the energy resources fromfossil fuels to renewable energy would be also promoted, and these trends generally have somepositive impacts to boost the global economy. 8
  9. 9. Voices From Paju Effects of Fair Trade Coffee on Global Economy By Katsuya Ishigaki and Hojae LeeI. I. The history of coffee After medieval times, coffee spread through the world. The earliest credible evidence ofeither coffee drinking or knowledge of the coffee tree appears in the middle of the fifteenthcentury, in the Sufi monasteries of the Yemen in southern Arabia. From Mocha, coffee spread toEgypt and North Africa, and by the 16th century, it had reached the rest of the Middle East,Persia and Turkey. From the Muslim world, coffee drinking spread to Italy, then to the rest ofEurope, and coffee plants were transported by the Dutch to the East Indies and to theAmericas. 11 Coffee was popular by the 18th century in Europe and European colonistsintroduced the crop to other tropical countries to help them supply a healthy domesticdemand.12 Coffee is the worlds second most valuable traded commodity, behind only petroleum.There are approximately 20 million farmers and coffee workers in over 50 countries involved inproducing coffee around the world. An estimated 11 million hectares of the worlds farmland arededicated to coffee cultivation. Around the globe, the annual consumption of coffee hasexpanded to 12 billion pounds.13 Coffee was traditionally developed as a colonial cash crop, planted by serfs or wagelaborers in tropical climates on large plantations of landowners for sale in colonial countries.Coffee producers, like most agricultural workers around the world, are kept in a cycle of povertyand debt by the current global economy designed to exploit cheap labor and keep consumerprices low. Because of this situation, many coffee workers bring their children to help them in thefields in order to pick the daily quota. These child workers are not officially employed andtherefore not subject to labor protections.1411 Wikipedia, “History of coffee,” http://en.wikipedia.org/wiki/History_of_coffee, accessed 17 Feb 201212 facebook, “Brief Coffee History,” http://www.facebook.com/note.php?note_id=400497537218, accessed 17 Feb 201213 The Catholic Action Network for Social Justice, “Coffee in the Global Economy,”http://catholicactionnetwork.org/dec05/documents/FAQsfromglobalexchange.pdf, accessed 11 Feb 201214 Ibid 9
  10. 10. Voices From PajuII. The characteristics of coffee industry Coffee beans are grown within an area known as the ‘bean belt,’ which is roughlybound by the tropic of cancer to the north, and tropic of Capricorn to the south. The bestgrowing areas offer moderate sunlight and rain, steady temperatures of around 70 degreesFahrenheit, and rich soil.15 Top 10 green coffee producing countries in 2009 are Brazil, Vietnam,Colombia, Indonesia, India, Ethiopia, Peru, Mexico, Guatemala, and Honduras in order ofproduction.16 The cultivation of coffee is a much more labor-intensive than alternative products of thesame regions such as sugarcane or cattle. Coffee beans must be picked, processed, dried androasted on a coffee plantation, so it is not subject to automation and requires constant attention.17 The prices of coffee beans are mainly determined by Coffee C Futures contract marketof ICE18 and NYSE Euronext.liffe.19 The factors which can affect the prices of coffee are theweather of producing countries20, supply and demand of coffee21, and speculation22.III. What is Fair Trade Coffee Fair trade was introduced to help the farmers to have a better life and support theirfamily. The Fair Trade movement began in the late 1950s as alternative trade organizations(ATOs) emerged in Europe and the US to promote grassroots development through direct,equitable trade. These ATOs bought directly from Third World producers, eliminating themiddlemen, and paid the producers a fair price while providing assistance in developing15 Coffee Producing Regions, “Coffee Producing Regions,” http://www.professorshouse.com/Food-Beverage/Beverages/Hot-Drinks/Articles/Coffee-Producing-Regions/, accessed 21 Feb 201216 FAOSTAT, “2010 Data,” http://faostat.fao.org/site/567/default.aspx#ancor, accessed 21 Feb 201217 http://en.wikipedia.org/wiki/Economics_of_coffee, accessed 21 Feb 201218 Coffee C Futures contract market of ICE(InterContinentalExchange):https://www.theice.com/productguide/ProductDetails.shtml?specId=1419 https://globalderivatives.nyx.com/contract/content/29040/contract-specification20 ezinearticles.com, “Brazil Weather Will Determine Coffee Prices, They Could Soar This Winter,”http://ezinearticles.com/?Brazil-Weather-Will-Determine-Coffee-Prices,-They-Could-Soar-This-Winter&id=6315290,accessed 21 Feb 201221 Kona Coffee Roasting, “Coffee Prices Rise in 2011 Due to Increased Demand, Reduced Coffee Supply,”http://www.konacoffeeroasting.com/coffee-prices-rise-in-2011-due-to-increased-demand-reduced-coffee-supply/,accessed 21 Feb 201222 The real news, “Speculation Drives Up Coffee Prices,”http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=7176, accessed 21Feb 2012 10
  11. 11. Voices From Pajutrading experience and market contacts. Such experiences helped producers raise their incomeswhile reducing their dependency on commercial middlemen.23IV. Issues of Fair Trade Coffee There are some issues for the fair trade coffee: very strict rules to be Fair Trade Coffeeand not enough benefits from Fair Trade Coffee. Producers need thousands of Euros to get the certificate of Fair Trade Coffee for a singleplant.24 There is an application fee, initial certificate fee, membership dues, annual audit fees andmore. Large corporate farms can often handle the paperwork and recuperate the cost ofcertification more easily than small, independent farms. As a result, there are plenty of small,independent farms that are not Fair trade certified even though they meet or exceed the Fairtrade standards.25 There is an issue that Fair Trade cannot help producers to be escape from poverty. TheICA(International Commodity Agreement) raised prices for the consumer, but after severaldecades of intervention, poverty remained a fact of life in coffee producing countries. Indeed,studies of the ICA have shown that it had no effect on poverty reduction.26 It may become themost of the profit goes to the middlemen.V. Prospect of fair trade coffee To help producers of fair trade coffee, the volume of fair trade coffee should beincreased. Nowadays, the volume of fair trade coffee is quite low compared with the volume ofother coffee. We should promote fair trade coffee and check the volume of fair trade coffee. There are few shops or cafes which produce fair trade coffee, while a lot of people wantto buy. For increasing sales volume of fair trade coffee, more diversification of sales is necessary.For example, cans of coffee or packs of coffee are effective options. Before selling them, sellersmay make an advertisement which introduces fair trade coffee to common people and influence23 Ibid24 FLO-CERT, “PRODUCER CERTIFICATION FEES,” http://www.flo-cert.net/flo-cert/65.html, accessed 21 Feb 201225 Wikipedia, “Economics of Coffee,” http://en.wikipedia.org/wiki/Economics_of_coffee, accessed 21 Feb 201226 Mercatus Center, “Does Fair Trade Coffee Help the Poor? Evidence from Costa Rica and Guatemala,”http://mercatus.org/publication/does-fair-trade-coffee-help-poor-evidence-costa-rica-and-guatemala, accessed 21 Feb2012 11
  12. 12. Voices From Pajupeople buy more fair trade coffee. To promote volume of fair trade coffee, tax exemptions are also effective. Taxexemptions will encourage sellers to sell more fair trade coffee and producers to produce more.It is necessary for related countries to negotiate each other for protecting the coffee producers.VI. Conclusion Historically, coffee producers suffer from their own poor wages. Fair trade coffee isinitiated to protect such poor producers, but it does not work well and there are a lot of poorproducers who still suffer. It is better to promote the volume of fair trade coffee 12
  13. 13. Voices From Paju The Effect of Chinese Taste Change By Toshiharu Kamada and Jongmin KimⅠ. Introduction“13.5 hundred million”, “960 thousand”, “300 thousand dollars”27 These numbers indicate China’s population, the number of Chinese billionaires, and theamount of money the Chinese billionaires spend annually overseas, respectively. In the past,many people believed that Chinese are very economical consumers and do not like to spendtheir money. However, this idea is far from the truth nowadays. Chinese are spendingconsiderable amounts of money on shopping, eating, and traveling every year. People can easilyencounter many Chinese who travel in many sightseeing cities and look around luxury brandshops. This large group of Chinese is starting to create changes not only in the middle pricedmarket but also in the luxury market all around the world. The movement to adapt to thechange is getting faster.Ⅱ. Effects on Travel Business A. Luxury goods for Chinese Travelers. The change of markets is observed in travel business. First and foremost, Chinese taste’schange has strongly influenced overseas travel business. For example, according to TheINDEPENDENT, 22.7 million Chinese tourists, out of a total of 36 million over 12 monthsin 2010,have travelled to Hong Kong,compared tothe 7.5 million Chinese tourists had done so in2003.28The main purpose of their travel was still shopping. However, what they wanted to buyand actually bought had changed from cheap goods to luxury goods.Actually, Chinese travelersto Hong Kong spent more than those who came from other countries. They spent approximatelyHK$12,000 (1,100 Euros) on average every time they came to Hong Kong.29 B. Luxury Service for Chinese Travelers.27Myungshin Kim, “Trend Report”, KOTRA(Korea Trade-investment Promotion Agency), November 17th, 201128“Chinese taste for luxury changes the face of Hong Kong shopping,” The INDEPENDENT, March 29, 2011,http://www.independent.co.uk/life-style/fashion/chinese-taste-for-luxury-changes-the-face-of-hong-kong-shopping-2255987.html, accessed February 2011.29 Ibid. 13
  14. 14. Voices From Paju In addition, many of the companies which sell luxury goods throughout the world aredeveloping new products and services adequate for Chinese tourists. According to The WHERE,one of the Canadian travel magazines, the affluent Chinese travelers sought for high-qualityAsian-style services besides European goods.30 Actually, Hilton started special hospitalityservices for Chinese travelers. Specifically, it provided them with Chinese breakfast and frontdesk attendants who was able to speak the Chinese language31. Moreover, we can also observe the tendency described above, not in the overseas travelmarket, but in the domestic market, that is, in the Chinese market. The changing taste of Chineseconsumers begins to focus on service qualityother than pricing. Specifically, many Chinesepeople tend to seek for information such as user reviews, shipping options, or productguarantees, other than price.According to The Wall Street Journal, we can also observe this trendin e-commerce companies. “In China e-commerce is all about discount shopping, said Hurst Lin,general partner at venture capital firm DCM and former COO of Chinese web portal andmicroblog operator Sina, but that won’t last. Mr. Lin believes that in several years, Chineseconsumers will have more discerning taste and that online retailers with the best design andbranding will challenge the dominance of Alibaba Group’s Taobao websites.”32Alibaba Group’sTaobao websites are the current biggestonline shopping in China. However, the top position willnot always continue in the future. Actually, the sales of Alibaba Group’s Taobao websites haverecently decreased. From now on, e-commerce companies will need to differentiate themselvesfrom competitors by providing customers not with cheaper prices, but with added values suchas better services or better design. As the example illustrates, Chinese taste change has stronglyinfluenced overseas travel business.Ⅲ. Effects on Wine Market A. French Wine Market30“Travel Trends: Why Chinese Tastes Matter,” Where, September 23, 2011, http://www.where.ca/blog/check-in/travel-trends-why-chinese-tastes-matter/, accessed February 2012.31Ibid32 Loretta Chao, “DCM Partner: Taobao Discount Model Not the Future of Chinese E-Commerce,” The Wall StreetJournal, November 2, 2011, http://blogs.wsj.com/chinarealtime/2011/11/02/dcm-partner-taobao-discount-model-not-the-future-of-chinese-e-commerce/?mod=WSJBlog, accessed February 2012. 14
  15. 15. Voices From Paju In addition, Chinese taste change and its effects on the market are observed in otherspheres. One of the spheres is the wine market. Recently, it is perceived that there is a big changein the global high-end wine market. The change coming from wealthy Chinese wine collectors ismaking Bordeaux wine cry and Burgandy wine smile. Until recently, French wineries have ledthe high-end wine market. Many people who enjoy drinking wine have unconsciouslymemorized many kinds of the names of French wines and usually ordered them in restaurants.However, wealthy Chinese people who enjoy drinking wine have begun to pick up Burgandy.Even though 60% of Bordeaux’s total exports are still consumed in mainland China and HongKong, no one can guarantee that Bordeaux’s wine will be able to maintain its popularity.Therefore, in the near future, it is expected that this trend will cause the price of Burgandy tosurge. According to Janicy Robinson, the British wine expert and critic, the effect that greaterChinese interest in Burgandy could have on the broader global market would be "dangerous" forBurgandy lovers. Because the quantities of top Burgandy produced are limited, thisphenomenon could upset the market. 33B. Australian Wine Market In addition, a similar phenomenon is observed in the Australian wine market.According to Campbell Thompson, an Australian and co-owner of the wine importing anddistributioncompany, The Wine Republic, French wines have led the gift-giving and corporatedining market until recently34. However, the demand for Australian wine is increasingdramatically. Australia’s top wine brands, like Jacob’s Creek, have begun to have more interestin the Chinese market. They expect that their major target will be businessmen, officials, andyoung white-collar workers, who are increasing rapidly in main cities in China.35 Therefore,many Australian wine sellers anticipate that the sales of the wine will surge and then the price ofAustralian wine will reflect the change.33Jancis Robinson, “Growing Chinese Taste For Burgundy Could Prove “Dangerous”, Jing Daily, November 22nd, 2011,http://www.jingdaily.com/en/luxury/jancis-robinson-growing-chinese-taste-for-burgundy-could-prove-dangerous/34 “Demand for Australian wine soars as Chinese taste change”, China Daily,December 13th, 2011, http://www.chinadaily.com.cn/bizchina/2011-12/12/content_14250015.htm35 Ibid 15
  16. 16. Voices From PajuⅣ. Conclusion In conclusion, many companies have tomake more efforts to establish the strategy toreflect Chinese taste change. As the example above illustrates, Chinese people penchants forspending money are largely changing from essential to luxury, such as overseas travel, wine, ordesigner goods. Many of the economists and the economic magazines predict that theChineseeconomy continues to grow for the moment. According to the Wall Street Journal, “A recent Bainstudy forecast that the Chinese market would grow 11 per cent per annum for five years,butLindit&Sprungli said it believed the market was growing by 30 per cent ayear based on research conducted for it by Nielsen.”36If companies aspire to affect the Chinese, toobtain Chinese money, and to make profits, they shall revise their strategy to reflect new Chinesetaste. Companies will have to focuson service qualityand provide other information,such asproduct guarantees, user reviews, or shipping options, and not only focus on pricing. Tosummarize our interpretation of the results, we can explain that many businesspersonsneed toendeavor to revisetheirplans of actionto reflect Chinese taste change.Last, please excuse me ifIoveremphasized my opinion more subjectively than was necessary.36Patti Waldmeir in Shanghai , “Confectioners bite into China’s soft centre”,THE FINANCIAL TIMES, December 23,2011, HTTP://WWW.FT.COM/INTL/CMS/S/0/DD414766-2D6E-11E1-B5BF-00144FEABDC0.HTML#AXZZ1LRIBIRPA,accessed February 2012. 16
  17. 17. Voices From Paju Camu Camu fruit By Hiroyuki Kaji and Hisami NatsumeThesis: The Camu Camu fruit’s impact on the global economy.I. IntroductionRecently, the number of people who are interested in health topics is growing in the world.Along with this, many kinds of nutritious fruits have become a part of people’s lives. CamuCamu, a specific kind of fruit made in Peru, is closely-related not only to human health but alsoto the global economy. Although Camu Camu is getting more popular in Japan, Camu Camu isnot widely used in the market. There is a possibility of expanding Camu Camu market in Japan.II. What is Camu Camu?A. FeaturesCamu Camu is a small bush which grows in the Amazonian rain forest of Peru. The CamuCamu bush produces a fruit which is about the size of a large grape and has a purplish red skinwith a yellow pulp.37Camu Camu fruit contains powerful phytochemicals with health benefits,including the amino acids such as serine, valine, and leucine, and more Vitamin C than anyother known plant in the world. Camu Camu is energizing, mood-lifting and highly effective instrengthening the immune system.Camu Camu has more natural Vitamin C than any known botanical on the planet and the effectson the human body are incomparable. Because of its food form, with bioflavonoids and otherphytochemicals, clinical evidence suggests that it is far more effective, milligram for milligram,than synthetic Vitamin C (ascorbic acid). Many people report that just two capsules daily (1/3tsp.) is sufficient to significantly increase their wellness. Wikipedia,”Myrciaria-dubia,”http://en.wikipedia.org/wiki/Myrciaria_dubia, accessed February 2012.37 17
  18. 18. Voices From PajuTable 1: Nutrition values of Camu Camu and Lemon: 1 cup (Health Benefits of Camu Camu38,Vitamins CamuCamu LemonVitamin B1 0.07 mg -Vitamin B2 0.16 mg -Niacin 8.25 mg 0.10 mgVitamin C 7.49 g 0.53 gLemon nutrition facts39)B. Cultivation of Camu CamuCamu Camu planting started in 1996 in Peru as part of government funded reforestation projects(under the Program Nacional de Camu Camu) for export to Japan. Since then Camu Camu hasbecome a widely cultivated fruit species in the floodplains of the Peruvian Amazon.40The Peruvian government expects that it will become a major export when its amazingproperties are discovered in the United States. It is preparing for the expected large increase indemand by making Camu Camu seedlings available free of charge to communities of nativepeople who are rain-forest dwellers for them to plant and to tend. It takes four to five years forthe Camu Camu bush to bear fruit. The growing popularity of this wild rainforest fruit iscontributing to the sustainable development of the Amazon River basin and helping the forestdwellers to maintain their traditional way of life.41 Life Style Lounge, “Health Benefits of Camu Camu,”http://lifestyle.iloveindia.com/lounge/health-benefits-of-camu-38camu-8860.html, accessed February 2012. Power your diet, ”Lemon nutrition facts,”http://www.nutrition-and-you.com/lemon.html, accessed February 2012.39 Entrepreneur’s Toolkit,”Camu Camu40Cultivation,”http://www.entrepreneurstoolkit.org/index.php?title=Camu_Camu_Production_in_the_Peruvian_Amazon, accessed February 2012. WHOLE WORLD BOTANICALS, “Camu Camu(Myrciariadubia),41http://www.wholeworldbotanicals.com/herbal_camucamu, accessed February 2012. 18
  19. 19. Voices From PajuIII. Camu Camu Fruit in PeruA. The Economy of PeruBeing among the Pacific Rim nations, Peru has recently joined the group of emergingnations.Despite the continuing improvements in addressing the problem of poverty, expandingthe income disparity continues to be a problem. The disparity between urban and rural areas issevere, and there is a serious mismatch between markets. In Peru, 19% of the Peruvian peoplelive in "absolute poverty," meaning they survive on less than US$1 a day. Furthermore, while31.2% of the population lives in urban areas, and 69.3% of the population lives in rural areas are"absolute poverty." Moreover, the percentage of GDP in agriculture is 0.7%, and percentage oflabor force in agriculture is approximately 25%. 42B. The advantages of producing Camu Camu in PeruIn Peru, by producing Camu Camu, social issues such as poverty problem, nature preservation,and eradication of illicit drugs can be solved.1. Poverty programProducing Camu Camu helps farmers to raise their income. At present, farmers can earn onlysmall amount of money by farming, and there is no other way for farmers to earn cash. Thedistribution of Camu Camu would aid in the improvement of the farmer’s livelihood. Also, thiswould contribute to improve the standard of living in Peru.2. Nature preservationProducing Camu Camu has positive impacts on the rainforest in Amazon areas. Perus rainforest,which represents 20 percent of the Amazon, faces a number of environmental pressures,42CIA-the world factbook,“ Transnational issues in Peru, ”https://www.cia.gov/library/publications/the-world-factbook/geos/pe.html, accessed February 2012. 19
  20. 20. Voices From Pajuincluding deforestation. Many kinds of fruits are not able to grow during the rainy seasonbecause these fruits are submerged in water. On the other hand, Camu Camu can grow in theareas even if the Camu Camu tree itself is immersed in water. Therefore, cultivation of CamuCamu would make international contributions not only in carbon dioxid reduction but also innature protection.433. Illicit drugsCamu Camu will be an alternative crop to the coca leaf. Peru is the world’s second largestproducer of the coca leaf, after being named number one until 1996. The cultivation of cocain Peru was estimated at 40,000 hectares in 2009. Produced cocaine is shipped out from Pacificports to the international drug market, increasing amounts of base and finished cocaine.However, produced cocaine which used to be ported into the international drug market ismoved to Brazil, Chile, Argentina, and Bolivia for use in the Southern Cone or transshipment toEurope and Africa, increasing domestic drug consumption in 2011. If Camu Camu issuccessfully used as an alternative crop to coca, it will lead to the reduction of illegal drugs. Thatcan have a great impact on a global scale.44IV. Camu Camu market in other countryA. Trade agreementThe Peruvian government has banned taking trees, seeds, and fresh fruits of Camu Camu out ofPeru. Other countries import the fruit in dehydrated, extract, flour, or powder form.Market overview in JapanThe fruit has recently become the large-scale cultivation and sale in the world. Especially,Japan is the major buyer becauseof the market which puts emphasis on the fruit nutritional Council on foreign relations,”Deforestation in Peru’s Amazon.”http://www.cfr.org/south-america/deforestation-perus-43amazon/p20968, accessed February 2012.44CIA-the world factbook,“ Transnational issues in Peru, ”https://www.cia.gov/library/publications/the-world-factbook/geos/pe.html, accessed February 2012. 20
  21. 21. Voices From Pajuvalue.In Japan, there is significant demand for juice drinks and nectars. So, suppliers of Camu Camuproducts in Japan mainly sell such kind of products. Currently they explore the creation of newproducts such as jam, sweets, and cosmetics using the fruits essence. In order to promote abetter sale in Japan, the suppliers include the fruit’s history and a map of its origin into eachcommercial packages of Camu Camu. According to the market research, there are threefundamental requirements that Japanese buyers require: The fruit must be a 100% organicwithout the use of pesticides or chemical fertilizers. Vitamin C of the fruit must be at least 1800 to2300 MG. per 100g pulp. The fruit must pass phytosanitary standards in Japan.45V. ConclusionRecently, Camu Camu is getting more popular in Japan than in the past. However, Camu Camuis not widely used as other berries in the market. There might be two solutions to find an answerto the problem. First, Camu Camu suppliers should cooperate with major suppliers of processedfruit products such as Dole Food Company, because the company is skilled at promotionstrategy. Second, Camu Camu suppliers should create new distribution channels. Though theyonly focus on retail stores to sell their products, there might be potential distribution channelssuch as fitness centers. By strengthening marketing strategies, it would help expand CamuCamu market even more and contribute to the economic growth of Peru as well. Article directory, “Supply and demand for camu camu”http://www.centrorisorse.org/supply-and-demand-for-camu-45camu.html, accessed February 2012. 21
  22. 22. Voices From Paju The possible impact of speech recognition technology By Toshiharu Kamada and Hensu JangIntroduction Quarrels through the Siri–Man says“Tell my wife I’m gonna be 30 minutes late.”,Woman says“Tell my husband I’m not surprised.”Man says “Tell my wife if she has a problem with my work schedule she is morethan welcome to get a job of her own.”Woman says “Tell my husband that I do just as much work as he does.”Man says “Tell my wife that if watching “Ellen” is a job she should geta promotion.”Womans Siri “Message from your husband: “I appreciate you.”46The above dialogue is from the parody videos on the online humor site in the USA. The mainpoint of this dialogue is that Siri, a speech technology of iPhone 4S, tries to meditate a quarrelbetween husband and wife. This is just a parody for humor, but it is good example of the futureof speech recognition technology.47What is speech recognition technology?“Speech recognition converts spoken words to text. The term "speech recognition" is sometimesused to refer to recognition systems that must be trained to a particular speaker—as is the casefor most desktop recognition software. Recognizing the speaker can simplify the task oftranslating speech. Speech recognition is a broader solution that refers to technology that canrecognize speech without being targeted at single speaker—such as a call system that canrecognize arbitrary voices.”48Thesis statement How can the speech recognition technology affect the world in the future?46College Humor –Siri Argument, Nov 19, 2011, http://lybio.net/college-humor-siri-argument/comedy/ access Feb 201247College Humor –Siri Argument, Nov 19, 2011, http://lybio.net/college-humor-siri-argument/comedy/ access Feb 201248Wikipedia, “Speech Recognition”, Feb, 2011, http://en.wikipedia.org/wiki/Speech_recognition, accessed Feb 2012 22
  23. 23. Voices From PajuHow big will the impact of the speech recognition technology be?Siri, thanks to artificial intelligence techniques such as speech recognition services can beconnected to commerce in the future. It could analyze your preferences and characteristics, andpropose the most appropriate products and order. The speech recognition services of the futurewill search for flight schedules and show the tendency of your personal tastes like a personalassistant. It will be connected to a speech-commerce service and a new ecosystem.49 How canthe speech recognition technology affect the world in the future? How big will the impact of thespeech recognition technology be? We tried to examine these questions.I. Definition of Speech Recognition Technology A. The SiriSiri is a new application that will be included with the iPhone 4S. This application is a new wayto control your phone with your voice. Instead of just dictating a message to your phone, youcan ask your iPhone to do stuff for you.50 B. Other technologiesIn the first half of this year, the speech recognition service Mazel will be released. Mazel, similarto the Siri, a little more advanced natural language processing capabilities. Tell Me a speechrecognition service of Microsoft has competed against Siri from January 2012. Windows phonesvoice recognition service ‘Ask Ziggy presented its application this year51II. The situation of a gap between rich and poor A. The situation of povertyThere were 1.4 billion individuals living on less than $1.25 a day in 2005 and 1.2 billion49JuHuiYoo, “Smart Tech for Human”, Seoul Newspaper, Jan 13,2012,http://economy.hankooki.com/lpage/it/201201/e20120131170341117700.htm, accessed Feb 201250Josh Smith, “What is Siri?”, Oct 05, 2011, http://www.gottabemobile.com/2011/10/05/what-is-siri/, accessed Feb 201251Hui Kyung Kang, “Future of Sir”, HankookIlbo, Jan 03,2012,http://news.hankooki.com/lpage/economy/201201/h20120126211408111720.htm, accessed Feb 2012 23
  24. 24. Voices From Pajuindividuals living on from $1.25 to $2 a day in 2006. So in total, there were 2.6 billion extremelyor moderate poor individuals in the world, which represented about 47% of all population in theworld. 52 Also, based on another standard, there were 4.6 billion individuals living in thecountries where GNI per capita was under $ 8.9, which represented about 69% of the worldpopulation.53 That means there are plenty of suffering people on earth and there is a huge gapbetween the rich and the poor, and there are 2 main causes: unaffordability and illiteracy. 1. Inaccessibility(unaffordability)It is obvious that people who cannot access the Internet cannot get much information, and such asituation is called “Digital Divide.” In Japan, whether people can use broadband and the Internetor not was strongly correlated with the income level of the user.54 Also, the word “Digital Divide”means that whether people have a computer or not can expand the gap between rich and poor.In short, one possible cause of inaccessibility can be not having money. 2. IlliteracyIlliteracy can also cause the economic gap to expand. The number of illiterate adult population inthe world was 8.85 million in 1995, in which the share of individuals living in developingcountries was 99%.55 Generally, people who cannot read and write have little chance to get jobs,and if possible, they cannot get much money. In a sense, the illiterate people can be the lowestlevel of the pyramid.Ⅲ.Analysis of the possible solution52The World Bank, “People Poverty rates at international poverty lines,” World Development Indicators 2011(April2011):65.53The World Bank, “People Population Dynamics,” World Development Indicators 2011(April 2011):38.54Ministry of Internal Affairs and Communications, Japan, “White paper Information and communication in JapanOutlook Japanese ver.,”http:// www.soumu.go.jp/johotsusintokei/whitepaper/eng/WP2007/2007-index.html:40, accessed 13 February 2012.55Ken Kikumoto, A Fundamental Study on the Establishment of the ScienceofInternational Cooperation in Education asan Academic Discipline(March 1998):1. 24
  25. 25. Voices From Paju A. Possible Solution for unaffordability 1. Possible solution to unaffordability for personal computersThere were 1.8 billion people who could access the Internet at the end of 2009, whichrepresented about 26.6% of the world population.56 Intel Corporation has suggested that whenweeks of income to purchase a notebook computer falls between 4 weeks and 8 weeks, thesaturation level of the notebook can be accelerated.57The company has also estimated that thepenetration would accelerate in China, Latin America, and Eastern Europe soon, which meansthat about 1.8 billion people who currently cannot use the Internet would be able to access theinternet in the near future.58 But 40 billion individuals would still not be able to access it becauseof the unaffordable price.The number of the sales of personal computers was 1 million, and the average price was about$ 4,000 in the U.S.in 1980.59 But the number of the personal computers was 350 million in2010,60and the retail price level of personal computers was about $700 in June 2011.61In Japan, from 1996 to 2000, as the number of personal computers manufactured increased by170%, and the price fell by about 30%.62 In the U.S., during the 1990s the number of personalcomputers increased at double-digit rates, and at the same time PC prices decreased by 80%, to$500 at a rate of the time.63How much the price at a certain time would be depends on where thepoint would be on the gradual diminution curve, and it is difficult to predict the future price. Butif the price decreases, the price level would not be affordable enough for the bottom level of the56Garbagenews.com.,”The saturation level of the Internet in the world,"http://www.garbagenews.net/archives/134032,accessed 13 February 2012.57Intel Cooperation, “Investor Meeting 2011,”http://intelstudios.edgesuite.net/im/2011/live.htm, accessed 13 February2012.58Ibid.,59Sano seminar, “historical trend of PC,”http://www.sanosemi.com/wordpress/?p=122, accessed 13 February 2012.60BCN Bizline, “The map of the personal computer industry,” http://biz.bcnranking.jp/map/pc/,Accessed Feburuary 2012.61My Navi News, “Silicon valley101,”http://news.mynavi.jp/column/svalley/328/index.html,Accessed 13 February 2012.62Link general research, “The trend of Information Communication deviceindustry,”http://search.yahoo.co.jp/search?p=%E3%83%91%E3%82%BD%E3%82%B3%E3%83%B3%E3%80%80%E7%94%9F%E7%94%A3%E5%8F%B0%E6%95%B0%E3%80%80%E4%BE%A1%E6%A0%BC%E3%80%80%E6%8E%A8%E7%A7%BB&aq=-1&oq=&ei=UTF-8&fr=top_ga1_sa&x=wrt, accessed 13 February 2012.63Peter E. Carlson, “personal Computer Industry Trends” NCEE (December 2006):1. 25
  26. 26. Voices From Pajupyramid. 2. Possible solution to unaffordability for tablets and smartphonesInstead, in terms of accessibility to the internet, tablet types are better than personal computersbecause of the lower price. The sales number of the mobile tablet types was 20 million in 2010,and 66 million in 2011. Yano research institute also has predicted that the number would reach300 million in 2017, about 5 times the number in 2011.64Moreover, smart phone types are muchbetter than the others, and the sales number was 300 million in 2010 and 480 million in 2011.The institute has estimated that the number of smart phones would reach 1.5 billion in 2017,about three times the figure in 2011, and low-end models under $150 would be getting attentionmore and more.65If we apply the case of the gradual diminution of the price of personal computers to the case oftablet types and smart phones, we can predict the same phenomenon as the personal computercase. Also, technologies, competitions, and other factors can decrease the price. As a result, forexample, if the price of smart phones decreases to the level of $112, it can fall under the range inwhich individuals living on under $2 a day can afford smart phones with their 8 weeks ofincome, which means penetration can accelerate explosively. B. Possible solution to illiteracyIt would be possible in the near future that individuals living on less than $2 a day would be ableto buy some devices that enable them to access the internet. Also, the competition of speechrecognition technology would be harder. As a result of the competition, even suffering illiteratepeople would be able to access the internet by buying devices with higher quality and lowerprices.64Yano research Institute, “The summary of a new market survey on tablet,” http://www.yanoict.com/yzreport/181,accessed 13 February 2012.65Yano research Institute, “The summary of a new market survey on smart phone,”http://www.yanoict.com/yzreport/180, accessed 13 February 2012 26
  27. 27. Voices From PajuConclusionWe have seen how big the role the internet could play in the changes in politics in many Arabiancountries around 2012. Even in the Western countries, the internet is playing important roles increating new public opinions that can affect their politics and economy. But only about 30% ofthe population in the world was able to affect our society at this time. In short, people who canaccess the internet can have such power. What will happen if people who are forced to liveunder severe conditions come to be able to access the Internet? What will happen if illiteratepeople come to be able to access the Internet? Those miserable people can have the sameopportunities that richer people have. This can shorten the huge gap between rich and poor. Or,the alternate might be able to change the situation drastically. 27
  28. 28. Voices From Paju The Costs and Benefits of London Olympics 2012 By Jeong woo, Lee (John) and So kogahara1 Introduction 1.1 The Olympics will be held in London 2012.Today, we have many major events. This year, the London Olympics is carefully watched aroundthe world. Plenty of people are looking forward to watch sports games. 1.2 Londoners will get the benefits but also spend the costs before and after the Olympic periodJournalists and some media estimate the total expenses for the London Olympics is less than theBeijing Olympics. However, many people believe that the London Olympics will bringLondoners to get much profit before and after the Olympic period. The following passages showestimations about the benefits and the costs of the London Olympics 2012.2 Examples 2.1 Advantages of hosting a major event 2.1.1 Raise the profile of city and countryHosting a major event is absolutely competitive for cities and countries. If cities and countrieswere to become host places, it might contribute to their profiles. According to previous majorevents, cities which host the Olympics can be assured of a persistent increase in recognition andtourism. Barcelona, Sydney, Beijing have all seen this from hosting the Olympics. For a country 28
  29. 29. Voices From Pajulike China with a controversial human rights record, hosting a major sporting event can be a wayto gain greater international acceptance. These events’raised profile can be important for givingeconomic benefits, such as, attracting tourists and business investment. In the case of most recentmajor event, the London Olympics 2012, London already has a very strong reputation66. 2.1.2 Long Term InvestmentSome major events require long term investments to facilities for the events. The city andcountry will have a legacy of improved sporting venues. Also, cities will usually have to invest ininfrastructure and transport to ensure efficient and reliable transportation. For example, Londonhas already invested in public transport projects around London. This will leave a lasting legacyfor residents of London, especially East London1. 2.1.3 Jobs and InvestmentPlanning to long term investment of the Olympics, the host city or country needs plentyemployees before and during the major events. Also, it is able to revitalize depressed cities, suchas the East London. It is estimated the London Olympics 2012, will create 8,000 full time jobs,and also lead to a boost in economic output of close to £2bn1. 2.1.4 EnthusiasmA major sporting event brings in enthusiasm and excitement for the city orcountry. It willcontribute to the nation to get better health and lead to a rise in volunteerism which promotescivic virtues1. TejvanPettinger, “Advantages of Hosting A Major Event”, Economicshelp, January 24 66 2012.http://www.economicshelp.org/blog/4909/economics/advantages-of-hosting-a-major-event/accessed on February 13, 2012. 29
  30. 30. Voices From Paju 2.1.5 Short Term economic benefitsMany people will gather together at London in the London Olympics period. This will providean increase in spending and injection of money into the local economy1. 2.2 Economic impacts of 2012 London Olympics 2.2.1 Benefit from ticket salesThe Olympics require much cost to prepare. For instance, the estimated cost of the LondonOlympic 2012 would be between $15 to 18 billion. This number is the second most expensiveOlympics below the 2010 Beijing Olympics with the cost of $40 billion. However, The Telegraphestimated that the London Olympics has already sold $470 million on the ticket sales. This ticketrevenue guarantees to grow the economy by 0.1%. It is also expected that overseas visitors willspend$1.1 billion during the Olympic Games67. 2.2.2 Expectation of London Olympics 2012The whole of the UK’s economy will get some sort of benefits from the London Olympicsbecause British companies have contributed to the project mostly. The London Olympics acquire30,000 employees for the project. Also, 98% of facilities have been built by British companies andgenerated $9.5 billion value2. 2.3 Costs and benefits of London Olympics Atsushi Sawa, “Economic Impacts of 2012 London Olympics”, World Sports Today,February 2 2012. 67 http://world-sports-today.blogspot.com/2012/02/economical-impact-of-2012-london.htmlaccessed on February 20,2012. 30
  31. 31. Voices From PajuAll the various costs and benefits of the London Olympics include both the monetary costs andbenefits and the non-monetary costs and benefits.68 2.3.1 Costs of London OlympicsThere are many monetary and non-monetary costs of the London Olympics. Therefore, manypeople worry about the negative impacts of the costs.The first negative effect of monetary costs is for the facilities.England will spend plenty of money to build facilities, which may only be used to their fullpotential for a short time during the Olympic Games.Second, the investment is short term.Many facilities can only be used for the 3 week duration of the Olympics. After that there is adanger of ‘white elephant projects’ – facilities that cannot be effectively reused such as theMillennium Dome.Third, the opportunity cost.Many reports showed that the cost of the Olympic village could cost up to £1billion. This£1billion cannot be spent on alternative investment schemes like transport and education inLondon.Fourth, the credit crunch is coming. That means the private sector investment has dried up.This increases the cost for the tax payers. Spending of government is already under strainbecause of the bank bailouts and recession.Last but not least, the London Olympic logo is truly awful.They alreadyspent too much money to produce it.However, according to the Sun newspaper itcould trigger epilepsy3. TejvanPettinger, “Costs and Benefits London Olympics 2012”, Economicshelp, March 11, 2011. 68 http://www.economicshelp.org/blog/1390/economics/costs-and-benefits-london-olympics-2012/accessed onFebruary 13, 2012. 31
  32. 32. Voices From Paju 2.3.2 Benefits of the London Olympics.On the contrary, hosting the Olympics also hasmany positive effects.The first positive effect ofhosting the Olympics is providingjobs and economic activities.Whenthe time is in recession, the private construction sector is going down. Thegovernment’sexpense can be seen as part of an expansionary fiscal policy.Second, hosting the Olympics boosts the prestige of the country.It may be a ‘once in a lifetime’opportunity to show a greatest festival to the world. Not all things can be reduced to simpleaccounts. This is a good example of non-monetary benefits.The third positive effect of hosting the Olympics is to boost tourism and travel to London,during the Olympics period and after.The fourth one is a lasting legacy of the Olympics. East London has a new rail line (Docklandlight railway extension) and improved public transport, such as improved international railstation at Stratford. This will help to reduce congestion and to increase productivity.Last, many venues will be used after the event;for example, Olympic stadium will remain notonly an athletic track, but also will be used by West Ham F.C. Other venues like the Velodromeprovide a much needed international standard track in the capital3. 2.4 The false economy of the London 2012 Olympics 2.4.1 Economic impact of the London OlympicsFrom the time when the London’s Olympic bid was accepted in 2005, every economistall overthe world has been debating how this short but big event will affect the UK’s economy.Following theglobal recession of the year 2008, more still have been speculating on its impacts.The general consensus shows that the British economy has been intensified by activity in andaround the Olympic Village. Price of houses in Stratford and the surrounding areas have beenincreased significantly (in some cases they have increased by 10 per cent), and almost 40,000 jobshave been created as a direct result of the Games. Stratford City has seen a major revampitself, 32
  33. 33. Voices From Pajuwith the construction of the new Westfield which is the largest shopping centre in Europe,constantly drawing trade from tourists and locals alike. In fact this new supermall has proved sopopular, that it saw 160,000 customers on the first day alone4. 2.4.2 The Olympicsis the hope for many people to bring England out of its current slump.Now that the event draws ever closer, and the Olympic hype reaches new heights, what effectwill the 2012 Games really have on the UK’s economy? One thing is for certain; in the midst ofthe Eurozone crisis, many people are wondering, and hoping, that London 2012 will be enoughto bring England out of its current slump for good.We feel that between July and September this year, Britain’s economy will indeed be boosted4. 2.4.3 Olympics’boom is not a continual phenomenonThis short boom cannotbe a sustainable phenomenon. When the Olympics are over,unfortunately, the two months of economic growth that wediscussed above is unlikely to besignificant enough to lift England out of recession in the long term.The London Organizing Committee for the Olympic Games and Paralympics Games (LOCOG)has to make plans to convert the Olympic Village into 3,600 new apartments and homes for thelocal community. The area which is underdeveloped now, this may well prove to be theregeneration needed to attract workers and businesses to the region.However, whether this will be enough to impact the rest of the UK’s economy is something thatremains to be seen4 Daniel Fox, “The false economy of the London 2012 Olympics”, The independent, January 30. 2012. 4 http://blogs.independent.co.uk/2012/01/30/the-false-economy-of-the-london-2012-olympics/accessed on February13, 2012. Michael Carty, “Economic prospects for 2012: Will an Olympic bounce help the UK skirt a double-dip 5recession?”Xpert HR, January 9. 2012. http://www.xperthr.co.uk/blogs/employment-intelligence/2012/01/economic-prospects-for-2012-wi.htmlaccessedon February 13, 2012. 33
  34. 34. Voices From Paju 2.5 Economic prospects for 2012 (Potential uplifts to 2012 GDP growth)Before and after the Olympics period, London would get much economic growth in 2012. In thefirst quarter of 2012, the Bank of Englands October 2011 extension of quantitative easing aidedLondon’s economy. Martin Weale estimates that the current program of asset purchases boostgrowth by up to 0.5%,in line with the Banks official calculations.In the second quarter of 2012, London might benefit from an Olympic bounce. Revenue fromadvance Olympic ticket sales have been deferred. ING estimates that Olympic ticket sales areworth £400 million in total, which could have created a 0.2% "Olympic bounce" had they beenincorporated into GDP data for Q2 2011.In the third quarter of 2012, the Olympic will boost their GDP5.3 Conclusion 3.1 Londoners should think about the cost of the Olympics.The Olympics may well make an economic loss in the short term. Some people will say it’s betterto spend the money on health care and education. 3.2 Benefits of the Olympics will make big profit to Londoners.However, there are also many benefits of hosting the Olympics. Furthermore, it is a once in alifetime opportunity to host the most important sporting event on the calendar.Let’s enjoy andtake pride in the London Olympics. 34
  35. 35. Voices From Paju Which one is more proper in Korea and Japan, Big Mac Index or Starbucks Index? By Seunghyun Kim (Aeron) and Toru YamashitaThere are many tools and measurements which can evaluate the appropriateness of currencyrates. The Big Mac Index and the starbucks index could be two of famous things however thereare some differences between them caused from change of social concept toward the products.These differences are making the starbucks index much more proper one to adjust advancedcountries such as Korea and Japan.The Big Mac Index was developed in September1986 as a relatively simple way to calculate theover- and under-valuation of currencies againstthe dollar.69 The index is based on the theory ofpurchasing-power parity (PPP). It means that adollar should buy the same amount in allcountries. Therefore the exchange rate betweentwo currencies should move towards theequalized rate. For example, identical productssuch as big Mac hamburgers should haveequivalent prices in every country.70The Big Mac Index has maintained its position asa popular measurement to support analysis of currency rate for several years. Especially inKorea it showed dramatic accuracy during Korea’s economic crisis period from 1997 to 2000.Before the crisis began, the real exchange rate was 850 KRW per 1 USD compared to 950 KRW69 “Ten years of the Big Mac index” The Economist, April 9, 1998,http://www.economist.com/node/397291?story_id=E1_PJSNJT&CFID=5300954&CFTO=, accessed February 2012.70 “Big Mac Currencies” The Economist, April 9, 1998, http://www.economist.com/node/159859, accessed February 2012. 35
  36. 36. Voices From Pajuper 1 USD according to the Big Mac index. This over-estimationof Korean won was cleared right after the crisis was started.71However, some economists have tried to develop another indexfor several years. They have argued that the Big Mac index isimproper for some reasons. Most importantly, they haveinsisted that the Big Mac does not have the same value in allcountries because although the Big Mac is considered a delicacyin many countries but people in advanced countries startregarding it as a junk food.72 This is especially true in Korea andJapan. As a result, some economists tried to choose alternativeoptions such as the Starbucks’ Tall Latte Index. In fact, themagazine that introduced the Big Mac Index, The Economist latersuggested the Starbucks Index as a better alternative.73The tables below shows price trends and Index of Big Mac and Starbucks Tall Latte. the measureis USD.The Big Mac Index (2004, 2008, 2011) Index (%)(Year) 2004 2008 2011 2004 2008 2011USA 2.90 3.50 4.07 0.0% 0.0% 0.0%South Korea 2.72 3.10 3.28 -6.2% -11.4% -19.4%Japan 2.33 3.60 4.02 -19.7% 2.9% -1.2%Phillippines 2.02 2.08 2.19 -30.3% -40.6% -46.2%71 “The Usage of Big Mac Index” The imail newspaper, July 28, 2008,http://www.imaeil.com/sub_news/sub_news_view.php?news_id=34623&yy=2008, accessed February 2012.72 “Fast food for thought “The Economist, Jul 30, 2011, http://www.economist.com/node/21524873, accessed February2012.73 “Burgers or beans?” The Economist, Jan 15, 2004, http://www.economist.com/node/2361072, accessed February 2012 36
  37. 37. Voices From PajuThe Starbucks Index (2004, 2008, 2011) Index (%)(Year) 2004 2008 2011 2004 2008 2011USA 2.80 3.08 3.00 0.0% 0.0% 0.0%South Korea 2.97 3.01 3.64 6.1% -2.3% 21.3%Japan 3.16 3.48 4.48 12.9% 12.9% 49.3%Phillippines 3.50 3.85 3.60 25.0% 25.0% 20.0% GAP Big Mac vs Starbucks 2004 2008 2011 0.0% 0.0% 0.0% 12.3% 9.2% 40.7% 32.5% 10.0% 50.6% 55.3% 65.6% 66.2%As above table shows, although the indexs of philippines had been stable, but the Big Macindex indicated that the currency value of Korea has been underestimated from -6% in 2004 to -19% in 2011. The index of Japan is similar condition. However the Starbucks index has showndifferent situation especially the currency value of Japan is highly overestimated in 2011. It’s verysimilar conclusion comparing to most of economists’ opinion that Japan’s currency wasoverestimated in 2011.Why the big mac index mismatched to the starbucks index and economists’ common consensusabout the currency value of Korea and Japan? One of possible reasons is that McDonald’s haslots of sales promotions. For example, McDonald’s in Japan has tried to sell a set with a muchcheaper price than before, which will Japan’s rating in the Big Mac Index.74 On the other hand, itis able to assume that the Starbucks Tall Latte’s pricing strategy has kept stability.7574 “Fast food for thought “The Economist, Jul 30, 2011, http://www.economist.com/node/21524873, accessed February2012.”75 “The Usage of Big Mac Index” The imail newspaper, July 28, 2008,http://www.imaeil.com/sub_news/sub_news_view.php?news_id=34623&yy=2008, accessed February 2012. 37
  38. 38. Voices From PajuFor analyzing this kind of gap , the most important factor which has led declining of the BigMac’s price is a change of social concept. Especially to fast food, people start regarding it asunhealthy, junk food. They don’t want to spend their money to buy it anymore, so sellers areforced to reduce the price of their product. This means their product drops in value whencompared with Big Macs in other countries. This change has especially happened in advancedcountries.76 For this reason, we can assume that the starbucks index is more proper than the bigmac index in Korea and Japan. In addition, the starbucks index also have strength in the point ofcultural reason, For example, Hindi people view beef as sacred animal. Instead of beef, Big Macsin Hindi countries are made with chicken and heep’s meat. Therefore, it is difficult to preciselycompare Big Macs around the world because their materials are different in different countries.On the other hand, the Starbucks Tall Latte Index is not affected by such cultural reasons orchanges in social concept. The material—and social concept— of the Tall Latte is standardizedaround the world.In conclusion, the Big Mac index is very well known. However, it’s concept is flawed because itsmaterial isn’t standardized around the world. Additionally, the ways the Big Mac’s social concepthas changed in some countries is also very important to explaining the shortcomings of the BigMac Index. The Starbucks Tall Latte Index is more reliable because it is made out of standardizedmaterial and has a standardized social concept in every country it’s sold..76 “Business and human capital-Mc Donalds” The imail newspaper, July 28,2008http://morrisseyhr.wordpress.com/2011/05/10/mcdonalds/http://www.pugetsoundoff.org/blog/erino/15540, accessed Feb. 2012 38
  39. 39. Voices From Paju Why did "Occupy Wall Street" demonstrators show up? By Siyung Jo and Woojin Yang“Occupy Wall Street” demonstrators appeared for the first time in September 17, 2011. Theyjustified that major banks and multinational companies are threatening democracy and have thepower related to corruption.77 They also point out that severe economic recession was caused byWall Street. So they desperately opposed the rich who made the unfair global economic order. Let’s go back to 2008 when the global economic crisis broke out by Lehman Brothers’bankruptcy. The US government saved the financial institutions which were on the verge ofbankruptcy by using $900 billion paid by 99% of the US citizens. However, what happened inWall Street? Bankers had a bonus party instead of self-reflections. There was an attempt tointroduce a bill called “the Buffet Tax”. But the bill making the richest pay more taxes did notpass through Congress. In 2011, another global economic crisis hit the world. At that time, 99%of the US people started to lose their temper. On the behalf of 99%, “Occupy Wall Street”demonstrators shouted “why are the innocent 99% of the US citizens taking responsibility for themistakes of the greedy 1% people?” It was not long before “Occupy Wall Street” spread out tomore than 100 cities in the US and 1,500 cities worldwide.Ⅱ. Causes of increasing the gap between the rich and the poor and solutions for reducing thegap 1. Causes of ‘the rich get richer, the poor get poorer’ phenomenonParticipants at “Occupy Wall Street” demonstrations insisted that ‘the rich get richer, the poorget poorer’ phenomenon spread all over the world. Why did the trend happen? A. Deregulation spread over all industries First, Neo Liberalism which has dominated the world economy for the last 30 years OccupyWallSt.org, “About Us”, http://www.occupywallst.org/about/, Accessed February 10, 201277 39
  40. 40. Voices From Pajuemphasized competition and effectiveness. As a result, both domestic and international divisionof labor has become common. For example, Apple designs their products at R&D centers in theU.S.A, purchases the electronic parts from companies in Korea, Taiwan and Japan, andassembles them at factories in China. By help of the international division of labor, Apple hasearned historically high profits in the last several years. However, Apple’s subcontractors inChina still struggle to make ends meet. In a pyramidal structure of manufacturing, a topcompany takes most of the profits but a myriad of companies in the bottom always has troublein survival. It is not difficult to witness similar cases happening in one country.During the dominance of Neo Liberalism, the gap between the rich and the poor has beengetting bigger. In the world, 29.7million people have assets worth more than $1million.78 Thereare 6,000million people in the world. Therefore, only 0.5% of the global population takes 38.5%of the total gobal assets. In the U.S. while the top 1% households’ income soared by 275% from1979 to 2007, the bottom 20%’s increased only by 18%.79 The former took 9% of the nationalincome in 1979 but the number recorded 24% in 2007.80 B. Decrease of regular jobsSecond, enterprises seeking high profits to win decreased regular jobs. For example, the revenueof the Hyundai Heavy Industries in 1999 was ₩6,330billion. It was increased to ₩ 45,700billionin 2010. However, regular jobs of the company decreased by an 8% point in the past 11 years.From an employees’ standpoint, there is a huge gap between the regular jobs and irregular jobs.The average salary of the regular jobs in Hyundai Heavy Industries doubled in the past 11 years.But, that of the irregular jobs is the same as the money that regular workers earned 11 years ago.The situation of decreasing regular jobs has made many people think that their social status is Credit Suisse, “Global Wealth Report 2011”(Oct. 2011), p.478 Congressional Budget Office, “Trends in the Distribution of Household Income Between 1979 and 2007”(Oct. 2011),79p12, http://www.cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf, accessed Feb. 2012 William Domhoff, “Who Rules America”,80http://www2.ucsc.edu/whorulesamerica/power/wealth.html, accessed Feb. 2012 40
  41. 41. Voices From Pajudeteriorating. According to a survey by Korea Statistics in 2011, 45.3% of households in Koreaanswered that they are lower level of the socioeconomic status and only 1.9% said that they areupper level of that. The middle level was 52.8%.81 If we compare the 2011’s result to the surveyconducted in 2009, the lower level increased by a 2.9% point. Otherwise, the upper and middlelevel decreased by a 0.8% point and a 2.1% point, respectively. In addtion, the global economic crises in 2008 and 2011 hammered the world economy,therefore, the poor got seriously poorer. Financial institutions, which earned much money fromthe Neo Liberalism, suddenly faced the crisis of the Lehman Brothers. If one bank bankrupts, therest of banks which lent money from the bank fall into big trouble. This ‘domino phenomenon’has affects on ordinary people. Because the banks struggled during crises, the poor could notborrow money at lower interest rates. All the governments acted to save the endangered banks.Naturally, the ordinary people became very angry at the situation, which the major beneficiariesof the Neo Liberalism like banks tried to recover and maintained their status using tax ordinarypeople paid. 2. Solutions for the problemsHow can we solve ‘the rich get richer, the poor get poorer’ phenomenon? Are there any solutionsfor this kind of historically complicated problem? Yes, we have to be positive, otherwise, therewill be a disaster in our future. A. Need for another way of economic system instead of Neo LiberalismOne possible solution is to find another way of an economic system instead of Neo Liberalism.Professionals are still struggling to look for a new economic system. Paul Krugman, who is oneof the Nobel Prize winners for economics and a liberal originating from Capitalism itself,insisted that governments should nationalize the financial institutions. It was surprising that Statistics Korea, “the social survey”,81http://kostat.go.kr/portal/korea/kor_nw/2/1/index.board?bmode=read&aSeq=252361 February 16, 2012 41
  42. 42. Voices From Pajusuch a kind of harsh criticism about the Neo Liberalism appeared in Wall Street. The new systemcould be located in between Neo Liberalism and Keynesism. But, many people agree with theargument that the new system needs to care for the social stability of ordinary people. If peoplein lower and medium level of social status feel their lives are more stable, not only will theythink that the economic gap between the rich and the poor is disappearing, but they also canspend more money on consumptions. Increase of household consumption can be good news tothe economy as a whole.In addition to strengthening the social stability of people, introducing new regulations forgreedy entrepreneurs is discussed as a good care system for the failure of Neo Liberalism. As“Occupy Wall Street” demonstrators argued, greedy executives of large financial institutionswere designated as main culprits of the 2008 global crisis. They made their employees ignore therisks of their jobs like trading high risk financial derivatives. Not to experience similar cases, thenew economic system needs to equip strong instruments to suppress the greed of someentrepreneurs. B. Making enterprises to reduce part time job What could be a solution to create stable jobs? There can be two ways for this issue.First of all, setting up new guidelines for job security is important. “Job Sharing Movement” inKorea is a good example. When working in “Job Sharing” company, two or three workers canshare the same position in a company, each doing a part of the work. Compensation isapportioned between the workers, thus leading to a net reduction in per-employee income.82Supporters of the movement argue that “Job Sharing” will not reduce the regular jobs. Generally,most companies layoff the irregular workforces in downturn and rehire them during theeconomic boom. By “Job Sharing”, the causes of reducing the regular jobs will disappear.Secondly, promoting medium and small sized enterprises is reasonable method to create moreregular jobs. It is not easy to expand the regular jobs for global conglomerates, since they operate Wikipedia, “Job Sharing”, http://en.wikipedia.org/wiki/Job_sharing February 20, 201282 42
  43. 43. Voices From Pajuthe R&D sectors in advanced countries and the production departments in underdevelopedcountries. Instead of the conglomerates, it is easier to increase the regular jobs for small andmedium sized companies. Additionally, raising the level of salaries of those companies willdecrease dissatisfaction of the poor class and enlarge the home market gradually. There will besome positive efficacy if we invigorate small-scale enterprises and tiny ventures.Ⅲ. Worldwide and nationwide efforts are necessary‘The rich get richer, the poor get poorer’ phenomenon threatens the future of Capitalism. WithNeo Liberalism dominating the world for the last 30years, deregulation strengthened the‘winner takes all’ situation and regular jobs have gradually disappeared. Now, worldwide andnationwide efforts are necessary to solve the problem of increasing the gap between the incomeof the rich and that of the poor. We should not only think of another way of the economic systeminstead of Neo Liberalism, but also care for the social stability of the lower and medium socialclasses. The possible solutions are introducing new regulations for greedy entrepreneurs,making enterprises reduce part time jobs, setting up new guidelines for job security, andpromoting medium and small sized enterprises to create more regular jobs. 43
  44. 44. Voices From Paju The Effect of Animation Outsourcing on Japan Economy By Takahiro Aoki and Lee Woochan1. Introduction : Outsourcing may destroy the Japanese animation industryOutsourcing has financial advantages. Animation productions can reduce their producing costs.But in the long run, outsourcing may destroy the Japanese animation industry in the future.Prior to the study of the effect of outsourcing on theJapanese animation industry itself, it is necessary tocheck out the basic structure & current situation ofJapanese animation outsourcing. It is well knownthat the industry is struggling to overcomeproblems with production cost cutbacks, whileJapanese animation has been in the spotlightoverseas.Production has increasingly been outsourced inrecent years due to the matter of its cutbacks. Whileplanning, directing and other processes requiringadvanced expertise have remained in Japan, animating,coloring and other simple operations are being shifted toother countries. 8383 Japanese Economy Division, “Japan Animation Industry Trends”, JETRO Japan Economic Monthly (June 2005) : 3. 44
  45. 45. Voices From Paju [ Exhibit 1 ] 842. - (1) Current Statuses & Scale of the IndustryIndustry experts estimate that major Asian countries such as Philippines, Taiwan, South Korea andChina are the preferred outsourcing destinations for 2D Animation, Canada and UK are the leaders in 3DAnimation.85 l Global DemandThe continued demand in the global animation market has allowed the Asia-Pacific region tofurther emerge as a premier destination for animation outsourcing. [ Exhibit 2 ] 8684 Ibid. : 3.85 TATA Strategic management group, “Animation and Gaming Industry in India” (Feb 2010)86 Tholons Inc., “The Philippine Animation Industry Landscape” (May 2008) : 3. 45
  46. 46. Voices From Paju l JapanThe Japanese animation industrys main business is selling the video program rights,merchandising rights, film distribution rights, broadcasting rights and video distribution rightsto foreign countries. Because DVD sales of Japanese animation in the United States havedeclined, the branch offices of video program manufacturers in Japan have been forced towithdraw. In the industry in 2006, right license revenue was 20 billion yen in size in 2010, has fallen toabout 13 billion yen, overseas market size is estimated to 195 billion yen in 2010.87[ Exhibit 7 ] Japans domestic animation sales(2010) Video Software Sales 246 149 TV animation advertisement sales 1,013 VOD 780 Animation Movie Sales(Top 20)87 http://humanmedia.co.jp/database/PDF/5-1.pdf, accessed Feb 2012. 46
  47. 47. Voices From PajuA famous animation director, Yoshiyuki Tomino, thinks the current situation of Japaneseanimation industry is not good. Because more and more individual products are appearing one afteranother and there is a trend that is making light of “studio work.”88 l IndiaThe Animation Entertainment segment in India is estimated at USD 122 Million (2009) and is expectedto show a CAGR (Compound Average Growth Rate) of 20% (2009-2013) to reach USD 253 million by2013. 74% of the animation entertainment work in India is outsourcing work for overseas clients. It isonly 26% of the overall animation entertainment in India, which is for domestic clients. 89[ Exhibit 3 ] 90 [ Exhibit 4 ] 91(Unit : USD Mil.) (100% = USD 122 Mil.)2. - (2) Expected Effects of Outsourcing l Positive Effects88 http://bizmakoto.jp/makoto/articles/0907/08/news035_3.html, accessed Feb 2012.89 TATA Strategic management group, “Animation and Gaming Industry in India” (Feb 2010) : 13.90 Ibid. : 13.91 Ibid. : 13. 47
  48. 48. Voices From PajuBasically, the prime-contractors can expect the positive effects of cost-cutback on their producionthrough their outsourcings. At the same time, the subcontractors may anticipate the creation ofnew jobs and development of their skills and techniques.The positive effects of animation outsourcing seem more favorable to the prime-contractors suchas Japan and USA in short term. As a prime-contractor, there is no doubt outsourcing must bethe most attractive method for the cost-cutback, because its main expenses come from labor cost.Therefore, outsourcing is an essential factor to accelerate the base of the animation industry.In addition, it is well known that the animaiton industry is strongly inclined to expand its areasrelated to other parts of industries such as characters, movies, and distribution. Moreover, it isalso a good way for countries to spread out their own cultures elsewhere. Therefore, it isabolutely true that animation outsourcing has been playing a positive role for both companiesand countries. l Negative effectsOutsourcing, the creative work to foreign countries, has negative effects.First, the fear of hollowing out of the animation industry is a serious matter. Japanese animationstudios are outsourcing relatively simple labor works, but to become skilled and creativeanimators, beginners should experience those simple labor works. If the number of skilledanimators continue to decrease, it will lead to land subsidence of the Japanese animationindustry.Moreover, there are problems beyond that, namely the fact that animation production, which shouldbe a team effort by the production staff, has become divided into a relationship between theplanning/development/design stage (production including planning, script, and storyboards), and 48

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