Island to international: The Panasonic business culture and potential pitfalls

OPINION: A more privacy-conscious Western culture may set back Panasonic's global plans if the firm does not go beyond the technology and consider the consumer.
Written by Charlie Osborne, Contributing Writer

OSAKA, JAPAN: When I first set foot on Japanese shores, I didn't realize just how far Panasonic had penetrated the Japanese market, or what the firm was cooking up beyond consumer electronics.

The Tokyo-based company occasionally hits the headlines in the US and generally it hasn't been for pleasant reasons. In the last few years, the Japanese firm has undergone aggressive restructuring which resulted in the loss of thousands of jobs.

In an attempt to regain a foothold in the technology realm, Panasonic has gone on acquisition sprees, promoted internal funding programs for innovative ideas, and began shifting into the services market.

Despite Panasonic's turbulent financial situation over the past few years, the company remains strong in its native land and has future plans to go global on a larger scale. However, the transition from an electronics focus to services is never an easy one -- and Panasonic needs to be challenged more on issues concerning privacy before the company will effectively be able to launch on a strong global campaign.

While being shown around the Panasonic Center in Osaka, I was able to see some of the technology in development for the business market, ranging from cameras to next-generation displays and Internet of Things (IoT) and connected home technology.

One surveillance camera, in particular, was explained with some fanfare. The circular monitoring system, once placed on a ceiling or by a side wall, recorded footage in crystal-clear definition and included a multi-direction microphone. The system could be controlled remotely, allowing an observer to pinpoint a particular person of interest, choose them through embedded facial recognition technology and hone in on their conversation.

While usually muffled by the buzz of multiple speakers in a room, this surveillance technology allowed controllers to listen in to speech without too many problems.

This could give business owners clear mugshots of shoplifters and a ready-made database of customer data -- such as age range -- which can be analyzed to improve and refine business practices and increase profit margins. However, with this development of clarity and expansion of surveillance equipment came a number of questions concerning privacy.

Don't get me wrong, across the UK at least you are on camera on streets and in shops as a matter of course. We're used to it.

It is the clarity and depth of the images recorded by Panasonic's equipment which changes the game. While very impressive on a technological level, it does raise questions of how much individual privacy we can expect in the future if establishments are equipped with this kind of technology.

If there is a sign on a shop door stating clearly that those who entered will be on camera, adults can make the conscious choice to give up their right to privacy or not -- in other words, if they enter the business establishment, they are granting consent to being recorded in such detail.

However, children cannot make this decision and parents might not be too happy with the idea of their children being monitored in such depth and detail -- and for this footage to end up online without their permission.

So what happens when the footage is uploaded to the cloud and in the case of minors? When asked, the Panasonic representative said footage would be scrubbed or faces blurred to protect individual privacy -- but this does not quite cut it. If the camera systems are focused on security, it makes no sense for uploaded footage to be cleared of personal, identifiable images -- especially as this footage would need to be pulled up in the case of theft or property destruction.

The process is yet to be fully explained -- but it seemed to me that questions concerning the privacy of minors and consumers at large are yet to be considered at all.

Another concept in development I was shown at the Panasonic Center was the Wonder of Japan card. The one-service-fits-all card is aimed at making travel across Japan easier. Real-time translation services remove the language barrier, purchases can be made through the card and special kiosks, and bookings can be verified without the point-and-mime action all too frequent when you travel to a country without a grasp of local languages.

However, the conceptual Wonder of Japan card is also the de-facto keys to your kingdom. Not only does it hold your name, family details -- should you be traveling with them -- financial information, travel plans, locations, purchase history, bookings and itineraries, but also a mugshot -- basically everything contained in one convenient place which could give an attacker a ready-made kit for identity theft.

Yes, the technology is conceptual, and holds promise as a one-stop-shop card for activities such as event ticket organization and for translation purposes -- especially as only five to ten percent of Japanese citizens are estimated to be able to speak English effectively. However, the idea of having so much data on one person held in a single system was horrifying.

When asked how the card would be secured, the Panasonic team said a number of procedures could be set in place, such as biometrics, codes or perhaps facial recognition. So, once we've added additional sensitive data on you to this tourist tool, perhaps misuse in the case of theft or loss could be prevented. However, my mind raced with a number of unanswered questions: The data would need to be stored in the cloud, so who would have access to this data? Which vendors or financial services? Would Panasonic control the information goldmine? How would it be protected?

It's a commonly accepted idea that data breaches are no longer a case of "if," but "when." Storing information in the cloud is no protection, as we've seen in high-profile cases such as the hack of iCloud accounts belonging to celebrities.

One of the few defenses we have left against rampant identity theft is keeping our sensitive data -- which is stored all over the place, have no doubt -- at least with separate entities, databases and agencies. It is not a complete solution to prevent identity theft, but at the least, it is safer for individuals than having massive, singular databases storing reams of sensitive information about you.

What happens if -- or when -- a data breach takes place, and the Wonder of Japan database becomes a target? The visitor whose information is stored might be back across the other side of the world and have no notion that so much concentrated, personal data is now being traded in the underground, or their bank account is just about to be rinsed. For the sake of a convenience card, it's not truly worth the risk to privacy and personal security.

This is the thing. My gut tells me that there is nothing malicious in this discarded notion of privacy in both cases; it simply isn't on the radar at all. You think of the US and UK government, intelligence agencies like the US National Security Agency (NSA) and the UK's GCHQ, and you might prompt angry thoughts about the erosion of our privacy in these countries.

In comparison, I would say with Panasonic the reason is cultural. There is a lot to be said about Japanese culture; the care and politeness which appears ingrained, the clean streets, the smiles. However, as with any culture, there are disadvantages. There appears to be a "yes, sir" attitude to business and not enough challenges launched their way -- in Panasonic's case, which could make the company see past the technology and think of the user.

In itself, this is almost a contradiction. I saw some brilliant technology and conceptual developments whilst in Japan. Panasonic has developed beds which turn into wheelchairs without the need for hoists and uncomfortable shifting for the aged or impaired and software which can assist in physiotherapy. There was also impressive smart home technology which transforms homes into virtual assistants which follow you around, responding to both voice and gesture in everything from relaying kitchen recipe recommendations to changing lighting ambience and displaying valuable day-to-day information and messages on cue.

You might not know of these devices or the fact Panasonic runs both a smart town and care homes. You're unlikely to, as the company focuses almost exclusively on the Japanese market (there are plans to expand further into Europe and the US beyond electronics, but little is set in stone.) Within these realms, Panasonic is beginning to shine -- but I think something is missing.

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The company is powerful and doing extremely well in the Japanese market. However, expansions into areas beyond the realm of consumer electronics holds risk. If Panasonic is serious about growing its presence beyond the confines of the island, it is not the quality of its technology or research which will hold it back -- it will be a lack of consideration or consultation with issues which are now growing more and more important to Western consumers.

Surveillance-thwarting devices, post Edward Snowden, are being developed and sold worldwide. Virtual private networks (VPNs), censorship-thwarting tools and the web browsing anonymizing service Tor are growing in popularity each day. Technology giants such as Apple, Microsoft and Google are embroiled in encryption and privacy battles in the United States and beyond.

This is a realm which, should Panasonic choose to enter, could be a bumpy ride unless consideration is given to issues now entrenched as critical in Western culture beforehand. It only takes one mistake, one serious data breach, for reputation to suffer and expensive market-growth campaigns to end up in tatters.

The company has shown its expertise in areas beyond electronics in Japan; but if it chooses to compete further on the global scale and shift from product to services, sales and shiny technology isn't enough -- consideration to cultural issues and consultancy must also come into play sooner rather than later.

Disclaimer: The trip to Japan was sponsored by Panasonic.

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