May 15, 2017 2:00 pm JST

Age of 'big data capitalism' dawns

Personal information is 'the new oil' as companies identify enormous opportunities

An app offered by Tokyu that checks congestion at train stations is used at Daikanyama Station in Tokyo's Shibuya Ward.

TOKYO -- The age of "big data capitalism" has begun, enabling companies and other concerns to use vast amounts of data as a new kind of growth driver. In Japan, big data will become easier to use due to the imminent revision of the personal information protection law.

A humanoid robot occasionally appears at a wine shop in the flagship store of Isetan department store in Shinjuku, Tokyo, offering three kinds of wine to visitors for taste testing. Visitors enter comments such as "dry" and "sweet," as well as their reaction to each sample, and the robot recommends a wine.

The robot is used in an artificial intelligence customer service program offered jointly by Isetan and Colorful Board, a venture business in Tokyo, which has collected data on the taste and preferences from more than 1,000 people. Colorful Board is planning to join hands with some 30 companies to gather data on various interests, such reading and traveling, from 1 million people.

Consumer purchasing patterns, equipment operations and various other data help create new services. "Data is the new oil," said Intel CEO Brian Krzanich.

In Japan, the enforcement of the revised personal information protection law at the end of May is expected to become a turning point in the use of big data. The legal revision will toughen the ban on providing personally identifiable information to third parties without the consent of the individuals concerned, but personal information, if made unidentifiable, can be offered for use by third parties for marketing and other purposes.

Leading Japanese advertising company Dentsu envisions ads tailored to individual consumers when they pass electronic signboards. The AI system it envisages will display ads by analyzing photographed images of individuals to estimate their age and other factors. 

Dentsu conducted a test last year, in which an AI system identified models of cars driving on a toll expressway in Tokyo and adjusted ads on large electronic signboards visible to drivers. The company is studying ways of applying the system to people, such as replacing their facial images to their age and other data from .

In the future, Dentsu hopes to use the system for ads in busy places such as the Shibuya intersection, a well-known scramble crossing near Shibuya Station in Tokyo, a company official said.

Telecommunications operator KDDI set up a joint company with major consulting firm Accenture in February to analyze data on 40 million subscribers to its mobile phone service in a bid to develop services that can better match customer needs.

"Combining data processed into anonymity will create new businesses," said Hitoshi Ienaka, president of the joint company.

Privacy concerns

Singapore is pulling ahead of Japan, encouraging demonstration experiments on cutting-edge technologies.

Collecting personal information in public places is permitted there, if approved by the government. NEC recorded the faces of some 200,000 commuters at train stations in Singapore every day for half a year in 2013 for studies on analytical technology. This practice is "impossible in Japan," said Keiji Yamada, vice president of NEC Central Research Laboratories.

Individuals subject to such a study may feel that their privacy is being violated. In the U.S., major retailer Target caused a stir after it monitored customers' spending habits and determined that some were or could soon become pregnant, then sent them shopping coupons for baby goods.

In Japan, East Japan Railway, or JR East, was criticized in 2013 for offering data on IC card usage by passengers to Hitachi without ample explanation to users.

Railway operators are introducing big-data systems in a measured way. Tokyu started an app service to help users understand congestion at major stations last year. Cameras take pictures of people near ticket gates; the images are rendered unidentifiable. The process is aimed not only at legal compliance but also at preventing passengers from feeling "eerie," a Tokyu official said.

Tokyu's system, developed by Hitachi, even makes the height and sex of individuals in the images unidentifiable because of the developer's bitter experience, a Hitachi official said.

Information technology has made it possible to gather huge amounts of personal information. Companies are continuing efforts to use it to improve customer friendliness and competitiveness while maintaining privacy protection.

(Nikkei)

Dentsu, Inc.

Japan

Market(Ticker): TKS(4324)
Sector:
Industry:
Commercial Services
Advertising/Marketing Services
Market cap(USD): 13,891.78M
Shares: 288.40M

KDDI Corp.

Japan

Market(Ticker): TKS(9433)
Sector:
Industry:
Communications
Wireless Telecommunications
Market cap(USD): 69,737.11M
Shares: 2,587.21M

NEC Corp.

Japan

Market(Ticker): TKS(6701)
Sector:
Industry:
Electronic Technology
Electronic Equipment/Instruments
Market cap(USD): 6,764.62M
Shares: 2,604.73M

East Japan Railway Co.

Japan

Market(Ticker): TKS(9020)
Sector:
Industry:
Transportation
Railroads
Market cap(USD): 38,440.38M
Shares: 389.40M

Hitachi Ltd.

Japan

Market(Ticker): TKS(6501)
Sector:
Industry:
Producer Manufacturing
Industrial Conglomerates
Market cap(USD): 29,153.67M
Shares: 4,833.46M

Tokyu Corp.

Japan

Market(Ticker): TKS(9005)
Sector:
Industry:
Transportation
Railroads
Market cap(USD): 9,624.61M
Shares: 1,249.73M

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