1 00:00:00,000 --> 00:00:04,879 Ladies and gentlemen, excellencies, you know who my guest is. He's one of the 2 00:00:04,879 --> 00:00:09,240 founders of one of the biggest companies in Japan and globally. So it's a pleasure 3 00:00:09,240 --> 00:00:14,839 to begin this conversation with Mickey. Mickey, ironically we were just using AI 4 00:00:14,839 --> 00:00:19,679 on one of your platforms on Viber just before we came on. How many Nobel Prize 5 00:00:19,679 --> 00:00:23,519 winners are there in Japan versus Ireland? But we will come back to that 6 00:00:23,519 --> 00:00:29,400 question in just a moment. Give our audience just a perspective. You said to 7 00:00:29,399 --> 00:00:34,079 me, Manus, to join Rakuten is probably one of the hardest companies in the 8 00:00:34,079 --> 00:00:37,879 world now to get a job in inside Japan and one of the most sought after. Why? 9 00:00:37,879 --> 00:00:44,200 What makes you a digital excellence, a destination for Gen Z? Well, definitely 10 00:00:44,200 --> 00:00:50,399 Japan has been enjoying its manufacturing excellency. We have been 11 00:00:50,399 --> 00:00:59,839 making good products like a Toyota or Sony or some materials. But now the world 12 00:00:59,839 --> 00:01:06,560 is going through this transformation. Everything is gonna change and Japan 13 00:01:06,560 --> 00:01:11,239 has been very very consistent quality, quality, quality. But it's now time we 14 00:01:11,239 --> 00:01:20,319 have to change. Not only retail but also everything will be transformed and we 15 00:01:20,479 --> 00:01:26,119 are the believer, we are the trailblazer of the transformation. We are very global. 16 00:01:26,119 --> 00:01:31,319 For example, internal communication language of Rakuten I changed from 17 00:01:31,319 --> 00:01:38,359 Japanese to English nine years ago. There was a huge criticism 18 00:01:38,359 --> 00:01:43,560 against us when I said the Mickey Toney is crazy. All these big CEOs attacked me. 19 00:01:43,560 --> 00:01:49,659 This is going to completely fail. But we are not afraid of making a mistake. We 20 00:01:49,659 --> 00:01:54,019 are the challenger. We are entrepreneurs. So that's why all these young talented 21 00:01:54,019 --> 00:01:58,579 people wanted to join Rakuten. You don't strike me as a billionaire that's crazy. 22 00:01:58,579 --> 00:02:03,219 That's one of the joys of meeting people that are entrepreneurs. When we're here 23 00:02:03,219 --> 00:02:07,299 to talk to this audience about digital transformation and what it can do for 24 00:02:07,299 --> 00:02:12,539 businesses. You run multiple businesses from e-commerce to football to fintech. 25 00:02:12,539 --> 00:02:18,060 Where is transformation, digital transformation most accelerated right now? 26 00:02:18,060 --> 00:02:23,979 Well everything is changing right? Obviously the fintech, the fiat currency, 27 00:02:23,979 --> 00:02:32,060 the printed bills and coins will disappear sooner or later. The AI will 28 00:02:32,060 --> 00:02:39,819 basically take over many many things whether you like it or not. Obviously you 29 00:02:39,819 --> 00:02:44,379 know you're talking about e-commerce. It's not just about buying online. All 30 00:02:44,539 --> 00:02:49,659 these in-store experience will be digitized. And one of the big project we 31 00:02:49,659 --> 00:02:54,460 are working on is really transforming wireless network which is going to be 32 00:02:54,460 --> 00:03:00,259 very very important. The smartphones, your wearable devices, it is not going to be 33 00:03:00,259 --> 00:03:05,699 just device to talk or messaging. It is going to become part of your brain. It is 34 00:03:05,699 --> 00:03:11,099 becoming to your self publishing platform. So it is probably one of the most 35 00:03:11,099 --> 00:03:16,699 important thing for many many people I think. I mean the zeitgeist at the moment 36 00:03:16,699 --> 00:03:22,259 is people are obsessed with chat GPT with AI. It's probably one of the most 37 00:03:22,259 --> 00:03:27,900 read stories on the Bloomberg terminal. You and I have just used your AI. The 38 00:03:27,900 --> 00:03:35,979 infancy of AI within Rakitan is within Viber. What do you think AI will do for 39 00:03:36,739 --> 00:03:41,619 you? What are we not getting in this audience at the moment? Well obviously 40 00:03:41,619 --> 00:03:47,099 when we talk about chat GPT, the format is very different from what we 41 00:03:47,099 --> 00:03:52,579 thought. It is very conversational. It's not like search on Google. You talk 42 00:03:52,579 --> 00:03:59,019 with your smartphone and then smartphone will give you the answer like what human 43 00:03:59,019 --> 00:04:05,060 would explain to you. So the interface is going to be more natural. 44 00:04:05,060 --> 00:04:10,979 So that's very important and many many people think okay now university 45 00:04:10,979 --> 00:04:16,139 students they don't need to write essay anymore because chat GPT will write your 46 00:04:16,139 --> 00:04:20,459 essay. But this is already happening. Maybe some of you don't know but your 47 00:04:20,459 --> 00:04:26,060 kids are doing this. Whether you like it or not. And they are very clever. 48 00:04:26,060 --> 00:04:31,420 Now they're saying okay I don't want my professor to know I am using chat GPT. 49 00:04:31,420 --> 00:04:38,580 So I was talking one Japanese Chinese girl yesterday and she said she's gonna 50 00:04:38,580 --> 00:04:45,819 do this question on Google AI or chat GPT in Japanese and get the answer and 51 00:04:45,819 --> 00:04:51,819 then translate it into Chinese with you know computer. And then they will not 52 00:04:51,819 --> 00:04:57,020 know whether they use chat GPT or not. So these are getting very very smart about 53 00:04:57,020 --> 00:05:00,700 this. I think what you got to be confident is the chat GPT didn't create 54 00:05:00,699 --> 00:05:04,659 the questions for the next 10 minutes and then create something which we both 55 00:05:04,659 --> 00:05:12,579 can't which we're both unsure about. When you set out on this vision to 56 00:05:12,579 --> 00:05:17,180 create Rukitown you said that you had a social idea you look around your peers 57 00:05:17,180 --> 00:05:25,579 now and some of them are retiring. Are you still full of ambition and drive to 58 00:05:25,579 --> 00:05:29,620 step up Rukitown? You're more involved in the telecoms business now you're anywhere 59 00:05:29,620 --> 00:05:35,540 near retirement? Well when I started a business I you know kind of pledged when 60 00:05:35,540 --> 00:05:42,019 our transaction volume reached to 10 billion dollars I am going to retire. 61 00:05:42,019 --> 00:05:49,379 Now our transaction volume is over like almost 300 billion US dollars globally 62 00:05:49,379 --> 00:05:56,780 but I have a two big project in a moonshot in your hand. One is transform 63 00:05:56,779 --> 00:06:02,739 wireless connectivity. Why? Because you have your smartphone but it is connected 64 00:06:02,739 --> 00:06:07,979 to your wireless network and wireless network has been and still is 65 00:06:07,979 --> 00:06:14,699 dominated by legacy hardware. Either it's a Huawei or Samsung or Ericsson or Nokia 66 00:06:14,699 --> 00:06:20,219 and this is wrong in my opinion. It has to become something like more or less 67 00:06:20,220 --> 00:06:27,580 like a Wi-Fi and it has to be cheaper because so much money are taken by you 68 00:06:27,580 --> 00:06:31,140 know wireless connectivity companies because it's so legacy. But you would 69 00:06:31,140 --> 00:06:34,500 say it's about virtualization which in other words it's beyond the handset in 70 00:06:34,500 --> 00:06:40,460 our hands. Yes. So just explain what you mean by virtualization. Okay so I used to 71 00:06:40,460 --> 00:06:49,180 be a banker right commercial banker and 25 years ago many people told me you 72 00:06:49,180 --> 00:06:54,660 cannot do banking service on Unix server. It has to be a mainframe big 73 00:06:54,660 --> 00:07:01,699 computer. Now I have the biggest online bank in Asia maybe like I have with a 74 00:07:01,699 --> 00:07:08,460 14 million accounts and everything is working on Unix. Everything IT platform 75 00:07:08,460 --> 00:07:13,620 has been transformed being formed and becoming more software oriented more 76 00:07:13,620 --> 00:07:20,899 crowd oriented. But the one big sector which has not gone through this is 77 00:07:20,899 --> 00:07:27,060 telecom and wireless. And why is that? It's because the industry is 78 00:07:27,060 --> 00:07:32,740 oligopolized by you know four or five players and there is no incentive to 79 00:07:32,740 --> 00:07:37,740 move it that way right. If you think about internet platform it's a crowd. 80 00:07:37,740 --> 00:07:45,060 There's AWS or you know Google Cloud or Microsoft.Zoo. Everything is moving to 81 00:07:45,060 --> 00:07:50,460 the crowd. But this is not happening for the you know mobile industry. So we 82 00:07:50,460 --> 00:07:56,019 questioned why. And then we were crazy enough to you know take this challenge 83 00:07:56,019 --> 00:08:02,019 four years ago and we I think because of Rakuten now industries started to talk 84 00:08:02,019 --> 00:08:06,100 about open radio access network. Everybody thought this is kind of a joke 85 00:08:06,100 --> 00:08:11,660 five years ago. When I talk with the big CEOs big companies hey good luck 86 00:08:11,660 --> 00:08:17,460 Mickey you're going to fail. But you know fortunately you know for more than 400 87 00:08:17,460 --> 00:08:23,740 thousand radios are connected to our network in Japan on the virtualized 88 00:08:23,740 --> 00:08:31,180 network. So this is the future. Obviously device algorithm like a chat GPT is 89 00:08:31,180 --> 00:08:36,419 important but we have to be optimize wireless network and we have the future 90 00:08:36,419 --> 00:08:41,580 of wireless network is going to be virtualized. Virtualized meaning it will 91 00:08:41,580 --> 00:08:49,139 be working as if it's the internet and working on a software. The technology 92 00:08:49,139 --> 00:08:54,060 industry is having a rough time at the moment. That's a very broad term in terms 93 00:08:54,060 --> 00:08:59,740 of developers in terms of people involved in that industry being let go and job 94 00:08:59,740 --> 00:09:03,259 losses. Do you see that as an opportunity for you to pick up talent that can help 95 00:09:03,259 --> 00:09:07,340 you grow the telecoms and the tech business the tech side the pure tech side 96 00:09:07,340 --> 00:09:14,700 of Rakuten. Yeah we are seeing many people joining from big hyperscalers like 97 00:09:14,700 --> 00:09:21,259 Google Amazon because we are different. And what is most important is the data. 98 00:09:21,259 --> 00:09:26,620 Not the not the quantity of data but the quality of data. We have the biggest 99 00:09:26,620 --> 00:09:30,500 e-commerce company in Japan. We are biggest critical company in Japan. We are 100 00:09:30,500 --> 00:09:36,139 biggest travel agency in Japan. We are the biggest you know only brokerage firm 101 00:09:36,139 --> 00:09:42,460 and almost one third of Japanese people come to our website and do some 102 00:09:42,460 --> 00:09:48,100 transactions. So we have online data and offline data. So this is the unique of a 103 00:09:48,100 --> 00:09:55,019 set of data. And you know whenever you talk about AI or data science you have 104 00:09:55,019 --> 00:10:00,860 to have good data. And we have a very good data which is very very attractive 105 00:10:00,860 --> 00:10:06,500 you know thing for these super intelligent data scientists and AI 106 00:10:06,500 --> 00:10:11,659 engineers. So that's why many people even in the Silicon Valley are moving to 107 00:10:11,659 --> 00:10:19,059 Rakuten. Japan is in transition political transition. Abinomics has been a period 108 00:10:19,059 --> 00:10:22,299 of time of where women have been in power bringing women into the economy. 109 00:10:22,299 --> 00:10:27,459 We're very cognizant of what Abinomics is. You have a new prime minister. You 110 00:10:27,459 --> 00:10:33,500 you have a new economic paradigm at the central bank. How do you think things 111 00:10:33,500 --> 00:10:39,259 are going to change in Japan? Do you think Koshida is very pro business for 112 00:10:39,259 --> 00:10:46,379 you? That was a wonderful topic I wanted to avoid. Well it's Bloomberg you get 113 00:10:46,379 --> 00:10:52,299 asked tough questions. Go on give it a go. Obviously Abin was a great leader. 114 00:10:52,299 --> 00:10:59,419 He was my good friend. The day after I visited the setting happened I visited 115 00:10:59,419 --> 00:11:06,059 his house. I was one of his advisor and he made a you know big transition. 116 00:11:06,059 --> 00:11:09,980 Japanese economy was going down. Nikkei was at the bottom. He brought it up. I 117 00:11:09,980 --> 00:11:14,779 think Kishida-san need to become a little bit more aggressive. He has to 118 00:11:14,779 --> 00:11:20,419 really think about the future not to try to keep the harmony. Destruction will 119 00:11:20,419 --> 00:11:26,059 make a little bit disruptive society in a short term but that's the 120 00:11:26,059 --> 00:11:31,980 transformation stage we need to go through. So I hope you know including 121 00:11:31,980 --> 00:11:37,459 you know monetary policies and everything I think not just listening to 122 00:11:37,459 --> 00:11:42,019 the people but he has to have the vision where we want to go. We cannot just 123 00:11:42,019 --> 00:11:48,699 we create depend 100% on just manufacturing and assembly industry. We 124 00:11:48,699 --> 00:11:54,659 have to more lead become the leader of the digital economy. We need to have 125 00:11:54,659 --> 00:12:01,779 more challenges more entrepreneurs like myself and that's something I hope Mr. 126 00:12:01,779 --> 00:12:09,539 Kishida will you know kind of embrace and lead. You were you are an entrepreneur 127 00:12:09,939 --> 00:12:16,980 and you were sort of an evangelist for your business across the businesses. Is 128 00:12:16,980 --> 00:12:22,539 Japan society and you hire the youth of Japan you hire even people my age in 129 00:12:22,539 --> 00:12:29,099 Japan. Is society in Japan ready for another jolt because I've been on mix 130 00:12:29,099 --> 00:12:34,099 was a jolt it was an economic jolt. Kishida-nomics what really needs to be 131 00:12:34,099 --> 00:12:37,860 jolt you said he needs to sort of give the tree a bit of a shake. He was an 132 00:12:37,940 --> 00:12:42,659 entrepreneur what do you want to see him shake. So I'll give one example nine 133 00:12:42,659 --> 00:12:46,820 years ago I changed internal communication language of rock them from 134 00:12:46,820 --> 00:12:51,899 Japanese to English. I thought all these senior people will probably quit my 135 00:12:51,899 --> 00:12:57,379 company because they cannot redo it but surprisingly the first generation who 136 00:12:57,379 --> 00:13:02,620 we you know master speaking English was the senior people. They they had a pride 137 00:13:02,860 --> 00:13:08,500 in themselves and they challenge it. So you have to be trust you know not to 138 00:13:08,500 --> 00:13:14,179 just protect them you have to show the vision and you need to trust your people 139 00:13:14,179 --> 00:13:20,940 that this is going to be a good thing. That's something we Japanese becoming in 140 00:13:20,940 --> 00:13:28,019 a short expression to socialist. I think we have we have to believe in capitalism 141 00:13:28,019 --> 00:13:33,699 we have to be believe in the future and we need to build a future and he has to 142 00:13:33,699 --> 00:13:38,620 show what the future is going to be. I think Elon Musk was with the audience 143 00:13:38,620 --> 00:13:44,460 this morning and he talked about Twitter as being a startup in reverse. We covered 144 00:13:44,460 --> 00:13:48,860 that extensively when he when he was on air from here. You're a man of moonshots 145 00:13:48,860 --> 00:13:51,699 you're a man of ambition. Where's the next moonshot? What do you want to buy? 146 00:13:51,699 --> 00:13:55,539 If I said to you what could you buy? What business could you buy that you just 147 00:13:55,539 --> 00:14:03,019 can't get your hands on? I don't have any I'm hands up full with this very big 148 00:14:03,019 --> 00:14:10,659 you know project for mobile industry transformation. Move away and wake up all 149 00:14:10,659 --> 00:14:16,500 these telecoms. Don't go to the traditional legacy pass. Let's move to 150 00:14:16,500 --> 00:14:20,779 the future. This is what I did for e-commerce 25 years ago. We have to 151 00:14:20,779 --> 00:14:25,620 virtualize. We cannot really depend on hardware for wireless network so that's 152 00:14:25,620 --> 00:14:30,860 a very big project and I need to become a evangelist for that and the other one 153 00:14:30,860 --> 00:14:36,139 is I need another 15 minutes to talk about this but I have another biotech 154 00:14:36,139 --> 00:14:40,339 company which is to conquer the cancer and we want to be very active in the 155 00:14:40,339 --> 00:14:43,939 Middle East. Miki-san thank you very much for being with World Government Summit 156 00:14:43,939 --> 00:14:46,939 today. Thank you.