The following is the Founding Prospectus of Tokyo Telecommunications Engineering Corporation that Mr. Ibuka drew up in 1946. (Tokyo Telecommunications Engineering Corporation) Established on May 7, 1946

The Founding Prospectus of Tokyo Telecommunications Engineering Corporation

During the war, I worked at Japan Precision Instrument Co. with a number of engineers testing and producing new military equipment. We worked so hard that we literally forgot to sleep or eat. After the war and dissolution of the company, about 20 of these dedicated and truly worthy engineers joined me to start Tokyo Tsushin Kenkyujo (Tokyo Telecommunications Laboratory), for the development and production of communications equipment.

The first and primary motive for setting up this company was to create a stable work environment where engineers who had a deep and profound appreciation for technology could realize their societal mission and work to their heart's content.

During the war, though we were subjected to some of the poorest conditions, we tried hard to fulfill our mission. I experienced how passion together with capabilities can be driven by a profound and fascinating mission. On the other hand, I also realized what could weaken these intense motivations.

Thus I began to conceive of ways for these motivated individuals to be united on a personal level, to embrace a firm cooperative spirit and unleash their technological capacities without any reserve. If this could be accomplished, the organization would bring untold pleasure and tremendous results, regardless of the meagerness of its facilities or the limited number of employees. The end of the war brought us closer to realize this dream.

Not just anyone, but those with similar resolve have naturally come together to embark on this new mission with the rebirth of Japan after the war. We felt no need to discuss how to prepare ourselves for such an embankment. Based on a common understanding we had developed over time, our ship sailed off naturally.

With scarce testing equipment and parts obtained from Japan Precision Instrument and capital the size of an allowance, we drew up a plan to somehow make our way through. We believed that our high aspirations and confidence coupled with our unity and technological know-how would break through any rough waves, despite the small size of our operations. Further, we began on a small scale because we were unable to foresee societal circumstances during a period when our country was facing a turning point. In addition, we realized that it would take some time for our work to be recognized and valued by the society.

However, as we actually began our operations, we realized how much Japan urgently and indispensably required a company like ours - with technological spirit and a set of management policies. We first became aware of this strong need through the activities of the Ministry of Posts and Telecommunications, the Ministry of Transportation and other government agencies related to the field of communications. Unlike the other ministries, which seemed to wallow with their problems, the ministries related to communications defined a clear direction by taking the initiative and announcing numerous detailed plans, such as the release of all-wave receivers to the general public, the liberalization and initiation of private broadcast stations, the overseeing of trial television broadcasting and the rapid rebuilding of the communications

network devastated by the war. These ministries made it seem as tough public companies were being lead by them.

Such activities had a direct influence on us. Due to our close ties with the Ministry of Posts and Telecommunications from the wartime, we soon began receiving large orders for vacuum-tube voltmeters and the like. In little time, proposals for new product research and requests for trial tests grew significantly. In addition, the licensing of all-wave receivers to the public rapidly increased interest in post-war radio programs and in radios themselves. This, coupled with a huge number of 'sets' (such equipment as gramophones) which were destroyed during the war, the demand for radios from our company's radio service division grew by the day. We were also receiving many requests to manufacture quality parts from cooperative university scholars, research laboratories and conscientious enterprises with similar intentions as us.
As mentioned above, the increase in demand from various customers made us more determined. Namely, we realized the importance and need to increase capital and equipment. I feel joy beyond expression that our diligent effort has produced such a great response from all levels of society and that our company has become successful in such a short period of time since its founding. I am delighted not only because this promises our company's rapid growth in the future, but because it means that the ideals we set forth coincided with the role and function a company had to play during the period of Japan's reconstruction.

Purpose of Incorporation

  • a) To establish an ideal factory that stresses a spirit of freedom and open-mindedness, and where engineers with sincere motivation can exercise their technological skills to the highest level
  • b) To reconstruct Japan and to elevate the nation's culture through dynamic technological and manufacturing activities;
  • c) To promptly apply highly advanced technologies which were developed in various sectors during the war to common households;
  • d) To rapidly commercialize superior technological findings in universities and research institutions that are worthy of application in common households;
  • e) To bring radio communications and similar devices into common households and to promote the use of home electric appliances;
  • f) To actively participate in the reconstruction of war-damaged communications network by providing needed technology;
  • g) To produce high-quality radios and to provide radio services that are appropriate for the coming new era;
  • h) To promote the education of science among the general public.

Management Policies

  • a) We shall eliminate any unfair profit-seeking practices, constantly emphasize activities of real substance and seek expansion not only for the sake of size;
  • b) We shall maintain our business operations small, advance technologically and grow in areas where large enterprises cannot enter due to their size;
  • c) We shall be as selective as possible in our products and will even welcome technological challenges. We shall focus on highly sophisticated technical products that have great usefulness in society, regardless of the quantity involved. Moreover, we shall avoid any formal demarcation between electronics and mechanics, and shall create our own unique products uniting the two fields, with a determination that other companies cannot overtake;
  • d) We shall fully utilize our firm's unique characteristics, which are well known and relied upon among acquaintances in both business and technical worlds, and we shall develop production and sales channels and acquire supplies through mutual cooperation;
  • e) We shall guide and foster sub-contracting factories in ways that will help them become independent, and we shall strive to expand and strengthen mutual cooperation with such factories;
  • f) We shall carefully select employees, and our firm shall be comprised of minimal number of employees. We shall avoid to have formal positions for the mere sake of having them, and shall place emphasis on a person's ability, performance and character, so that each individual can fully exercise his or her abilities and skills;
  • g) We shall distribute the company's surplus earnings to all employees in an appropriate manner, and we shall assist them in a practical manner to secure a stable life. In return, all employees shall exert their utmost effort into their job.

Managing Departments

  • 1) Service Department
    When we consider the spread of all-wave receivers in society and introduction of household appliances and televisions, service departments ought to place more importance on both the quality and frequency of their services. Currently, there are not any 'radio technological service providers' in Japan that truly fulfills what their names stand for. The ones that do exist have only provided low technological services to radio dealers. With the introduction of high quality receivers in the future, these inferior service companies will inevitably disappear. On the contrary, due to a large demand for high quality receivers and the rise of venture spirit, large servicing companies that form special alliances with major hardware manufacturers will probably appear.

With this in mind, our company plans to provide the best service by utilizing both its technological skills and measuring instruments. The use of compact service cars is an example of such a service. These cars will service various weights and sizes of electronic phonographs, high quality receivers and television sets. The car contains all the necessary equipment for measuring, fixing and servicing home electronic appliances and will respond speedily to a phone call. The car will improve our work efficiency, and the number of technicians and equipment that is needed can be minimized.

For rural areas, since the number of high quality products are still small, we plan to service our products on a specific date by making arrangements with a specified radio shop.

The fact that the Japanese government allowed all-wave receivers to be used for commercial purposes, has encouraged large and small radio companies, including ours to manufacture them. Due to a lack of materials and other related issues, it will take some time for these products to actually hit the market. To respond to the needs of the consumer in the interim, we have developed a device which will easily convert the customer's hand-held receiver into all-wave receiver. However, materials for the new converting device are also not readily available. Nonetheless, due to its technological superiority and function, we have accumulated orders from consumers as well as radio shops. By next June we plan to manufacture 500 of these products for 400,000 yen in total. In the meantime, we will determine our strategy after observing how all-wave receivers perform on the market.

Orders for repair work are increasing as there are many people who were affected by the war and because of a lack of trustworthy radio shops. Our response to the situation at hand is to make profit secondary to service. We will provide reports which explain the problems in layman's terms and provide the best customer service. We will remain responsible for fixing any problem we find -no matter how complicated they may be. This will be the motto of your service department.

Additionally, we are developing and planning extra high quality receivers, electronic parts and household appliances, though they may be small in number compared to what our competitors are making. Introducing technologies from overseas, creating a library which has information and books on radios, holding workshops to educate consumers on the basics of electronics will also be important issues the service department must address.

(Service to shareholders)
We will provide in-depth service to shareholders in the future. It shall be interesting to add a membership type of a characteristic to a normal relationship between a corporation and shareholders so that members can request service anytime they wish

Additionally, we are developing and planning extra high quality receivers, electronic parts and household appliances, though they may be small in number compared to what our competitors are making. Introducing technologies from overseas, creating a library which has information and books on radios, holding workshops to educate consumers on the basics of electronics will also be important issues the service department must address.

We will give away new equipment, such as a device which prints the contents of a newspaper that it receives over the radio, to develop a more intimate relationship with the shareholders. As household appliances flourish, this becomes an extremely valid method to communicate with our shareholders.

  • 2) Measuring Instrument Department
    Compared to the number of radio manufacturers, there are only a few companies that make measuring instruments needed to produce and repair radios. The number is even smaller for radio dealers that are capable of repairing products with these instruments. Although radio receivers which are commonly used by the public can be fixed by non-scientific methods, it will not be possible to do so in the future as equipment becomes more complex, and as people begin to use high quality receivers and all-wave receivers. In the past, the reason why measuring instruments were not frequently used was because they were difficult to use and required many other additional equipment. Either way, the limited number of measuring instrument manufacturers clearly illustrates the ample room that is left for growth in this field, both technologically and from a business point of view. It is a favorable direction for any business that employs sophisticated technology. Profitability is high due to few input materials and high selling price. Moreover, there is very little competition.

Nihon Measurement Company, that we used to belong to, is one of the rare measuring instrument manufacturers. This company started with a very small capital investment and poor facilities. The reason why the company succeeded in such a short period of time is due to the great management style that was employed in its measuring instrument department.

For Totsuko, the vacuum tube volt meter (VTVM) for measuring ultra-short waves is the resulting product of 10 years of endeavor.
The great support we have received from the public is something we can definitely be proud of. Further, the fact that our instrument is one of the best in the world was proven when the Occupation Forces took the product back to the U.S. The production of the VTVM is being planned for this new company (Totsuko) since we have received 150 orders from the Ministry of Communications (about 300,000 yen). We plan to complete the production by the end of March. We are progressing very well.

Since the Ministry has plans to place orders during its fiscal year 1946 for a greater quantity than from the general public, and televisions will probably be a big hit when they are launched in the future, our company can be financially sound even with a single product - VTVM.

In addition, we plan to develop special high quality measuring instruments. We will also place great emphasis on a 'total service measuring equipment.' This measuring equipment will allow even technically untrained radio shop persons to perform analysis on high quality radios. In other words, it will be a simple fault-finding device. The spread of such equipment will make the public realize what true service really means. And we plan to make our equipment useable to small and large manufacturers.

The Service Department I have mentioned at the beginning of this section deals with the general public. The latter part refers to providing service to experts. However, the spirit and the depth of services are the same in both.

  • 3) Communication Equipment Department
    The above two departments are in charge of maintaining and managing the company's operations. In contrast, this department helps the company to grow in the future by performing research and development of special communications equipment. The Ministry of Posts and Telecommunications, the Ministry of Finance and other government agencies are aggressively planning to improve the efficiency of the communications network, which they believe is a very important issue. To respond to their needs, our company has developed the following new products.
    a) Time Split Multiplex Method
    Making use of the existing wire and radio, and with a simple piece of equipment, 3-4 layers of communications become possible. Research began in 1943, at Tohoku Teidai's (university)communications research center during the war. This equipment works uniquely since it employs the most advanced wave-detector technology. The aforementioned government agencies are deeply interested, and if the prototype ordered by the Railway Ministry proves to be successful, the order for the planned 12 layered ultra short wave radio phone device will be ours at an estimated price of 5,600,000 yen.
    b) Simple Multiplex Telephone
    This is a simple device that uses existing telephone wires to double the amount of communications. A simple multiplex telephone can be made from equipment that we developed with many years of research for a different purpose. The prototype is currently being made, vigorously, which is just another one of our talents. If it is actualized, I am sure there will be great demand for it.
    c) Recordable Letter Communication Device
    This device was also developed to ease the burden of memorizing communication signals for pilots during the war. However, the war ended before the product could be utilized. The sender uses a typewriter to send a message, instead of a signal emitter, and the receiver can read the output on a tape when the transmission finishes. Recordable Letter Communication Device is simple to use like a portable typewriter. The receiving unit is the size of a small safe which can be used with both radio and wire. In the future, this device can be used by telephone companies to send telegraphs over phone lines, and if someone is not home, the person who called can leave a typed message. Another application for this device is in control centers at railway stations so that commands can be printed out. The device is very convenient and can be used in many fields, but to make the actual product can be very difficult. The production of such a device requires high precision instruments. It is very difficult to make this device into a product immediately. Nonetheless, we are moving forward with the design so that we can make a prototype that is faultless.
    d) Program Selection and Reception Method
    This is also a device that can be made from a product which has already been developed by our company. First, the studio (sender) begins the program with a sound that is different from the actual program (for example, 'Do' for news and 'Re' for music).
    Second, the listener needs the Program Selection and Recognition Receptor to detect different sounds. With this device, a listener can simply press the sound that corresponds to the program he or she wants to listen to, so that the radio automatically switches on when it recognizes the note. And when the program ends, there will be a special sound to denote the end and the radio will automatically switch off. This device can also be used to set the time on clocks and watches to time signals.
    e) Other Special Parts
    Of the tuning fork oscillator, filtering switch and tuning fork oscillation clock that we researched and developed for use in the war, many have potential applications in the field of communication technology. Thus, if there is demand, we plan to produce them accordingly.