Many people wonder what it's like in the Japanese animation industry. While in the 3D part of the industry, where I work, things are slightly better, in general it's quite different from the impression westerners have of working conditions at Pixar or DreamWorks.

A recent Harvard Business School report focused on innovation in Japanese companies looks at three case studies: packaged software, mobile phones, and animation. Their comments about the animation industry are devastating, and accurate. Here are a few select pull quotes, but it's well worth downloading the original from their website to read for yourself.

The Japanese anime market was worth ¥234 billion (approximately $2.3 billiion) in 2005 in revenues.

That is to say, the entire anime market in 2005 was smaller than the revenues of Uniqlo, a single Japanese clothing retailer. Anime revenues have been slowly shrinking, so in 2009 the comparison wouldn't even be close.

Toei Animation, the largest animation production company in Japan, had revenue of only ¥21 billion ($175 million). Whereas Disney and Pixar spend in excess of ¥10 billion to produce one anime movie; Japanese anime production companies’ average budget is ¥0.2-0.3 billion (Hayao Miyazaki’s Studio Ghibli is an exception: it invests ¥1-3 billion in one production). And while Japanese animes are omnipresent in global markets, Japanese anime production companies have virtually no international business presence.