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Revitalised and Resurgent: Japan's New Business Climate

Tokyo at night

Tokyo at night


But we have had, around the world, repercussions, rebounds, from this extreme focusing on one stakeholder, and particularly, even including the short-term professional orientation, the pendulum is being swung - hopefully to the centre, we could go to the other extreme as well. Now in Japan, before this took place, I must admit, Japan had been at the other extreme. We were talking about the whole - help the community to be run for the benefits of employees. Maybe customers and employees at the top, and investors were told - please wait. In the long run, you'll be paid. But except for those bubble years, when of course there were capital gains, and particularly after the bubble burst, many investors and shareholders found out that not only had they lost a great deal of their investment, but they also had no idea how to be paid for the investment from the corporations they had invested in. So in a way it was natural for them to really go to the other extreme and say “pay us, maximise our investment returns, and otherwise you're fired”.

So we are now right in the middle of finding our own business models. Number one: accepting some of those extremes of so-called American ways, but the Japanese economy has been helped by that direction, manufacturers have been more productivity/profitability-oriented, they have forced their excesses to come down, and they are in that sense more competitive. At the same time, this whole question and debate about corporate social responsibility, that sort of started in Europe and is going around the world. Particularly in Japan, it's like a fad. If you're a business leader, unless you say something about CSR, you are not invited to speak, or you're not invited even to important meetings. Now corporate social responsibility, or corporate societal responsibility, which I prefer it to be called: we all know that all good business either here or in Japan, America, Europe - many of those corporations that have weathered generations of challenges and who prosper today, have grounded their businesses, placing their stakeholders in their views. Not just one stakeholder, not just shareholders, not just employees: stakeholders in balance. But I guess when this CSR drive developed in Europe and caught the imagination of people around the world, partly because it really came in the midst of corporate scandals. In some ways compliance plays the biggest role in the whole of CSR. But in Japan, at least, we think this is probably a golden time. Firstly, to let a more competitive business model say to our people: yes, we are now a more mature economy, we will not go back to the unemployment rate of 2% or lower, but we will develop the system where we will have a more flexible labour market and therefore just a high unemployment rate does not signify poor economic conditions; after all, we are experiencing a very low birth rate and will become, among the developed nations, one of the more aged in the next couple of decades. So we do need to develop a system to make much better use of a slowing flattening population, particularly the working population that we have. Labour mobility is going to be a very important part of it. But also, if labour mobility is important, it is also important to again emphasise productivity in the larger sense, not just physical, of every single working person: men, women, old, young. And this is where that factor I mentioned earlier is relevant: how creative, how imaginative a man can be, not just accepting the challenges and questions and just trying to find the answers. We do need people who will develop a new set of questions, a new set of challenges, in order to develop the world that corporations can develop their new business and new challenges. As I said, education is not just teaching them to count things better, to memorize things better, but to let people develop their ability to think better about whats and whys, and this is going to be the most important challenge if we are going to go up against the challenges of creating more imaginative and more creative people.

Again for this to happen, interaction with our neighbours, not only trade partners in Asia, but the United States, Australia, and the other nations are crucial. Exchange of people as well as ideas will be very important. Going back to Prime Minister Nakasone and Prime Minister Koizumi, leaders have been talking about the need for a sizeable increase in the exchange of young people and students. It is true between our two countries, and it is true between China and Japan and in other parts of Asia as well. The outcomes certainly will not only be a better understanding on the part of our respective young generations about the cultures of other people, but the chemistry that will come out of such exchanges. I'm hopeful this will also result in a lot of new questions to be asked, global or in the region, and that will help develop tremendous opportunities for the younger generation to tackle. The regional groupings, like the East Asian community: I remember vividly when Prime Minister Mahathir talked about EAEC - there are a couple of versions, I don't remember everything - but it's interesting that EAEC, after many years, is sort of acting in substance as ASEAN plus three. We talked about ASEAN plus four, but all indicating the importance of this region. Not really coming together, but developing a common sense of aspirations and hopefully common sense belief in our ability to achieve such aspirations, and most importantly developing concrete plans to achieve such goals. Now for a region as versatile and rich in cultural and religious belief and stages of developments, it is not easy to come up with simplified goals and aspirations, but I think that the whole process of developing aspirations itself is an extremely effective and useful tool by which to develop a commonsense community. In Japan, largely because of the fear and dislike towards China - which is unjustified, anyway, but some people have some personal beliefs - there are a lot of people who believe it is just too premature at best to think about the East Asian community. I may be wrong, I am always an optimist, but for a single human being or group of human beings, whether it's a corporation or a country, I just cannot think of people being able to develop further without any goals or aspirations.