The Journal The Authority on Global Business in Japan

CONFERENCE | REFORMS

DECEMBER 2014

Boosting Innovation and Dynamism
Globis G1 forum offers solutions to transforming Japan’s economy

Japan already has most of the ingredients required to boost its international dynamism and enhance its innovative capacity in the years leading up to the Tokyo 2020 Olympic and Paralympic Games.

It just needs to apply those skills and knowledge to remind the rest of the world what this country is capable of achieving, according to delegates attending the G1 Global Conference.

Held at the headquarters of Globis University, in Tokyo’s Chiyoda Ward, the fall event attracted participants from around the world.

Rather than simply seeking to apportion blame for Japan’s shortcomings, delegates were challenged to come up with realistic, effective solutions to the issues that must be addressed for a transformation of society and the national economy.

The conference opened with a video message from Prime Minister Shinzo Abe, who said he is committed to following through on the third leg, or arrow, of his ambitious Abenomics economic policy, insisting that he would carry out “reforms that were thought to be impossible.”

Emphasizing the lengths to which he is prepared to go, Abe said he is “ready to be the electric drill that pushes through against vested interests.”

Bicultural citizens, bilateral relations
Delegates then divided into a series of breakout sessions, with one focusing on the role of Japanese-Americans in enhancing bilateral relations.

Despite the mere 1.3 million Japanese and mixed-heritage Japanese among the US population of 308 million, immigrants from Japan have contributed greatly to US society, said Mitchell T. Maki, vice provost of California State University, Dominguez Hills.

Notable Japanese-Americans have included figure skater Kristi Yamaguchi, Star Trek actor George Takei, and the late US Senator Daniel Inouye.

Yet the legacy of World War II has largely hindered Japanese-Americans from working to bring the two nations closer together, at least until recent years.

“As an adviser to the Japan American National Museum, and as a member of the U.S.–Japan Council, I’ve been dealing with Japan–US relations for many years, and I’d become a bit frustrated by what I felt was a lack of interest in the relationship,” said Glen Fukushima, a senior fellow at the Center for American Progress and a former president of the American Chamber of Commerce in Japan.

“But maybe that was understandable given the way in which first- and second-generation Japanese-Americans educated their kids, and the sense that being associated with Japan was a negative,” he added.

It meant that all the way through the 1960s and ’70s, there was little incentive to interact with Japan. From the Japanese side, meanwhile, there was a sense that those who had left to seek a better life elsewhere had in some way betrayed their peers and homeland.

That has changed in recent years, Fukushima said, adding, “Japanese-Americans are being recognized as solid US citizens, and bilateral relations are gaining more attention.”

Maki emphasized that there is still a great deal more that remains to be done to enhance the relationship, particularly given that the Japanese–American community is growing smaller, as fewer Japanese emigrate to the United States and the existing community intermingles with the rest of American society.

To ensure that Japanese-Americans continue to play their part in enhancing ties across the Pacific, Maki and Fukushima called for the expansion of existing programs that see delegations of social and business leaders traveling to each other’s countries, as well as new programs to encourage exchanges among young people.

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Vital signs
The final session of the G1 conference examined the measures required to inject new vitality into Japan’s private sector in terms of strategy, organization, and people.

The panelists and audience took part in a spirited discussion on priority strategies, the promotion of diversity and inclusion in the corporate world, improved corporate governance, as well as the prerequisites for a globally competitive workforce.

Takashi Mitachi, co-chair of the Boston Consulting Group’s Japan operations, identified the twin problems of low productivity and a “silo mentality” in the management of big companies as restraining the domestic economy.

To that list, Yoshiaki Fujimori, president and CEO of LIXIL Group Corp., added that Japan generally has poor marketing skills for the leading products that its companies devise.

Robert Feldman, managing director and chief economist for Morgan Stanley MUFG Securities, called for introducing more incentives for companies that are innovative and forward thinking.

“Before Abenomics, I would have given the state of corporate management and social development a mark of two out of 10,” said Fujimori. “Abenomics has brought that up to five out of 10.”

One of the problems, the panelists all agreed, is the broad reluctance to take risks in business, although Fujimori said he sensed a gradual change in this area, particularly among younger people. “One of the core values of our organization is to take risks, and we do not punish that if it doesn’t work out,” he said.

Feldman suggested changes to the existing labor laws, which “stifle innovation and emerging entrepreneurs.” However, Fujimori countered that entrepreneurs and the founders of start-up companies generally ignore labor laws anyway, if they have a project about which they are enthusiastic.

All were in agreement that companies should be more open to hiring qualified, experienced foreigners to diversify their thought processes and ways of working, and that there is a need for immigration regulations to be eased.

To encourage future generations of entrepreneurs with a worldview, Feldman suggested that all Japanese university students should be required to complete a year of studies abroad before they are able to graduate.

“The most important thing that they would come out with would not be the language, but self confidence,” he added.