Japan's Challenge: Creating Future Through Innovation

Takahiro MIYAO (Professor and Head, Japanese Institute of Global Communications, IUJ)

As a new attempt in our Platform seminar series, we organized a small discussion group in an informal setting on March 14 to take up various issues regarding future prospects for Japan with emphasis on innovation. In addition to the speaker, Mr. Hiroshi Tsukamoto　(General Manager, EU-Japan Centre for Industrial Cooperation), and the discussant, Mr. Toshihiko Kinoshita (Professor, Waseda University), there were the following participants (in the alphabetical order): Ms. Nathalie Cavasin (Visiting Waseda University, Innovation Specialist), Mr. Rene Duignan (Central Bank of Italy, Int'l Management Specialist), Mr. Yoshisuke Iinuma (Oriental Economist), Mr. Sam Jameson (Journalist, Japan Specialist), Ms. Akiko Kashiwagi (Newsweek Tokyo Correspondent), Mr. Kanzo Koyabashi (IT Coordinators Association), Mr. Weston Konishi (Council on Foreign Relations, Hitachi Fellow), Mr. Yoshiji Makino (Media Office Jidai Shigekijin) as well as Mikihiro Maeda and Takahiro Miyao (IUJ, Global Communications Platform).

First, Mr. Tsukamoto gave a brief presentation, referring to "JAPAiN" and "Going Hybrid," which signify two opposing views on Japan recently featured by the Economist, and pointing out Japan's strengths in the high-tech area (robots, environmental technology, wearable IT, etc.), the soft-content area (games, anime, manga, etc.), and the comfortability area (washlet, massage chairs, food, wall-hanging TV, etc) as well as Japan's problems with regard to fiscal deficit, aging society, regional gaps, and inefficient service industries. As for future strategies, Japan should focus on its Asia policy, especially regarding China, to develop mutually beneficial relations in the future, and also play a more positive role on such global issues as environmental problems and ODA, especially for Africa, according to Mr. Tsukamoto.

Next, Prof. Kinoshita gave a brief comment and emphasized Japan's success in going hybrid regarding management practices, especially among "excellent companies," along with many cases of failures in coordination (especially decision-making power delegation) between corporate headquarters in Japan and their subsidiaries overseas as well as problems in communication between Japanese managers and their employees in foreign countries, as seen in his recent article (in the References below). He also pointed out the low productivity of service industries as one of Japan's major weaknesses in the global economy.

In the free discussion session, severe criticisms of Japan's lack of progress in social, political, economic and management reforms in recent years were expressed by Mr. Iinuma ("the negative factors outweigh the positive factors"), Mr. Duignan ("economic and political reforms are not moving forward"), Mr. Jameson ("no change has taken place for the last few decades") and Mr. Konishi ("Japan's politics is not addressing any of the key issues"), whereas Mr. Tsukamoto and Prof. Kinoshita tried to highlight positive prospects for Japan's economy and business, at least relative to other countries in Asia and Europe, if not to the U.S. In that context, Mr. Kobayashi pointed out that the IT revolution since 1995 has changed Japan in many ways, although it may not be so visible and more efforts should be made to apply IT in Japanese society.

Focusing on Japan's innovation, Ms. Cavasin explained her research findings about industrial clusters in the Tokyo region and argued that social and educational (especially, university) reforms are necessary to encourage social interaction for creative thinking and disruptive innovation in Japan. Then, Ms. Kashiwagi asked the question as to what steps and what kinds of input are needed to change Japan in the desirable direction. In response, no consensus emerged among the participants regarding future strategies, especially about the role of the government, Japan's positioning in Asia, the effects of environmental policies and technologies, etc.

Actually, there was a disagreement over Japan's growth potential, as Mr. Jameson regarded 3% real growth as a reasonable long-term target, whereas Mr. Tsukamoto and Prof. Kinoshita maintained that only 1-2% growth would be possible in view of various constraints imposed on Japan's economy and society. However, everybody seemed to agree on the necessity of introduction and utilization of managerial and technical human resources from abroad for Japan to maintain and improve its power for innovation in the future.

Although the discussion lasted for about one and a half hours, it was just a beginning and more time was needed to reach any conclusions on the key issues raised at the meeting. This may be reflecting the fact that Japan is facing so many difficult challenges in reforming itself to continue to innovate.

Reference:
Toshihiko Kinoshita "Japanese Management Overseas: Dilemma and Challenges" http://www.glocom.org/opinions/essays/20080212_kinoshita_japanese/

This report is adopted from the following blog (with its Japanese translation):
http://glocom.blog59.fc2.com/blog-date-20080314.html