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Shin Tanaka: 2020 is Tokyo’s Time to Shine

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In order to be an ideal regional leader, Japan now needs to construct a new ‘identity’ says Fleishman Hillard’s Shin Tanaka

Like many nations in East Asia, Japan’s culture is unique and perceived to be relatively inaccessible. How has Japanese business been able to bridge the cultural gap and generate such a notable global presence in 70 years?

Japanese industries have two prominent strengths. One is the advanced technology of manufacturing industries, and another is the spirit of teamwork.

Historically, Japan has a unique culture of craftsmanship that pursued the best-quality products with good designs. Japanese manufactures since the 1950s have inherited this culture and tradition. Fuel-efficient cars, durable electrics, and solid bridges and roads – all those Japanese products earned a well-founded global reputation. One more thing I need to mention is that Japanese consumers are the most demanding people on the earth. The products that survive the Japanese market survive in the global market.

Another strength of Japan is the fine teamwork. In Japanese culture, ‘Wa (harmony)’ is considered as high value, so it is not so difficult for various stakeholders to cooperate to achieve the same goal. This custom became the strong driving force behind our remarkable economic growth. Government, private companies, and individuals, all worked within the ‘convey’ system, which is why the Japanese business system has been called ‘Japan Inc.’ While strong ties within Japan Inc. sometimes created a negative impact through high regulation, low creativity, and uncertain locus of responsibility, the truth that teamwork delivered Japan’s current economic position.

What developments within Japanese business trends can reasonably be expected in the next six years and how important is 2020 to rebuilding confidence in Japan’s economy?

Japanese industries are facing the second wave of globalization. The first was in 70’s and 80’s when Japanese automobile and electronic companies such as Honda, Toyota, Sony and Panasonic, became global. After the Plaza accord in 1985 when the Yen appreciated a huge domestic market was suddenly created that diverted Japanese companies’ attention away from foreign markets. Since then, we have not seen so many global brands coming out of Japan. But facing this second wave a huge number of companies in most of the industries will be going global. This will enhance regional economic integration and stability, and will have a significant impact on the global economy.

Additionally there is a social and economic momentum emerging in Japan, which could be called The Year 2020 phenomenon. This is created by Abenomics and is empowering Japan.

There are few elements to this momentum. Principally, Abenomics – most economic policy initiatives are targeted for year 2020. Within that, the fourth arrow of Abenomics, the Tokyo Olympics 2020 will be a stepping stone not only for Japan but for the region to move to the next stage of economic development; as was the 1964 Tokyo Olympics. Japanese companies are also orientated to this, setting the year 2020 for their next strategic achievements. These new developments and initiatives are encouraging Japanese people and energizing them with more confidence.

What are the projected implications for business in Japan during this Asian century?

In the past, Japan has been focusing on exporting its ‘hardware’ such as fine manicured products and credible constructions. However, in coming Asian Century, the main export items will be our ‘software’, the underlying principle of which is ‘Omotenashi (hospitality)’. This is seen, notably, in the craftsmanship to make quality products with long-term credibility, fine and efficient customer-service, unique media content, anime costume play sub-cultures and Japanese fast-food-style gourmet called ‘B kyu Gurume’.

Following the Fukushima disaster, what changes to Japan’s regulatory practices concerning the oversight of industry by government are expected and what are the implications of these for public-private sector relations?

Fukushima is the forerunner of emerging social problems such as energy supply, disaster control, shrinking and aging population. Various private organizations are gathering to solve these problems and I expect that the collected power and knowledge following Fukushima will be a significant, prescient force to help Japan and the world in near future.

The on-going change in private sector business trends is too fast for the public sector to catch up, which renders government leadership under the aforementioned ‘convey’ system largely redundant. Now, with national debt is over 1000 trillion Yen, I expect that government regulations will be loosened on the Abenomics wave of structural reform and free competition will enable the private sector to expand its businesses. At the same time, collaboration between public and private sector will increase.

Japan’s developed economy present significant differences to its Asian neighbours. What role can tri-sector collaboration in Corporate Shared Value (CSV) play in the Japanese context?

Asia will be the global business centre in the near future, thus contributing to Asia is parallel to contributing to the world. Japan has played key roles in Asia’s economic growth previously and I believe that it shall make further contributions to regional development.

Japan became the major economic power in past decades, but we could not build the proper identity suitable for a regional leader. In order to be an ideal regional leader, Japan now needs to construct a new ‘identity’ by carefully reviewing and analysing what we can or should do for the best of the community. When I think of new identity, my only concern is the vicious nationalism emerging within Japan, such as the ‘Net Uyo’, online right-wingers. Such people are still the minority in Japan, but if more and more people are dragged toward vicious nationalism, Japan will be isolated in the global community. Now is the time to develop an open-minded and unselfish identity to reconstruct the productive and cooperative relationship with neighbour states. Such process will foster the mutual respect and understanding among tri-sectors and bring peace and stability to the region.

Shin Tanaka is president of the FleishmanHillard Japan Group

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