Japan Inc is stalled and its engine trouble may be irreparable, Shukan Gendai (Dec 7-14) fears.
No one wants bad news now. It’s a happy season: ring out the old, ring in the new. And bonuses are up this year – way up, in fact; very near a peak level not seen since 1959. While spoil the celebration, as Shukan Gendai seems intent on doing? Because, it says in effect, the sober reality we’ll awaken to once the celebrating is done is very grim, and preparations to meet it, owing to incurable optimism, appear less than adequate.
The rising bonuses suggest a flourishing economy – misleadingly, the magazine claims. Citing a Nikkei Shimbun survey of 1712 major Japanese companies, it finds year-on-year profits down across the board – 14 percent overall, worth some 17 trillion yen altogether. The steepest drop is in the electronic appliance sector – down 54 percent. Chemicals are down 22 percent; automotive, 16 percent. Why? Simple: failure to adapt to rapidly changing times.
The blame generally placed on the U.S.-China trade spat is a face-saving canard, Shukan Gendai says. We’ll soon see, the superpowers having worked out a compromise. It won’t get Japan out of its rut, the magazine is sure. Consider electronics. China in particular, and other Asian nations as well, are marketing good, inexpensive computers worldwide. U.S. maker General Electric (GE) took note, saw it couldn’t compete, and got out of that sector, shifting instead to industrial software and medical equipment. Here’s a lesson Japanese firms might learn, but don’t – they plod on regardless, and suffer the inevitable consequence: growing global irrelevance.
The Japanese solution, Shukan Gendai laments, is not innovation and adaptation but “restructuring,” a euphemism for mass layoffs. Panasonic has announced ongoing restructuring through 2021. And that’s just the beginning.
The junior baby boom generation, born in the 1970s, is about to turn 50. They are in their prime, at the peak of their earning capacity – to the despair of their employers. They are vigorous and experienced – and very expensive. Eliminate them, and overhead shrinks, giving struggling corporations a bit of breathing room. Over the first six months of this year, major corporations have called for a total of 8,200 employees aged 50 and up to take early retirement. That’s the near equivalent of last year’s figure for the full 12 months. Kirin Holdings reaches down even farther – to age 45 and up. And this at a time when the government is actively promoting work to age 70 and beyond to keep the strained national pension system solvent.
There are other threats to the harassed and struggling worker. Foreign labor is one, artificial intelligence another. Leading clothing firm Uniqlo, for instance, hires half its specialized IT staff from India and one-third from China and Taiwan. As with IT, so with marketing: Japanese specialists compete not only with each other but with counterparts from all over the world.
Individuals can win that battle with diligence and training, but against AI a mere human has no fighting chance. Predictions of 40 percent to half of today’s jobs being computerized and dehumanized within a decade or two abound. “So long white collar,” says Shukan Gendai.
A separate but related issue is infrastructure. Japan’s, the magazine says, is crumbling rapidly. Transport ministry figures show 40 percent of the nation’s bridges and 31 percent of its tunnels will be 50 years old come 2021. An estimated 68,000 bridges are potentially dangerous. Reinforcement and replacement will require enormous manpower and cash. Where are they to come from? Nobody seems to know.
2020 is mere days away. The Olympics and Paralympics are the year’s scheduled main events. Japan will shine on the global stage. National pride will soar.
It looks like Japan’s last festival, Shukan Gendai concludes bleakly.© Japan Today