Here
and
Now

opinions

Why I’m bullish on Japan

47 Comments
By Jesper Koll

The media loves to harp on Japan’s “lost decade” and use the world’s second-largest economy as a negative example. Yet while corporations in other countries are still gaming the government for handouts and freebies, corporate Japan has learned the hard way that government actions tend to merely delay the inevitable. This time, Japan Inc is restructuring for real and a leaner, meaner Japan is poised to rise back to the top.

As the global crisis deepens, it is back to basics. No more excuses, no more cushion from fancy financial products. The future winners will be those who focus on their core competence and redefine their competitive edge. Japan’s core competence is clear: superb technology and a proven track record of applying technology to bring innovation and better products to global consumers and producers.

The facts speak for themselves: Japan’s focus on investing in R&D has been relentless. Currently, almost 3.5% of GDP is invested on R&D, by far the highest in the OECD. The U.S. is about 2.6%, and China is barely 1%.

Most importantly, Japan’s R&D investment has steadily increased over the past decade. Japan’s competitive edge may be hidden by the current gloomy cyclical news. But structurally Japan is in pole position -- whether energy efficiency, medical devices, construction machinery, cars, electronic components, the world cannot do without Japanese suppliers.

Global patent-applications data confirms Japan’s undisputed lead in Asia. Her engineers filed 28,744 patents last year, which is about 18% of the global total, second only to the U.S. China is often touted as the next intellectual property superpower, but the facts suggest Japan has nothing to fear from the Peoples Republic. Last year, China filed 6,089 patents, not even one-fifth of Japan’s total.

Moreover, over the past four years (2004-08), Japan added 8,480 patents to its annual total -- more than twice as many as China did over the same period. Remember, Japan barely produces one-twelfth of the engineers that China does, so clearly Japan’s got a sizable productivity advantage.

Also, Panasonic and Toyota alone registered 3,093 patents in 2008-two companies alone doing more than half of what all of China achieved. Japan’s top six companies exceeds China’s total. Also interesting, in China Huawei Technologies alone accounts for 29% of all of China’s total patents. Japan’s leader -- Panasonic -- is barely 6% of the country's total.

Sure, Japan is a developed, advanced industrial economy while China is still in the development stage. However, the diversity, depth and number of intellectual property patents produced by Japanese companies is still overwhelming. Make no mistake -- the immediate future will be designed and invented in Japan, not China, nor elsewhere in Asia.

Technology is a powerful asset, but in the end the most important asset for any economy is its people. Here, it is fashionable to lament the decline of youthful vigor in Japan’s younger generation, but this is more an indication of the older generation not willing to let go, rather than the lack of new, creative and forward looking ideas from the younger generation.

In the corporate world, the current crisis is acceleration the generational change. Already, the leading car company, under new, younger leadership, is pushing through changes that the older generation would have thought impossible. For example, steel is now being sources from lower cost Korea and the entire supply chain and merchandising chain is being radically restructured.

Rather than crying to the government, Japan’s companies are making hard but forward-looking decisions to ensure future global leadership and competitiveness. The government is seen as an obstacle, not a solution, to help corporate leaders size the opportunities created by the global crisis. This perhaps is the biggest contrast between Japan and America today: Japan is rediscovering its capitalist roots, while America is gaming the public sector for all it can get.

Japan’s most powerful asset, however, is its people. Highly educated, diligent and hard working, Mr and Mrs Watanabe still possess a basic power and discipline that build a strong foundation for future recovery. Everywhere global consumers face harsh adjustment, with unemployment rising and debt repayments mounting. Japan is not spared the former, but has nothing to worry about from the later.

Household balance sheets are very strong, since Japan’s deleveraging already happened during the 1990s. Prudent borrowing and spendthrift financial management is nothing new to the Japanese people, and the current crisis is not a financial and balance sheet crisis for Japan’s consumers.

Indeed, if there is one household sector in the world that has the financial wherewithal to invest, it is the Japanese households with their huge liquidity base -- almost two-thirds of Japanese household financial assets are in bank deposits/liquid assets. Just as in management, the generational change of these assets from old into the hands of the young, will unfreeze this capital. A young generation will take risks, in fact is eager to do so sooner rather than later.

Finally, Japanese politics is much better than its reputation. It’s fair to criticize the lack of leadership in the current government. But let’s not forget that Japan is a functioning democracy. The opposition Democratic Party of Japan (DPJ) has a real chance of winning control of the government, not just because the ruling Liberal Democratic Party (LDP) has made such a mess of things, but also because their ideas are actually forward looking, new and credible.

Heath-care reform, pension reform, tax reform, reform of the technocracy -- all the hard-to-tackle policies at the core of Japan’s problem are right at the top of the DPJ agenda. Where the old-generation LDP just waffles, the young DPJ wants to make real changes -- just as the young corporate leaders are actively building a new, leaner and meaner corporate Japan.

Of course, there is much that needs to be done. Most daunting, perhaps, is the task to reform public finance. It’s well known that Japan’s fiscal deficit is more than 180% of GDP. But its real problem is that the tax system is terribly inefficient -- the tax multiplier is barely 0.5, while in most OECD countries, including the U.S., it's about 1.

But every country faces harsh fiscal realities as the cost to combat the crisis mounts. In the end, public debt will have to be paid back by the people and by the returns generated on national assets. Japan’s technology base and its powerful diligent workforce should bring high returns.

With the stock market, land prices and the level of production all back to levels last seen in 1983, it’s certainly been fashionable to “short” Japan and treat it as a has-been. But Japan thrives in times of hardship and global turmoil. This time, in my view, will be no different. A new generation of Japanese leaders in business and politics is poised to emerge and, together with the strength and creativity of the Japanese people, will prove that it is by no means a lost generation.

Jesper Koll, former chief economist for Merrill Lynch Japan, is the president of TRJ KK, a Tokyo-based investment-research firm.

© Far Eastern Economic Review

©2021 GPlusMedia Inc.

47 Comments
Login to comment

Reading the last line first "Jesper Koll, former chief economist..." would have saved my time. These financial experts are partially (if not fully) responsible for the global financial crisis, rosy writing ultimately proved misleading.

0 ( +0 / -0 )

But every country faces harsh fiscal realities as the cost to combat the crisis mounts. In the end, public debt will have to be paid back by the people and by the returns generated on national assets. Japan’s technology base and its powerful diligent workforce should bring high returns.

But, that's precisely the problem, if those R&D don't translate to exports, it won't do much good for Japan whose econonmic survival is so critically dependent on her exports. How about Japan and other Asian countries investing in becoming more economically self-sufficient? Or, even, becoming less dependent on the West for trades and trading more among themselves in Asia to be more robust against the economic downturns in the West that would hurt their exports?

0 ( +0 / -0 )

Almost none of today's hi-tech innovations have come from Japan: personal computers, the Internet, e-mail, the Web, cell phones, e-commerce, IPods, digital-music download services, they were all invented in the U.S. and elsewhere.

In software development - perhaps the globe's most strategic technology - Japan doesn't even rank. There ain't no Silicon Valley here.

Those patents mostly represent incremental developments on innovation created elsewhere. Panasonic and others simply have the money and power to invest in armies of patent lawyers and in the patent process.

0 ( +0 / -0 )

Almost none of today's hi-tech innovations have come from Japan: personal computers, the Internet, e-mail, the Web, cell phones, e-commerce, IPods, digital-music download services, they were all invented in the U.S. and elsewhere.

JeffLee,

You are right? Most of the research comes from others who are contracted to work on projects with a Japanese employee overseeing the project. After that it is all about patents and who gets it first.

I will also say Japan is really good at offering the best features to satisfy its domestic market. Even if they don't invent the technology for it. That is also saying a lot because Japanese consumers can sometimes be described as 'whiney' or maybe 'spoiled' is a better word.

0 ( +0 / -0 )

JeffLee,

And if you are correct then what is wrong with that? The real strength of Japanese industry is that they take on board new technology, wherever it may have been originally invented, and they tweak it and develop it over the long term.

As an example, cameras were not invented in Japan but who's your global daddy now when it comes to camera brands?

Cars were not invented here either but who is the dominant producer of cars in the world right now in terms of numbers sold and number of world class companies(despite the recession) as a result of constant innovation.

Where others tend to cut back at the first sign of recession, Japanese companies - my small one included, continue with R and D and generally come out stronger as a result.

It's natural that there will be cycles in regional strength as new countries develop but Japan has been pretty much at the top of its game for nearly 40 years now. I don't see that changing too much.

0 ( +0 / -0 )

JeffLee, so out of 150000 global pattens, you named 9 that were not invented in Japan. So yeah, Japan is going to collapse. You also named the Web and Internet as two separate entries, which gives us the right to question your credibility.

Moving on, I agree with most points of the article. If you look at global crisis, you can only laugh at moronic attempts by governments to break whatever is left from free markets to "fix" economic model that doesn't work. Japan is the only country who's government so incompetent the only decision they could come up with as stimulus is give everyone 100 bux to spend. What this means is that they let people and businesses take care of themselves. This is the opposite of what is happening globally, where governments spoonfeeding their largest failed businesses with bogus pork bills. Japan's environmental run is marketed by companies rather than being forced by the government, which is also extremely healthy way of doing it. At the same time, Japan's banks are sound and their currency is rock solid. These banks will go on shopping spree buying cheap foreign assets. For foreign investor Japan is becoming a safe haven for fixed income buyers.

Going forward we will witness a few changes, not quite what Obama had in mind when running his change campaign though. We will see change in economic superpowers. We will see global consumer nations change. Price of oil will be close to 200 in couple years time that will ensure a large cash flow into Canada, Australia, Russia and middle east. They will replace failed Europe and US economies as global consumer.

Two things I am hoping are not going to happen that can destroy Japan's potential: public unrest and global currency.

0 ( +0 / -0 )

Heath-care reform? hmmmm maybe they should reform it.

0 ( +0 / -0 )

Interesting article but a few points...

Japanese workers - "Highly educated, diligent and hard working"...I'll agree with the last two, but the first one? It looks good on paper but when you realize just what the Japanese education system consists of it loses its appeal.

Politics - "But let’s not forget that Japan is a functioning democracy."...This is pretty funny.

Interesting article but personally I'd be more bullish on China and India for the next 45 years.

0 ( +0 / -0 )

There's some pretty uplifting writing in this article, but a couple of things overlooked, and namely those pointed out by NoSoEaWa: R&D, while extremely important, doesn't amount to much if there are no sales, and particularly in the form of exports. Archiebald points out the success of Japan's automotive industries, and while their superiority cannot be denied in my opinion, nor can the fact that they are in the red for the first time in decades thanks to a massive decline in sales/exports. It's for this reason precisely that many Japanese companies force their employees to spend a large part of their salaries on their own products, and do not allow their employees to buy the products of a rival company (of course they can, but if seen they could face problems).

I'm not sure how the digital camera market is bearing, but my guess is they too are feeling a bit of a pinch in sales, at least for the higher end products.

Keep up the R&D, for sure, but the bottom line is that the economy needs to encourage consumer spending.

0 ( +0 / -0 )

I agree with the writer on Japan's technology. Just on cell phone contents alone, Japan is light years ahead of anyone else.

However, the key to a sustained economic recovery in Japan is less reliance on exports and more emphasis on stimulating domestic demand. That means we all have to get out there and spend cash, and not use credit cards.

0 ( +0 / -0 )

Just on cell phone contents alone, Japan is light years ahead of anyone else.

i take it you haven't used a nokia recently?

0 ( +0 / -0 )

I want to thank Mr. Koll for writing as his view highlights a way of thinking that is no longer effective.

It is clear to me that Mr.Koll has the wrong perspective on Japan and on the world going forward. As a former economic analyst with a major investment house, he is seeing the world in ways that no longer apply. He is looking at the world through the rear view mirror.

The R&D argument is easy to refute. As is the case with the education system in the US where more money is spent per child than in any other country. You would expect the results to be stellar. Far from it. It is not how much you spend, it's how you spend it.

If patents are a measure of economic success, does it really help the wealth of the nation if these patents pertain to some functionality of a vending or pachinko slot machine? sheer numbers of patents indicate nothing nor do patents on a vast array of technologies that may never be adopted. The number of patents in relation to economic output over the past 10+ years tells me that their systems are misaligned. They are out of focus. If,however, they are continually dominating patent awards and clipping along at 3-5% growth in GDP, then I'd say, yeah, they are really onto something and all countries would be rushing to Japan to study their success. They are not.

"The future will be designed and invented in Japan" Should read: "The future will be designed and invented in by a few companies in Japan for a little while longer until the Indians and Chinese have fully ramped up."

Creativity has been bred out of Japanese. That is no great revelation. The ability to get things done is clearly here, but those steering the ships are largely inept and inbred - in politics and in business - large and small. Ability, profit motives, efficiency and effectiveness are clearly absent from Japanese business. If the Japanese economy comes back it will take another 20 years. That's the amount to time it will likely take for all the deadwood to retire from the system.

Japan has been coasting for years on an explosion of wealth, savings blanketed in protectionism. Now that wealth is dwindling, the savings are going fast, and the population is ageing.

Japanese are not any more "hard working" than anyone else. They work long hours. Are they any more productive? Look at all the overtime, no holidays, no layoffs and economic growth that's been sliding for years. This is a very ineffective economy. Look at the other G7 countries where overtime is much less, people have holidays and there has been economic growth.

Japan today is the rich, spoiled child, now fully grown with no career, smokes, drinks, gambles and is living off a trust fund that's soon to run out.

All the "wa" in the land will not help Japan, the nation, regain it's former position.

At best, Japan will find its position in the world as the ageing engineer uncle who used to be wealthy, still knows a few things, but who no one takes seriously as the world has moved on while he still talks about the old days.

There is no vision in japan, no inherent spirit or drive like post-war Japan.

India and China will soon regain their positions as world leaders that they held a few hundred years ago.

Sadly, Mr.Koll is analysing the wrong things. The world has changed. Governments are and will continue to fall, banking systems are and will continue to collapse. Riots - have started and will continue. what we see now with bailouts is a necessary but short term window dressing. The media uses the word: recovery. This, too, is a misnomer. It's a whole new world emerging and we have to see it in a different way. The way that it is and not the way we think it is (or was) or the way we think it ought to be.

0 ( +0 / -0 )

and in this democratic country you cannot even send SMS overseas, all under control. At least I can receive from overseas but only on 3G mobile. Being in Europe last year I realized that Japan is years back with their mobile industry with their "stone" phones which used to be nice, handy and small, but now Europe have much nicer phones with many features as here.

0 ( +0 / -0 )

@jonnyboy What on earth are you talking about? Nokia better than Japanese phones? So which Nokia has a Bravia screen? Which Nokia doubles as a rail pass?

@European1 Why would you want to use SMS when it was fazed out out in Japan decades ago in favor of email, which has far greater flexibility. I was able to send emails to friends who had email capable phones overseas, it was the people with their 'stone' SMS only capable phones which were the problem.

In terms of keitai at least, Japan is so far ahead it doesn't even matter...

0 ( +0 / -0 )

Almost none of today's hi-tech innovations have come from Japan: personal computers, the Internet, e-mail, the Web, cell phones, e-commerce, IPods, digital-music download services, they were all invented in the U.S. and elsewhere.

JeffLee, you seem to trumpet on about how the US gave us all these great products and how Japan of today gives us no hi-tech innovations. Of all the things you listed I seem to remember that most were invented elsewhere many generations ago. I also seem to remember that Sony's walkman when it was released back in the seventies was the greatest innovation of it's time allowing you to carry music in your pocket. Without the Japanese invention there would be no iPod. Of interest, the web you are using right now was developed in Switzerland by a Brit. Where would your e-commerce, digital download services be without the web!

In a very un-American way, the Japanese go about their business prudently, developing and innovating the things we take for granted on a day-to-day basis. Considering over one million hybrid vehicles have been sold in the US now, I'm sure Japan will be satisfied it is doing just fine with their low-tech innovations.

It's worth noting that Japan doesn't have a SIlicon valley of it's own because unlike the US, whose native tongue ENGLISH so happens to be the worlds lingua franca, can't compete. They also don't spend the fortunes America does on it's military where some of your innovations like the internet derived from.

0 ( +0 / -0 )

But let’s not forget that Japan is a functioning democracy

That statement alone makes the whole article questionable

0 ( +0 / -0 )

You also named the Web and Internet as two separate entries, which gives us the right to question your credibility.

The Web and Internet are two entirely different things.

0 ( +0 / -0 )

I have to say my money is on India for pulling ahead. This article is looking past a lot of very real problems to achieve its optimistic view.

Japan's economy is export based. Take away exports and your patents don't add up to much. With consumer credit tight and economies turning away from hard core consumerism to something a little less spend focused, exports will suffer. And Japan with them.

Productitity. Japan has never ranked very high in productivity. Norway, Finland and other nations frequently outstrip Japan for worker productivity. Given the number of hours people work here, one would think a lot gets done. But it simply does not. Japanese business has too much red tape and the government is too bogged down to be adaptable. Productivity is a big problem.

Well Capitalized. Today maybe. But what about after a few years of double digit unemployment and economic hardship?

Japan is great at improving things. Far more than making new things. Japan has a great history of taking existing tech and making it better. This is where Japan really shines. The fact that patents are developed, does not mean that financially viable things are being patented. If it isn't sellable, it won't help keep Japan's position. And you can see my point on exports for the financially viable things that were patented.

Politics. The DJP represents as much opportunity for real change in Japanese politics as switching from Abe to Aso. The fact is both parties are far too invested in the status quo to shake things up. They both lack trusted and inspired leaders. And nothing will help with these issues until Japan's so called democracy actually becomes one where the people choose the leadership. Until then, Japan's old Gentleman's club will carry on supporting their own best interests over those of the people.

Quality. Sony products self destruct as if programmed to do so at the two year mark. Japanese goods used to be synonymous with quality. But like former US makers, they are more intersted in upsales and resales than they are in providing us with long lasting products. This is not helping exports. Especially when Korea is making better and better products.

So why India. They have an economy based on more than exports. And are investing the necessary money to continue to educate their people and empower entreprenurial development. Their corporate world is developing with global values and not the rigid "We do things the Japanese way" thinking of many companies here. And unlike China, they are not staring down the barrel of lost exports and potential political revolt by workers.

India is a far better bet today.

0 ( +0 / -0 )

structurally Japan is in pole position

What? Japan has abandoned the idea of structural reform. The budget is a mess. The debt to GDP ratio is a mess.

Rather than crying to the government, Japan’s companies are making hard but forward-looking decisions to ensure future global leadership and competitiveness.

Is this wrong or a flat-out lie? Japanese firms are begging the government for public funds and the Bank of Japan is buying their shares to help their balance sheets look good.

Highly educated, diligent and hard working, Mr and Mrs Watanabe still possess a basic power and discipline that build a strong foundation for future recovery.

Like anywhere else.

Household balance sheets are very strong, since Japan’s deleveraging already happened during the 1990s.

Does this guy know any real Japanese people outside of the Roppongi Hills bubble? Savings are eroding and people are not spending.

Prudent borrowing and spendthrift financial management is nothing new to the Japanese people

I guess that explains the lines outside the pachinko parlors.

[DPJ] ideas are actually forward looking, new and credible.

What??? Name one. A single one. You can't? That's because they've never come up with one.

Have to wonder about this guy's past predictions.

0 ( +0 / -0 )

@jonnyboy What on earth are you talking about? Nokia better than Japanese phones? So which Nokia has a Bravia screen? Which Nokia doubles as a rail pass?

regardless of headline grabbing features, keitais are cheaply made with features packed in so as to look good in the brochure but with no regard whatsoever given to real-world functionality. the rail-pass & e-wallet features are handy benefits of japans closed mobile market, i'll grant them that, but try getting a phone with bluetooth? and try keeping your phonebook, calenders, notes etc. synced up with your computer. good luck.

the problem is that certain manufacturers have such solid deals with certain networks that there isn't anywhere enough competition in order to actually deliver high quality phones. plus the market is saturated so manufacturers want people to toss their keitais every 18 months.

the likes of nokia have to compete and deliver to customers on a world scale. nec and hitachi do not

0 ( +0 / -0 )

Jesper my dear, as my former neighbor in Jingumae,

I know that you are highly invested in all things Japan but please open your eyes ...

... this country is spent, and getting old so quickly it makes my head spin. I hope that your analysis holds some grains of truth but the malaise of this place is in my nose every day. It's a stale, sometimes acrid smell.

And youngsters in Japan today are not highly educated ... golly, if anything they are lowly educated, pumped full of facts and data but not primed with any ability for critical thinking/analysis. They, for the most part, are not creative at all. In short, the present and future generation of Japan are/will be merely mediocre ... and this will mean a continuing deterioration of quality of life in this place. Naturally, a big part of this country's problem is its hardheaded refusal to allow others to integrate into their society. What a waste.

Alas, the best is not yet to come ... it's just in view in the rear view mirror.

0 ( +0 / -0 )

European1,

and in this democratic country you cannot even send SMS overseas, all under control. At least I can receive from overseas but only on 3G mobile. Being in Europe last year I realized that Japan is years back with their mobile industry with their "stone" phones which used to be nice, handy and small, but now Europe have much nicer phones with many features as here.

Laugh, I nearly fell off my chair. The first handyphone I had could send text, but that was an awful long time ago. Every phone I've had for the last 10~12 years has had full email access.

SMS is from the dark ages my friend.

0 ( +0 / -0 )

Jesper Koll, former chief economist for Merrill Lynch Japan

hahahaha, oh dear

0 ( +0 / -0 )

Japan has invested for a rainy day. The superficial (virtual) financial decade has come to an abrupt end and now the product making superpowers will thrive. I just hope Japan will get back into the game of renewable energy, robotics and bio-tech ASAP.

0 ( +0 / -0 )

European1, if you really must send an SMS then Softbank is your answer since the backbone is Vodafone. But, then to not have an email address for your mobile to me is really backwards. Actually any mobile that is GSM ready for overseas usages (DoCoMo, AU or Softbank) would have no problem with SMS. Personally I'm waiting for 4G to kickoff.

0 ( +0 / -0 )

Maybe being bullish is a bit too optimistic, but, this time around, Japan may indeed recover before other advanced economies, including and especially the U.S.

0 ( +0 / -0 )

I'm bullish on Japan too, but not based on the illusionary ideals, half truths, and outright, delusions posted in this article.

superb technology and a proven track record of applying technology to bring innovation and better products to global consumers and producers.

The world's consumers are awash with technological appliances and electronic toys of all kinds. It isn't so much a matter of over supply, the demand simply isn't there. There are not enough people in the world who have the excess dollars/yuan etc, to use for much else other than for paying for a roof over their head, food, and really the bare essentials. Its going to take far longer than a decade to see a mass of consumers with cash to spare save Japan once more through exporting that kind of product!

steel is now being sources from lower cost Korea and the entire supply chain and merchandising chain is being radically restructured.

Steel? Before steel manufacturing comes the mineral extraction from the ground, and at this point the mining industry throughout the world aren't doing a lot of mining. It just financially is not worth their while, that's if they can raise the funds to begin with.

But anyway, on the subject of commodities, notice the 'analyst' above does not mention oil! Oil is thought to have peaked in terms of the available amount able to be extracted without having to cost more in energy resources and money to extract than able to be profited from. The sheer cost of oil once demand increases again is going to make production costs soar at all levels. Just the cost of transportation alone is going to hugely increase. Let's consider for one moment what the cost of oil will be once the dollar crashes. Will the yen hold up under current conditions? Don't think so. Remember JAPAN HAS NO OIL RESOURCES OF ITS OWN.

Japanese politics is much better than its reputation... But let’s not forget that Japan is a functioning democracy

Japan's politics is a mess. Anyone who has written about it knows it. And as for the 'functioning democracy', what other democracy is Jesper comparing Japan's with exactly? Its really a risky statement to make at this point in time, when democracies all over the world are looking decidedly shaky. Japan's coming election looks to be a decided mess. Recent polls have already shown that more than 50% of the public have no faith in the leadership in either the LDP or the Democratic Party, particularly since the most recent accusations of corruption leveled at both leaderships.

Jesper is correct at least once. Japan does indeed have one powerful resource, and that is its people.

0 ( +0 / -0 )

Let's be really honest here. The ingenuity and drive of the Japanese is legendary. That's no understatement.

However, two points to consider here.

Imperialism enabled Japan to become a war machine early on last century. Snatching resources from its neighboring countries set up Japan as nation to rival the West in the same game. The reason that Japan was able to become first of all powerful enough to conquer its neighbors was because it was an imperialist power to begin with. That meant it was able to build up its resources in successive stages, to the point its ability to manufacture armaments rivaled even the US (at the early stages).

America, the world's sole most powerful economy after WW2 was the reason Japan became a massive economic marvel. The reason Japan became the world's 2nd biggest economy was because America after WW2 chose to plunge its resources into the country to harness Japan's ingenuity and drive, and already well organized industrial machine into an advanced capitalist economy.

BTW. of course, as the process of globalization took inevitable effect, the US discovered the advanced capitalist nation states it had created would have minds of their own, and undermine the whole program. That's the contradiction inherent in the capitalist system for you.

0 ( +0 / -0 )

Mr Koll, former "Chief Economist" and "Merrill Lynch". Your article was discredited the moment we read "Economist" and "Merrill Lynch". You might have been better off just solely putting your name to it, "Jesper Koll" or a psuedonym, perhaps "The Jester". The fact that you have to mention your former title and employer means you are saying, I need these to give me creditability.

We all wish Japan a bright and prosperous future. Toyota clearly make the best and most reliable mass production cars in the world and have done so for decades. The other range of manufactured products is average.

Japanese are great savers but their savings are wasted funding their Federal Government's massive public debt, almost twice GDP and propping up a banking system that because it propped up manufacturing in the seventies and eighties, has been insolvent for twenty years.

Too much Saki can take its toll. Cheers to the cheer leader!

0 ( +0 / -0 )

If the author is actually presenting his opinion then it is to be respected. I would like JT to clarify where his investment research firm gets their revenue dollars from; in case his business model is to provide investment research to foreigners as they invest in Japan then this here can be categorized as pre-sales opinion or what we call a "pitch". It just becomes easier to digest when we have this information, it becomes clear that a salesperson is trying to push his goods.

The "story" needs to find its buyers and does become a reality. The "story" needs to find new buyers (under-informed) to keep replacing old buyers who have been burnt.
0 ( +0 / -0 )

the japanese economic miracle was all born out of the direction and momentum that came out of its WW2 defeat. ever since the asian financial crisis it's pretty much tread water. now, needing a new direction i don't have much confidence it'll be able to dramatically focus itself as it has in the past

0 ( +0 / -0 )

Currently, almost 3.5% of (Japan's) GDP is invested on R&D, by far the highest in the OECD. The U.S. is about 2.6%, and China is barely 1%.

China just steals the industrial secrets it wants. Why invest in R&D?

0 ( +0 / -0 )

Japan,with it's rapidly aging population is, as we all know, sliding rapidly downhill. It had its heyday in the eighties. It feels as though this article has been written by a starry eyed newbie.

0 ( +0 / -0 )

taniwha,

To be honest, imperialism was not Japan's speciality though I don't think there were plenty of resources to snatch from our neighboring countries compared with other great empires. Since earlier on the century before last, Russia tried to come down southward to the Indian Ocean in the Central Asia and also through Manchuria to the Korean peninsula in the Far East. Whereas Britain conquered India and was encroaching China from Shanghai and Hong Kong. In this Great Game, Japan was picked out perhaps for her ingenuity and drive as a promising chessman for Britain to contain Russia in this region. The Meiji Restoration was even realized with backup from Britain. And halfway through the game the U.S. joined by setting Japan against China and eventually pulled down Britain from its position. Postwar Japan then became a chessman or chest for America. Should Japan be proud of herself for being picked out two times or should know better?

At least it's high time anyway we knew that Anglo-American style management doesn't fit or save this country as there are scarcely any business corporations that have not come to a dead end which had introduced globalism and by-result management in the last decades after the bubble economy collapsed.

0 ( +0 / -0 )

All this technology and money and living/housing conditions are still very very ordinary.

0 ( +0 / -0 )

All this technology and money and living/housing conditions are still very very ordinary.

the widely held belief that japan is some sort of futuristic sci-fi paradise, like something out of the Jetsons, is an example of very successful PR, but a complete myth that really needs to be put to bed

0 ( +0 / -0 )

corporate Japan has learned the hard way that government actions tend to merely delay the inevitable

Fovernment action and corporate Japan are indistinguishable.

0 ( +0 / -0 )

Seharinokaze

I'd say imperialism is what it is, be it small or big size. The fact that Japan wanted control of access to Manchuria back before World War 2 began may in fact have had more to do with geopolitical concerns than access to minerals in the ground.

Good points about the imperialist intentions of the other nations leading up to that period I think.

Globalism was not introduced by "Anglo-American style management", it is not an attribute solely of Western big business. If you look at some of the points you have already made earlier in your post you can see how globalism has been developing for more than a century.

When Japan moved into Manchuria, followed later by its move into areas of South East Asia and the Pacific, that is also an example of the process of globalization. In this case driven by imperialist interests; that is, a Japanese elite in control of the nation state and served by and acting to serve big business interests (largely itself).

Globalism does seem to have been driven largely by the desire to trade, and that is a fairly universal desire.

0 ( +0 / -0 )

"But let’s not forget that Japan is a functioning democracy."

Brother, where did this come from? I agree with many things in the above article, but THIS is just laughable.

0 ( +0 / -0 )

I am not sure there is a significant difference between LDP and DPJ in terms of policy?

Japan's politics should be privatised I reckon.

0 ( +0 / -0 )

taniwha

Globalism is what stronger world powers has to force for their own interest on lesser nations. Modern histories in Asia is full of such schemes and martial outcomes. Afghanistan is a good example. The world players often sent troops there since early 19th century all to little purpose. Will they ever learn?

The samurais of Satsuma, however, knelt down to globalism after the Anglo-Satsuma War in 1863 amidst the national movement calling for the expulsion of foreign powers, and with backup from Britain they eventually usurped the government (the shogunate) by holding up the Imperial brocade. Even the victory of the Russo-Japanese War was not feasible without help of the British Navy officers and the good offices of Rothschild. Whereas in Afghanistan and China the expulsion of foreign powers remained a chronic imperative disturbing the process of modernization. Neither the Opium War nor General Gordon's victory over the Taiping rebellion let the Chinese take "If you can't beat 'em, join 'em" attitude as easily as the Anglo-Satsuma war did with the samurais. You can call it Japan model.

So Japanese leaders submitted tamely to the trick of globalism. Anyone who opposes to selling away his souls and country to the world power is regarded as backward and excluded as a social outcast. Such is what globalism is all about. But now it's getting questionable as Koizumi's structural reform was mostly to let outflow the national wealth and monetary globalism devastate the domestic economy. Japan model is loosing its validity.

0 ( +0 / -0 )

Mr. Koll has an almost religious faith in Japan, and he is entitled to his opinion. But again, one can't help thinking that he is talking up Japan to at least partially serve his own interests as a Tokyo-based investor.

0 ( +0 / -0 )

"Why I'm bullish on Japan"

Just take a look at the current Picture of the Day.

0 ( +0 / -0 )

Just take a look at the current Picture of the Day.

what do you have agains forklifts?

0 ( +0 / -0 )

"You can call it Japan model."

Many people would prefer to call it "howling with the wolves", which is why so many people consider the actions of Japan from 1868-1945 to be so deplorable rather than heroic or justifiable in any way.

0 ( +0 / -0 )

Well, the model continued after 1945. And it tends to drift about when the world power shift occurs. But anyway I am rather bearish on Japan unless we put an end to the puppet regime of LDP and bureaucrats who are howling with wolves at their back.

0 ( +0 / -0 )

davidattokyo,

"I am not sure there is a significant difference between LDP and DPJ in terms of policy?"

Really? Are you serious? The LDP is the government itself, with decades of experience in government and running one of the most powerful nations on earth. The DPJ, on the other hand, is a rag-tag group of castouts and losers from other parties that rid themselves of such flotsam. The DPJ has never proposed a useful law, has never put forth any good ideas, and has done nothing but try to slow down the speed of legislation. Japanese people see through the fraud of the DPJ, which is a party based on the ego of Mr Ozawa. We will reject him thoroughly in the next election.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites