The Power to Compete
Japan's malaise is seated in a number of economic, business, political, and cultural issues, and this book doesn't shy away from hot topics. More than a discussion of economics, this book is a conversation between father and son as they work through opposing perspectives to help their country find The Power to Compete .
The Power to Compete
We are in a worldwide period of tremendous change, driven by the global information technology (IT) revolution. But not all of Japan has embraced the transformation. The sad truth is that few Japanese political, business, or governmental leaders understand where we are and where we are going. In many important ways, Japan today is the same as it was in the Edo period, when our country was closed off to the world and the leaders of the shogunate 1 paid no mind to the changes happening abroad.
Even though we are seeing massive global changes in the IT industry, Japan as a whole seems unable to participate in the process. We drift aimlessly. The IT revolution has created structural shifts that are bringing the world together as if it were one continent. And yet, in Japan, people continue to prefer conventional frameworks, believing that we should enjoy a separate, isolated kind of Galapagos island. People here do not even try to consider the current global reality. This is as true for cell phones as it is for corporate governance and international accounting standards. I believe that the old guard's refusal to allow society to change only results in lowered productivity and weaker competitiveness for Japan.
Nowhere is this problem more obvious than in our government bureaucracy, which has become so bloated and rigid that it should really be called state capitalism. The continuation of the bureaucracy-led economy can only create a situation in which innovation is stifled; it will not inspire economic growth. And as the Japanese economy decelerates, the national debt continues to swell. It is difficult to imagine that this country has a future if we maintain the current spiral of loss in which the public is forced to swallow tax increases just so the government can somehow get by.
Japan is a country of rich traditions, culture, and philosophies cultivated over a 2,000-year history. We also excel in advanced technology and creativity. We need to share this intellectual and technical wealth. We must not limit our ambitions to our own small national borders and become a country of exclusion. Japan should instead become a country of greater openness, one that accepts a variety of people and cultures, and is attractive to people everywhere. This calls for two intertwined goals: (1) We must work to become the wealthiest country in the world; and (2) we must also strive to become a safe and peaceful country with highly advanced science, technology, and culture.
My work with the Japan Association of New Economy is aimed at achieving those goals. First, we must eliminate anachronistic regulations. At the same time, we must develop innovative businesses and services through the use of the Internet and other IT, and connect that innovation to the economic growth of Japan.
The second Abe 2 administration, inaugurated in December 2012, created three councils-the Council on Economic and Fiscal Policy, the Industrial Competitiveness Council, and the Regulatory Reform Council-to act as the "control towers" for the economic revitalization plan popularly called Abenomics. 3 As a member of the Industrial Competitiveness Council, I have had the opportunity to debate a growth strategy, the third arrow of Abenomics. I combined my thoughts as a business leader on that debate into a proposal entitled "Japan Again."
While working on these issues of government and growth strategies, it occurred to me that I wanted to write a book about the topic. And I knew early on whom I would ask to be my coauthor: my father. My dad, an economist and a professor emeritus at Kobe University, had often been my debate partner and sounding board as I explored issues around the Japanese economy. He passed away in late 2013, but before that happened, we engaged in a series of discussions about the future of Japan and the global economy. The result of those deba