People have been bitching about Japanese corporate culture for decades. It's unrealistic to think that the government can cause anything more than a minor shift in the system.
A much fruitful would be, as you said, FDI. Foreign businesses can bring Western workplace and management practices into Japanese. The government should also encourage foreign investment into a Startup ecosystem. New ambitious firms will naturally select for the portion of the population that want to break free from the Japanese system. When Japan is full foreign businesses and start ups, the local investors and governments can let these old companies die more easily as opposed to propping them up with public money.
Agree with most of this, except for the EVs. The government push for hydrogen is unproductive, but EVs are not a good substitute in Japan. 40% of cars sold in Japan in 2023 were hybrids, and many of the rest were tiny kei cars with fully gasoline engines, only 8% were battery electric. Hybrids are a more efficient way to reduce carbon emissions given the high cost of battery minerals (now actually falling since EV demand in the US was overly optimistic, and production falling) and processed in China. Electricity supply there is not very clean especially when the government closes nuclear plants for decades long “safety inspections” forcing the use of fossil fuels (60% of Japan electricity now, evenly split between coal and imported natural gas, with 11% nuclear and 10% hydro).
In urban areas most people live in high/medium rise apartments with single small parking spaces without nearby electricity. The typical single family house has a 200V/30A supply (6kw) since mostly natural gas is used for cooking/hot water and wall mounted aircon units (central heating is rare) use 200V, everything else is 100V (and weirdly 50Hz in Northeastern Japan, and 60Hz in the rest with a HVDC interconnection). Household garages are also rare (carports are common) which all means a typical house isn’t quite adequate for home charging an EV. Gasoline is not very expensive now (about 120Y/liter or $3 gallon), and used cars devalue after 2 years because an expensive 車検 inspection is required when an older car is sold. EVs are still required to pass this, only exempt from the emissions part of the test.
As for charging stations, one place they would make sense is at the common 道の駅 roadside “stations” in rural areas which were setup to sell local products to road trippers and usually have adequate parking and time to charge while shopping/eating but in urban areas space is at a premium and many gasoline stands don’t even have room for pumps (the hoses and nozzles drop down from above) and even automatic car washes are only as big as a single car. To make room for the same number of vehicles charging as filling up now would require N times more room where N is the time required to charge an EV divided by the time to fill a tank, now about 10.
In the US the EV hype is finally fading (even the UAW is asking Biden to kill his proposed crazy EPA “mileage” rules that would make any non-zero emission vehicles illegal in a few years). Toyota profitably outsells other makers while not jumping on the bandwagon. More RAV4s were sold in the US last year than Model Ys, and hybrids are probably driven more miles than EVs since they aren’t the high-priced second cars that most EVs in the US are.
In the 80s and 90s you saw Western firms hire contract manufacturing to Asian companies while keeping the higher value added activities like engineering design, marketing and after sale services in house. Now, since the 2010s, you're seeing Asian contract manufacturers hire or buy out western design and marketing firms to increase their competitiveness. An interesting reversal of fortunes.
Replace the practicality of hybrid vehicles with Lithium/rare earth dependent EVs dependent on nuclear energy, in a country with the worst experiences with nuclear energy.
"Japanese businesses, meanwhile, have to be determined to win back their traditional place in the global electronics supply chain. That success will require humility — an admission that South Korean and Taiwanese companies have become the industry leaders, and a willingness to learn from them."
From what I know, "humility" is a scarce commodity in Japan particularly when it comes to S. Korea, China, and Taiwan. There is also the problem of admission and atonement for WWII atrocities that Japan has not yet admitted to its neighbors. A lot of "humility" will be required and I predict the Japanese culture will find that difficult.
Nice article, and sound advice. Japan is a very interesting place, and a lot of instructive experiments are running live in the Japanese economy (handling aging, monetary policy, shifting from follower to innovation economy). In many ways, Japan is the exemplar for where the developed world might be going.
Culturally, the Japanese abhor chaos and value harmony, and its great strength is the strong cultural value system. Many decisions around immigration or allowing creative destruction are based on this very basic Japanese value. In a global competition, it appears one has to tolerate a bit of chaos to enable innovation... especially six-sigma levels of innovation. It will be very interesting to see how the Japanese handle this issue. It is very possible they find another optimization point which is uniquely Japanese.
One of the things she stressed is how American investments in Mexico basically stole the country from the people who lived there. I think this is a common attitude on the Left. This seems an area where you can find overlap between the right and left.
The Japanese have historically and currently maintained substantial trade barriers regarding food. They do so by imposing substantial, arbitrary, and often absurd standards on agricultural imports. They do this to protect their agricultural industry, which cannot compete without substantial trade barriers, so any food supply issues are self imposed. With respect to issues with importation of labor, the Japanese have traditionally been among the most racist societies in the world, and consider essentially everyone else to be inferior. The historical closure of Japanese society and culture to "residential contamination" has been successful as compared with many other countries that are suffering the effects of less or uncontrolled immigration. However, national demographics will probably force a change.
Some great points and ideas here. But didn't get the EV part - aren't we at the top of the EV hype cycle? And why is hydrogen a dead end? I think hydrogen is a better way that batteries to avoid dependence on rare earths which are largely controlled by China
You lost me at the EV bit. Toyota has been the smartest of the global car makers in its exploration of alternative fuels. EV manufacture is peaking and will drag down China’s car manufacturing.
Good ideas. Another point to mention is that if Japanese economic growth (GDP) were zero for a century, then per capita incomes would approximately double due to falling population. Falling population has already eased pressure on housing prices. Japan will have to import less food. Air pollution will improve. Natural areas and biodiversity will likely recover. So quality of life will improve without growth.
I am surprised that under Reform Japanese Culture you don't make any reference to women and their role in the workforce, though admittedly you did in that piece from 2 years ago on Fixing Japan's broken corporate culture. It's very low in US and Europe (20-25%) for tech jobs, do you know where it stands in Japan?
All of this makes sense. But I feel there's not much hunger for growth in Japan. I've seen plenty of successful business owners who are happy with their situation, and prefer to focus on perfecting their service to existing clients, than to expand to new markets. In many ways, that's a healthier attitude than thinking always that more is better.
I do think the shock of completely missing out the EV turn will be a wake up call. More than missing out on IT was, hopefully.
"Corporate Japan, with its traditional focus on promoting managers up through the ranks as they age, has become a gerontocracy. Mid-career hiring can shake up that gerontocracy, because management hires will tend to be selected for talent rather than tenure."
Startups can shake up that gerontocracy, too. All of today's Japanese behemoths were once startups.
People have been bitching about Japanese corporate culture for decades. It's unrealistic to think that the government can cause anything more than a minor shift in the system.
A much fruitful would be, as you said, FDI. Foreign businesses can bring Western workplace and management practices into Japanese. The government should also encourage foreign investment into a Startup ecosystem. New ambitious firms will naturally select for the portion of the population that want to break free from the Japanese system. When Japan is full foreign businesses and start ups, the local investors and governments can let these old companies die more easily as opposed to propping them up with public money.
Agree with most of this, except for the EVs. The government push for hydrogen is unproductive, but EVs are not a good substitute in Japan. 40% of cars sold in Japan in 2023 were hybrids, and many of the rest were tiny kei cars with fully gasoline engines, only 8% were battery electric. Hybrids are a more efficient way to reduce carbon emissions given the high cost of battery minerals (now actually falling since EV demand in the US was overly optimistic, and production falling) and processed in China. Electricity supply there is not very clean especially when the government closes nuclear plants for decades long “safety inspections” forcing the use of fossil fuels (60% of Japan electricity now, evenly split between coal and imported natural gas, with 11% nuclear and 10% hydro).
In urban areas most people live in high/medium rise apartments with single small parking spaces without nearby electricity. The typical single family house has a 200V/30A supply (6kw) since mostly natural gas is used for cooking/hot water and wall mounted aircon units (central heating is rare) use 200V, everything else is 100V (and weirdly 50Hz in Northeastern Japan, and 60Hz in the rest with a HVDC interconnection). Household garages are also rare (carports are common) which all means a typical house isn’t quite adequate for home charging an EV. Gasoline is not very expensive now (about 120Y/liter or $3 gallon), and used cars devalue after 2 years because an expensive 車検 inspection is required when an older car is sold. EVs are still required to pass this, only exempt from the emissions part of the test.
As for charging stations, one place they would make sense is at the common 道の駅 roadside “stations” in rural areas which were setup to sell local products to road trippers and usually have adequate parking and time to charge while shopping/eating but in urban areas space is at a premium and many gasoline stands don’t even have room for pumps (the hoses and nozzles drop down from above) and even automatic car washes are only as big as a single car. To make room for the same number of vehicles charging as filling up now would require N times more room where N is the time required to charge an EV divided by the time to fill a tank, now about 10.
In the US the EV hype is finally fading (even the UAW is asking Biden to kill his proposed crazy EPA “mileage” rules that would make any non-zero emission vehicles illegal in a few years). Toyota profitably outsells other makers while not jumping on the bandwagon. More RAV4s were sold in the US last year than Model Ys, and hybrids are probably driven more miles than EVs since they aren’t the high-priced second cars that most EVs in the US are.
In the 80s and 90s you saw Western firms hire contract manufacturing to Asian companies while keeping the higher value added activities like engineering design, marketing and after sale services in house. Now, since the 2010s, you're seeing Asian contract manufacturers hire or buy out western design and marketing firms to increase their competitiveness. An interesting reversal of fortunes.
Here's a précis of this article:
Turn corporate drones into 24/7 corporate drones.
Replace respect for age with agism.
Militarize, militarize, militarize!!
Replace the practicality of hybrid vehicles with Lithium/rare earth dependent EVs dependent on nuclear energy, in a country with the worst experiences with nuclear energy.
"Japanese businesses, meanwhile, have to be determined to win back their traditional place in the global electronics supply chain. That success will require humility — an admission that South Korean and Taiwanese companies have become the industry leaders, and a willingness to learn from them."
From what I know, "humility" is a scarce commodity in Japan particularly when it comes to S. Korea, China, and Taiwan. There is also the problem of admission and atonement for WWII atrocities that Japan has not yet admitted to its neighbors. A lot of "humility" will be required and I predict the Japanese culture will find that difficult.
Nice article, and sound advice. Japan is a very interesting place, and a lot of instructive experiments are running live in the Japanese economy (handling aging, monetary policy, shifting from follower to innovation economy). In many ways, Japan is the exemplar for where the developed world might be going.
Culturally, the Japanese abhor chaos and value harmony, and its great strength is the strong cultural value system. Many decisions around immigration or allowing creative destruction are based on this very basic Japanese value. In a global competition, it appears one has to tolerate a bit of chaos to enable innovation... especially six-sigma levels of innovation. It will be very interesting to see how the Japanese handle this issue. It is very possible they find another optimization point which is uniquely Japanese.
I recently heard a lecture by Kelly Hernandez on her book, "Bad Mexicans". See https://www.kirkusreviews.com/book-reviews/kelly-lytle-hernandez/bad-mexicans/
One of the things she stressed is how American investments in Mexico basically stole the country from the people who lived there. I think this is a common attitude on the Left. This seems an area where you can find overlap between the right and left.
The Japanese have historically and currently maintained substantial trade barriers regarding food. They do so by imposing substantial, arbitrary, and often absurd standards on agricultural imports. They do this to protect their agricultural industry, which cannot compete without substantial trade barriers, so any food supply issues are self imposed. With respect to issues with importation of labor, the Japanese have traditionally been among the most racist societies in the world, and consider essentially everyone else to be inferior. The historical closure of Japanese society and culture to "residential contamination" has been successful as compared with many other countries that are suffering the effects of less or uncontrolled immigration. However, national demographics will probably force a change.
Some great points and ideas here. But didn't get the EV part - aren't we at the top of the EV hype cycle? And why is hydrogen a dead end? I think hydrogen is a better way that batteries to avoid dependence on rare earths which are largely controlled by China
You lost me at the EV bit. Toyota has been the smartest of the global car makers in its exploration of alternative fuels. EV manufacture is peaking and will drag down China’s car manufacturing.
Good ideas. Another point to mention is that if Japanese economic growth (GDP) were zero for a century, then per capita incomes would approximately double due to falling population. Falling population has already eased pressure on housing prices. Japan will have to import less food. Air pollution will improve. Natural areas and biodiversity will likely recover. So quality of life will improve without growth.
I am surprised that under Reform Japanese Culture you don't make any reference to women and their role in the workforce, though admittedly you did in that piece from 2 years ago on Fixing Japan's broken corporate culture. It's very low in US and Europe (20-25%) for tech jobs, do you know where it stands in Japan?
All of this makes sense. But I feel there's not much hunger for growth in Japan. I've seen plenty of successful business owners who are happy with their situation, and prefer to focus on perfecting their service to existing clients, than to expand to new markets. In many ways, that's a healthier attitude than thinking always that more is better.
I do think the shock of completely missing out the EV turn will be a wake up call. More than missing out on IT was, hopefully.
Some sensible suggestions. Alas Japanese corporate culture changes at a glacial pace…
On increasing the use of EVs, will Japan be able to increase the supply of electricity to accommodate the expected increased use?
"Corporate Japan, with its traditional focus on promoting managers up through the ranks as they age, has become a gerontocracy. Mid-career hiring can shake up that gerontocracy, because management hires will tend to be selected for talent rather than tenure."
Startups can shake up that gerontocracy, too. All of today's Japanese behemoths were once startups.