A Visit to Japan – Part I

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I spent the last week in Tokyo. This was my first visit to Japan. It was a rather hectic official visit. However, since I was meeting senior Japanese people, I got plenty time to interact with them and observe them very closely, both in office and outside office. 

Traditionally, Japan must have been a very family oriented culture. Senior managers at large firms having 3,000 plus employees under their charge talk of their employees as family. Even in hard-nosed serious business meetings, they showed their concern for the employees, worried that the changing technology may lead to mass layoffs. This is in sharp contrast to similar discussions in the West where cost cutting takes precedence over such people issues. 

However, family values could be weakening as the people continue to move to cities from the rural heartland weakening the familial links. Japanese society is changing. It is becoming westernised and impersonal at a very rapid pace. Marriages aren't as stable as they used to be. The population is decreasing as youngsters look at procreation as a burden rather than the joy of patenting. Many young Japanese girls are not even marrying partly because there aren't enough suitable bachelors due to shrinking population. They are worried about their future, both from an economical as well as social perspective. 

They are quite worried about their manufacturing industry which is in decline. We all know that Korean, Taiwanese and Chinese are in the ascendant in electronic manufacturing. Chinese are taking up the low-end electronic manufacturing while Koreans are taking up the high end manufacturing.  Specialised manufacturing such as semiconductor is being taken up by the Taiwanese. That leaves little scope for the Japanese. Their giants such as Sony and National are facing a defining moment which leaves them in a vulnerable position at the moment and they realise it. 

Their automobile manufacturing is facing huge pressures. Germans have managed to take centre stage in all luxury car segments. BMW, Mercedes, and Audi are the aspirational brands for the upwards mobile. Even many Japanese are buying these cars. Resurgent JLR and Volvo, both under ambitious Asian management, are going to make it tougher. The mid segment is currently under Japanese dominance, but before long Chinese, Koreans and Indians are going to provide competition here. Japanese will change and change rapidly. 

US and UK have faced similar challenges in the past. UK responded by Thacherism during the crisis of its manufacturing sector and is now a largely services economy. It also had the advantage of the English language being native to it. US is a much larger economy and has vast natural resources. US could open up its immigration policy taking up vast numbers of highly talented Indians and Chinese who gave a boost to its economy. I doubt if a homogenous society like Japan can open up significant immigration. 

It will be instructive to watch how a medium population, highly prosperous, Asian country with little or no natural resources responds to this challenge. They are looking for solution under the leadership of their popular leader Shinzo Abe who has won an absolute majority in their lower house after a series of governments collapsed after very short tenures. The situation is similar to the win of BJP in India under Modi. His set of policies is called 'Abenomics'. 

One sense I got is that they are looking for partner countries which have large, comparatively less well off people with which they can have mutual beneficial long term relationship. China was such a country for them till a few years back. However partly due to political reasons and partly due to business reasons, China is becoming more of a competitor rather than remain a co-competitor. 

Could India be that country?

All indicators point to such an outcome. India is perceived as non-threatening. It has had historic ties. There is a cultural affinity with India. I will talk about the cultural affinity and the possibilities in my next write up.

 


T. V. Sinha

T. V. Sinha, Guest Contributor, PatnaDaily.Com

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