Innovate or perish: new Keidanren chief

Strategy should be independent of political forces, Yonekura says

by Hiroko Nakata

Hiromasa Yonekura, newly appointed chairman of the Japan Business Federation (Nippon Keidanren), says he wants to compile a Japanese version of landmark U.S. industrial competitiveness reports that should strongly appeal to the public.

The 73-year-old veteran businessman said in an interview this week he hopes Keidanren’s vision will be something like the Young Report proposed by the industrial competitiveness council under the Reagan administration in 1985 or “Innovate America,” published in 2004. It lays out an action agenda for a wide range of stakeholders to improve U.S. innovation capacity.

“I wonder if we can compile something like a Japanese version of these,” said Yonekura, also chairman of Sumitomo Chemical Co.

Yonekura, with high-profile overseas business experience, including in the United States and the Middle East, was officially appointed Keidanren chairman Thursday. He replaces Fujio Mitarai, who led the lobby since 2006.

The nation’s largest business lobby, grouping about 1,600 companies and industrial organizations, will hold its annual gathering in July in the Karuizawa resort area in Nagano Prefecture to discuss economic growth strategy.

Like Mitarai, Yonekura believes that a hike in the consumption tax on goods other than food is unavoidable, warning there aren’t enough public funds to finance huge social welfare and medical costs amid the rapidly aging society.

Yonekura also shares Mitarai’s stance that the government’s goal of reducing greenhouse gas emissions by 25 percent from 1990 levels by 2020 is too high.

On top of these long-held views, Yonekura said this year’s report on revitalizing the economy should focus on maintaining the country’s technological edge and nurturing open-minded and outgoing young Japanese.

Yonekura, an avid fan of reading detective stories in English, said young Japanese are growing less interested in other countries. He believes it is important to urge them to gain overseas experience to compete with other parts of Asia and promote growth in Japan.

For the country’s economic growth, he stressed the importance of entering economic partnership agreements with other countries and regions, including the Association of Southeast Asian Nations, China, South Korea, India, Australia and New Zealand.

Keidanren’s vision should also focus on fast-growing sectors, including the Internet and software, Yonekura said.

“New industries are not only created by new ideas. They need investors to back them up,” he said. “I’m interested in knowing how we can develop such sharp-eyed investors.”

Yonekura stressed that such proposals by Keidanren should be independent of the economic strategies the ruling Democratic Party of Japan will compile next month.

“Without depending on the government, we as a business circle ought to draw up our own economic growth strategies,” he said.

Meanwhile, the new chairman shrugged off speculation that the business group may no longer have enough influence over politics after ending its donations to political parties.

Keidanren announced in March it will stop making systematic campaign contributions, before a DPJ bill to ban corporate donations to political parties was drafted.

The business lobby had close ties with the Liberal Democratic Party, which until last year September controlled much of postwar Japan. Keidanren has reportedly failed to build close relations with the DPJ, which is backed by labor unions.

“I don’t think our policies were accepted by the government only because we provided donations, but because the proposals persuaded the government,” he said.

The lobby also said in January it will drastically revise the way it makes its annual assessment of the main parties’ policies.

Keidanren traditionally assigned grades to LDP and DPJ policy initiatives that served as a guideline for member firms when they made political donations. It decided to stop giving its five-level rating with the change in the political landscape brought on by the DPJ’s walloping of the long-ruling LDP last August.