Mr. Hiromasa Yonekura, chairman of Sumitomo Chemical Co., on May 25 became the top leader of the Japan Business Federation (Nippon Keidanren), Japan’s most influential business lobby. He assumes the post at a time when the Japanese economy is suffering from deflation, high unemployment, a low birth rate and severe competition in overseas markets. He faces the difficult task of finding ways to achieve sustainable economic growth.
One of the most important jobs for Mr. Yonekura will be improving the competitive edge of Japanese companies. Competition with emerging economies is becoming harsh in international markets and Japan’s competitiveness is reportedly now lower than that of China and South Korea. Nippon Keidanren must not only encourage innovation by individual companies but also persuade the government to strengthen the nation’s industrial policy.
An impression exists that Nippon Keidanren has so far placed priority on maximizing individual enterprises’ profits, as shown by its push for liberalization of the labor market, which has resulted in a marked increase in the number of temporary workers. Naturally those in unstable employment situations have less money to spend and keep tighter reins on their purse strings, thus ultimately weakening the Japanese economy. Keidanren must create as many jobs as possible and strive to ensure stable employment.
The unemployment rate increased 0.1 percentage point in April and reached 5.1 percent, marking a rise for two consecutive months. Japanese firms have regained profitability mainly through cost-cutting measures. Mr. Yonekura should encourage companies to increase capital investment so that they can develop attractive products and services, and increase employment opportunities.
Nippon Keidanren was not on good terms with the Hatoyama administration, opposing its call for reducing greenhouse gas emissions by 25 percent by 2020 from 1990 levels. Keidanren should strive to get off to a fresh start with the Kan administration. Working closely with the government, it should seek to create eco-friendly industries and explore market opportunities in Asia for Japanese infrastructure-related technologies.