Japan is not No. 1. After 20 years of stagnation-punctuated decline, it should not be news to anyone that Ezra Vogel got it wrong in his 1979 best-seller, “Japan as Number One: Lessons for America.” Yet, in their endless navel-gazing and wheel-spinning (which, sadly, continues even in the face of natural and nuclear disasters of historic proportions — exhibit No. 1 being the political class’s recent solipsistic no-confidence motion), most of Japan’s governmental elite continues to behave in the same “if it ain’t broke, don’t fix it” way they did when Japan was top dog. Politicians talk today about the need for far-reaching and innovative policies. But talk is cheap and action has been meager.

One key measure of a country’s economic well-being is its global competitiveness. According to the IMD business school’s annual survey, Japan was ranked No. 1 in competitiveness in 1989, the first year the survey was conducted; by 2010, it had sunk to No. 27, behind China, South Korea, Taiwan, the United States and many others.

Until recent events shifted people’s attention to more immediate concerns, there had been a lot of teeth-gnashing as Japan at last slipped behind China as the world’s second-largest economy. This concern is misplaced; given its vast population and sustained growth, China’s ascendance was just a matter of time. The real tragedy is the interminable downward spiral in Japan’s competitiveness.

When professor Vogel and others were falling over themselves in praise of Japan’s purportedly superior business culture, the failure of Japan to adapt and develop many truly globally-minded enterprises may have been understandable, if short-sighted. Today it is self-indulgent and self-defeating. Avis, long the runner-up to Hertz in the U.S. rental car industry, had a slogan: “We’re No. 2, so we try harder.” At No. 27 (and falling), Japan needs to try a lot harder.

As any time spent watching Japanese news programs or visiting Japanese bookstores quickly reveals, a lot of smart folks have been doing a lot of serious thinking about Japan’s economic woes. What’s been largely missing is systemic, urgent action to begin to improve Japan’s competitive position. This will require innovative thinking and the willingness of Japan’s business elite to act on their own, without waiting for Japanese politicians and bureaucrats to lead the charge (the cavalry isn’t coming).

There are, of course, many reasons for Japan’s declining competitiveness. I would like to emphasize one here: Japanese business’ failure to develop a “user-friendly interface” to the world. Just as Apple is eating Sony’s lunch because Apple understood that software (chiefly in the form of a user-friendly interface) trumps hardware, Japan as an economic power is being left in the dust by the likes of South Korea and China in part because Japanese companies have not developed an effective “interface” to the world, including the ability to communicate effectively in English (fair or not, the de facto international language of business).

Look at South Korea. Korean culture is as different from its Western trading partners’ cultures as Japan’s, and the Hermit Kingdom’s mind-set may in some ways be even more closed. Yet South Korea has systematically built an effective interface to the world in the form of armies of managers and executives holding undergraduate and graduate degrees in engineering, business and law from American and other foreign universities who confidently speak serviceable English.

The Korean language is structurally very similar to Japanese but this has not prevented them from developing a large cadre of businesspeople who use English well. South Korea is still Korea, but it has learned to successfully interface with foreign business partners in terms they understand. The same can be said of Taiwan, China and many other countries.

By contrast, Japanese companies typically have not developed a strong interface to their foreign counterparts, starting with their generally poor skills in spoken English.

I mentioned in a previous column (“Japan, be confident!,” Zeit Gist, Feb. 15) — based on my own, admittedly anecdotal experience working with and teaching Japanese and other non-native English-speakers over 20 years — that many Japanese have better fundamental English skills (“book smarts”) than they realize, but lack the confidence to apply them in conversation. This knowledge, more widely disseminated, could help prompt Japanese to be less fearful of speaking up in English. (It might also be helpful if that inane television program that forces Japanese to publicly embarrass themselves by goading them to speak English in unrealistic settings — the catchphrase, I believe, is “English, please!” — never sees the light of day again.)

Merely building self-esteem, of course, is no substitute for an overhaul of English education in this country, which is likely to be a plodding, government-led process. In the meantime, Japan’s business leaders should put their heads together and devise concrete, short-fuse programs that could help plug the gap in Japanese companies’ capacity to interface with their foreign business partners in English. Some companies are already making laudable efforts toward this end; for example, Fast Retailing (Uniqlo) and Rakuten have designated English as their primary language for business, and Panasonic, Sony and others are ramping up their hiring of non-Japanese. To help spur further discussion, here are a few ideas.

1. Corporate hiring pledge

Imagine that the heads of major enterprises such as Toyota, Hitachi and NTT, as well as many chūshō kigyō (small and medium-size companies, which will be the locus of much future hiring) signed a public pledge to give a firm hiring preference to any Japanese student who scored 650 or above on TOEFL or spent at least two years studying or working in an English-speaking country. To make it even more compelling, the pledge could explicitly rank this factor above which university the student graduated from (for example, a graduate of Hokkaido University with two years’ work experience in the United States or Singapore would be hired over a University of Tokyo graduate with no such overseas experience).

The impact of this pledge could be immediate and dramatic. The downward trend in young Japanese studying abroad could be stemmed, or even reversed, nearly overnight. Within a few years, a new, larger generation of English-speaking Japanese with solid overseas experience could start coming to the fore.

2. ‘Come home’ campaign

As I noted in another recent column (“Japan loses, rest of the world gains from one-citizenship-fits-all policy,” Hotline to Nagatacho, Dec. 7, 2010), there are thousands of young, educated English-speakers abroad who have (or had) dual foreign-Japanese citizenship. Even if the government does not move swiftly to amend the Nationality Law to allow the retention of Japanese dual citizenship past age 22 (or at least grant automatic permanent or long-term resident visas to these folks), there’s nothing stopping Japanese companies from proactively identifying and systematically recruiting more of these young people to their ranks.

In addition, the Japan Business Federation (Nippon Keidanren) or some other private body (perhaps in cooperation with the Ministry of Economy, Trade and Industry) could “seed” interest in Japan among dual Japanese citizens abroad by giving them the opportunity to travel to Japan for free or at little cost.

A good model could be Taglit-Birthright Israel, a private organization funded by private and public donors and overseen by a board of directors including many business heavyweights. Taglit-Birthright Israel organizes trips for young Jews to spend 10 days in Israel every summer. The program is open to virtually any non-Israeli Jewish young person at no cost (even airfare is included!). The program is intended to engender solidarity with Israel and surely is also subtly geared toward encouraging participants to settle in Israel and contribute their talents to the economic development of the state. A similar large-scale, well-promoted Japanese program directed at young Japanese dual citizens at high schools and colleges — starting, say, in North America and Europe — would be a great investment. Even if only a small percentage of the participants ultimately moved to Japan or joined Japanese companies, the English skills and foreign life experience of those who did could have a big impact on enhancing Japan’s ability to interface with the world.

3. ‘Anime-niac’ recruitment push

Many people were attracted to the study of Japanese in the 1980s (including this writer) by the career opportunities afforded by Japan’s then seemingly limitless growth potential. Professor Vogel’s book was a powerful spur in those bygone days to Japanese language study. Business mercenaries today gravitate toward Chinese, of course. But the pull of Japanese culture, especially anime and manga culture, is strong. There are many foreign, English-speaking young people (including a surprising number of business and law students I have taught over the years) who study Japanese today in order to understand anime and manga in its native tongue. Few of these students, however, pursue Japan-related employment (though I hear that some have found themselves in the IT and graphic design departments of Japanese companies).

A sustained, deep push by traditional Japanese companies to recruit young anime enthusiasts for responsible, outward-facing jobs could yield a lot of new English-speaking employees with an existing affinity for Japan. It could at least help replace some of the current crop of aging Japan hands. As a start, Toyota, Mitsubishi, etc. could set up recruiting booths at major anime conventions in the U.S., such as Anime Expo in Los Angeles.

There’s more to building a user-friendly business interface than simply language. In a future column, I will offer suggestions for improving the speed and transparency of Japan’s corporate decision-making process.

Glenn Newman (gnewman@newmanlaw.net) is an attorney and former long-term resident of — and frequent business traveler to — Japan. Send your comments on this issue and story ideas to community@japantimes.co.jp

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