NEW YORK – Japanese businesses need different managers who are more willing to take risks as the country emerges from 15 years of deflation that hampered innovation, according to Takeshi Niinami, chairman of Lawson Inc.
“Most CEOs were promoted because they are really good at cost-cutting, not doing business, something new,” Niinami said Wednesday at a Japan Society conference in New York. “Those people can’t manage in this kind of situation where you can find more business opportunities.”
Niinami, 55, an economic adviser to Prime Minister Shinzo Abe, is on the Industrial Competitiveness Council of Japan and a member of the government Tax Commission. He was previously the chief executive of Lawson, Japan’s second-biggest convenience store chain, and was named president of Suntory Holdings Ltd. this year.
After 18 months in office, Abe has fired two of what he calls his three arrows of “Abenomics” — a program of fiscal stimulus and radical monetary easing to end deflation.
Prices excluding food but not energy, the Bank of Japan’s preferred inflation gauge, rose 3.4 percent in May from a year earlier, the fastest gain in 32 years. The stimulus helped trigger an 18 percent slide in the yen against the dollar last year and boosted share prices. It has strengthened about 3.8 percent in 2014 and the Topix index of stocks has dropped.
The plan’s revised third arrow includes structural reforms, such as opening markets to competition and increasing female participation in the workforce, as well as a reworking of corporate taxes. Some firms don’t pay as much tax as they should due to loopholes set up in the 1960s and 1970s to hike exports, Niinami said.
“Those loopholes should be filled if we want to reduce” the corporate tax rate, he said. “We are well behind global equal footing.”