It’s been 18 years since Edelman introduced its trust barometer. It had its beginnings following the “Battle for Seattle,” a protest activity around the World Trade Organization conference in Seattle in 1999. The appearance of 40,000 protesters in the streets and until then unseen influence of nongovernmental organizations led us to believe that something was going on with the trust in NGOs. This spark led to the Edelman Trust Barometer, which has grown to be the only global piece of research into trust in the key institutions of government, business, media and NGOs.
Over the years, people have become more convinced about the importance of trust. In modern society, we delegate important aspects of our well-being to these four institutions of business (economic well-being), government (national security and public policy), media (information and knowledge) and NGOs (social causes and issues).
To feel safe delegating important aspects of our lives and well-being to others, we need to trust them to act with integrity and with our best interests in mind. Trust, therefore, is at the heart of an individual’s relationship with an institution and, by association, its leadership. If trust in these institutions diminishes, we begin to fear that we are no longer in safe, reliable hands. Without trust, the fabric of society can unravel to the detriment of all.
Edelman has recently released the results of the 2018 Trust Barometer. I would like to focus on some of the key findings and implications for Japan.
The most striking finding of this year’s survey was the polarization of trust. In past years, swings in trust in response to economic circumstances or key events were generally seen. Trust by Japanese in Japan’s institutions, for instance, collapsed following the 3/11 triple disasters in 2011 and has failed to revive to any significant extent since. However, this year the global data suggests a decoupling from economics or key events in the trust profile. In addition, trust swings tended to be in one direction. This year a polarization is apparent, with trust rising strongly in some countries but falling dismally in others.
This is most evident in the trust profiles for the United States and China. Trust in U.S. institutions plummeted. Particularly among informed publics; the higher income, higher education and more information savvy segment. Trust in government by this segment fell by a dramatic 30 points so that now only 33 percent of Americans trust their government to do the right thing. Likewise, trust in media fell 22 points to 42 percent and trust in business fell 20 points to 54 percent. While at a low level, business is now the most trusted of the four institutions in the U.S.
China is exactly the opposite story. Trust in government by the informed publics in China is now at an amazing 89 percent. One may question the degree of freedom of the press in China, but trust in that institution is also high at 80 percent. Trust in business is at 85 percent.
From a trust perspective, a polarization is seen between a trust-impaired U.S. and a China that is becoming more confident in what its institutions are delivering for the Chinese people.
Within Asia, there is also a degree of polarization. The trust index, which is an average of the trust in the four institutions, shows high levels of trust in China, Indonesia and India, and solid trust in Singapore and Malaysia. These countries might be referred to as “New Asia.” Oppositely, the people of “Old Asia,” made up of Hong Kong, South Korea and Japan, are net distrusters of their institutions.
The trust index in Japan hovers at a miserable 37 percent. Meaning that only around 1 in 3 Japanese have trust in the four institutions to do the right thing. Among informed publics Japanese trust in media fell 8 points to 37 percent. Trust in government was down 6 points to 47 percent and trust in business down 3 points to 52 percent. Trust in NGOs rose 2 points to 46 percent. Among informed publics, business is the only institution trusted by more than half the population.
The situation is even more dire among the general population, with trust in media at 32 percent, in government at 37 percent and business at 42 percent. Trust in NGOs saw a significant rise of 6 points to 37 percent, making them now trusted equally with government, albeit by only one-third of the population.
But how is Japan viewed from the outside? Trust in companies headquartered in Japan, a surrogate of “Brand Japan,” unfortunately declined in 18 of the 28 countries surveyed. Although trust in Japanese companies increased in the major markets of the U.S. (plus 3 to 54 percent), China ( plus 3 to 48 percent) and South Korea (plus 9 to 44 percent), there can be no doubt that the “quality issues” experienced by many Japanese companies in recent years, and particularly in the second half of 2017, have taken their toll in trust in Brand Japan.
Whether it be trust in Brand Japan or trust in their own institutions by Japanese, the trust story in Japan does not paint a pretty picture. Particularly if we accept that high trust in a country allows it to pursue innovation and reform in a more dynamic and energetic way. Wallowing in low trust and stuck in “Old Asia” are shackles on Japan’s ability to move forward and assume a leadership role as the power shift vacuum being vacated by the U.S. is filled by China.
It is time for Japan and its companies to move beyond a narrative that relies on monozukuri manufacturing quality. Not only is it an impaired narrative given the recent mistakes of some companies, it is a narrative for which there is incredible competition from rising economies such as China and key competitors such as South Korea. Additionally, in a world where objective facts are being replaced by relative truths, quality is becoming increasingly difficult to articulate, validate and sustain.
Japan’s corporations are trusted the most at home. While trust in Brand Japan has fallen it is still relatively high among its competitor countries. According to the survey, 53 percent of Japanese say they want Japanese CEOs to take the lead in change, while 72 percent of Japanese expect CEOs to be doing things that build trust in their company.
This is a great opportunity for Japanese corporate leaders to start articulating to the world the benefits their companies bring to global society. No, let me correct that. This may be the last opportunity for Japanese corporate leaders to step up to the plate and take a stance to ensure Japan’s business plays a leading role in the world of the future.
Ross Rowbury is president and CEO of the PR agency Edelman Japan. He advises senior business executives on issues ranging from corporate branding to media strategy and internal and external communications strategy.