Washington – When it comes to dealing with the pandemic, South Korea and Taiwan have been heralded as models of effective governance. Decisive actions by Taiwan in particular to shut down borders, and the extensive use of data technology by both Taipei and Seoul have been seen as examples for others to emulate.
Japan’s approach, meanwhile, has been much more muted, even though it has been effective in keeping the pandemic from spreading, especially when compared to the United States or Europe. So even though COVID-19 has given renewed interest in and increased the influence of Asian powers beyond China, Tokyo’s frustration for not being recognized for its own achievements in fighting the new coronavirus spread is understandable.
Wounded national pride aside, the bigger issue that Japan must focus on is whether or not the country will be able to leverage the changes brought about to the global economy by the pandemic. The pandemic has provided a unique opportunity for Japan to reenergize its economy and could also provide the basis for Tokyo to enhance its global standing should it succeed in doing so.
Japan has actually weathered the risks brought about by the virus relatively well to date, especially when compared to the U.S. While travel and experience-based industries such as hotels, airlines, and restaurants have been hard hit, even the worst-case expectations for unemployment hovers around 6 percent, which pales in comparison to the U.S. rate of 15 percent. What’s more, the pandemic’s spread has not disproportionately hurt one particular income or demographic group. As such, long-term social unrest as a result of the pandemic’s outbreak is far less likely.
What has become clear, though, is the inherent weaknesses in Japan’s way of approaching the world of work. The need for social distancing in answer to a health crisis has given a tremendous boost to telecommuting and has in effect been a grand experiment for the country to see whether teleworking is viable. If nothing else, it has incentivized small- and medium-sized companies to invest more in networking technologies, and it has also led to national debates about how to digitize work flow and be less dependent on paper as well as in-person meetings.
Still, as the worst of the virus’ spread appears to be over for now, the looming question is how and when to go back to work as usual, rather than using it as an opportunity to overhaul antiquated work practices once and for all. So perhaps it’s not surprising that despite Japan’s economic foundation remaining relatively resilient to the pandemic, Japanese companies still do not rank as highly as their U.S. counterparts, even by Japanese standards.
A joint survey in March by the Nikkei daily and Hitotsubashi University, for instance, found that six of the top 10 companies ranked for innovativeness were based in the United States, with Amazon, FaceBook, Alphabet/Google and Apple (known collectively as GAFA) in the top four spots. Rated by their creative ability, inherent potential, and organizational value, it’s hardly surprising that GAFA are highly regarded by Japanese standards too.
What is surprising, though, is that the same survey found Samsung in eighth place and China Mobile in ninth, while the first Japanese company to make it to the list is Toyota at 11th place. The second Japanese company to make the list, meanwhile, is Sony, at 45th place.
The pandemic has forced companies to rethink their business operations in the near-term, but in order for them to remain competitive in the global economy in the longer term, it is no longer enough to think about enhancing efficiencies or reducing costs. Consumers worldwide are not only reimaging how they want to be entertained and interact with one another, they also expect more from companies as responsible actors in the global economy.
For instance, the worldwide appeal of South Korea’s success in keeping the COVID-19 infection rate down was not simply in the actual results, but also the novel way in which the central as well as local governments utilized data technology that set an example for other countries to learn from. Issues concerning privacy and security notwithstanding, Samsung has been seen as a critical private sector partner in the fight against the pandemic, which has also furthered its image as an innovation leader.
The speed and degree of the spread of COVID-19 across borders has highlighted the strengths as well as weaknesses of countries and their communities. Japan’s strength has undoubtedly been the consensus about making necessary changes to daily life in order to keep infection rates low, without resorting to extreme lockdown measures. Its weakness, on the other hand, has been the muted response in leveraging the pandemic to think outside of the box.
Yet it’s precisely outside-of-the-box thinking that Japan needs the most right now in order to address issues beyond the immediate health and economic crises brought about by the novel coronavirus.
The pandemic has not changed the fact that Japan is the world’s most rapidly aging society. Nor has the pandemic changed the fact that most other industrialized nations too are dealing with the challenges of graying societies. How Tokyo deals with the demographic challenge has been closely followed worldwide, and yet inspirations to deal with that challenge have been far and few.
The need for social distancing in dealing with pandemics, however, has created new opportunities to deal with some of the pressing challenges the elderly population has, including online community engagement, telemedicine, remote learning and virtual socialization. At the same time, the spread of telework would be a boon to those needing to care for aging family members as well as for those seeking to balance work and raising children.
Just as some industries have actually flourished during the pandemic while others have been devastated, a number of Asian governments have been able to leverage the COVID-19 outbreak to elevate their positions as innovative leaders with solid public policies.
Tokyo’s ability to contain the spread of COVID-19 and to ensure social stability should certainly be acknowledged. But for Japan to be an inspiration, it must harness the momentum of the new ways of doing business that the pandemic has brought about across the globe.
Shihoko Goto is deputy director for geoeconomics and senior associate for Northeast Asia at the Wilson Center’s Asia Program.