Business traditions hurting Japan

Opinion: By Joel Brinkley | February 16, 2010 at 12:00a.m.

Thirty years ago, when Harvard East Asia specialist Ezra Vogel wrote his seminal book, “Japan as Number One: Lessons for America,” he helped set off a decade of angst about the threat from the East.

American executives trooped over to Tokyo to observe and copy Japanese manufacturing techniques. Automakers in Detroit tried to mimic Japanese quality control.

Oh, how things change. A recent article in Japan Echo, an English language news magazine in Tokyo, carried the headline: “Japan as Number Three.” The catastrophic problems at Toyota are only the latest and most visible symptom of a proud society crumbling before our eyes because it has been unable to adapt to modern times.

The Japan Echo article was referring to the likelihood that Japan would soon lose its spot as the world’s second-largest economy. China is poised to overtake it in part because “the Japanese economy has slumped further than that of any other major nation,” the magazine reported. So it always seems for Japan these days.

Suicide count

The indications of trouble are everywhere, but the pluperfect sign is the suicide count. In recent years, the number of Japanese committing suicide each year has been 20 percent higher than in previous times — double the per-capita percentage in the United States.

Toyota is recalling 9 million cars worldwide for acceleration problems. And then on Feb. 9 it recalled 437,000 more Prius hybrids — Toyota’s “halo car.” Toyota sales are plummeting. It’s hard to see how the company can come back from this.

Sony, the consumer electronics and entertainment conglomerate, finally earned a small profit for the most recent quarter after losing money for most of the previous year. Sony was the company everyone envied and imitated not so long ago. But it lost its edge to Apple, now the home of cutting-edge consumer-electronics innovation.

The leaders of Japan Airlines bowed in apology before the cameras as the company filed for bankruptcy last month — just as the president of Toyota did last week.

I spent a month in Japan in 1982 on a journalists’ exchange program and met a host of senior business and political figures. Their attitude then: almost uniformly arrogant, supercilious, condescending. These days, Japanese business executives are trooping to the United States to learn how Americans do it.

What happened? Japan’s overriding problem is its inability to create fundamental innovation. Think of the major consumer products from Japan. Color television: Japan made the best sets, but RCA invented color TV. Remember the Walkman, the portable audio player? Once again, RCA invented the cassette, Philips of Holland invented the compact cassette. Japan built the player.

How about the VCR? Ampex, an American company, invented videotape recording. Sony adapted it for consumer use. Japan’s strength has always been to take someone else’s invention and come up with an attractive consumer product. Japanese culture makes original innovation extremely difficult.

Some might remember the TV images from the days when everyone wanted to mimic Japan’s corporate culture. Workers, all wearing identical uniforms and caps, worked out in military-like formations on the factory floor just before the shift began. That was a metaphor for the nation’s rigidly hierarchical corporate culture. There is no place for an innovator who wants to invent the next big breakthrough in his garage.

No risk takers

Japan is a member of the Organization for Economic Cooperation and Development, which represents industrial democracies worldwide. And in an economic survey of Japan, the OECD wrote that Japan’s “innovation system” is “largely input driven and focused on incremental innovation based on a closed and stable corporate employment.” In other words, innovation is directed from above. Workers “salarymen,” as they are called are more concerned about keeping their jobs than taking risks.

Japanese society is far older than most in the world. Like most countries, its people cling to tradition. But the traditional way of doing business in Japan does not work in the modern age.

X Joel Brinkley is a former Pulitzer Prize-winning foreign correspondent for The New York Times and now a professor of journalism at Stanford University.