'Japan-first isolationism' threatens to exacerbate economic decline: Uniqlo's Yanai
Ideas
The "Japan-first isolationism" is not only related to people but also Japanese products that can no longer compete on the global stage. Products from South Korea and China have now moved way past Japanese products and many Japanese products that were global in the 80's and 90's are all gone and no where to be found, simply because they didn't innovate and change as needed.
Yes, there seems to be less energy in Japan these days as it seems some or many walk around like zombies or just existing in life because maybe they feel there are just too many barriers from them to move ahead in life.
And yes, Japanese companies seem to have lost their ambition to be a global company these days and they see the price needed to be successful on the global state just too much for them now.
Its much easier to exist in the Japanese economy only than to compete against US companies, Chinese companies or even South Korea companies these days.
Low-performing companies that need loans to survive have been doing so for many years, maybe the last 30 years. There are now thousands of zombie companies in Japan that should be closed or exit the market but because there are so many it would probably harm the economy even more to close them all.
The Japanese government has been using the same practice, related to infrastructure projects, for a very long time as a way to try and stimulate the economy with no real effect.
Increasing earning capacity mean companies changing their mindset from old-school Japanese style work to 21st century work which many Japanese companies are unwilling to do even today.
Also many companies really are not interested in real economic growth, they only want to survive and keep the status quo and not rock the boat, as even zombie companies that still stay in business these days.
The Japanese company mindset it to think in yen terms as that is probably what they trade in everyday while the rest of the world now trades in dollars.
Yes, using the yen is an illusion. For example the yen trades at 100 yen or increases to 120 yen, or increases to 140 yen. So what has happened the Japanese yen has weakened and the bigger the yen gets the weaker the yen becomes, while the dollar gets stronger.
Yes, there are some 21st century Japanese companies that are on the mark but there are few left these days that think globally.
No country is isolated or stands alone as logistical supply chains have connected every country around the world.
It might be easy for some Japanese companies to think they are just a Japanese company but they are part of a bigger picture and if they don't see it soon Japan will continue to slide further down the global importance index.
Yes, inflation is much higher than that as there a economic factor that makes it maybe two or three points higher than 3 percent and its the same globally in all countries.
There used to be a thought that as prices increased, then wages would increase and everything would be kept in a normal balance. But that balance has been shattered in recent years, as prices continue to increase and wages have not kept up with the increase in prices.
So what has happened, frugality or austerity has set in which means there is now less spending in the Japanese economy instead of more spending which is needed to get the economy moving again.
The problem is not the increase in prices, which is normal and expected but again, in most countries, including Japan, wages have not kept pace with prices increases which is needed to grow economies these days.
Back in the 80's and 90's Japan had some of the best brands globally but as the lost-decades period set in, and wages began to decrease, deflation hit Japan and many companies started to focus on low prices and not on brand-value.
But the tide as changed and prices are increasing again and companies know they need to again focus on branding as a way to offset the high prices mindset or the mindset that high prices are not good and will not buy but if companies like GU and Uniqlo again focus on improving the brand customers will again not think of prices but how good the products are.
Uniqlo needs to be very careful that it doesn't create a company that only looks at the best talent available or the best performing employees as some employees in a company are diamonds in the rough and some employees take time to grow in a company.
If you create a company that is inclusive for all types of talent and not just the 1 percent at the top a company can reap the benefits of all of the talent available to a company.
There was a recent article that said some younger employees in Japan like the seniority-based system instead of the more competitive merit based system. That might say a lot about some Japanese young workers as they don't want to compete in the market place and just want to exist in a company.
But both systems have positives and negatives depending on a person's preferred work style, as the more ambitious might prefer a merit based work system while the less ambitious might prefer the seniority-based work system.
Yes, the cost of living in Tokyo is high but it's not that Tokyo is that expensive it's that many companies just don't pay their workers good starting salaries.
Japan, compared to other advanced nations has some of the lowest corporate salaries globally and its getting worse compared to the starting salaries for new workers in many countries.
Rural development is not so good in many countries and what Japan is experiencing might be very similar in other countries such as South Korea, where all young people want to go to university in Seoul or to work in Seoul instead in the rural areas.
That can be said for the US too in many states or regions that are rural and will continue to be rural with very little development.
Again, it's the same in South Korea and or the US. How can a company get 1,000 workers to leave Seoul and move to a rural area in South Korea as they might build a new factory in some small out of the way town.
It's the same in the US as a how can a car company that wants to build a new factory in rural Mississippi in the US and try to get 1,000 workers to leave a vibrant city area to work in the rural south in the US.
Yes, borders for the most part have vanished but not for all companies or everyone as some companies and individuals don't want to live an a world without borders.
Again, some companies are content to live only in the Japan and their Japanese only mindset, but to be fair that mindset exists in many countries and many companies too as they don't see the need to engage with the rest of the world.
Again, many companies or some companies don't want or feel they need to see themselves as part of the wider world as they are content being in their little niche in Japan which is comfortable for them at the moment.
And again to be fair, the mindset exists everywhere in the world too and its not just a Japanese problem, but a global problem for some companies.
But the challenge is once a companies tries to enter a global market now there are a multitude of challenges that they must now overcome to even be a player in that market and some companies might be reluctant to enter the global stage.
But at the same time, some Japanese companies might have become stagnant in Japan with a Japanese market mindset only and maybe the only way to get out of their stagnation is to take a leap of faith and enter the global stage where the rewards are much bigger but so are the risks need to survive.
Have a nice day!
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