HIDA JOURNAL 2014 SPRING No.4

10/28

8 HIDA JOURNALFirst, I would like to ask you about the commemorative lecture in New Delhi, India. You gave the three-part lecture: Part 1 “Japan at Present: Abenomics,” Part 2 “Lost Two Decades” and Part 3 “Entrepreneurs in Japan and India.” Would you introduce our readers the main points of the commemorative lecture?After Harvard Professor Ezra Vogel published the book “Japan as Number One: Lesson for America” in 1979, the Japanese management boom arrived in the 1980s. However, at the time, the world market was rapidly growing against a backdrop of goods shortage. So, many companies achieved a great success simply by going with the times. EPCM started in the midst of such Japanese management boom. In the opening ceremony of the very first program, I said as follows. “It is not the case that all Japanese corporate managers are smarter than their counterparts in the world. As in your country, there are great managers and not so great managers. But what I can tell you is that the quality of Japanese corporate workers is one of the best in the world. The literacy rate of Tokyo residents 150 years ago was 80%. Considering 30% of London and 20% of Paris around the same time, the educational level of ordinary people in Japan has been historically outstanding. During EPCM, I would like you to observe both good and bad of Japanese management.” Since then, I have been telling the participants the same thing for 30 years.As for the quality of ordinary Japanese people, on the day after the March 2011 Great East Japan Earthquake, the world media praised the Japanese by saying, “Even though they lost their family members and are devastated, they help any people around who are suffering. Hotels and inns let people stay and eat for free. There is no looting and social order is perfectly maintained. There is no other group of people like them.”Before returning home, many of the participants of EPCM tell me, “I envy Japanese corporate managers. Because their subordinates are excellent, they do a good job on their own without any instructions.” One of foreign media which praised ordinary Japanese people in its editorial on the day after the Great Earthquake also mentioned, “A sense of urgency over the lack of good leadership in Japan will dissipate because of this.” In this lecture, I also told the audience the lack of good leadership in Japan was a very serious problem.I also mentioned “three arrows” of Abenomics. I commend the demand created by large-scale public investments led by the government under the first arrow of “bold monetary policy” and the second arrow of “agile fiscal policy.” However, I added my personal concerns about heavily construction-focused public spending and Prime Minister Abe’s ambition to simultaneously achieve fiscal soundness. The third arrow of “economic growth strategies to encourage private investment” is problematic. So-called “Lost Two Decades” started in the beginning of 1990s. I told the audience that I have serious doubts whether businesses can take full advantage of the growth environment created by the third arrow, using only the improved results in number thanks to cheap yen and high stock prices brought by the first arrow, without eliminating the cause of the “Lost Two Decades.”In Part 3, I gave a lecture based on the result of the survey on entrepreneur development in the world. My colleagues in UK and US business schools and I started this survey in 1997, and at present, over 40 countries participate in it. The entrepreneurship rate of Japan has been the lowest in rank since the start of the survey. On the other hand, the entrepreneurship rate of India, for example, is quite high, at 20%. The perennial bottom dweller does not sound good. However, low entrepreneurship rate can mean that many young people choose to make a contribution in major companies rather than taking a risk and starting own business. Conversely, high entrepreneurship rate can mean that the society does not offer many employment opportunities to young people so that they have no choice but to start own business. In fact, according to my analysis, there exists a certain correlation between GDP and entrepreneurship rate, and a country with low GDP has relatively high entrepreneurship rate. So I told the audience that the people of India should not feel too comfortable for having high entrepreneurship rate and asked them to develop industry further so that the entrepreneurship rate would drop a little. I also added that they should develop industry not only as a leader of one company but also in consideration of the entire nation.Dr. Tsuneo Yahagi Ph.D., Professor Emeritus, Keio UniversityHIDA will establish its third Overseas Office* in New Delhi, India. Since this year is also the 30th anniversary of the establishment of the Executive Program on Corporate Management (EPCM), we had a commemorative lecture by Dr. Tsuneo Yahagi Ph.D., Professor Emeritus of Keio University, who is the program director of EPCM, on October 30, 2013. The theme was “Japanese Management Today and Tomorrow.” About 80 people attended the lecture and there was a lively exchange of questions and answers. I asked Dr. Yahagi about his lecture in India and 30 years of EPCM.[Date of interview: November 21, 2013, Interviewer: Hiroyuki Tanaka, General Manager, Management Planning Department]The 30th Anniversary Lecture for the Executive Program on Corporate Management (EPCM)—Japanese Management Today and Tomorrow—

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