Thu, Aug 09, 2012 - Page 9 News List

A decline in entrepreneurship gets the blame for Japan’s woes

Japan Inc has seen its place on the world stage eroded by latecomers with more imagination, but some hope to bring back the lost spirit of ‘monozukuri’

By Yuri Kageyama  /  AP, TOKYO

Worn out and resigned to its dwindling status, Japan Inc is said to be quietly shuffling off the world stage. However, do not tell that to Kenji Hasegawa, who is ready to conquer the global auto market with his nifty innovation, a bolt that does not need a nut. Or Chiaki Hayashi, who makes millions teaching big-name companies to be creative again.

As different as they seem — Hasegawa runs auto-parts supplier Lock’n Bolt Corp and Hayashi is a rare woman to help found a Tokyo startup — both highlight the potential of innovation and entrepreneurship in a nation that is often typecast as facing an unrelenting decline.

Of the decline, there is plenty of evidence.

Long in the doldrums after its 1980s bubble-economy burst, Japan has been eclipsed by China as the world’s second-biggest economy. Many of its consumer-technology companies have been overtaken by South Korean competitors and are racking up huge losses. The number of young Japanese choosing to study abroad has dropped. While Facebook lured hundreds of millions of members worldwide, management at Japanese social network Mixi never looked to grow overseas.

The naysayers claim Japan is stagnating, only looking inward and squandering advantages such as its well-educated workforce, low crime rate and a rich history of technological prowess.

However, even while acknowledging big challenges that include its swollen national debt and rapidly graying population, Japan Inc’s boosters say it can still rekindle the sparks of ingenuity that in the past delivered network-connecting mobile phones years before the arrival of smartphones and made “instant noodles” part of the global diet for the last four decades.

First, though, Japan must recognize that what ails it is at least partly in the mind.

“In order to have innovation, you must accept a certain amount of failure. To the Japanese, this has become taboo,” said William Saito, a prolific technology inventor who now runs a company that identifies up-and-coming innovators and tries to match them with investors.

Saito said conformist Japan frowns upon failure, and does not allow for second chances. Worse, Japan appears to be wallowing, when what it needs is action, Saito and others say. Even the rising yen, long cited as the death knell for an exporting economy such as Japan, should be reframed as an advantage, delivering bigger purchasing power for Japanese companies abroad.

For some, Japan’s revival can come from re-inventing what it has long known best — manufacturing, but with innovative ideas.

As tiny as a nut-less bolt is, it has the potential to make Hasegawa, the supplier, rich. Most machines, including cars, ships and factory equipment, use bolts — untold numbers of them. And so a bolt that does not require a nut is a big timesaver.

A nut-less bolt, based on the idea of a smaller bolt within a bolt, a patented secret, is also significantly lighter than a regular bolt, delivering cost-savings in fuel and raw materials, and other perks like better mileage in a car.

Hasegawa is talking with a long list of interested companies, including Panasonic Corp and Toyota Motor Corp. He is looking into production outside Japan, perhaps Vietnam, he said.

Hasegawa says the key to Japan’s revival lies in breakthroughs such as his that developed because of a legacy in monozukuri, which translates as “making things,” but is more akin to craftsmanship.

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