ACCJ Journal November 2009

¥800 | November 2009

Journal

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Green Marketplace Forum

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“In the Black” Charity Ball

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Consultant Close-ups

THE INTERNET ECONOMY Time to reboot?

SPECIAL SECTIONS

TRAVEL & LEISURE INSURANCE & RETIREMENT PLANNING

ACCJ Mission Further the development of commerce between the United States of America and Japan, promote the interests of U.S. companies and members, and improve the international business environment in Japan.

CONTENTS

Volume 46 | Issue 11 | November 2009

12

FEATURES COVER STORY 12

Internet Economy The White Paper issued by the ACCJ Internet Economy Task Force in June offers a comprehensive assessment of the strengths and weaknesses, and a series of recommendations to boost the economy.

By Julian Ryall インターネット・エコノミー ACCJインターネット・エコノミー・タスクフォースは、経済の長所と短所に関する総合的な評価のほか、一連の景気 浮揚策を盛り込んだ公式報告書を6月に発行。ジュリアン・ライアル

22

ACCJ Event Green Marketplace Forum: The September interactive event explored future trends and business opportunities of green design/building and green mobility/transportation as they relate to lifestyle and a carbon-free society. Report by Alana Bonzi ACCJイベント 「グリーン･マーケット・フォーラム：9月に行われた交流イベントでは、ライフスタイルとゼロ炭素社会に関係のあるグ リーン･デザイン／ビルディングおよびグリーン・モビリティ／輸送手段の今後の動向やビジネスチャンスを課題として 検討。アラナ・ボンジ

25

ACCJ 2009 Charity Ball Here are some of the tantalizing details that add fun to an evening benefiting charities in Japan earmarked by the ACCJ. By Jeffrey Shimamoto ACCJ 2009 チャリティ・ボール ACCJが取りまとめる日本での夜会チャリティを盛り上げる内容の一部を紹介。ジェフリー・シマモト

November 2009 | The Journal | 1

CONTENTS

Volume 46 | Issue 11 | November 2009

17 38

TONY MCNICOL

TONY MCNICOL

20

DEPARTMENTS 9

Note from the Editor

11

President’s Message

17

Media Watch Eating out. Net returns. Less is more. Wheel of misfortune. On the record.

20

On the Spot Keith Henry, Principal Officer of Asia Strategy: A Business Strategy and Government Policy Consultancy, is interviewed by Julian Ryall

30

Jesper Koll Writes The Closing of the Japanese Mind

32

Events Line-up Business and leisure-related happenings in November. By David Umeda

34

FDI Portfolio Run for the money. Florence fashion. For all to see. From Tokyo. By Nicole Fall

38

Business Profile Timothy Langley is President and Representative Director of Langley Enterprise.

By Julian Ryall

41

Behind the Book Japan’s Open Future: An Agenda for Global Citizenship by John Haffner, Tomas Casas i Klett and Jean-Pierre Lehmann, is reviewed by Tom Baker.

42

Advocacy Update ACCJ White Paper

44

In the Final Analysis By Samuel H. Kidder, ACCJ Executive Director

2 | The Journal | November 2009

Presidents Emeriti Thomas F. Jordan (1994-1995) Robert F. Grondine (2000-2001) Debbie Howard (2004-2005) Charles D. Lake II (2006-2007) Allan D. Smith (2008) ACCJ Leaders President Thomas W. Whitson KPMG FAS Co., Ltd. Chairman Allan D. Smith AIG Companies, Japan and Korea Vice Presidents Michael J. Alfant Fusion Systems Japan Co., Ltd. Laurence W. Bates General Electric Japan, Ltd. William R. Bishop, Jr. Nippon Becton Dickinson Co., Ltd. Michael D. Bobrove (Kansai) Nihon Medrad K.K. Kumi Sato Cosmo Public Relations Corporation Mark F. Schwab United Airlines, Inc. Chris Zarodkiewicz (Chubu) Cezars International K.K. Treasurer Nasir Majid PricewaterhouseCoopers Brett Jensen (Kansai) Colliers Hallifax Steve Burson (Chubu) H&R Consultants ACCJ Governors Andrew Conrad Aflac International, Inc. Bruce J. Ellsworth Johnson & Johnson Family of Companies James Foster Microsoft Japan Harry Hill (Chubu) Oak Lawn Marketing, Inc. Tad Johnson Pratt & Whitney Aftermarket Japan KK John Kakinuki AXA Life Insurance Co., Ltd. Jiri Mestecky Kitahama Partners L.P.C. Kinji Yasu Stone Container Japan Co., Ltd. Douglas L. Peterson Citi Group Japan Holdings Nicole W. Piasecki Boeing Japan Jay Ponazecki Morrison & Forester LLP Mitsuyo Teramura Federal Express Corporation Jim Weisser PBXL ACCJ Executive Staff Samuel H. Kidder Executive Director Aron Kremer Deputy Executive Director ACCJ Committees Aerospace & Defense Committee Jean Pierre Bolat/Terry Nakatsuka American Auto Industries Rick Brown Architecture, Construction & Real Estate Kevyn Johnson/Michael P. King Asia Business Philip C. Jones B2B Sales Karl Hahne/Craig Saphin Banking and Finance Thomas Clark/Ernfred Olsen Charity Ball Barbara Hancock Competition Policy Task Force Robert Grondine Corporate Social Responsibility Patricia Bader-Johnston Direct Marketing Joseph Peters Environmental Rebecca K. Green Financial Services Forum Chris LaFleur Food and Agriculture Collin Benson Foreign Direct Investment Nicholas Benes Government Relations Ira Wolf Healthcare Steve Plunkett Human Resource Management Chris Lamatsch, Adam Kassab Independent Business Doug Jackson Information, Communications & Technology Darren McKellin, Ann Rollins Insurance Nathaniel Graddy/Jonathan Malamud Intellectual Property David Case International Education Patrick Newell Internet Economy Task Force Yoshitaka Sugihara Investment Management David Monroe Leadership Forum Michael J. Alfant/Kumi Sato Legal Services Arshad Karim/Eric Sedlak Corporate Counsel Clair Chino Marketing Programs Koichi Hama Membership Relations Andrew Silberman Privatization Task Force David Hoover Retail TBA Securities Douglas Hymas Soft Landing Task Force Adam Kassab/Mariko Nakazono Special Events Barry Bergmann Young Professionals Group John Ghanotakis/Daniel Lintz Taxation Jack Bird/Michael Shikuma Toiletries, Cosmetics & Fragrances Yukiko Tsujimoto Transportation and Logistics Jeff Bernier/Jeremy Goldstrich Travel Industry Kayoko Inoue University Briefing Program Richard May/David Satterwhite Kansai Chapter Business Programs Pabel Delgado Community Service Kojiro Dan External Affairs Kiran Sethi Living in Kansai Barry Louie Membership Paul Dupuis Women in Business Mari Nogami Chubu Chapter Community Service Steve Burson Independent Business Chris Oostyen/Jason Morgan Living in Chubu Lowell Sheppard Membership Relations Chris Zarodkiewicz Programs Steve Brown American Chamber of Commerce in Japan Masonic 39 MT Bldg. 10F, 2-4-5 Azabudai Minato-ku, Tokyo, Japan 106-0041 Tel: 03-3433-5381 Fax: 03-3433-8454 www.accj.or.jp / www.ecentral.jp The ACCJ is an independent membership organization with no affiliation with any government or other chamber of commerce. The ACCJ is a member of the Asia Pacific Council of American Chambers and values its relationships with Japanese, American and other nations’ business organizations.

Journal

Publisher Vickie Paradise Green paradise@paradigm.co.jp Editor-in-Chief Simon Farrell editor@paradigm.co.jp Senior Editor David Umeda Art Director Paddy O’Connor Graphic Designer Akiko Mineshima COLUMNISTS Tom Baker, Nicole Fall, Jesper Koll CONTRIBUTORS Alana Bonzi, Geoff Botting, Martin Foster, Justin McCurry, Tony McNicol, Anthony H. Rowley, Julian Ryall, Catherine Shaw PHOTOGRAPHERS / ILLUSTRATORS Tony McNicol, Jeremy Sutton-Hibbert, Darren Thompson, Mattias Westfalk Published by Paradigm President Vickie Paradise Green Creative Director Richard Grehan Advertising Sales Eileen Chang, Sarit Huys, Helene Jacquet, Leai Kubotsuka 4-18-12 Takanawa, Minato-ku Tokyo, Japan 108-0074 Tel: 03-5447-8831 Fax: 03-5447-8832 e-mail: inquiries@paradigm.co.jp www.paradigm.co.jp THE ACCELERATED GLOBAL MBA FOR EXPERIENCED PROFESSIONALS

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NOTE FROM THE EDITOR

Continuing On

C

ommuting by train or taking a break at a coffee shop, you know that the Internet is alive and well here. However, upon closer scrutiny, as did the ACCJ Internet Economy Task Force in its White Paper issued in June, there is need to encourage both user and supplier to get more engaged online. Julian Ryall for our cover story met with Chair Jim Foster and Vice Chair Yoshitaka Sugihara of the ACCJ Task Force, comprised of some 25 companies, to highlight key strengths and weaknesses in the industry, and what needs to be done by both the private and public sectors to make sure Japan doesn’t get relegated to the second tier of Internet users.

As inevitable as change is in this digital world, what remain constant through the years are the ACCJ’s CSR endeavors. The ACCJ 2009 Charity Ball on December 4 at The Westin Tokyo Hotel is raising the stakes Las Vegas-style, as detailed by co-chairs Jeffrey Shimamoto and Barbara Hancock. There’s still time

12 to reserve a spot in what is billed as “In the Black.� At the end of September, the ACCJ Green Marketplace Forum convened under the theme, “The Future of Where We Live & Work and How We

Get Around,� held at the Four Seasons Hotel Tokyo at Chinzan-so. Our Alana Bonzi covered this interactive event led by the ACCJ CSR Committee with support from the ACCJ Environmental Committee, the ACCJ ACRE Committee, and the ACCJ American Automotive Industries Committee. Other Chambers of Commerce, the Keidanren, and the EU-Japan Centre for Industrial Cooperation were also involved. This issue’s book review by Tom Baker looks ahead, to Japan’s Open Future: An Agenda for Global Citizenship by John Haffner, Tomas Casas i Klett and Jean-Pierre Lehmann.

Nothing quite defines an organization like its longterm members, and so our On the Spot and Business Profile by Julian Ryall cover a lot of firsts that describe not only the career paths of Keith David Umeda is Henry and Timothy Langley, Senior Editor at Paradigm respectively, but also some ACCJ milestones. â–

Erratum — In the October 2009 ACCJ Journal, a chart entitled “Lower House’s New Balance of Power� on page 11, in the Vice President’s Message, “Trading Places,� did not indicate source, which is the Nikkei. We apologize for this oversight.

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PRESIDENT’S MESSAGE

Full Steam Ahead

O

ctober was a hectic month for the ACCJ. On October 1, we rolled out the long awaited Internet Economy White Paper to the press. Press interest was heightened because Minister of Internal Affairs and Communications Haraguchi had met Federal Communications Commission Chairman Genachowski for discussions on related subjects just the previous week.

On October 2, Senior U.S. Official for APEC Kurt Tong visited Tokyo to discuss APEC issues for 2010 (Japan) and 2011 (USA).

APEC will be a significant source of activity (i.e., it’s more than one event) in 2010 and we will form a task force to insure that our member issues get properly raised at the various APEC working groups.

The Kansai Chapter borrowed the Osaka Mayor’s official residence for an ACCJ board meeting and even invited the Mayor to a reception at his own residence that featured U.S. Ambassador John Roos (and his son). We are trying to get the Ambassador to speak to the general membership before year end. The Ambassador also participated in the Kansai Charity Walk and Festival, which was the biggest in the four years Kansai has held the event.

I hope that all ACCJ members will attend the Ordinary General Meeting on November 11. This is your chance to hear formally about the state of the Chamber, the Treasurer’s report, and learn about the slate of candidates who would like to lead the ACCJ next year.

We have scheduled our Diet Doorknock for December 1-3.

This year presents special challenges that the External Affairs Advisory Council and the Government Relations Committee

Shojiro (Mike) Makino 1929-2009 The Chamber has lost a true gentleman and a great ACCJ member. Shojiro (Mike) Makino died October 10. He was 80 years old. Mike was active in many areas of US-Japan relations during his life. He was a member of the America Japan Society.

He served on the Prime Minister’s Council

U.S. Ambassador John Roos at the Kansai Charity Walk

are working to meet. Please express your interest through your committee chairs if you would like to participate.

And lastly, mark December 4 on your calendar Thomas Whitson is for the Charity Ball. We have cut the price from ACCJ President. prior years and have selected some really worthy twhitson@accj.or.jp charities that deserve your support this year. ■

for Administrative Reform for many years.

He led the WR Grace Company’s Japan operations until his retirement.

Mike served as an ACCJ board member and, even after he retired from WR Grace, he stayed active as a quiet contributor to the ACCJ. In recent years, he headed the ACCJ’s Membership Expansion subcommittee and was a longtime member of the Community Service Advisory Council. He identified and visited many of the charities that the CSAC has

donated funds to. In 2008, the ACCJ gave Mike the first Lifetime Achievement Award, an honor he richly deserved.

Men of goodwill and thoughtfulness like Mike have been an important part of the fabric of US-Japan relations since the war. He mentored many of us over the years. And his passing leaves an empty place in our hearts.

I think that each of us should take a moment to remember Mike and reflect on his life and good works.

November 2009 | The Journal | 11

The Internet Economy ACCJ TASK FORCE RELEASES ICT WHITE PAPER.

By Julian Ryall

B

efore 1996, the Internet was not yet a household word, and there was no hint as to the differences it would make to our lives.

A mere 13 years later, the World Wide Web looms above our corporate, social and everything-in-between lives like a colossus. Most of us shudder to think of how we managed before, when all we had to communicate with were letters,

12 | The Journal | November 2009

landlines and that wonder of a bygone age, the fax machine.

The change has been both dramatic and overwhelmingly positive as businesses evolved, sought out new marketsâ&#x20AC;&#x201D;growing exponentially. Yet, the Net also has presented enormous challenges for the public and private sectors, in ways that have impacted how the global economy operatesâ&#x20AC;&#x201D;now and into the future. Japan may earn

plaudits for the manner and speed with which society and firms have become connected, but pundits fear that failing to adapt to the pressing issues of today will escalate to an alarmingly critical level soon enough, resulting in Japan being relegated to the second tier of Internet users.

To underscore the dire situation in which Japan finds itself, a recent study on consumer Internet use indicates

THE INTERNET ECONOMY

that—regarding secure Net services, electronic commerce, government online services and consumer software spending—Japan ranks 22nd out of 23 nations. Only Portugal fared worse.

One of the key advocacy issues for the ACCJ this year, spelled out in the annual Diet Doorknock in spring, is the future of information technology and communications. The ACCJ Internet Economy Task Force produced a White Paper later in June that offers a thorough assessment of the strengths and weaknesses in the sector, as well as arriving at a series of recommendations on needed improvements (turn to pp. 42-43, Advocacy Update, for Executive Summary).

“One of the problems is that Japan’s information and communications technology [ICT] sector is overly concentrated,” says Jim Foster, director of corporate affairs at Microsoft Co., Ltd. in Japan and vice-chairman of the task force. “If you look at the top 10 companies in the ICT field from 25 years ago and today, it’s clear that in Japan they are the same names: Fujitsu, NEC, Toshiba, Hitachi, Sony, Panasonic and so on. But in the United States, they’re completely different.

“Back then, Microsoft barely existed and there was no Google,” he says. “U.S. companies in the electronics industry were on the verge of being obliterated, but we have seen a fascinating turn of events.”

Now it is the Japanese firms who are being overtaken by upstarts from countries that Tokyo has previously considered lagging behind in the technology race. But Foster believes that it is Great Britain that should be used as the template for other governments to follow.

“With its ‘Digital Britain’ project, the British government has identified ICT as both an economic opportunity and a security imperative, and made a lot of the structural reforms that are now needed here in Japan,” says Foster.

The ACCJ White Paper is the combined effort of some 25 companies—including Intel, Apple, HP, Amazon, Verizon and Ebay—and has been an ongoing project for around 18 months.

It is centered on recommendations for regulatory reform and proposals to promote greater ICT utilization here— referencing best practices that will help develop and promote the Internet economy in the country.

The challenge for Japan, says Foster, is in regards to managing a complex set of issues that include the revamping of broadcast and telecommunications regulations, and new rules for privacy and security. There is also a desire for measures to promote online content and commerce, new guidelines for the assignment and use of the broadcast spectrum, and the introduction of new technical standards.

“These are some of the most knotty problems that we see anywhere in the world and they’re all coming together here,” says Foster. “Policy here is fragmented and the stakeholders are just huge, meaning that there is no oxygen for the smaller entrepreneurial companies that lead innovation in the U.S. and Europe. Many of the established leaders in the ICT field are just too big to be innovative.”

The main concern for Japan is that the traditional ways of operating in this sector just do not work anymore. Thus, a country that has long prided itself on its technological prowess runs the risk of being shut out of the emerging global Internet economy unless Japan updates its regulatory framework and takes steps to better integrate the Net into its economy.

Similarly, the old uncompetitive policies of preserving industries, nurturing domestic “champions” and protecting the Japanese market from foreign competition no longer make sense. There is also a pressing need for new leadership and ideas.

… the traditional ways of operating in this sector just do not work anymore.

The task force believes that, if utilized appropriately, the Internet economy can be the key to Japan’s economic recovery, offering opportunities for new partnerships with foreign companies and putting the country back in the driver’s seat in terms of regional leadership.

“Japanese bureaucrats and companies that we have been talking to already understand that the door is nearly closed on future opportunities in the industry, that U.S. companies already have a larger share of the total market, and that they are far more competent than their Japanese counterparts,” says Yoshitaka Sugihara, manager of the Corporate and Government Affairs Department at Intel K.K. and chair of the ACCJ Internet Economy Task Force.

“They understand the issues that we are talking about with them, for example on the present obsolete spectrum policy, but it is very complicated because control of that policy is spread through several different ministries and agencies, and decisions are difficult to achieve,” he says.

“It seems to me that the biggest problem is simply the lack of leadership and the fragmentation of responsibility,” continues Sugihara, pointing to arcane regulations that impact, in particular, the health and education sectors, as well as retard Japanese efforts in the new green industries.

The task force is suggesting that, to make the very most of the Internet economy, a mixture of government

November 2009 | The Journal | 13

THE INTERNET ECONOMY

Task Force White Paper Five basic principles ●

Transparency in regulations ●

Simplicity maintained ● ●

●

regulation that focuses on ensuring a competitive marketplace—coupled with a broad scope for private initiative—is the most appropriate approach.

The ACCJ is calling on the authorities to think globally and avoid Japan-only solutions, to encourage innovation by strengthening market forces, and to give precedence to the interests of consumers instead of industry.

“They always get that [last] one backwards here,” says Foster. “They forget that it is the consumer who drives change on the Internet.”

The White Paper offers a set of five basic principles that are needed in Japan. First, there is transparency so that regulations are clearly understood by all those involved. Second, simplicity of regulations is maintained. Third, fairness prevails so that specific technologies, services or companies are granted an advantage. Fourth, a consistency that permits regulators to speak with a single voice on national policy objectives. Fifth, harmonization to ensure regulations meet global best practice.

Along with regulatory reforms, the task force has identified shortfalls in the optimum utilization of ICT in Japan.

Recommendations include transforming government procurement, delivering government services online, moving business online, transforming education,

as well as realizing greater efficiency in healthcare.

The last two areas regarding education and healthcare are of particular concern to the ACCJ, as they unquestionably are fundamental to a well-functioning society and economy. Japan, however, continues to lag behind many of the other OECD nations in leveraging the power and connectivity of an Internet economy to drive meaningful change.

Foster points out as one example that there is a constant outcry among teachers, parents and educational authorities regarding the amount of time children spend on their mobile phones downloading content and accessing data. Educational authorities should focus their efforts on teaching the nation’s younger generation how best to use—and how to get the most out of—the technology, instead of gnashing their teeth at how terrible it is and banning phones from schools.

Ageing computers also should be replaced and a three-year replacement cycle introduced. Wireless services should be available in every school, and a cadre of ICT support professionals be on hand to manage software and hardware issues on campus.

The White Paper emphasizes the need for dialogue between Japan and the U.S. on ways in which to promote

Fairness prevails

Consistency of voice

Harmonization in regulations

the Internet economy, which is entirely premised on partnership and connectivity. The issue is not one of “opening” the sector in Japan, but rather finding ways in which the world’s two most powerful economies can cooperate in leading the development of the sector, on a regional and global level.

The issues of convergence and divergence need to be high on the agenda. But as Intel’s Sugihara points out, Japan will be host of the 2010 APEC meeting and the run-up to that event would provide the perfect opportunity for the two sides to make meaningful progress.

Foster says the tone of the report’s conclusion is overwhelmingly positive and optimistic. This upbeat measurement underlines the belief held by the ACCJ that the advent of the Internet economy represents an important evolution in the country’s economic structure and the role of foreign companies operating here. In place of the conflict that would be inherent in efforts to pry open markets, this situation offers opportunities to build and enhance the partnerships between Japanese and foreign firms, Julian Ryall is The Daily and enable them to work Telegraph’s Tokyo together to develop new correspondent. markets. ■

November 2009 | The Journal | 15

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MEDIA WATCH

Eating Out, More or Less With consumers cutting back on expenditures, family restaurants, fast-food chains and other major players in the foodand-beverage industry are making frantic moves to ensure their survival. A 20-page special in the business magazine Keizaikai (Sep. 20) notes that, since January, such incentive measures as special discount campaigns or reduced prices—ranging from en-daka kangen (rebate due to appreciated yen) to super savings lunch menus—have become widespread throughout the industry.

Revenues for the restaurant industry peaked in 1997 at ¥29 trillion, but have subsequently declined, with turnover in 2008 down to ¥24 trillion. Sales have been largely blunted by competition from the so-called naka-shoku, of prepared or semiprepared take-out foods, typically consumed at home, which are sold by convenience stores, take-out specialty shops and supermarket delicatessens.

While consumers are more strongly motivated to practice thrift, polarization of consumption is also occurring. One example might be the growing popularity of gourmet hamburger meals,

with large patties made from high-quality beef, which sell for at least ¥1,000.

“Among the super-deluxe class, a portion of the restaurant industry maintains firmly rooted popularity,” observes industry analyst Jotaro Fujii. “As opposed to this, it’s questionable whether the mid-priced chains can avoid the weeding-out process.”

The recession has hit family restaurant chains particularly hard. Among the majors, only Saizeriya, whose menu offers mostly inexpensive Italian-style items, has shown continued growth. As of June 2009, year-on-year sales were up 12.3%.

“The general view is that cheap food doesn’t taste good and expensive food is good, and that you can’t have products that are both cheap and tasty,” Chairman Yasuhiko Shogaki is quoted as saying. His company’s strategy is to offer tasty, affordable foods as part of the consumer’s daily diet, appealing to consumers’ heightened awareness of a need to safeguard their livelihoods during the recession.

November 2009 | The Journal | 17

Ping-pong Pubs Seedy pool halls where professional gamblers with raspy voices shoot balls into pockets between puffs on their cigarettes are not unknown in Japan. Other places offer darts and golf putting as forms of recreation, but these appeal mostly to males. But lately, wholesome takkyu bars, where people of both genders can get together for drinks and engage in a friendly match of ping-pong, have been springing up in urban areas.

The Nikkei Marketing Journal (Sep. 2) reports on a Tokyo shop called Nakameguro Takkyu Lounge, where revenues have increased annually since 2003. Since last year’s recession, customers who hang out all-night have tapered off, but their overall numbers are up. “These are times when it’s harder for people to meet up,” remarks proprietor Shinkichi Sekino. “Table tennis, an

activity anyone can enjoy, is a way to bring people together in decent surroundings where they can tap into new information.”

While most pubs only have space for one or two tables, Dandy, a ping-pong izakaya in Amagasaki City, Hyogo Prefecture, opened in 2003 and boasts nine tables spread out over 500m2. Operator Hirofumi Nakamura even installed showers for players.

According to Nakamura, business has been growing at the rate of 2-3% a year.

“We’ve been getting more customers who hear about us by word of mouth, people who drop in alone, and more groups of retirees,” he says.

The Japan Table Tennis Association reports three straight years of growth in its membership, which is now approaching 300,000.

Meet Scrooge Suzuki In-house campaigns to economize on expenditures have gone far beyond turning down the thermostat and switching off the lights at lunchtime. Under the headline “Kaisha de daiben suru na!” (don’t defecate at the company!), weekly magazine Shukan Gendai (Sep. 19-28) offers a potpourri of how firms have unleashed bureaucratic managers determined to cut costs at every turn. Or perhaps we should say, at every flush.

It seems that the administration at a certain company, deciding its flushing was inflating the water bill, ordered staff to do their business at home or in restaurants during their lunch break.

Someone calculated that each use of the toilet costs ¥5-9 per flush, plus an additional 80 sen (¥0.80) for paper. Hey—¥10 here, ¥10 there and it really adds up.

The article continues with numerous other examples of corporate parsimony, including one outfit that calculated elevator usage added ¥300 a day to corporate tabs. While it stopped short of turning

18 | The Journal | November 2009

off lifts entirely, it launched a one-up, two-down campaign—to encourage staff to climb stairs at least one flight and descend two flights.

Some other creative attempts to economize included shutting off the air conditioning; halting all use of color copying in favor of monochrome; halting janitorial services and entrusting cleanup to junior staff; and keeping the length of cellphone conversations to within three minutes.

Business consultant Masao Kitami, author of Kieta nenshu (Vanished annual income) from Bungeishunju-sha has a low opinion of management that insists on such draconian measures. “I’ve seen many cases where trivial efforts at cost cutting have hurt worker motivation and reduced job efficiency,” he tells the magazine. “Just going around demanding that expenditures be cut does not translate into good management. Rather, good management is focusing on acquiring knowledge that will contribute, even slightly, to boosting sales.”

MEDIA WATCH

Gone in 60 Seconds If you drive a Toyota Hi Ace van and live in Aichi, Chiba or Osaka Prefectures, you stand the greatest chance of having your wheels stolen. The Hi Ace accounted for 15.5% of all vehicles ripped off last year.

Tokyo Shimbun (Sep. 13), which compiled the latest stats (for all of 2008) from the National Police Agency, reports the top five most popular items for car thieves is rounded off by the Suzuki Wagon R, and three more Toyotas: the Mark X, Land Cruiser and Celsior. If stolen, the chances of seeing your car again are not favorable: the recovery ratio has hovered fairly steadily at around 30% for the last decade.

In 2008, some 1,370,000 crimes against vehicles were reported nationwide.

Aichi Prefecture led the nation with 4,001 vehicle thefts (as opposed to only 685 in Tokyo). But Osaka reported 22,526 cases of vehicle break-ins (i.e., items stolen from inside cars) and another 15,603 cases of auto-parts theft. Roughly 60% of the crimes occurred while the vehicle was in a parking lot.

Interestingly, 60.8% of the stolen vehicles were aged five years or more, whereas only 2.4% had been shipped from the factory within the previous six months.

Supposedly, thieves target more of certain models because they mix in more easily, making them harder to trace; also, the older models are less likely to be equipped with increasingly sophisticated antitheft devices.

Speaking of which, while the overall number of vehicle thefts has declined from a peak in 2003, last year’s crooks set a new record in thefts of auto parts and components. The most popular item was car navigation units, accounting for 37.3% of the total.

Time Shift When the “Be between” column in the Asahi Shimbun conducted an online survey, out of 6,847 people (multiple responses given), 43% said they record programs for later viewing as opposed to 57% who did not. The main reasons for taping included being too busy to watch the broadcast (2,087); wanting to view when they could relax (1,467); skipping over commercials (1,449); wanting to keep the recording (1,228); and not watching because another show they wanted to see was broadcast at the same time (1,153).

Among the 43% who do record TV programs, 55% said they don’t keep recordings of their favorite shows. Their main reason is they seldom watch the show again (2,597 responses). This was followed by it being nothing they want to keep (1,211); DVDs pile up (1,127); programs are often shown as re-runs anyway (210); and the contents can be viewed on the Internet (109).

“I miss many good programs that appear to have been dropped because of their low viewer ratings,” remarked a 21-year-old woman in Aichi Prefecture. “And it’s a pity documentary programs are broadcast mostly during the late-night and early morning hours.”

November 2009 | The Journal | 19

Keith Henry PRINCIPAL OFFICER, ASIA STRATEGY: A BUSINESS STRATEGY AND GOVERNMENT POLICY CONSULTANCY

By Julian Ryall Photos by Tony McNicol

For the past 25 years, Keith Henry has had his feet in two seemingly incongruent worlds in Japan: government and business. Working under James C. Abegglen, one of the founding partners of the Boston Consulting Group, Henry assisted some of the world’s largest firms build a competitive presence in Japan. As one of the first foreigners to work for a Japanese politician, including two ministry stints when the lawmaker headed the Environment Agency and then the Defense Agency, Henry has acquired an insider’s knowledge of the lobbying that occurs among politicians, business and government officials.

With the recent change in administration, there are serious implications and challenges ahead for U.S. businesses, including in their government relations and advocacy efforts.

How has the role of government relations changed in the last 25 years?

Back in the mid-1980s, I remember talking to a senior foreign executive in Japan about the need for U.S. business to take a more proactive stance with regard to government relations. He soothingly explained to me that his Japanese joint venture partner handled that messy work for him and that government relations was a blackbox better left untouched by American business.

In the 1990s, the power of the “iron triangle”—of collusion among politicians, government and business in Japan— seemed so impenetrable that influencing policy-making in Japan was seen as almost impossible for the individual U.S. firm.

Indeed, it seemed that without pressure from the U.S. government, access 20 | The Journal | November 2009

would be impossible. Although corporategovernment relations became an accepted appendage of business activities in Japan, more often than not, government relations meant relations with Washington, not so much Tokyo, in order to force largescale regime change in Japanese business practices.

Today, government relations are very much an accepted part of the corporate landscape in Japan and the most effective government relations take into account the need to not only maintain positive relations with the U.S. government. Just as important—if not more so—are positive partnerships with a broad cross-section of key organizations and people in the Japanese government, business and trade associations, consumer groups, academia and the media. Today, for the most part,

confrontation has been replaced by partnership and the means to impact policy in Japan.

What is your view of this transition from confrontation to seeking out policy partnerships?

It’s a very positive one. But as the old adage goes: “If all you have is a hammer, everything looks like a nail.” We all have our favorite “hammer” to use when approaching government relations in Japan.

Over the past 25 years, mine has been to search out policy partnerships on this side of the Pacific—in Japanese government, politics and business—when advocating the interests of my U.S. corporate clients. In the 1980s and ’90s, some might have seen this as a “sell-out” to the Japanese—we sometimes forget how heated the trade disputes

ON THE SPOT were at that time—but down the years it has always proved to be the most effective approach for my U.S. corporate clients.

Government relations has changed over the years, but with fewer trade disputes on the horizon, does it have a role today?

The need for government relations is even more important today than it was 20 years ago. Much of Japan’s economic future will be determined by public policy, and this, in turn, will dramatically change the competitive infrastructure of many sectors in Japan. For instance, creation of a more competitive and efficient service sector will be crucial to future growth in Japan. This means that public policy will increasingly be used as a tool to transform sectors such as healthcare, financial services, travel and tourism, energy distribution and telecommunications. By partnering with domestic interests in government, politics and business, U.S. firms should be in a position to anticipate, if not actually influence, positive policy outcomes in these areas. Failure to do so will put these firms at a competitive disadvantage.

How has the emergence of the new government affected the role of government relations?

I believe that the policy-making process will become more transparent to the casual observer and there will be more open participation for “outsiders,” both of which are very good for Japan and U.S. corporations.

When I worked for a member of the Liberal Democratic Party (LDP), I asked him what was the best way to follow policy development. He advised me to attend the weekly LDP committee meetings, where key members of the party and bureaucrats would gather to debate policy, decide budget allocations, and finalize legislation for submission to the Cabinet Office and then to the Diet.

By attending these meetings over the years, I was able to observe the close interaction of the politicians, bureaucrats and selected private-sector business interests, and understand the balance of power among these three groups. But most of these meetings were closed to all but politicians, bureaucrats and their staff.

Given the LDP’s majority in the Diet, by the time policy was decided in the LDP, the subsequent public debate in the Diet was perfunctory and unenlightening—to say the least.

With the creation of the National Strategy Bureau, the Democratic Party of Japan (DPJ) appears to be splitting the roles of campaigning and policy-making by bringing the debate and formulation of policy into the government, where it will be more openly debated and, hopefully, more transparent to the Japanese people. In this sense, the DPJ will become more similar to a political party in the U.S., where the party organization focuses on campaigning and taking care of the party faithful, while policy debate and formulation is left to party members who are politicians in Congress.

What impact will this more open approach have on U.S. business?

The DPJ’s more populist stance, combined with its more open approach to debating policy and drafting legislation, means that power will gravitate to the politicians and away from the bureaucrats and, to a certain extent, away from big business. This means that politicians will need to focus on a larger cross-section of the Japanese people when considering policies.

Of course, the traditional interest groups will not disappear anytime soon, but we should expect the rise of more consumeroriented interest groups. For instance, we are likely to see the rise of interest groups that focus on the needs of retired people, single mothers, or parents of disabled children, or those concerned about preserving Japan’s environment.

As these new voices are heard in the halls of the Diet, and politicians attempt to address a more pluralistic set of interest groups, policy-making in Japan will become much more fluid and dynamic, and, perhaps, result in some unexpected outcomes.

All of this means that U.S. businesses will need to target a much broader crosssection of organizations and key individuals for their government relations strategy, and certainly politicians will require more strategic focus than before.

What does this mean for government relations in Japan?

I have always been amazed when Japanese involved in government relations tell me with a straight face that government relations, meaning advocacy, does not exist in Japan. But that is a little like asking a goldfish what it feels like to be wet. Traditional Japanese interests involved in government relations are so much a part of the policy-

making fish bowl that they do not even recognize what they do as government relations. However, as more opportunities arise for outsiders, whether they be Japanese or not, to participate in policy discussions that lead to regulatory change, I believe that those involved in government relations as specialists will have more of an opportunity to represent the interests of those who traditionally have been left out of the policy-making process. That will be a good thing for Japan, its economy, and for U.S. busiJulian Ryall is The Daily nesses that have a strategic, Telegraph’s Tokyo well-executed government correspondent. relations program. ■ November 2009 | The Journal | 21

From left: Kiyotaka Fujii, President, BetterPlace; Martin Murray, Manager, Asia-Pacific Hybrid Engineering, GM; Paul Sands, General Manager (Japan), Virgin Atlantic; and Patricia Bader-Johnston, ACCJ CSR Committee Chair.

ACCJ Event GREEN MARKETPLACE FORUM: THE FUTURE OF WHERE WE LIVE & WORK AND HOW WE GET AROUND

By Alana Bonzi Photos by Aron Kremer

T

hree ACCJ committees— Corporate Social Responsibility; Architecture, Construction & Real Estate; and Environmental —hosted the forum held in the Four Seasons Hotel Tokyo at Chinzan-so.

The afternoon session on Green Mobility focused on how to reduce emissions and still get around.

The opening keynote address was

by Mayor Hiroshi Nakada, former mayor of Yokohama, followed by a panel discussion involving Martin Murray, manager, Asia-Pacific Hybrid Engineering, GM; Paul Sands, general manager (Japan), Virgin Atlantic; and

22 | The Journal | November 2009

Kiyotaka Fujii, President, BetterPlace.

The session ended with a stakeholder dialogue on future trends and business opportunities.

If you had ¥5 billion, what would you spend it on? This was the question Mayor Nakada asked his electorate when he began his environmental program in 2002. Five billion yen amounted to savings from reductions in garbage and attendant incineration—30% less garbage. This was the discrete goal, followed by town hall meetings and citizen-initiated activities that formed the cornerstone of a mixed approach to his environmental agenda, “Raise awareness, encourage action.” The

result is that now in Yokohama, 50% of the junior and senior high schools will have PV cells; ¥100 million of subsidies were distributed to 900 homes. That awareness has risen, and there was a 40% reduction rate in 2008 in the amount of garbage collected are good signs, but the agenda is not a smooth one. Resource recovery can be an economically thorny issue. Take used PET bottles, for instance.

They are exported, like used paper, to China for processing and then reused here in Japan. The raw material no longer processed here has led to swathes of smaller players being locked out of the market as they cannot adapt their expertise to compete with China.

ACCJ EVENT

From left: Gordon Hatton, ACCJ Architecture, Construction & Real Estate Committee Vice Chair; Rebecca K. Green, ACCJ Environmental Committee Chair; and Professor Shinichi Tanabe, Department of Architecture, Unit for Indoor Climate & Energy, Waseda University.

Chad Stewart, ACCJ CSR Committee Vice Chair

Miwa Mori, Architect (Germany) Key Architects

Kenichi Ishida, Head of Global Warming Prevention R&D Institute, Environment Improvement Department, Sekisui House Ltd.

But there is some expertise unique to Japan that makes multinational companies set up their R&D operations here. Kiyotaka Fujii of BetterPlace, a key infrastructure player in green mobility space, explained: “Japan has an accumulated knowledge of EVs [electric vehicles].” R&D started in earnest in 1973 during the first oil shock. Japan’s vulnerability and high dependency on oil drove the need to innovate. The world is a different place now. The lucky constellation of global public opinion that accepts eco-friendly values, erratic oil prices, current woes of the three big U.S. manufacturers and the declaration by the Chinese government that EVs

are the future—and the increasing affordability of electric vehicles (most importantly, in terms of battery price)— mean that Japan’s time has come. The two big markets, the U.S. and China, are ready, not for a symbolic gesture—like a government fleet of a few EVs—but mass adoption, where the goal is to reduce emissions. BetterPlace’s starting point is in the present and looks toward the future. Right now, the obstacles to buying EVs are battery price and range, or more precisely range anxiety (EVs generally run less than 100km before having to recharge). BetterPlace offers a leasing option for the battery, extends the range and reduces the risk of owning

obsolete technology by offering a battery switch. With launches in Israel and Denmark, Fujii and his team shoulder the customer’s and the manufacturer’s burden and absorb the risk.

IT is an important component of BetterPlace’s system, so it’s no wonder that BetterPlace was started by former SAP executives. An onboard system navigates the cars to the nearest source for a battery switch. So the anxiety is mitigated as the range is increased threefold via the switch, and price is reduced through a leasing plan.

BetterPlace plans to roll out its system with Tokyo taxis. They are ideal: there is a limited variety, so a reduced need

November 2009 | The Journal | 23

ACCJ EVENT

Mayor Hiroshi Nakada, former Mayor of Yokohama

Tim Cipullo, Officer, Environment, Science & Technology, U.S. Embassy

for different kinds of batteries, and the LPG structure is ageing. Finally, taxis in Tokyo are highly visible. Since Tokyo is the world’s second-largest market for taxis (Beijing is the largest) and has the highest concentration of foreign companies conducting Asia-Pacific operations (51 in Tokyo; #1 on Fortune Global 500 cities’ list, followed by Paris with 27), taxis here are symbolic and an icon that can open markets in other countries.

3-5%.” So Virgin works on reducing its impact either through fleet decisions (weight reduction, waste management) or through only providing fair trade coffee, and having a good offsetting scheme. Most importantly, Virgin works with the industry to develop solutions tactically and technically, either via air-traffic management systems, or by spearheading new fuels.

Last year in February, Virgin, Boeing and GE made a test flight from London to Amsterdam with engines powered by biofuels. Since then, Air New Zealand, JAL and Continental have followed suit, always with an increased proportion of biofuels. Virgin is also investing in algae biomass, which the company sees as the biofuel with the most potential in the short term. But biofuels have their downside, as Virgin found out. Friends of the Earth campaigned heavily against the use of biofuels that compete for food and water, so now the airline has stringent conditions and criteria on the kind of biofuels it selects.

The future short term and long term, GM’s Martin Murray believes is predicated on the “displacement of petroleum through energy diversity.”

He presented a scenario where the co-existence of different sources of

SNAPSHOT GMF Morning Session: Green Buildings The Green Marketplace Forum opened with a focus on green buildings. The keynotes set the general theme of carbon reduction—with Tim Cipullo, U.S. Embassy Environment, Science and Technology officer, followed by Tokyo Metropolitan Government Planner Yuko Nishida. Themes such as thermal comfort and productivity, sustainable communities and Japan’s first certified Passive House Project in Kamakura were taken up by the panelists. The latter included Waseda University’s Professor Shinichi Tanabe, Sekisui House’s Kenichi Ishida and architect Miwa Mori.

Symbolism is also key at Virgin Airlines. Paul Sands explained: “The public perception is that the aviation industry contributes 70-80% to Global Warming when, in fact, it is only

24 | The Journal | November 2009

energy was the norm. All three panelists spoke of a balance between localization, or customization, and standardization.

Depending on the attributes of the market, varied sources of fuel stock could be used to make a homogenous or standard biofuel.

But who decides and implements the standard? Ideally the government should. During the stakeholder dialogue, Randy Krieger, president of Ford Japan, suggested that government can help provide structure by ensuring that across jurisdictions there is some level of homogeneity in key components (like fuel or electrical frequency). Business lobby groups like the ACCJ can help— according to Gordon Hatton, executive officer of Bovis Lend Lease and ACCJ ACRE Committee chair; Timothy Langley, president of Langley Enterprise; and Jean-Pierre Bolat, partner at Articmaster Japan—as well as advocate and provide up-to-date information on international standards.

Alana Bonzi In the meantime, what is an adjunct can you do now to reduce lecturer at Keio emissions and still move University and a consultant. around? Put air in your tires! ■

ACCJ 2009 CHARITY BALL

CONTINUING A TRADITION OF GIVING

By Jeffrey Shimamoto

T

he ACCJ’s year-end event hopes to get everyone back “In the Black.”

The ACCJ 2009 Charity Ball, “In the Black,” will be held on Friday, December 4, 2009 at The Westin Tokyo Hotel in Ebisu starting at 6:30 p.m. The price is ¥22,500 per person.

This annual ACCJ tradition marks the end of the year for the American business community in Japan. The Charity Ball in years past has been attended by some of the most powerful and influential Americans in Japan, including the U.S. Ambassador and his wife, and the Chief of the Army, Navy, Air Force and Marines.

The theme for this year’s Charity Ball is “In the Black,” aptly named to emphasize the Chamber’s commitment to helping its member companies and the charities the ACCJ supports get back “In the Black.” As for the evening’s activities, as we do every year, we will have a silent auction, live auction and a raffle. As a special treat this year, we will have a full Las Vegasstyle casino. The professionals at party casino-operator Bright, Inc. have agreed to prepare a full Las Vegas-style casino with blackjack, roulette, baccarat, big six and big & small for our Charity Ball.

The way the casino works is if you buy a certain number of raffle tickets, you will also get a corresponding amount of casino chips with which to gamble. If you lose all your chips, you still have your raffle tickets, so there’s no way to lose by evening’s end. If you win more chips, then you can exchange them for more raffle tickets. So, be prepared to let it ride!

This year’s Charity Ball Committee is under the co-leadership of Barbara Hancock and yours truly, who work closely with the caretakers of the Community Service Advisory Council, which carries out the philanthropic efforts of the ACCJ. Despite these challenging economic times, ACCJ member companies have been very generous in supporting the Charity Ball and its primary charities. We can all truly take pride in the accomplishment of donating more to charity each and every year.

All financial donations in excess of costs will be donated by the ACCJ to the following primary charities: • YMCA Challenged Children’s Project – YMCA/ACCJ Ohisama Camp, a Tokyo YMCA Center program held in late summer, in cooperation with the ACCJ, where an expected 40 children with conditions such as Asperger’s Syndrome, Attention Deficit Hyperactivity Disorder, Information Processing Disorders and other Learning/Developmental Disorders can enjoy the outdoors and participate in camp activities.

• Nonohana-no-ie (Wildflower House), a secure home-like environment for hundreds of Japanese and non-Japanese children, who are the victims of child abuse, neglect and other inhumane treatment.

• Waku Waku Workshop, a safe place for those with sight, speech or hearing disabilities to improve their involvement in the community through activities with all the participants, staff and volunteers.

November 2009 | The Journal | 25

TRAVEL & LEISURE

Special Advertising Section

Integral Part of the Community

H

ow many people are aware that the City of Kobe is all about “Travel & Leisure”? It actually is. But I am not talking only about the beauty of its geographical and topographical features, nor fascinating historic intrigue. At the forefront of cross-cultural exchange, the city has experienced an influx of diverse artistic traditions, which has led to a multilayered mix of cultures to coexist. If you visit the ocean-side Meriken Park, at the south end of the city center, you will see today lines of containers holding the artwork of various artists. The reason is Kobe Biennale 2009, held October 3-November 23, with the park being the main venue. Having been inaugurated in 2007 by the City of Kobe, with assistance from the Hyogo Prefectural government, the event embodies a number of purposes, including “Presenting Kobe’s image to the world”; “Discovery and cultivation of up-and-coming artists”; “Cross-pollination and fusion of a broad spectrum of arts and culture”; “Drawing upon the arts and culture for urban development”; and “Linking artistic and cultural activities.” The Biennale attracted 144,000 people in 2007, and aims for 200,000 visitors in 2009.

Kobe has been garnering recognition as “The City of Fashion” for the past five years. With backing from the city, the Kobe Shimbun and the Kobe Chamber of Commerce, the Kobe Collection held its 15th fashion show this August. The Collection has grown steadily since the first show in 2002, with the latest one selling 11,000 tickets, and is now a core event of the semi-annual Kobe Fashion Week since 2006. The terms “Kobe Fashion” and “Kobe Style” are now widely recognized throughout Japan. Kobe Jazz Street, one of the biggest traditional jazz festivals in Japan, celebrated its 25th

anniversary this October. Kobekko, Kobe-born citizens, are proud to say the country’s jazz started from their city when a band was formed in 1923. Kitano is not only a popular tourist area where you can view various European-style houses from 100 years ago, but also famous for its good jazz spots. Kobe Jazz Street is held along the Kitano slope, where people wearing an admission tag can freely enjoy jazz at some 15 participating venues.

The City of Kobe proactively invests in such cultural events, especially since experiencing the Great Hanshin-Awaji Earthquake of 1995, and sees such support as energizing and vitalizing the community. Further enhancement is seen in the city’s participation in UNESCO’s Creative Cities Network and Kobe’s pursuits as a City of Design.

The hospitality sector is proud to be a part of the community.

This year, Kobe has suffered under the H1N1 flu—more than any other Japanese city, with the country’s very first reported case here back in May. Kankeiren (Kansai Economic Federation) reported in August that the economic impact from the H1N1 outbreak through the region back in May was estimated at ¥131 billion (GRP basis). One of the most affected industries, needless to say, was tourism and the hotels. In order to stimulate business and the community’s economy, the sector proactively has participated in the promotional activities headed by the Convention and Visitors Association.

George Koumendakos General Manager Crowne Plaza Kobe November 2009 | The Journal | 27

TRAVEL & LEISURE

Special Advertising Section

Air Canada

Crowne Plaza Kobe

Tel: 03-5405-8800 (in Tokyo) Toll-free: 0120-048-048 (from outside Tokyo) Web: www.aircanada.jp

Tel: Fax: E-mail: Web:

Air Canada, together with Air Canada Jazz, provides scheduled and charter air transportation for passengers and cargo to more than 150 destinations, vacation packages to over 90 destinations, as well as maintenance, ground-handling and training services to other airlines.

Canada’s flag carrier is recognized as a leader in the global air-transportation market by pursuing a strategy based on valueadded customer service, technical excellence and passenger safety.

Air Canada offers electronic ticketing and Web check-in on most North American and international routes, and continues to expand convenient online services, simplified fare products, innovative multitrip Flight Passes and self-service check-in kiosks.

ANA Crowne Plaza Osaka Tel: Web:

06-6347-1112 www.anacrowneplaza-osaka.jp/english/

As part of the IHG ANA Hotels Group Japan, the ANA Crowne Plaza Osaka represents the newest luxury hotel in Osaka—offering the highest international standards of quality and service. As “The Place to Meet” for business or pleasure, the ANA Crowne Plaza Osaka offers 478 newly renovated guest rooms, excellent banquet and business facilities, an award-winning lobby and lounge featuring live entertainment, seven restaurants, an indoor pool, 24-hour fitness center and luxurious Club Floor rooms with a Club Lounge—all supported by a friendly bilingual staff. Guests are also provided the finest modern amenities, including a fully equipped business center with high-speed Internet access and PC; copy, fax and printing services for all your business needs.

The hotel is centrally positioned in the main business district of Umeda, known for its dining, shopping and entertainment. A conveniently located 10-minute walk from JR Osaka Station, Umeda Station on the Hankyu and Osaka City Subway lines, provides easy access to all major transit hubs in Osaka, as well as to Kobe, Nara and other key Kansai regional destinations. Whether in town on business or with the family, make the ANA Crowne Plaza Osaka your first choice of accommodations in the Kansai area.

28 | The Journal | November 2009

078-291-1121 078-291-1151 info@cpkobe.com www.cpkobe.com www.crowneplaza.com

Crowne Plaza Kobe, a well-known landmark, is quickly becoming the meeting place of choice for discerning guests from all over the world.

Some 592 accommodations are fully equipped with free highspeed broadband. A wide variety of restaurants and bars include Japanese, Italian, Chinese and other cuisine to meet your needs.

Some 23 function rooms range from small meeting rooms to large banquet rooms accommodating 2,500 guests buffet-style. Our staff assist in planning and managing your event, right down to the finer details. We provide the optimum in facilities for your successful business meetings and events.

Being adjacent to Kobe’s Shinkansen Station, and only a 10-minute walk from Sannomiya, our hotel has easy access to major transportation options. The Kobe Airport is 20 minutes away, Kansai International Airport only 65 minutes away.

After your meetings, Crowne Plaza Kobe becomes a relaxing amenity. The hotel is perfectly located on the hillside of the National Park to view Kobe’s famous night-time panorama. Other specialities are a world-famous Angsana Spa that gives you the refreshing blend of treatments to rejuvenate the body, mind and spirit, as well as a swimming pool, sauna and training gym. The hotel provides refreshment after your busy day.

Kobe’s “Place to Meet”—Crowne Plaza Kobe.

Evergreen Outdoor Center Tel: Fax: E-mail: Web:

0261-72-5150 0261-72-8056 tours@evergreen-outdoors.com www.evergreen-hakuba.com

Hakuba is the gateway to the Japan Alps, with massive peaks and long ski runs featuring a snowfall of over 12m per year. Since 2000, Evergreen Outdoor Center has provided outdoor recreation activities, ecology tours and mountain safety courses in the region.

Our programs that run year-round offer professional, safe and environmentally sustainable tours for all abilities. The aim is to instill

The Pacific Islands Club Tel: E-mail: Web:

03-3436-0777 (for inquiries/reservations) reservations@picsaipan.com www.picresorts.com

The Pacific Islands Club (PIC) is the ultimate family resort in Guam and Saipan. We boast an all-inclusive facilities concept where guests can enjoy over 40 (Saipan)/70 (Guam) different sports and recreational activities at no additional cost. PIC has by far the best and most exciting water attractions. At PIC-Guam: our “Swim-thru Aquarium,” waterslides and various games at seven different pools. At PIC-Saipan: our “Point Break Wave Machine,” where you ride a perpetual wave machine and rage down one of two 20m waterslides. For PIC’s younger guests ages 4 to 12, a daily activities program is available by enrolling in our Kids’ Club, where your children can experience a unique international environment created by our Clubmates. Both Guam and Saipan have built the Siheky Splash Pools for our youngest guests.

PIC takes pride in our friendly, seasoned staff who make your stay pleasurable, exciting and educational.

When it comes to comfortable accommodations, as well as excellent choice of restaurants, PIC makes guests feel welcomed.

Whatever you do, PIC has it all for your next holiday.

Sakura House / Sakura Hotel Tel: Web:

03-5330-5250 (Sakura House) www.tokyo-hotel.jp/

Since 1992, Sakura House has been the pioneer in managing monthly guesthouse and furnished apartments exclusively for foreigners in Tokyo. Now we have expanded to 211 locations throughout the capital, and currently house around 2,000 residents from more than 80 countries. Sakura House provides not only a place to live, but also many opportunities that facilitate cross-cultural communication through various organized events and workshops throughout the year.

Our office is in Shinjuku, and open 7 days a week with staff speaking English, French, Spanish, Korean and Chinese.

Our sister company, Sakura Hotel, enjoying nearly the same length of history, has been running economy hotels under the same concept and hospitality as Sakura House. Their hotels are located in Jimbocho, Ikebukuro and Hatagaya, and Sakura Hotel also runs a hostel in Asakusa for backpackers and group travelers. Room rates start from ¥6,090 for single rooms and from ¥9,000 for doubles, as well as ¥2,940 for dormitory beds. Both Sakura hotels and hostel have been highly recommended in English guidebooks such as Lonely Planet and Rough Guide, as well as guidebooks published in other languages around the world.

Yaesu Fujiya Hotel Tel: Fax: Web:

03-3273-2111 03-3273-2180 www.yaesufujiya.com

Situated five minutes from the Yaesu south exit of Tokyo Station, the hotel is within easy walking distance to Tokyo International Forum or the Ginza area. With quick access to eight rail and subway stations, connecting to 20 transit lines, it is an ideal location for business and tourist travelers alike. Also you can directly access Narita International Airport by taking an airport limousine.

We have a wide range of accommodations, from practical Westernstyle rooms to quiet, restful Japanese rooms, so that you can enjoy a relaxing stay. Internet connection is available in all rooms. We provide excellent culinary options with Dining and Bar Wisteria offering delicious fare for breakfast, lunch, dinner and cocktails, as well as Japanese restaurant Katsura.

Our versatile facilities, including banquet halls and conference rooms, can meet all of your needs: be it for a party, wedding reception, business meeting or other kinds of functions.

We look forward to serving you soon!

November 2009 | The Journal | 29

TRAVEL & LEISURE | Special Advertising Section

a love for the outdoors, while venturing along a path of adventure, personal challenge and teamwork.

Tune up your skills with a ski or snowboard lesson, take a relaxed day in the forest on snowshoes or ride some steep and deep powder riding in the backcountry. Children will have a ball in our Kids Camps, where the emphasis is on skill development and fun on the slopes.

Parents can feel at ease that their children are learning proper ski technique and having a great time with other kids of the same ability.

The younger ones can also be dropped off at our daycare where they can play inside and outside in the snow. Lunch is also available for full-day lessons and daycare.

Experience Hakuba and allow Evergreen to set up a winter getaway you won’t soon forget. 4377 Hokujo Hakuba-mura, Kita-Azumi, Nagano-ken

The Closing of the Japanese Mind

T

here I was, sitting high on the podium in front of some 100 senior executives from Japanese companies. Joining me on the panel were two CEOs from Japan’s Fortune 50 companies. “Corporate Governance and Leadership in the post-Crisis World” was the subject we were to discuss. The presentations had gone well, predictably thoughtful and ambiguous.

And then I almost fell from the stage as one of my fellow panelists answered a question about human capital and management training from the audience by boasting: “The American model of capitalism is dead. American universities are bankrupt, both financially and intellectually. Sending our young employees to an American business school is a complete waste of time. Future leaders will have to be educated in Japan. In my view, that is one of the important lessons from this global crisis.” Wow. So much for subtlety.

Now there is nothing wrong with a bit of anti-capitalist rhetoric mixed with a more critical view about America—hardly original thinking in the post-crisis world. But what is astounding is the incredible ferocity with which the Japanese appear to be closing their minds and withdrawing from the world. My fellow panelist nicely pinpointed a general trend where, indeed, fewer and fewer Japanese are studying overseas. Unfortunately, this is greatly at odds with the increasing globalization of corporate Japan—overseas investment by Japanese companies buying

30 | The Journal | November 2009

companies or building factories, retail shops, or service outlets outside Japan has increased almost three-fold in the past two years. If capital is invested overseas, but human resources are not educated to be international, how can this work?

The data speaks for itself and is outlined in the table “International Students in the U.S.” So while the number of international students in America has grown by almost 30% in the last 10 years (1998 to 2008), the number of Japanese students studying in the U.S. has dropped almost 30%. The peak year for Japan was 1998, with her 47,073 students making up almost 10% of all international students in the U.S. By 2008, the number was down to 33,974, which is just above 5% of the total.

Japan’s absolute and relative decline stands in contrast to explosive growth in Asia’s youth seeking education in the U.S. There are now more than two-times as many Koreans than Japanese studying in America, while 10 years ago there were slightly more Japanese. Young Indians (94,563 students) outnumber the Japanese by almost three-fold now, and there are almost 2.5-times more young Chinese (81,127 students). In 1998, Japan had still been on top.

To take this to the next level, let us look at the number of students actually going to graduate school. This is the place where the really high value-added, creative smart power is most likely to be educated. As the table “Global Smart Power” outlines, the gap separating Japanese from Asian competitors gets even

JESPER KOLL WRITES

International Students in the U.S. 1998

2001

2004

2008

Total

481,280

547,867

572,509

623,808

Japan

47,073

46,497

40,835

33,974

Korea

42,890

45,685

52,484

69,124

India

33,818

54,664

79,736

94,563

China

46,958

59,939

61,765

81,127

9,309

10,128

8,745

8,907

Germany

INSTITUTE FOR INTERNATIONAL EDUCATION; JESPER KOLL

Global Smart Power International Students in the U.S. – Graduate School Total

Graduate School

Japan

33,974

6,862 = 20%

Korea

69,124

24,677 = 36%

India

94,563

68,280 = 72%

China

81,127

53,057 = 65%

8,907

3,670 = 41%

Germany

INSTITUTE FOR INTERNATIONAL EDUCATION; JESPER KOLL

wider here. This is because only about 20% of Japanese students studying in the U.S. actually attend graduate school there, with the vast majority only in undergraduate programs. In contrast, 72% of Indians studying at U.S. universities are in graduate school. For the Chinese, it is 65%, and 36% for the Koreans. This means that at the graduate level, there are almost 10-times more Indians than there are Japanese, and almost 8-times more Chinese, and 3.5-times more Koreans.

To be sure, Japan does have very different population dynamics than India, China or Korea. So some of the analysis of the absolute numbers on international students should be taken with a grain of salt. However, the overriding point remains a strong one—in both absolute and relative terms, fewer young Japanese are being educated overseas, are learning about the ways of the world, and are connecting to fellow youth from other countries and cultures in a relatively carefree environment.

Clearly, the crucial value of an international education goes well beyond the coursework assigned, whether it is in bio-engineering, financial accounting or anime filmmaking.

Rather, it is the people with whom you live, the friends you make while studying, and the shared experience of becoming an adult that are priceless, that are a value that no on-the-job training at a closed-circuit Japanese company will ever be able to provide.

So should a firm have a problem with its Indian joint venture, who would be in a better position to find a solution—the

homegrown salaryman who has nothing but the in-house manual to come up with a fix, or the internationally educated manager who has friends and contacts in India to help find out what really has been going on?

Apart from everything else, the bigger point lost on my fellow panelist is that the world’s most high-growth economies continue to send an ever-increasing number of their students to the U.S. for studies. The real cost of Japan’s new closed mindedness could well be that the next-generation of managers and leaders are going to be left without genuine friends in the real world. I am worried that this may turn out to be the biggest fundamental challenge for Japan Inc. to be able to maintain its global leadership and sales-champion position.

My panel discussion ended with the vast majority of the audience seemingly endorsing my call for a new openness and need for more international engagement at the student level.

Whether more companies will actually start to send abroad more junior managers and future leaders for international training Jesper Koll is President and and education remains to be seen. If they CEO of Tantallon do not start to do so soon, it may be too Research Japan. late to reverse the closing of the Japanese mind. ■

Kobe Biennale 2009 October 3-November 23 www.kobe-biennale.jp/about/index_e.php This year’s theme is “wa,” meaning a traditional Japanese element of harmony and peace. This art show is where Kobe’s art scene and potential talents are introduced to the world.

Kobe Meriken Park area, Sannomiya Motomachi Shopping Arcade area, HAT Kobe area

in the international security industry getting together with leading Japanese researchers to share best practices and technology. The most significant new discoveries about computer network hack attacks are presented for discussion.

Aoyama Diamond Hall, Omotesando Station, Exit B5, Ginza Line

Corteo

8th PacSec November 4-5, 10:00http://pacsec.jp/ The conference addresses the growing importance of information security in Japan, with the best-known figures

32 | The Journal | November 2009

November 11-13 10:00-17:00 www.jma.or.jp/jhbs/en/index.html Some 700 exhibitors display at 1,100 booths to 95,000 professionals visiting over 10 zones.

Tokyo Big Sight, East, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

Call Center/CRM Demo & Conference Tokyo

November 4www.cirquedusoleil.com/en/shows/corteo/ tickets/tokyo.aspx Opening of new Cirque du Soleil production, Corteo, which means “cortege” in Italian—a joyous procession, a festive parade imagined by a clown. The clown pictures his own funeral taking place in a carnival atmosphere, watched over by quietly caring angels; the strength and fragility of the clown, as well as his wisdom and kindness, illustrate the portion of humanity that is within each of us.

Harajuku Grand Chapiteau at the National Yoyogi Stadium Olympic Plaza, Yoyogi Park, Shibuya

31st Japan Home + Building Show 2009

November 12-13 http://events.ubm.com/event?eid=344

Asia’s No. 1 Band Competition November 8 12:00- (doors open at 11:00) www.global.yamaha.com/ news/2009/20090403.html Amateur band competition Grand Final involves 13 bands representing 11 Asian countries, under the title “Tokyo Band Summit 2009 vs. Asian Beat.” Sponsored

by Yamaha, the 12th annual event is combining both competitions for the first time, and had received 721 band applications.

National Convention Hall of Yokohama at Pacifico Yokohama, Minatomirai 21, Minatomirai Station, Toyoko/Minatomirai Line

Hardware, software and services for the call center and customer contact center industries.

The 60-story Sunshine City complex, Ikebukuro Station, Yamanote Line

32nd Family Festival at ISSH November 14 10:00-16:00 www.issh.ac.jp Come along for the fun when the International School of the Sacred Heart campus is filled with international food booths— representing a wide variety of countries with fabulous authentic cuisine and a

EVENTS LINE-UP

glimpse into many cultures—and carnival games, live entertainment showcasing celebrations and art forms from all around the world, vendors, and a raffle with exciting prizes.

A 10-min walk from Hiroo Station, Tokyo Metro Hibiya Subway line, Tel. 03-3400-3951

XXth Regional Congress of the ISBT, Asia November 14-18 www.isbt-web.org/nagoya/ The International Society of Blood Transfusion is a world-renowned scientific society (1935) bringing together professionals from more than 95 countries. Internationally recognized specialists are featured. The Congress also focuses on blood transfusion services in resource-limited countries.

The large commercial exhibition covers pharmaceutical items and technical equipment.

Nagoya Congress Center, Nagoya, Hibino Station, Meikou Line (10 min)

attracting over 23,000 professionals.

Tokyo Big Sight, West 1-2, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

CoMHI in Hiroshima 2009 November 21-25 http://home.hiroshima-u.ac.jp/~humind1/ comhi2009/CoMHI-brochure01.pdf The Collaborative Meetings on Health Informatics centers on “Health Information Is the Global Resource – Sustainable Step in Security, Service, and Symphony.”

International Conference Center, Peace Memorial Park, Hiroshima, from Hiroshima Station (South Exit, A-3), No. 24 Hiroshima Bus for Yoshijima to bus stop “Peace Memorial Park” (20 min)

Mariinsky Ballet Japan Tour November 22, 23, 27, 29 & 30 www.japanarts.co.jp/english.htm

Labor Thanksgiving Day November 23 Kinro kansha no hi is a National holiday.

Taxes Seminar Offshore Investments: The truths, the myths, the facts November 25, 18:30www.isgjapan.com/events.cfm The subject of offshore investments and bank accounts has been a hot subject in the news for the past year. However, rumors outweigh truths in the current environment. What are the real truths of investing in foreign investment funds, bank accounts and other investment vehicles? Experienced international tax adviser Charles Rees introduces the ins and outs of holding international investments. There is a way to make the system work for you.

Shangri-La Hotel Tokyo; Tokyo (Yaesu North), Otemachi (B10), or Nihonbashi Stations (A3)

JISSE-11 November 25-27 www.sampe.org/events/calendarevents.aspx

27th INCHEM Tokyo 2009 November 18-20 10:00-17:00 www.jma.or.jp/INCHEM/en/index.html

The biennial Japan International SAMPE Symposium & Exhibit reflects how making strides in advanced materials’ development and the fabrication process is very important to realizing new products. Concurrently running are the International Robot and Parts Feeder exhibitions; and Technology Fair for Government-Academy-Industry Cooperation, Regional Advanced TechnoFair, and Patent Distribution Fair in Tokyo.

Tokyo Big Sight, East 3, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

The biennial trade fair for chemical plant engineering and advanced materials attracts 87,000 visitors. Concurrently running is the ECO-MAnufacture 2009 that includes the Battery Messe; Technologies for Efficient Utilization of Water; Separation & Collection of CO2; and Collection, Recovery and Alternate Materials of Rare Metals.

Tokyo Big Sight, East 1-3, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

University Researchers www.sis.lab.u-ryukyu.ac.jp/en

33rd Measurement & Control Show November 18-20 10:00-17:00 http://expo.nikkeibp.co.jp/jemima/ english/ Japan’s largest biennial trade show of its kind offers an exhibition site consisting of five zones by product categories,

Tchaikovsky’s Swan Lake. Artistic & General Director: Valery Gergiev. From St. Petersburg, Russia.

Kanagawa Kenmin Hall (22nd & 23rd), Nihon Odori Station, Toyoko/Minatomirai Line; Tokyo Bunka Kaikan (27th, 29th & 30th), JR Ueno Station, Park Exit

The University of the Ryukyus in Okinawa is involved in the Rising Star Program for Subtropical Island Sciences, supported by the Ministry of Education, Culture, Sports, Science and Technology. Interviews conducted in Japanese or David Umeda is English in mid-November 2009, Senior Editor at Paradigm with results made public at month’s end.

November 2009 | The Journal | 33

Making a Difference

Tokyo’s financial industry will come together again on November 29, for the fifth annual Financial Industry in Tokyo (FIT) For Charity Run, to be held at the National Kasumigaoka Stadium in Shinjuku Ward. Funds raised will be donated to the following seven non-profit community organizations based in the Tokyo area: Florence, Japan Hearing Dogs for Deaf People, Kibo-no-ie, Nonohana-no-ie, PALETTE, Place Tokyo and The Tyler Foundation for Childhood Cancer.

Established in 2005, FIT For Charity has already supported 22 charities through participation by approximately 14,000 individuals from the leading companies in Tokyo’s financial community. Last year, nearly 94% of funds collected were passed directly on to the nominated charities. The event has grown rapidly from more than 1,500 participants and more than ¥16 million donated in 2005 to nearly 4,900 participants last year and approximately ¥55 million donated.

“FIT For Charity’s growth is a testament to the financial industry’s commitment to positively contribute to the Tokyo community. This past year has been a critical one for our industry and it is now more important than ever that we work together and demonstrate that commitment. FIT For Charity Run 2009 promises to be a fun event that will generate meaningful financial support for local community organizations,” said Guy Matthews, co-chair of the Organizing Committee.

Composed of volunteers from mainly foreign financial institutions, FIT is focused on social issues generally underrepresented in Japan, including homelessness, domestic violence, juvenile delinquency, hunger, child abuse, other social crimes, HIV, as well as disease and disability.

Luxe Launch Italian luxury fashion brand Roberto Cavalli has opened its first shop-inshop inside the high-end Shinjuku Takashimaya department store.

The third-floor 32m2 space houses all the Roberto Cavalli women’s collections, including accessories, sunglasses and jewelry, along with some accessories for men.

Designed by Cavalli himself, with Italian architect Italo Rota, the boutique displays “cutting-edge structural technology in harmony with tactile textile elements,” according to Cavalli.

To celebrate the opening in September, Cavalli designed some exclusive limitededition items that include a tote bag and

34 | The Journal | November 2009

wallet in his signature animal print in silver.

Roberto Cavalli was established in Florence in the 1960s and today is available in more than 50 countries.

The brand is popular with celebrities, including Victoria Beckham, and is well known for its eye-catching prints and bold use of color.

FDI PORTFOLIO

Expanding Art

Long-time Japan resident and artist, David Stanley Hewett, continues to go from strength to strength, with his work in demand in the corporate sector despite the protracted slump.

“Following on the enormous success of his Takashimaya exhibition last fall, his number-one selling obi and line of

yukata, Hewett’s art continues to be in high demand,” says Caroline Pover, who represents Hewett.

He has completed a series of commissioned works for individuals and corporations in 2009, most recently, a large gold leaf and acrylic painting for The St. Regis Hotel Osaka, opening

October 1, 2010. “While the economy remains stagnant, interest in Hewett’s unique modern artwork continues to grow rapidly,” she says.

Ohio-born Hewett has been a teacher, a United States Marine, a banker and a small business owner, all while pursuing his artistic dreams. His works can be found in art collections from Japan to the United States to Europe. Hewett’s art has been in exhibitions in this country, as well as in Singapore and Boston; and his works have been purchased by many other major enterprises, including the Imperial Hotel, The Hotel Okura and The Peninsula Tokyo. According to his representative, Hewett’s longevity in the Japanese market comes down to “creating Japanese-influenced modern art, appealing to both Westerners and Japanese alike.”

Asian Exec

Working in Japan can lead to bigger things. Just ask Wal-Mart Stores Inc., which announced the appointment of Tokyo resident Scott Price as president and CEO of Wal-Mart Asia. Wal-Mart

executive staff usually rise up through the company ranks, but Price was CEO of DHL Express Asia Pacific, president of DHL Express Japan and CEO of DHL Express Europe before landing the coveted post. Also holding the title of executive vice president, he reports to Doug McMillon, president and CEO of Wal-Mart International, and is responsible for the company’s operations in Asia, including the fastgrowing Wal-Mart China and the struggling Seiyu in Japan.

“He has established a history of delivering results in the Asian markets,” McMillon says. “He knows the countries, he knows the customers, he knows how to run a business and he knows the region’s potential.”

For the year ending January 31, Wal-Mart Contact Nicole Fall at nicole@ International recorded sales of $98.6 billion, a 9.1% fivebyfifty.com if increase over the previous year. Wal-Mart has you have ideas about 630 units in China and Japan, and more than for this column.

100,000 associates, according to WWD.

November 2009 | The Journal | 35

INSURANCE & RETIREMENT PLANNING Special Section

Pensions – The Employer’s Challenge in Japan

F

or many Western executives working in Japan, the issue

current exposures and how these comply with the corporate objectives

of employer-sponsored retirement plans raises particular

dictated by global HR and finance policies.

challenges. While expatriates may continue their personal coverage within their employers’ plans back in the U.S.—or

How are we positioned against our competitors and how are we

whatever home country their employment arrangement

responding to changes in the marketplace?

dictates—as business leaders in Japan they need to understand the

Retirement benefit plans typically represent a significant portion

impact of local retirement benefit plans on the business here and the

of total rewards for employees in Japan. These programs are often

responsibility that falls on the leadership team to manage these plans.

expensive to provide and are in the area where market practice has

Employer-sponsored retirement plans are rarely simple, and this is

been changing significantly in recent years. Unlike cash and bonus

as true in Japan as it is elsewhere. While the Japanese social security

compensation programs, these retirement benefit plans can be difficult

system does provide a baseline level of retirement benefits, it is

to benchmark across competitive data. Leadership teams, therefore,

standard practice here for employers to supplement this through

should ensure they understand where their plan sits in comparison to

an employee pension plan. These plans significantly impact cash

their competitors and whether the plan is appropriately designed and

flow, balance sheets and reported expenses. Executives working

targeted. Market practice regarding benefits has been changing rapidly

in leadership positions, ranging from business to HR and finance,

over the last few years—and has a legislative deadline in 2012 for

for foreign-affiliated multinationals in this country will share a

reviewing certain types of plans. Such reviews often result in significant

responsibility for managing such impacts. Typically, these executives

plan changes that demand broad employee communications.

are also on the front lines for communicating with their corporate

Understanding the market position and the need, or desire, to make

office, which may have clear objectives surrounding HR programs

any changes in the plans, as a result, is essential for any company.

and thus find it difficult to appreciate the particular challenges these benefit plans pose in Japan. Complicating matters are the ongoing

Do our employees understand our plan and the value we provide?

changes here, such as the new defined contribution plans (similar to

The provision of a retirement benefit plan represents a significant

a U.S. 401(k) or a UK personal pension) and certain other plans being

cost to many businesses—and significant value for many Japanese

phased out.

employees. Leading employers in Japan and elsewhere are active in

Within this context there are three key questions that a leadership

ensuring that their employees understand—and value—these plans.

team in Japan should ask itself regarding significant HR programs such

Employers, in turn, are looking to receive “bang for their buck” in

as retirement plans.

providing such benefits and ensure that they are adequately addressing their duty-of-care in helping employees’ understand their retirement

Do we understand what we currently offer, and how this impacts our business results?

benefits.

Retirement plans pose significant risk without careful oversight,

A clear understanding of the current plans, including any historical

leading to adverse financial impact on business results. Leadership

promises to closed groups of employees, is essential. This

teams, therefore, need to ensure that appropriate measures and

understanding of the basic plan design is a first step toward ensuring

controls are in place to manage the risk. Successfully doing so allows

that the financial impact of the plan—from both a cash-flow and

these programs to contribute significantly to enhancing employee

funding perspective, as well as from a financial reporting and

engagement, attraction and retention.

accounting angle—is understood and can be managed. Such plans can amount to extremely significant financial exposures, and unexpected

Steve Allan

movements in key capital market indices can produce major financial

Principal, Japan Retirement Leader

shock waves. The management team in Japan should understand its

Towers Perrin

36 | The Journal | November 2009

Address

Toranomon Kotohira Tower 5F, 1-2-8 Toranomon, Minato-ku, Tokyo 105-0001

Tel

03-5521-2180

Fax

03-5521-2189

E-mail

marketingjp@coface.com

Web site

www.coface.jp/

Year established

1995

Staff Size:

60 in Japan

Contact:

Jonathan Perez, Coface Japan, Marketing & Communications

Company Activities / History Cofaceâ&#x20AC;&#x2122;s mission is to facilitate global business-to-business trade by offering its 130,000 customers four product lines to fully or partly outsource trade relationship management, and to finance and protect their receivables: credit insurance, factoring, ratings and business information and receivables management. Coface also offers, in France, management of government export guarantees.

Thanks to the worldwide local service delivered by 7,000 staff in 67 countries, over 45% of the worldâ&#x20AC;&#x2122;s 500 largest corporate groups are already customers of Coface. Leveraging its global presence, Coface offers local services in 97 countries through its partners in the CreditAlliance network, united by shared credit risk management systems.

The Common Risk System, a high-performance database that enables the Cofaceâ&#x20AC;&#x2122;s employees (in particular, the 337 underwriters) and clients to track more than 55 million companies across the globe on a real-time basis, is the backbone of the Coface offering. From now on, Coface offers a universal company search and identification system built around a single identification number: Easy Number.

With the establishment of a local office in 1995, transformed into a fully licensed branch in 1999, Coface showed an early and strong commitment to the Japanese market.

Coface Japan is a leading provider of credit risk management solutions in the Japanese market, through protection of accounts receivables to companies of all sizes, including export credit insurance since May 2005. Coface Japan launched its factoring services in 2006. Companies in Japan are now being provided not only with protection, but also with finance services through Coface.

Towers Perrin Japan Address

Imperial Hotel Tower 6F, 1-1-1 Uchisaiwai-cho, Tokyo 100-0011

Tel

03-3581-6602

E-mail

steve.allan@towersperrin.com

Web site

www.towersperrin.com

Year established

1934

Staff Size:

60 +

Contact:

Steve Allan, Principal, Japan Retirement Leader

Company Activities / History Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and capital management, insurance and reinsurance intermediary services, and actuarial consulting. Towers Perrin has offices and alliance partners in major countries across the Asia-Pacific, the Americas, and EMEA. More information is available at www.towersperrin.com.

Established in Japan 25 years ago, Towers Perrin employs 60 Tokyo-based professional staff providing a full spectrum of HR consulting services.

These services range from HR implications of M&A transactions to retirement plans, executive compensation & rewards benchmarking and design, to employee research, workforce communication and change implementation strategies.

We are a leading consulting firm advising Western and Japanese corporations on realizing strategic business objectives through people. Bringing global best practices to bear while working with local country management and corporate executives to address key HR program design and governance issues, along with program financial reporting and risk management. We also assist organizations to re-align organizational structures to match business plans relevant to recent economic conditions. Please contact Steve Allan at 03-3581-6602 or steve.allan@towersperrin.com with further questions.

November 2009 | The Journal | 37

INSURANCE & RETIREMENT PLANNING | Special Section

Coface Japan

Timothy Langley PRESIDENT & REPRESENTATIVE DIRECTOR AT LANGLEY ENTERPRISE

By Julian Ryall Photos by Tony McNicol

I

f the problem is straightforward and relatively simple, Timothy Langley finds it humdrum. As an expert in Japan’s legal alleyways and a “fixer,” he will make sure that the issue is dealt with and resolved, but it’s the impossible that he gets a kick out of achieving.

This is, after all, the man who chaperoned George H. W. Bush around Japan for five days after he had stepped down from the presidency in 1992. On the first day, Bush mentioned that he would like to meet the emperor, the prime minister, the current foreign minister, former Prime Minister Kiichi Miyazawa, the previous foreign minister, opposition leader Ichiro Ozawa, U.S. Ambassador Walter Mondale and Polish leader Lech Walesa, who happened to be in Tokyo for a two-day state visit.

Langley had arranged everything on that rather daunting wish list by

38 | The Journal | November 2009

the time Bush left the country.

“I love living and working here, just because as a foreigner things tend to be a bit difficult,” says Langley. “It’s just my personality. I am attracted to and compelled by the difficult and the complex.”

His proclivity for the near impossible has been parlayed into a business and legal consultancy that does the jobs that other companies cannot or do not want to get involved with.

Born in Virginia, Langley first arrived in Japan at age 11 when his father was posted to Okinawa with the U.S. military.

He earned a black belt in karate and a deep affection for his adopted home in the five years of his father’s posting. After spending some time in Akita Prefecture teaching English and absorbing more of the language and culture, he won a Ministry of Education scholarship to study law at Tohoku University.

BIOGRAPHY Timothy Patrick Langley ■

Born: Virginia

■

Education: The University of Georgia (BA), Athens, Georgia; Georgetown University Law Center (JD), Washington, D.C.; Georgetown University School of Foreign Service Graduate Program (MSFS); Tohoku University Law School (LLM), Sendai; University of Denver, Sturm College of Law (LLM), Denver.

■

Married: To Akemi

■

Children: Joey (20), Mickey (18), Kelly (16) and Ailey (13)

■

Languages: English and Japanese

■

Hobbies: Restoring old cars

■

Career: Formerly top lawyer for Apple Computer (Japan), General Counsel to General Motors (Japan); Far East Trade & Investment Representative for the US Commonwealth of Kentucky; first non-Japanese inside the Japanese Parliament as aide to a member of the Upper House.

BUSINESS PROFILE SNAPSHOT Langley Enterprise ■ Number of staff: Five ■

Date established: October 2006

■

Location: Nihonbashi, Tokyo

■

Main business: Specialist in legal and corporate issues in Japan, adviser on government affairs.

■

Web site and e-mail address: www.langleyenterprise.com and timothy@langleyenterprise.com

Repeated efforts to sit the Japanese bar exam came to nothing, so he tried his trademark unconventional approach in 1982. Langley convinced a politician that he needed his insight and experience at a time when trade and protectionism issues were the main point of contention between Tokyo and Washington.

Langley’s position as an aide to the Liberal Democratic Party’s Taro Nakayama made the American the first foreigner to work inside the Diet and something of a celebrity—at least partly because of an unfortunate consequence of his family name, according to Langley. CBS “Sixty Minutes” even did a feature on the first “blue-eyed” staffer in the cloistered world of Japanese politics.

Part of Langley’s duties required him to liaise closely with other politicians’ assistants in giving and receiving favors.

While he may have left the political realm, the lessons learned and the contacts made have stood Langley in good stead since. Prime Minister Takeo Fukuda even spoke at the publishing party that was thrown at the Okura Hotel when the book charting his time in the Diet, written in Japanese by Langley, was released.

Langley, married with four children, had spells as chief lawyer advising Apple Computer and General Motors on how to increase their profiles and presence in Japan, and helped Toyota Motor build a factory in Kentucky.

“I know a lot of people and can get things done, which is the way to growth in this country,” says Langley, turning to the legal side of his organization.

“If you get into trouble in this country, sometimes you are just stuck with the result, due to the limited avenues available to seek justice,” he says. “If you’re a foreigner, if you’re old, a single mother— these kinds of ‘demerits’ just tend to line

the system up against you. A lot of the work I do is representing the disadvantaged against a company that has acted improperly, such as firing or a contract breach, even incidents of extortion or whistle-blowing.”

As he is not a certified bengoshi under the Japanese legal system, Langley is not able to represent a client in court or give an opinion on Japanese law, but he is able to guide clients through the regulations, teach them the true sense of their particular situations, or use his wealth of experience to either extract them from a tricky situation or guide them to a bestscenario settlement.

Langley’s cases range from divorce to employment disputes, and include a heavy dose of plain corporate troubleshooting. Nearly 80% of his clients are foreign. Another area that has recently mushroomed is writing wills that meet dual-country legal requirements and are in two languages, satisfying the needs of a Japanese wife and a foreign husband, for example.

“People need a proper will to stop the confusion when someone dies,” says Langley. “All the assets need to be covered, the tax implications need to be dealt with, and everyone needs to feel safe. If not, the damage that can be done to families after the death of a loved one is often impossible to repair. And that is completely avoidable.”

Langley and his five-strong office prepare a couple of wills every month and a divorce—almost always involving spouses of different nationalities, often with children, and frequently complicated—every month.

Langley has been an active member since joining the Chamber, setting up the Government Relations Committee in 1993 and being the driving force behind the creation of what has become an annual institution, the Diet Doorknock.

Doorknock initially was met with great skepticism, says Langley, but what began as an informal tour of the Diet—which attracted 120 people—has grown into one of the key planks of the Chamber’s lobbying activities.

“We are only guests in this country, and I have been here for 36 years, but I still feel I am a guest,” he says. “If I project

“I love living and working here, just because as a foreigner things tend to be a bit difficult. It’s just my personality.

I am attracted to and compelled by the difficult and the complex.” anything other than that, people will think I’m uppity or arrogant, and, in any event, there will always be people who dislike someone who is not like them. That undercurrent is strong here.

“But in this country, you cannot give up,” says Langley. “Even if it’s something like learning the language, you can’t give up—and learning never stops. It takes time and commitment, sure, but we are the ones who chose to be living here.”

For those times when all that effort is still not quite Julian Ryall is enough to overcome a legal The Daily Telegraph’s Tokyo hurdle or break into a new correspondent. market, speak to Langley. ■

November 2009 | The Journal | 39

BEHIND THE BOOK

Japan’s Open Future: An Agenda for Global Citizenship

By John Haffner, Tomas Casas i Klett and Jean-Pierre Lehmann Anthem Press, 320 pp, $29.95 Reviewed by Tom Baker

When American author Alex Kerr gave Japan some tough love in his 2001 book Dogs and Demons, criticizing the political and business establishments for inflexibility and inertia, his tone was one of frustration. Now, a trio of authors from Canada, Spain and France—John Haffner, Tomas Casas i Klett and JeanPierre Lehmann, respectively—each of whom has spent years living and working in Japan, makes similar criticisms in Japan’s Open Future. But, as the title suggests, their tone is more optimistic.

Japan has failed to achieve a world leadership role proportionate to its immense wealth, and pessimists say it is losing its chance to ever do so as China rises and Japan’s population shrinks. But the three authors are not pessimists, even though they vividly depict a catalogue of woes, such as persistent protectionism, low levels of gender equality, ultra-restrictive immigration policies, zombie corporations having soaked up financing that entrepreneurial start-ups couldn’t get, political leaders throwing sand in the gears of their own diplomacy by denying historical realities, an anemic civil society characterized by a dearth of active and visible NGOs, kisha clubs that strangle the flow of information from institutions to the media, a criminal justice system whose 99% conviction rate wouldn’t pass what American lawyers call “the straight-face test,” and much, much more.

The authors argue that Japan can improve its standing abroad and develop a more flourishing

economy at home by shifting from a “modern” nation-state to a “post-modern” society. The former is characterized by jealously guarded sovereignty, protectionism, obedience, conformity and preservation of the existing power elite, while the latter is characterized by international cooperation, free competition, irreverence, diversity and a tolerance for creative destruction.

For the change to occur, the authors write, Japan must “conceive of its self-interest more broadly,” both in the corridors of power and at the grass roots. It’s a tall order, but there is reason for optimism. For instance, the recent introduction of the lay judge system “will help inculcate in citizens a new way of seeing their relationship to the justice system as something no longer external to them.”

Not long after Japan’s Open Future was published, Japanese citizens voted in a government solidly controlled by a new party for the first time in over 50 years. Hopefully, one result will be that this and future governments will become more transparent and responsive—something the authors wish for—thanks to the realization that they can be replaced.

This book is remarkably well edited insofar as the three different authors speak their minds in one clear and smoothly unified voice. But even better editing would have eliminated the typographical tic of putting Asian surnames in all caps and would have brought more transparency to the (ironically) hazy footnotes.

But these quibbles should not distract from the overall validity of the authors’ diagnoses and the Tom Baker is appeal of their prescriptions. Anyone interested a staff writer in a more open Japan will find plenty of realistic at The Daily Yomiuri. encouragement by opening this book. ■ We are giving away 3 copies of Japan’s Open Future. Simply e-mail editor@paradigm.co.jp by November 20. The winners will be picked at random.

Winners of the The Ramen King and I: Eric W. Sedlak, Jones Day; Kenneth G. Smith, Ernst & Young Transaction Advisory Services Co., Ltd.; and Flavio Souza, Japan Market Intelligence K.K.

November 2009 | The Journal | 41

Advocacy Update The ACCJ is pleased to announce its major White Paper for 2009 on the Internet Economy in Japan. For over 60 years, the ACCJ has provided commentary and recommendations on the international business environment in Japan, but in many ways, this White Paper was one of the most challenging projects we have ever attempted because the borderless Internet Economy does not easily fit into the forms of the old economy. Nevertheless, the Internet Economy is an important engine for future economic growth, so we hope this White Paper is the beginning of a spirited and constructive debate on the future of the Internet Economy in Japan.

ACCJ Internet Economy White Paper Achieving the Full Potential of the Internet Economy in Japan

Executive Summary The American Chamber of Commerce in Japan (ACCJ) believes that the global economy stands on the brink of major change with the further expansion of the Internet Economy. This change makes it incumbent on government, businesses and the wider Internet user community to engage in open and vigorous debate to ensure that the benefits of the Internet Economy are available and apparent to all, and that any negative impacts of such change are minimized.

For more than 60 years, the ACCJ has been an advocate of business issues on behalf of the foreign community in Japan. As such, and in the same spirit of cooperation and constructive debate that has characterized its contributions over the years, the ACCJ offers its views on the Internet Economy in Japan in this comprehensive White Paper.

The Internet Economy is the sum of all business transactions – financial, informational and social – over networks enabled by the Internet. The global nature of the Internet means that economies are being linked together in increasingly complex ways at a speed that confounds most observers.

In that context, it is more important than ever before that governments and regulators adopt flexible mechanisms to deal with change, and look to promote innovation and entrepreneurial activity.

The ACCJ believes that the further expansion of the Internet Economy can be transformative for Japan and that the involvement of foreign and multinational companies is critical to this transformation.

The global nature of the Internet Economy changes the discussion. Our goals are not

42 | The Journal | November 2009

limited to the opening of markets in Japan.

We also want to expand opportunities for true partnerships with Japanese firms that will allow all parties to share the responsibility of developing new markets and deploying new business solutions regionally and globally.

The ACCJ Internet Economy Task Force is comprised of leading global companies that have not only led in the development of the Internet, but are also successfully working with traditional industry sectors in Japan to enable them to participate in and gain from the Internet Economy. ACCJ members have an enormous stake in the success of Japan’s efforts to further participate in the global Internet Economy and are committed to working with Government of Japan (GOJ) policymakers and industry leaders in Japan to achieve that success.

We see this White Paper and its recommendations as the start of a continuing dialog and long-term cooperative relationship.

We expect that the issues surrounding the development and growth of the Internet Economy in Japan will constitute a major pillar for future ACCJ initiatives and activities.

This White Paper addresses four principal elements: 1. Basic Principles for the Internet Economy 2. Key Issues for the Internet Economy in Japan 3. Challenges and Opportunities in Utilizing Information and Communication Technology (ICT) 4. Proposal for a U.S. – Japan Internet Economy Dialogue Each chapter also contains a number of recommendations, which are summarized at the end of this Executive Summary.

Basic Principles In the introductory chapter, the ACCJ proposes five overarching principles necessary for the further growth and development of the Internet Economy in

Japan, which are as follows: 1. Transparency 2. Simplicity 3. Fairness 4. Consistency 5. Global Harmonization Inherent in all five principles are the requirements for consultation, clear lines of accountability with avenues for redress, unambiguous roles for public and private sectors, a “single voice” for Japanese government policy and the over-riding need for global rather than “made-in-Japan” solutions.

Regulatory Issues The chapter on regulatory issues argues for the creation of a GOJ regulatory framework that incorporates a more global view, promotes innovation, balances legitimate business needs against consumer concerns, and allows market forces to determine commercial outcomes. The regulatory discussion covers the following six major areas: 1. Government Reorganization and Leadership 2. Nippon Telegraph and Telephone (NTT) Reform 3. Spectrum Policy Reform 4. Privacy, Security and Data Portability 5. Intellectual Property (IP) and Online Content 6. Standards and Innovation Key among the recommendations are the need for a new and comprehensive legal framework, the creation of an independent regulatory authority, clarity around leadership roles and responsibility, a possibly wider role for the Japan Fair Trade Commission (JFTC) and the creation of professional certification standards for government and private sector Chief Information Officers (CIOs).

The ACCJ also calls for an immediate start to the debate around NTT’s future role and

status and a complete overhaul of spectrum policy, including the introduction of spectrum auctions and spectrum trading, as well as support for unlicensed use of “white space.”

We recommend a review of privacy policy to ensure clarity and consistency. We also caution on restricting and “filtering” of Internet content and urge the adoption of global standards to facilitate the free flow of data.

Additionally, we believe that Japan should further strengthen the protection of IP in the online environment, reform the copyright levy system, and encourage the creation and distribution of online content while relying primarily on industry initiative and supporting efforts to combat piracy.

The chapter concludes with a series of recommendations that call for broader participation by foreign companies in the standard-setting process in Japan and warns against “premature standardization,” which can undercut both interoperability and global harmonization.

ICT Utilization In the third chapter, the ACCJ argues that there are six major areas that need to be tackled if Japan is to leverage the full potential of the Internet Economy – and the regulatory reforms proposed in the previous chapter – to the benefit of its economy, citizens and overall national interests.

In summary, the six areas are as follows: 1. Continued Reform in Public and Private ICT Procurement 2. Delivery of Government Services Online 3. Promotion of Online Commerce 4. Convergence of the Internet with Education 5. Delivery of Better Healthcare Solutions 6. Promotion of “Green” ICT Challenges to greater ICT utilization often go beyond the framework of laws and

regulations to include business practices and social attitudes rooted in Japanese culture that will not change easily. Yet, if Japan is to achieve the economic and social transformation that the further growth of the Internet Economy implies, these issues must also be confronted and their solutions identified.

Major recommendations around government procurement include support for greater transparency and continued efforts at reform, including the expansion of multiyear budgeting and prototyping and greater harmonization of procurement practices with international auditing standards and rules.

Effective delivery of e-Government services will require a coherent information architecture for government online content and services, the use of user-centric design principles, the consolidation of “backend” operations across government, business process outsourcing (BPO) and single sign-on technology for e-Government services.

The ACCJ believes that there should be no substantive difference in policies or rules between online and offline businesses, small and medium enterprises should be further supported in their efforts to move online, the role of non-bank institutions in online transactions should be further expanded and harmonization across jurisdictions should be a key theme of efforts to guarantee security and privacy online.

In education, the ACCJ advocates major government investment in infrastructure and connectivity for Japan’s schools and universities, creation of a public-private partnership to put personal computers (PCs) into the hands of Japanese students, a regular replacement cycle for ICT hardware, integration of ICT devices into the learning experience, a far-reaching reform of teacher training and re-skilling and an overhaul of educational administration using advances in ICT.

The ACCJ understands that healthcare information technology (HIT) represents an important opportunity to improve and expand the range and quality of services available to patients. We recommend the swift introduction of electronic health records (EHR) and individual patient control of personal health records (PHR), allowing private companies to hold and manage healthcare records, the consolidation and integration of back-end support services and the inclusion of ICT into the healthcare curriculum.

Finally, the ACCJ supports the construction of “green” data-centers harmonized with international best practices and standards, the promotion of “smart-grid” technologies and the creation of incentives for companies to support mobile work-styles and lifestyles.

U.S. – Japan Dialogue Perhaps the most far-reaching recommendation in this White Paper is the creation of a U.S./Japan dialogue on the Future of the Internet Economy with public sector, private sector and academic participation as a key component of a larger U.S. – Japan economic dialogue.

The goal would be to find real opportunities for bilateral cooperation on regional and global economic competitiveness. The ACCJ believes that the emphasis should be on mutual learning, exploring areas of convergence and translating agreement between the two countries into broader regional and global consensus.

While the ACCJ acknowledges that creating a new bilateral dialogue on the Internet Economy represents a major commitment, it also contends that the nature and speed of the change facing both nations mean that open and constructive discussion offers the best path to efficient and harmonized online interaction between our governments, industries and citizens.

November 2009 | The Journal | 43

IN THE FINAL ANALYSIS

Up Ahead

I

t’s been a busy fall already and I can think of three things we’ll be working on moving forward.

First, we’ll be working on “walking the walk.” The ACCJ Kansai Charity Walk & Festival on October 3 in Osaka’s Nakanoshima Park was spectacular. Ambassador Roos was there with his son and parents, and many ACCJ members and guests followed his lead by making the Festival a real family event.

The talk of the Walk was about “Improving the Environment for Working Women in Japan.” And the talk at the opening ceremony was about the contributions member companies are making in this regard. P&G, Eli Lilly and Universal Studios all showcased the importance of women as employees and customers. Joining Ambassador Roos on stage for the opening ceremony were dignitaries from regional governments and ACCJ elected leaders, including President Whitson, Kansai VP Bobrove and Kansai Governor Mestecky. The only woman joining the VIP group on stage was Mrs. Billy Blanks, who accompanied her husband, the noted exercise guru, actor and entrepreneur. Then we did the Walk.

However, if we, as a Chamber, are actually going to ”walk the walk” we’ll need to work harder to increase our own female membership and participation. We’re aiming to have a more balanced VIP group on stage in the coming years, so we’ll be working on that.

Second, we’ll be working on U.S.-Japan engagement at the highest levels. For the past year the ACCJ has encouraged a formal dialog between American and Japanese trade policy officials at this level. We all know the bilateral relationship between the United States and Japan is vital to the security and prosperity of this part of the world. Our leaders repeat this every time they meet and the new administrations in both countries have done so as well. But whether we’ve achieved most of our goals and Japan is now open for American business or whether we’ve made our peace with a less than perfect system or whether we see little hope for further progress, it is not so easy to focus trade officials’ attention on Japan. To help in this process we need our members to make the case for high-level engagement by corporate leaders to address the issues we face here. So please lobby your head offices. If we can get more focus on Japan, back in corporate America we will have a better shot at getting the same level of interest among America’s top trade policy makers.

And finally, we’ll be working on our swings and putting. This year our European friends bested us in the 2009 Daimler and Chrysler Cup. The North American team still leads the series 4 to 3 but we need to make sure our rivals don’t close the gap any further. I’m sure the hours spent in Internet Economy Task Force meetings took some away from valuable time at the driving range. And those hours were well spent since we have an excellent White Paper to show for it. Take a look at it on the website if you are not Samuel H. one of the dozens of members who spent hours Kidder is drafting and refining this major opus. And then go ACCJ Executive Director. find a carpeted hall and practice your putting. ■