ACCJ Journal July 2009

Page 1

¥800 | July 2009

Journal

ACCJ Event full report ■ Washington Doorknock ■ Niigata Business Profile ■ Book: Creative Capitalism ■

U.S. AUTOS ROUNDTABLE Detroit’s Big 3 debate market entry and an eco-friendly future.

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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 7 | July 2009

12

FEATURES COVER STORY 12

U.S. Autos Roundtable America’s Big Three motor manufacturers discuss niche appeal and market entry in Japan, and the historic rebirth of their companies. Moderated by Geoff Botting 米国自動車業界円卓会議 米ビッグスリーがニッチ製品としての訴求力や日本市場参入について語る。さらに3社の歴史的な再生の行方はいか に。司会：ジェフ・ボッティング

22

ACCJ Event Fixing the Employee-Customer Disconnect in the Land of Disengagement: Human Sigma from a Consumer and B2B Perspective. By Geoff Botting ACCJイベント 「無気力」が蔓延する国で従業員と顧客の断絶状態を是正するには消費者やB2Bの視点に立ったヒューマンシグマ という考え方。文／ジェフ・ボッティング

26

Bridging the Divide Norman Mineta, the first Asian-American member of a U.S. Cabinet, talks on U.S.-Japan ties, leadership, and why Japan should promote itself better. By Julian Ryall 格差解消 アジア系米国人として初めて閣僚を経験したノーマン・ミネタが日米の関係やリーダーシップ、日本自らの振興策の必 要性について提言。文／ジュリアン・リアル

30

MBAs: Taking Care of Business MBA programs remain a viable means to lead corporations into the future. By David Umeda MBA：ビジネスのマネジメント能力とは MBAプログラムは、依然として企業の未来を切り開く有望な手段である。文／デビッド・ウメダ

July 2009 | The Journal | 3

CONTENTS

Volume 46 | Issue 7 | July 2009

19

TONY MCNICOL

26 38

DEPARTMENTS 9

Note from the Editor

11

Vice President’s Message

19

Media Watch Eating frugally. Private brands favored. Regional net retailing. TV survey. Pocket money. Dept. stores slump. Mobiles privacy.

24

On the Spot Former U.S. Secretary of Commerce William M. Daley, now Vice Chairman of JPMorgan Chase & Co., on U.S.-Japan trade relations. Interview by Julian Ryall.

28

Opinion Leader David W. Powell, President of Johnson & Johnson K.K. オピニオンリーダー 「ジョンソン・エンド・ジョンソン株式会社代表取締役社長デイビッド・W・パウエル

32

Jesper Koll Writes Bubble Lessons

38

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

41

Out and About Speakers, members and guests photographed at recent ACCJ events.

59

Marking 150 Years of U.S.-Japan Diplomatic Relations By William Bishop

60

FDI Portfolio Barbecue culture. Airline lounge facelift. Office subsidies. New York fashion boutique. By Nicole Fall

64

Business Profile The International University of Japan is one of only two ACCJ members in Niigata. By Tony McNicol

67

Behind the Book Creative Capitalism: A Conversation with Bill Gates, Warren Buffett and Other Economic Leaders edited by Michael Kinsley, is reviewed by Tom Baker.

68

Advocacy Update ACCJ Viewpoints

70

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

4 | The Journal | July 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. Christopher K. Ellis Chrysler Japan Company, Ltd. 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 GE Consumer Finance Co., Ltd. Jiri Mestecky Kitahama Partners L.P.C. Patricia O’Keefe USC International Offices-Tokyo Douglas L. Peterson Nikko Citi Holdings Inc. 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 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 Capital Markets Douglas Hymas 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 Charles D. Lake II 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 Nate 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 Dominic Carter/Koichi Hama Membership Relations Andrew Silberman Privatization Task Force David Hoover Retail TBA 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/Vincent You 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 simonfarrell@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 R. 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 Kamiyama Ambassador 209 18-6 Kamiyama-cho, Shibuya-ku Tokyo, Japan 150-0047 Tel: 03-5478-7941 Fax: 03-5478-7942 e-mail: inquiries@paradigm.co.jp www.paradigm.co.jp

Published monthly in Tokyo, on the 25th of the month, since 1964. Indexed in the PAIS BULLETIN. All rights reserved. The views and opinions expressed herein (other than editorials from the ACCJ itself) are solely the opinions and views of their authors. The ACCJ is not responsible or liable for any portions thereof. Subscription rates for non-ACCJ members One year ¥9,000; two years ¥15,000; three years ¥22,000. ¥800 per copy. Rates include domestic postage or surface postage for overseas subscribers. Add ¥7,500 per year if overseas airmail is preferred. Please allow eight weeks for changes of address to take effect. Subscription requests should be sent to info@accj.or.jp The ACCJ Journal welcomes story ideas from readers and proposals from writers. Letters to the editor may be edited for length and style. The ACCJ Journal is produced entirely on Apple computers

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NOTE FROM THE EDITOR

Historic Times

I

t’s quite a coup to gather the leaders in Japan of the Big Three U.S. automakers around a table at the best of times, let alone in the midst of Detroit’s historic restructuring. But that’s what we managed to do for our cover story this month in the latest of our Roundtables. Hats off to moderator Geoff Botting, whose line of questioning coaxed them into opening up on such diverse and topical subjects as Chapter 11 bankruptcy protection proceedings, barriers to market entry in Japan, transformation, and the future of eco-cars—not to overlook, of course, their top-selling models here. A key message is that it’s business as usual in Japan, with the U.S. automakers’ Japanese subsidiaries not falling under Chapter 11 jurisdiction—and proclaiming, “We are here to stay.� It’s also an historic month for U.S.Japan ties. As Executive Director Sam Kidder writes in his column on page 70, the ACCJ warmly welcomes the nomination of John Roos as the next U.S. Ambassador to Japan. And in the month that we celebrate America’s Independence Day (see the July 4th

12 message from U.S. ChargĂŠ d’Affaires ad interim James P. Zumwalt on page 42), Bill Bishop, an ACCJ Vice President, tells us in words and pictures on page 59 that it is 150 years since the ďŹ rst U.S. Legation in Japan was established, on July 7 in Azabu Juban, where he recently

stumbled across a stone monument marking the very spot. Considering such historic events, it would be an appropriate time to assess the U.S.-Japan relationship, which is exactly what Norman Mineta does on page 26. The ďŹ rst Asian-American member of a U.S. Cabinet pulls no punches in stating that Japan—as the world’s second-biggest economy—should not be shy about taking a lead in global affairs, and taking credit where it’s due. Another high-proďŹ le take on bilateral ties is offered by a former U.S. Secretary of Commerce. On a recent visit to Tokyo, William M. Daley took time off from meeting clients and government ofďŹ cials to speak at an ACCJ event. We caught up with him later to learn his thoughts on a number of other issues as well, including the wider AsiaPaciďŹ c region, the broader economy, and President Obama’s performance so far (page 24). From everyone at the Simon Farrell ACCJ Journal, we wish you a simonfarrell@ pleasant and relaxing July 4th paradigm.co.jp celebration. â–

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VICE PRESIDENT’S MESSAGE

ACCJ Washington, D.C Doorknock

I

am pleased to brief the membership on the annual Washington Doorknock, which was held on June 9-12—later than the usual April timeframe to ensure that the delegation could meet as many as possible of the newly appointed high-level officials dealing with Japan and the AsiaPacific. The delegation consisted of 10 ACCJ leaders, and held more than 30 meetings with Administration officials across the spectrum of Cabinet departments and agencies—including the Departments of Commerce, Justice, State, Defense, Treasury and Transportation, as well as the National Security Council, the Federal Trade Commission and the Office of the U.S. Trade Representative. The delegation also met with key members, or their staff, both Democratic and Republican, of the U.S. Senate and House of Representatives, with Ambassador Ichiro Fujisaki and key officers at the Embassy of Japan, with Keidanren (whose leadership was visiting Washington in parallel for the Business Roundtable), and with the U.S. Chamber of Commerce. I am impressed by the ability of the ACCJ to secure meetings with such a broad array of stakeholders in the U.S.-Japan relationship, which is a testament to the credibility that the ACCJ has built up over the years in its advocacy efforts and to the importance of the U.S.-Japan economic relationship. The Obama Administration still does not have its full team in place, and is understandably busy with its key priorities of the moment. Moreover, election uncertainties in Japan have, in the eyes of U.S. stakeholders, made it difficult to devise a Japan engagement strategy, in the perceived absence of a willingness on the Japanese side to commit to a specific substantive agenda. The delegation forcefully carried forward a proposal, which we informally called the U.S.Japan Dialogue for Economic Competitiveness and Recovery. Consistent with the ACCJ’s 2009 Core Advocacy Principles of commitment to open and free trade, ensuring a level playing field, transparency and due process, adoption of global best practices, and corporate social responsibility, the ACCJ proposal can be summarized as follows: Why engage Japan now? ● The U.S. and Japan share many common values, including democracy, freedom of speech and the rule of law, as well as a 50-year strategic security alliance, and together, even with their current economic problems, comprise 40 percent of global GDP. ● Both Governments have more than three

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decades of experience in addressing difficult economic issues, and thanks to that many of our member companies have become hugely successful in Japan. Japan is the second largest market for U.S. exports, after Canada, but ranks first in a number of key industries at the high end of the technology spectrum. But Japan’s level of inbound FDI, as a percentage of GDP, at 3 percent, ranks lowest in the OECD, which demonstrates the potential for much deeper market penetration, which would be incremental to the growth of U.S. exports and jobs, given the nature of Japanese market opportunities. The political uncertainties in Japan and the anticipated dramatic decline in Japanese GDP due to the fall-off in exports makes it all the more imperative to engage Japan at this particular time on the issues facing U.S. and Japanese companies, and their competitiveness in the fast-growing Asian region. Conversely, neglect—even benign neglect— of the importance of the Japanese economic relationship to the broader U.S.-Japan relationship, could convey, however subtly, that Japan’s economic future lies more with fast-growing Asia, and could possibly undermine that broader U.S.-Japan relationship.

Where will U.S. engagement count most? ● ACCJ member companies see continued focus on the bilateral relationship as necessary in several key industries and cross-sector policy areas—including healthcare, ICT, postal privatization, physical infrastructure and air transport, financial services, FDI, aviation and defense and competition policy. ● The focus of these bilateral discussions, which should be at a high level, should increasingly be not only on removing any remaining regulatory barriers, but also on regulatory harmonization, as between Japan and the U.S., such that U.S. and Japanese companies in a mutual win-win manner can also compete more effectively in the fast-growing emerging markets of Asia. ● The ICT industry, and the Internet economy in general, on which the ACCJ will soon issue a White Paper, is a prime example of the opportunity, as an industry that almost by definition requires harmonization of regulation across borders. The U.S. and Japan, with their large markets, could potentially set an example for appropriate regulatory environments in other markets in emerging Asia.

How can the U.S. and Japan better position themselves (and their companies) in the dynamic Asian economy, and improve our mutual competitiveness? ● Japan and the U.S. are hosting consecutive gatherings of the Asia-Pacific Economic Forum, in 2010 and 2011, and they should leverage a newly enhanced bilateral dialogue around common themes in their own economies, such as those above, to take to the broader region. ● At the same time, the U.S. and Japan can show joint leadership in other areas of common regional, or even global concern, including energy and the environment, and intellectual property rights. ● With intra-regional trade excluding the U.S. trending upward, but as the fall-off in Japanese exports shows still significant inter-connectedness between the Japanese and U.S. economies, it is very much in the mutual U.S. and Japanese interest to move forward with a high-level dialogue focusing on both bilateral and multilateral issues, in preparation for leveraging the APEC opportunity, and realizing in time the ACCJ’s long-standing vision of a comprehensive economic integration agreement—a high-end Free Trade Agreement—between the U.S. and Japan, which would anchor the U.S. and Japan economies squarely in the context of the fastgrowing Asian emerging economies. While I am greatly pleased with the receptivity of U.S. stakeholders to the ACCJ proposal, I am also aware that with many competing priorities for both U.S. and Japanese stakeholders, we must continue to work on both sides of the Pacific to enhance the economic relationship between our two great countries, to facilitate mutual economic recovery, and to position our companies for greater competitiveness and growth in both Japan and the greater Asian region. Toward that end, the Washington Doorknock delegation is developing a concrete list of actions to be followed up on, at the suggestion of the many Washington stakeholders we met. I feel greatly privileged—as I know do President Tom Whitson and the other members of the delegation—to represent Laurence W. Bates our diverse and committed is an ACCJ Vicemembership in these matters President and Chair of the ACCJ External of critical importance to the Affairs Advisory U.S. and broader business Council. community in Japan. ■

July 2009 | The Journal | 13

U.S. Autos Roundtable REBORN U.S. MANUFACTURERS OFFER NICHE APPEAL IN SMALL, REGULATED MARKET. Moderated by Geoff Botting Photos by Tony McNicol

As the headlines continue to remind us, the American auto industry is in a state of profound change. General Motors is in the process of being vastly downsized and reinvented, while most of Chrysler’s assets are planned to be sold to Italy’s Fiat. Ford, thanks to its earlier turnaround program, has managed to avoid bankruptcy procedures, yet still faces a bumpy road ahead. But despite the upheavals in Detroit and Washington, D.C., the U.S. automakers’ managers in Japan say they have no plans of pulling up stakes here. The market here for U.S. vehicles may be tiny, but it continues to offer profits and opportunities, thanks to an enthusiastic customer base. The ACCJ Journal talked to the three American automakers about their products’ niche appeal, the rebirth of their companies, and adapting to Japanese regulations. Geoff Botting: You’ve got a tiny share in a market marked by intense competition, tricky regulation and a raft of non-tariff barriers. Meanwhile, there’s a much bigger—and arguably easier—market right nearby, namely China. Is it really worth your time to be in Japan, especially now that your head offices are in the process of downsizing? Rick Brown: Historically, the Japanese market has been good business for General Motors. What’s more, the market

14 | The Journal | July 2009

certainly offers opportunities for the kind of products we bring here. It’s all about the product. We don’t import vehicles that compete head on with Toyota and other domestic makers. We’re a niche player, so we bring in luxury models that wouldn’t otherwise exist in this market. We essentially compete with European imports. We also bring in the large SUVs, which are in a field of their own. But also, because we’re always bringing in new products, we’re

continually cultivating new Japanese customers. For instance, last year saw the introduction of the Cadillac CTS, and 50% of its Japanese buyers had never bought a GM vehicle before. As we continue our presence, we spot opportunities. Christopher K. Ellis: As Rick said, we’re here primarily because we can make a good business here. But participating in the Japanese market has other, secondary advantages, as well. For one, we can

U.S. AUTOS ROUNDTABLE

Participants:

Randy Krieger President and CEO Ford Japan Limited

gain knowledge about the Japanese manufacturer’s direction with regards to technology and innovation. Also, since Japan’s automobile consumers are some of the most discerning in the world, our efforts to satisfy those customers pay dividends in our efforts to improve our product and service quality. Randy Krieger: I would echo the points mentioned by Rick and Chris. We all have a dedicated, loyal customer base. In Ford’s case, we have over 100,000 existing customers—people who have bought Ford products over the past 25 years, and remain a very dedicated and loyal owner base. Our job is to take great care of these customers while welcoming new ones to the brand. RB: An interesting thing happened in the first quarter of this year: GM’s Japan— thanks to our Chevrolet presence—and China operations were the company’s only operations whose performance exceeded that for the previous year’s first quarter. That’s phenomenal when you consider how vibrant the market was in the early phase of last year. The financial problems surrounding your companies have dominated the news for the last few months. What kind of assurances do you give your Japanese customers, partners and the public

Rick Brown President, Operations and Representative Director General Motors Asia Pacific (Japan) Limited

in general as to the viability of your companies? CE: Chrysler expects to emerge from bankruptcy by mid June, with the sale of the company’s productive assets to a new company formed in alliance with Fiat. In the meantime, we’ve been assuring all of our stakeholders – customers, dealers, suppliers – that, although our American parent company is in Chapter 11 proceedings, our Japanese subsidiary is not included in those proceedings. Our business continues just as it did in the past. We’re still selling and servicing cars and offering warranty protection just as before. From the standpoint of a Japanese customer, there’s really no difference to the business, and we’ve been trying to get that message out. RB: GM in the U.S. filed [for] voluntary Chapter 11 [bankruptcy proceedings] on June 1; but GM Japan is not part of the filing, as with any other operation outside of the U.S. Therefore, we are here to stay, as part of the GM Asia-Pacific operations, having the new GM as our parent. So nothing will change in terms of our setup and our ability to serve the customers. In fact, we will continue with our new product as well as FY2010 programs. We’re using our dealers and the media to spread that message.

Christopher K. Ellis Representative Director and President Chrysler Japan Co., Limited

Randy, presumably you’ve got less to say about this, given Ford’s comparatively healthy position. RK: Sure. The media in Japan has done a good job highlighting that we continue to make solid progress on our transformation plan, moving decisively without a U.S. government bridge loan and positioning Ford to grow profitably as the global economy improves. We are fortunate [the] customers are seeing that Ford is different— and the real difference is in our plan, the strength of our great new products and our industry-leading quality, fuel efficiency, safety and value, which are helping us gain market share in the U.S. and Europe. Getting back to your market, what’s the appeal of your products? Why would a Japanese motorist want to drive an American car? RK: We sell the American lifestyle. There is a very dedicated group of consumers in Japan who want to be a part of American culture, whether in clothing, vacations, hobbies or automobiles. So when a customer walks into our dealership, they’re looking for the freedom and adventure of America; and our products and services have to fulfill that desire. If we meet that promise to our customers, we’ll continue to be successful.

July 2009 | The Journal | 15

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16 | The Journal | July 2009

But you weren’t always niche players in Japan. Up until a few years ago, it seemed you were somewhat interested in muscling into the mainstream market. RB: I can’t speak for Ford or Chrysler, but historically GM had tried to sell its multiple brands in Japan; but we didn’t do a very good job. Thus, in the past few years, we’ve become purely a premiummodel player, supplemented with Chevrolet models to seek scale. That’s the strategy. But, at the same time, we’re also striving to expand our presence in the marketplace. The way GM is re-engineering its global engineering footprint could put us in the position by 2010 or 2011 to bring in additional fuelefficient, small and compact models— which would be part of what we call “global architecture,” meaning we could sell them anywhere in the world. One of your major advocacy points is about pedestrian protection [PP] regulations, which are aimed at reducing injuries to pedestrians. Why do you see this as a possible market impediment? RK: The issue is over the implementation schedule. Japan, Europe and the U.S. have agreed in principle to a common set of standards on this issue. However, Japan prefers an earlier implementation than the global agreement would require. Our concern is that the earlier start by Japan would result in a gap of two to four years, during which it might be difficult to import U.S. manufactured vehicles into Japan. Has the ACCJ committee been making progress on the issue? RK: The Japanese government has not finalized the timing of the implementation. So until we see the full implementation plan, it’s hard to comment. CE: We have been busy lobbying, however. RB: Whenever these kinds of issues come up, the three of us try to deal directly

U.S. AUTOS ROUNDTABLE

“Often it’s hard to get Detroit to appreciate the peculiarities of the Japanese market.” — Christopher K. Ellis with the ministries involved, namely the Ministry of Land, Infrastructure and Transportation; and the Ministry of Economy, Trade and Industry. For example, the government has introduced a new-car purchase scheme as part of its economicstimulus package. But we noticed that the scheme’s provisions clearly discriminate against importers based on the criteria that were established. So the three of us went to speak directly with the Trade Ministry and formally lodged a complaint. Even so, the most effective approach is working together to develop sets of global regulations that apply equally to everybody. The PP is such an attempt, albeit an imperfect attempt. But we’ve also had our successes. What’s the most frustrating aspect of advocacy for your committee [American Auto Industries)? CE: One difference is that in the U.S., if something isn’t written down, then it’s OK to proceed until someone does write it down. But in Japan, it’s the opposite—if something isn’t written down, then you can’t do it. Often it’s hard to get Detroit to appreciate the peculiarities of the Japanese market. So, we spend quite a lot of time educating our head office about that. RB: The rule-making process here isn’t very transparent. One person will tell us to do something one way, while another person says another way. Sometimes, oversight is split among various agencies and ministries, and there won’t be a clear series of steps that need to be followed. Similarly, sometimes we go to the ministry with a specific issue and ask for instructions on how to fix it. And the issue is so unique that they don’t have a process to refer to. To cite one such example, we have an issue with our fuelcell vehicle. This vehicle is part of a GM program called Project Driveway, which allows approximately 100 customers around the world to experience the ownership of a fuel-cell vehicle. The vehicle [Chevrolet Equinox-based] has a

hydrogen tank; but the specifications for the steel for that tank don’t exist in Japan, therefore the tank doesn’t qualify. This is only one of the reasons GM cannot test this vehicle on public roads in Japan. CE: One problem for American manufacturers like ourselves is that Japanese and EU regulations tend to be much more aligned than are American and Japanese regulations. And that makes it more difficult to bring our vehicles here. Often, it’s not a case of substantive differences; it’s a case whereby the regulations as they’re written, or the testing criteria for proving compliance, are not completely the same. We deal with this on an ongoing basis. RB: But it’s also up to the U.S. government to bring itself in line with what’s happening in the rest of the world. Japan and Europe are much more harmonized, so it’s easier for us to bring in European models, such as Saab, than American cars. We have become much better at engineering vehicles to meet global requirements, but often we still have to modify them once they arrive so that they conform to Japanese regulations. What kind of attitude do you get from the ministry officials whom you deal with directly? Are they sympathetic? RB: They’re very sincere; they listen. They’re willing to give time to small players like ourselves, and they set up meetings with higher-ups, such as the kacho of the automotive division. But, at the same time, you get the sense that their hands are also tied—by the politicians and interest groups. The new-car purchasing scheme is the perfect example. It contains a lot of contradictions, and they know them. But when you point them out, they say, “I agree with you but …” CE: We’ve issued a couple of ACCJ Viewpoints recently and had meetings concerning the Viewpoints (see page 68). The government officials we have met with have indicated an interest in continuing to meet on a regular basis. RB: I recently gave a presentation to the

Leadership Forum of the ACCJ on behalf of our committee. Many people in the audience were under the impression that we’re basically free to do whatever we want—bring in vehicles tax-free, not have any regulatory issues, etc. But according to the feedback I got later, the presentation changed that assumption, making them appreciate how hard it still is to do business in Japan in the auto sector. Another area of advocacy for your committee is regarding taxes, which you say put an unfair burden on Japanese motorists. CE: We have three basic issues about taxes. One is that the overall amount of the tax, which at the purchase point is about three times the amount for a vehicle purchaser in the U.S. We think this serves as a disincentive for vehicle purchases, and that a revision of the tax code could spur more purchases, which would be helpful, particularly in the current economic climate. The second is that some of these taxes, particularly the tonnage tax and gasoline taxes, have, in the past, been set aside for road improvement, etc., as a kind of “you play, you pay” for motorists. But from this year revenues from those taxes will go into the general fund. So in our mind, that takes away the original reason for the tax, and unfairly burdens automobile users with extra tax. The third point is that some of these taxes were originally intended to be temporary taxes. But these taxes have gone on for 30 years. So what you’ve got are “30-year temporary taxes.” RK: So, our issues are firstly [that] the taxes are expensive and complex; and, secondly, that motorists are being taxed twice because their automotive fees are being used for general government funding, not automotive-specific services. CE: For example, motorists must pay two types of consumption taxes. There is both a “consumption” and “acquisition” tax. That’s not a payment that someone who buys, say, a refrigerator, has to make.

July 2009 | The Journal | 17

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U.S. AUTOS ROUNDTABLE

What are your hit models in Japan? RK: For us, the best selling is the Explorer [an SUV], while the most recognized is the Mustang. So we think of the Explorer as being the heart of our company, the Mustang the soul. RB: Cadillac is probably our most recognized brand, and our hottest product is the Cadillac CTS, a new model. We plan to keep up the momentum with the introduction of the Sport Wagon and then a coupe next year. CE: In terms of sales volume, our Jeep models are in the top slots. The Patriot, a small Jeep model, which we just launched last year, is currently No. 1. However, the new four-door Wrangler, which we also introduced last year, is extremely iconic and is selling very well. We typically have the most success with unique, iconic products. For example, the 300 C sedan, a large car clearly in the premium category, has also been very successful.

Finally, a question that many of us wonder about—what’s the deal with importing cars into Japan with the steering wheel on the left? But, first, roughly what percentage of your vehicles are left-hand drive [LHD] and RHD? RB: It depends on the model. For the CTS, for instance, about 65 percent of the sales are for LHD. CE: All Chrysler models are available in RHD versions. Only about 5% of our sales are LHD models. RK: As for Ford, we offer all our products, except Escape, in LHD; and they represent 65% of our sales. So question No. 2: Why the popularity of driving from the “wrong side”? CE: I think it’s due to prestige and that it makes the car look authentically American. RB: It’s difficult to make a general statement. It depends on consumer

preferences and other factors. For example, in the urban areas, drivers generally want their steering wheels on the left; and, in rural areas, where the customer profile differs, on the right. I actually drive an LHD model, and I prefer it for safety and other reasons. You don’t do a lot of passing in city traffic in Japan, so you don’t have a big issue with visibility on the right. An LHD model gives you a clear view of the edge of the road. RK: I would not characterize it as “popular.” If it were popular, buying one of our vehicles would not hold the same authenticity and uniqueness it does today. And that genuine American automotive lifestyle is something that Geoff Botting is a freelance can only be purchased journalist based at a Ford, GM or Chrysler in Tokyo. dealership. ■

July 2009 | The Journal | 19

MEDIA WATCH

Food Price War With the economy in the doldrums, the media is taking a growing interest in the humble salaryman’s lunch. The Sankei Shimbun (Apr. 16) noted that a price war has been raging among the three gyudon (stewed beef over rice) majors: Sukiya, Yoshinoya and Matsuya. Probably in reaction to falling revenues (down by 1.6% from the previous year), Zensho (Sukiya chain) announced price cuts of ¥20 and ¥50 for its standard gyudon and curry items, respectively, to take effect from April 23. Zensho’s restaurants use Australian beef, which is said to cost 1.5 times more than the U.S. beef utilized by its two rivals. Yoshinoya’s parent company, taking advantage of low rents and the growing number of vacancies in commercial buildings, announced plans to open 120 new outlets by February 2010—the most ambitious expansion in the company’s history. The Subway sandwich chain, operated by Suntory Ltd., and McDonald’s Japan have also expedited openings of new outlets, with plans to open 60 and 85, respectively, over the coming business year. Nevertheless, a growing body of evidence does not bode well for the food and beverage industry. A survey of 1,100 adults in single households conducted by condiment maker Q.P. Corporation found that the practice of naka-shoku (eating at home, irrespective of whether the food is prepared in the home or brought back from outside) has reached approximately 80% on weeknights. Two-thirds of the survey respondents said they take home a bento (boxed meal) at least once a week.

Q.P.’s results, posted on its Web site in April, noted that those taking their evening meals at home on weeknights and weekends were 79.8% and 73.4%, respectively. As to the 17% who eat lunch in restaurants, 42.1% consume their meal at their workplace. The weekly magazine Spa! (May 19), meanwhile, took a look at the dietary habits of the “U25” generation, and was amazed at how deeply entrenched the practice of frugality toward food outlays has become. In a survey of 100 male subjects age 22-25, 79 said when eating out they only order specials and 77 prepare their own meals to the greatest degree possible. Another 72 say they buy up large amounts of food after prices have been reduced and continue to eat it even beyond the consume-by date. When McDonald’s offers specials on its burgers, 45 say they’ll buy up a big batch and freeze it for consumption at a later time. Spa! was also amazed to find that nearly half the survey subjects say they cultivate food items, such as cherry tomatoes, on their verandas. Jun Sekiguchi (a pseudonym) told the interviewer that he shops for cheap cuts of meat at a discount supermarket and stretches 100g of pork or chicken to last a week. “Beef is expensive, so I don’t buy it,” he tells the magazine. A contract worker has his own creative approach to gustatory indulgence. “If I feel like eating a Big Mac, I’ll order two regular hamburgers and stack them on top of each other,” he says. “Then I just add some sesame sauce and I’ve got the same thing, but pay ¥40 less. I can do without the cheese,” he adds.

Private Brand Move A recent Internet survey of 1,214 adults in the Kanto and Tohoku regions by the Distribution Economics Institute of Japan shows a pronounced shift in attitudes toward private brands, which are enjoying greater popularity due to their image of offering good value. As reported in the Nikkei Marketing Journal (May 4), 61% of respondents said

they had increased outlays for private brand goods over the previous year, with the growth particularly high among low-income households and consumers in their twenties and thirties. Only 4% said they were less likely to purchase private brand items than before. Among the respondents, 81% said they felt no resistance to purchasing

and owning private brand goods. The most familiar were Aeon supermarket’s “Top Value,” at 86%; followed by SevenEleven’s “Seven Premium” (78%) and the Japanese Consumers’ Co-operative Union’s “Co-Op” (73%). The Distribution Economics Institute is selling a DVD of the entire survey, with 106 pages in PDF file format, for ¥52,500.

June 2009 | The Journal | 21

Net Retailing Goes Local Regional economies, whose goods are already heavily promoted at Japan’s post offices, may be receiving a boost from two major shopping portals on the Web. The Nikkei Marketing Journal (Apr. 24) reports that at the urging of Miyazaki Prefecture’s Governor Hideo Higashikokubaru, Amazon Japan has agreed to

set up a page to promote some 430 agricultural goods and other products from the prefecture. From Autumn 2008, Amazon.co.jp had expanded its range of items on its site to include food. Jasper Chan, the company’s representative director, was quoted as saying the company hoped to tie up with more regional organizations. In April 2008, Web portal Rakuten had previously launched its “Machi-Raku” pages with product displays arranged according to Japan’s 47 prefectures. According to a Rakuten spokesman, orders during the January-March 2009 quarter were up by 32% over the previous October-December 2008 quarter. In addition to home food deliveries, the various locale sites also incorporate links to Rakuten Travel to plan trips, reserve rental cars and so on. The Nomura Research Institute estimates that, in 2008, online consumer sales achieved year-on-year growth of nearly 20%, to reach approximately ¥6.2 trillion. To sustain growth, more Web marketers are likely to seek ways to boost their product mix. In a related move, NTT DoCoMo announced on May 6 it had acquired controlling interest in Oak Lawn Marketing of Nagoya, operator of the “Shop Japan” TV channel, for ¥31 billion. This marked the mobile carrier’s entry into the mail order business. The move is also seen as a preparation for multimedia transmissions to car navigation units, which are expected to commence from 2011. Initially, Shop Japan’s contents will be made accessible to DoCoMo subscribers via i-Mode.

Digital TV Survey An opinion survey conducted in March by the Cabinet Office determined that 54.9% of Japan’s households now own TVs with digital reception capability. This was the first time for a survey to report that diffusion of the flat-screen (digital) TVs had exceeded 50% of homes. The current figure for CRT TV ownership, which apparently overlaps with digital, is 83.5%; and ownership of digital-compatible DVD player-recorders, at 73.1%, rose by 1.4 points over 2008. Perhaps as many as one-half of Japan’s local governments feel the switchover to terrestrial digital TV should be extended

22 | The Journal | July 2009

beyond the current July 2011 deadline. The weekly magazine Shukan Shincho (May 21) reports the results of a survey conducted by the NHK Broadcasting Culture Research Institute that found 53% of the local municipalities are now favoring a delay. An official at the Ministry of Internal Affairs and Communications was quoted as saying some 600,000 households may be located in areas where reception will be difficult. Relay towers or antennas to permit digital reception will range in price from ¥30,000 to ¥50,000 on the low end, to as much as ¥500,000 on the high end. The local governments are concerned that

residents will be expecting them to foot up to one-half of these costs. The problem is not confined only to the archipelago’s remote islands, where governments are expected to be saddled with ¥20 billion in additional costs. Even Kamakura, which prohibits construction of edifices higher than 20m—an ordinance aimed at protecting its ancient scenery—expects that 5,000 of the town’s 72,000 households will have trouble with reception. Fukuoka City anticipates as many as 20% of condominium residents may incur reception problems due to signal interference by the buildings.

MEDIA WATCH

Rich Kids Japanese children are among the world’s wealthiest. Sankei Shimbun (Apr. 19) reported on the results of a survey of 300 children in primary school, grades 4 through 6, by the Nihon Soroban Kyoiku Renmei, the federation that promotes abacus education. Some 56.3% said they received a scheduled allowance from their parents. The average amount was ¥913, but 26% said the figure was between ¥1,000 and ¥2,000. Only 10.1% received over

¥2,000. The respondents also received monetary gifts at New Year’s and on birthdays, etc. Their annual income averaged ¥40,500. Greatest outlays were for confections and fast foods, at 55.7%. Some 85.7% said they saved the money. When asked what they planned to do when they accumulated sufficient funds, 67 out of the 300 replied for travel, followed by the purchase of a video game (55), or something for the home (44).

Departing Stores Sales at the nation’s department stores continue to slump. In March, the Isetan-Takashimaya group reported a 14.5% year-onyear decline; Matsuzakaya fell by 13.4%; Daimaru by 11.4%. Daimaru and Matsuzakaya have already closed branches in Imabari and Yokohama, and several Marui-Imai branches have been shut down in Hokkaido. A recent shock came with Isetan’s plans to close its Kichijoji branch, which enjoyed an annual turnover of some ¥17.5 billion. “We’ve become inured to drops of 10%, so minor fluctuations [upwards] aren’t going to get anyone excited,” a staff member at an unnamed store is quoted in Nikkan Gendai (May 14). Business journalist Takashi Matsuzaki tells the newspaper that, if things get much worse, he expects the next move by the

department stores would be to try to generate revenues in the real estate sector. “Many of them are located in central areas of Tokyo, but you don’t see them engaging in any other business except selling merchandise,” says Matsuzaki. “I think they should consider combining their shops with offices as a source of revenues.” Since the stores’ current profit margin averages about ¥0.15 for every ¥100 in sales, the journalist believes they’re unlikely to recover. “The stores need radical management,” Matsuzaki remarks. “They should start bringing in complete outsiders—as did McDonald’s Japan did when it hired Eiko Harada from Apple Japan—to ‘shake up’ the companies out of their complacency.”

Keitai Privacy “Do you ever peek at the contents of your partner’s cellphone?” No, 84% of the 5,866 respondents to the Be between survey told the Asahi Shimbun (May 16). Furthermore, 81% said they had no desire to do so. The main reason given for refraining, stated by 2,728 respondents, was that it was a violation of that person’s privacy and morally wrong. Another 1,918 respondents simply said they weren’t interested. Of the 16% who said they peeped, 81%

admitted to have done so multiple times. The most common reason given, with 420 responses, was just for the fun of it. This was followed by looking to see if he/ she isn’t concealing something (206); we both look at each other’s (170); suspect infidelity (120); want to know whom he/ she is associating with (99); want to know everything about partner (75); collecting evidence of infidelity (51); and because he/ she is also peeping at mine (30).

“My husband keeps his keitai locked, and sleeps with it beside his pillow, so I suspected he was playing around,” explained a 48-year-old woman in Saitama. Nevertheless, 75% of the peepers said they discovered nothing out of the ordinary. “I want to check my husband’s keitai; but I absolutely don’t want him looking at mine!” said a 45-year-old woman in Shiga Prefecture. It would seem the Golden Rule also applies to mobiles.

July 2009 | The Journal | 23

ACCJ Event FIXING THE EMPLOYEE-CUSTOMER DISCONNECT IN THE LAND OF DISENGAGEMENT: HUMAN SIGMA FROM A CONSUMER AND B2B PERSPECTIVE By Geoff Botting Photo by Hitoshi Maruyama

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hat happens when employees become “disengaged”? Rex Valentine, president of Gallup K.K. (retired), has a photograph that illustrates the situation. There’s a tree that’s fallen onto a road. On the road’s edge is a pair of freshly painted lines. The lines veer around—not under— the part of the tree sticking into the road. “There’s another photo that shows a possum road kill with the lines painted—over it,” he points out. But there’s nothing funny about disengaged workers, Valentine adds. Disengaged employees, such as the road workers who deliberately paint lines in the wrong place, are more than just lazy or apathetic—they’re destructive, capable of wrecking your operation. “The disengaged are people who are actually working on messing up your business. That’s their job,” Valentine says. “They show up every day to try to tell people that it’s not worth being there.” Such employees make up 15% of employees in the United States, according to Gallup Poll research. Perhaps more astonishing, the rate is even higher in Japan—25%.

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The figures were collected by the Gallup Organization while its researchers were drawing up a set of management principles termed “Human Sigma.” The study lasted several years and was aimed at analyzing the employee-customer encounter, while also examining the attitudes of employees toward their jobs. The findings were tested with nearly 2,000 business units at 10 companies in the fields of financial services, professional services, retail and sales. The Human Sigma principles were outlined in an article, “Manage Your Human Sigma,” by John H. Fleming, Curt Coffman and James K. Harter, and published in the July-August 2005 issue of the Harvard Business Review. An in-depth description appeared about two years later in the book Human Sigma, published by Gallup Press, New York. If the title sounds familiar, it’s because the book was preceded by Sigma Six, which offered prescriptions for the manufacturing industry. Valentine gave a presentation at an ACCJ event December 9 to explain the management approach. Employers can divide their employees into three broad groups—disengaged, neutral and engaged.

ACCJ EVENT

“The disengaged are people who are actually working on messing up your business. That’s their job.”

Neutral employees are the ones who show up for work and do little beyond what’s expected of them. In the U.S., this group was in the majority—54% of the total. In Japan the number was 68%. So who are the engaged? These are the achievers, the person “who’s really emotionally connected to the company, who really wants to do a good job,” Valentine says. “He comes every day to work and looks at the challenges, and says, ‘Yeah, I’m going to take the challenge and really do something great.’“ In Japan, it should be noted, the engaged made up a mere 7% of employees surveyed, while in the U.S. they were 29%. The engagement-disengagement dynamic cuts two ways—in employee-management and employee-customer relations as well. Clients, too, can be engaged, disengaged or neutral in the ways they feel about doing business with your company. An engaged customer feels an emotional bond to the company he or she is dealing with. That’s right, an emotional bond. Remember when your Economics 101 professor said consumers always act rationally? Forget it. According to the Human Sigma approach, the opposite is true. Business relationships are emotional by nature. “It’s important not to think like an economist or an engineer when you’re assessing the employee-customer interaction,” say the authors of Manage Your Human Sigma. “Emotions, it turns out, inform both sides’ judgments and behavior even more powerfully than rationality does.” As Valentine explains: “You get attached to the person who always takes care of you and is always really nice to you. “If [a customer] is emotionally attached, he’ll tell you about how much he loves your company,” he says. “It’s like Starbucks fans … People will drive far out of their way to get their Starbucks coffee.” Conversely, one or two bad experiences by a client can destroy a business relationship for all eternity. A single encounter with a rude or lazy service representative is often enough to turn a customer away from your company forever. “You can never step into the same river twice. That’s exactly what it is in terms of dealing with a customer,” Valentine explains. “You experience this yourself, when you’re out buying something. You get one great experience with one person in the store; but before you get out the door, someone has made you mad.” So how does your company woo customers and keep them loving you? The answer lies in how you train and nurture your staff. In a nutshell, develop their individuality rather than treating them as cogs in a machine, Valentine recommends. “You like the different personalities that you find in people, and that’s where people develop attachments, where everybody is not sounding like a robot,” Valentine says.

This point may be the most radical aspect of the Human Sigma approach. It means that outsourcing customer services—for instance, to call centers in India—is the wrong approach. “We’ve been treating humans like they’re a costly nuisance for a quite a while. If you try to dumb things down, make it as simple as possible and give everybody a script, then you’ll take the personality right out of the person,” says Valentine, who was president of Nippon Becton Dickinson Co., Ltd., a medical equipment manufacturer, before joining Gallup in 2007. Never confuse engagement with satisfaction. As for employees, they can be both disengaged and highly satisfied at the same time. “They’re happy; they’re getting paid well and are being left alone,” Valentine explains. As for customers, “You can have perfectly satisfied customers who act just like disengaged customers. But they’ll leave you very easily. “With engaged customers … you’ll be deeper,” says Valentine. “They’ll spend more, and they do it at a higher margin.” This is the bottom line: companies with high numbers of engaged employees and customers tend to have better-thanaverage productivity and, yes, profitability, according to Gallup’s research. Furthermore, they boast of higher rates of employee attendance and retention, and better safety records. Disengaged workers account for about $300 billion a year in lost productivity, according to a Gallup estimate. The situation appears even worse in Japan. As indicated earlier, Gallup’s findings paint a sorry picture of the workplace here. The engagement level is low (7%) and disengagement high (25%). Reflecting this, a mere 24% of Japanese were optimistic of the future, according to a poll conducted in 2007 that involved 100 questions given to employees in 135 countries. By comparison, optimists accounted for 44% of employees in South Korea in 2007 and 50% in Hong Kong in 2006. “The difference is that in Hong Kong, people feel that if they work hard, they can get ahead,” Valentine says. But Valentine, who first set foot in Japan three decades ago, doesn’t need statistics to tell him that attitudes toward work in Japan have been steadily worsening. “I first came to Japan 30-some years ago, and you could feel the work ethic. Everyone was hard at work creating the economic miracle,” he says. Yet, Valentine adds, “The good news is that you can engage people and you can really make a difference and increase your performance.” That’s where Gallup can help out. One of its Geoff Botting is a freelance services is to help companies engage more of their journalist based employees, thereby making them more productive— in Tokyo. and, most importantly, profitable. ■

July 2009 | The Journal | 25

WILLIAM M. DALEY VICE-CHAIRMAN, JPMORGAN CHASE & CO. By Julian Ryall Photos by Tony McNicol

As U.S. Secretary of Commerce under former U.S. President Bill Clinton between 1997 and 2000, William M. Daley was instrumental in ensuring the passage of the North American Free Trade Agreement and was key to the election campaign of President Barack Obama in 2008. As vicechairman of JPMorgan Chase & Co., he is responsible for overseeing the firm’s global strategy and efforts in government affairs, public policy, and environmental and community affairs. He was in Tokyo in late May to meet Japanese officials and the U.S. business community. In the nine years since you were last in Japan, how has the economic relationship between the two nations evolved? Obviously our ties with Japan are very strong but the last time I was here, Japan was experiencing enormous financial problems that were not so much global—and it was the U.S. that was being very aggressive with its advice. It is ironic that it is the U.S. that finds itself in that situation now. I think the debate about stimulus that we see in the U.S. now—whether we need it or not, whether it is enough or not—is the same as Japan experienced 10 years ago. The situation is affecting us all, although we have been in it longer and

26 | The Journal | July 2009

are down deeper than Japan. But I think that everyone understands that pointing a finger of blame right now is not going to get us anywhere. We have to accept what has happened, and move on and find actions that we can take collectively. Given that the ACCJ recently visited Washington for its annual D.C. Doorknock, how do you see Japan’s relationship with the U.S. in a wider, global context—particularly in trade issues in the Asia-Pacific region? My sense is that whenever a Chamber from Japan, or from any other part of the world, has visited Washington in recent

SNAPSHOT JPMorgan Chase & Co. ■ ■

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Number of staff: Over 200,000 Date established: Earliest predecessor dates from 1799 Location: Corporate headquarters in New York City, retail financial services and commercial banking based in Chicago, and operational in more than 60 countries around the world Assets: $2.1 trillion Main business: Investment banking, financial services for consumers, small businesses and commercial banking, financial transaction processing, asset management, and private equity www.jpmorganchase.com

ON THE SPOT

“My sense is that whenever a Chamber from Japan, or from any other part of the world, has visited Washington in recent years, they have met a fairly difficult audience.” BIOGRAPHY William M. Daley ■ Age: 61 ■ Born: Chicago, Illinois; August 8, 1948 ■ Education: De La Salle High School, Chicago; Loyola University, Chicago; and John Marshall Law School, Chicago ■ Married: To Loretta ■ Hobbies: Water skiing Career ■ Senior executive of the Midwest region for JPMorgan Chase & Co. and member of the Executive Committee and International Council since May 2004; President of SBC Communications Inc. from December 2001 to May 2004; Chairman of Vice President Al Gore’s 2000 presidential election campaign, prior to serving as U.S. Secretary of Commerce from January 1997 to June 2000 in President Bill Clinton’s Administration.

years, they have met a fairly difficult audience. That is not to say that Washington is becoming protectionist, but now is not the time for crazy action—because of the pain that is going on in U.S. communities. It is always easier to blame that on trade. When it comes to Japan, it’s also a very difficult message to deliver because of the overwhelming love affair in business circles with China. Whatever policies are attempted by any administration have been swamped by the business community and that, in turn, is skewing the ability of the policy-makers to look at Japan in a more considered way. What is your outlook on the state of the broader economy? It’s anybody’s guess, really, but it feels as if we’re bouncing along the bottom of a normal recession. And most of our expert guessers say that we will most likely see growth—although not health—in the fourth quarter of the year and it will be the end of the first quarter of next year before we can all breathe a little easier. I think unemployment will remain a problem in the U.S. and will settle at about 6%—and we will just have to get used to that. I think there will be dramatic changes in the way in which we all live,

and anyone who thinks we will soon be back to the good old days of three years ago is crazy. I don’t think we’ll see that again in my lifetime. People talk about a “V-shaped” recovery, but I don’t see that; I expect to see a shallow “U-shaped” return to growth, although not immediate health. Returning to the situation in the U.S., do you expect healthcare reform to be a top priority for this administration? I think it is the single biggest issue and that President Obama intends to attempt to do something about reforms. We are now getting some big names coming to the table and saying that America needs to do something about its health system because it is not working. I would not bet against serious moves at healthcare reform later this year, and if this administration hits the bull’s eye on this, then it will become the issue that it will be truly remembered for. President Obama was elected with the support of young people and others who had not voted before. Does he run the risk of disappointing that group of people who have only just become engaged? It’s a big risk. There is no doubt that young people have become re-engaged in public service, teaching, the community, and there is a certain sense that they want to fix what we have screwed up. This last election campaign took advantage of the Internet and the social networking phenomenon. Taking that into the governing world is much harder, but people are going to be much more connected. How would you assess President Obama’s first 100 days in office? I have a very positive impression of his first 100 days, considering that he is dealing with two wars, an economy that no one has seen since the Great Depression, and a contagion from that recession.

He has picked good people and talked about a whole host of issues, from healthcare to the environment and foreign policy. The first 100 days have completely Julian Ryall is changed the tone that The Daily Telegraph’s Tokyo had been there for a while correspondent. before that. ■

July 2009 | The Journal | 27

Bridging the Divide ASSESSING THE U.S.-JAPAN RELATIONSHIP. By Julian Ryall Photo by Tony McNicol

J

apan needs to stop wringing its collective hands at the position it occupies on the global stage and, instead, underline its achievements, its strengths and the very important role it plays in world affairs. This assessment was by Norman Mineta, who has served as both transport and commerce secretary in the United States government and is now vice chairman of public relations firm Hill & Knowlton. Mineta said the country of his parents’ birth has nothing to be shy about. “Japan is the number two economy in the world, and it has a great deal to offer; yet there always seems to be this handwringing,” said Mineta, during a lecture at The Sasakawa Peace Foundation in late March. “Japan is also now on the United Nations Security Council; it should not be a shrinking violet. I know that some of the issue is cultural, but it seems to me that Japan needs to stiffen its back and actually lead.”

28 | The Journal | July 2009

Such a step is doubly important when much of the rest of the world is looking to China and India as emerging economic powerhouses, while Japan’s achievements—including meeting its U.N. obligations and excellent development work in Africa—go unnoticed, said Mineta. Asked why Japan might feel unable to promote itself more visibly, he suggested that a revolving door of prime ministers might be affecting the stability of the political system and instilling a damaging sense of uncertainty in both the public and incoming governments. While Bill Clinton was U.S. president, Mineta pointed out, he dealt with seven Japanese prime ministers over eight years; George W. Bush had five prime ministers in two terms of office. Yet, despite such changes in governments, Mineta emphasized the importance of the relationship that exists across the Pacific. “My father said that Japan was the land of his birth, but that the U.S. was the land

of his heart,” said the 78-year-old Mineta. “I am also very proud of my ancestry and I have tried to build bridges of cooperation and understanding between the citizens of these two great nations. Those bridges have been built not by one person, but by generations of people like you and me.” Mineta’s father left Shizuoka Prefecture at the age of 14 in search of new opportunities, later marrying at age 24 and first meeting his new bride when she arrived to join him in California. Norman Mineta was born in San Jose in 1931; the entire family was held at the Heart Mountain internment camp in Wyoming for four years, following the U.S. entering World War II in 1941. That experience made him more resolute to become a bridge between the two cultures and peoples. After graduating from the University of California at Berkeley in 1953, he entered the U.S. Army and served as an intelligence officer in Japan and South Korea.

BRIDGING THE DIVIDE

After returning to San Jose, Mineta was elected to the city council and later served as mayor from 1971-74. The attributes that he honed in his early years have served Mineta well in later public service. “During the war, Japanese-Americans were interned in camps for the duration and, at the time, no matter who we went to for help, nobody would help us,” he said. “Two things that I have done since I have been in public office are, firstly, to be accountable for my actions and, secondly, to be accessible to my constituents. “If someone comes to you with a problem, try to help them,” he emphasized. Mineta said that he saw the same attributes in then-Senator Barack Obama as he was vying for the Democratic Party’s presidential nomination. That is why he opted to support a candidate who was, at the time, trailing badly in the polls—and in spite of a long and effective working relationship with the Clintons, going back to his spell as Secretary of Commerce under Bill Clinton for the six months until the end of his presidential second term in January 2001.

“I saw it in Obama’s approach; he was a bit like me,” said Mineta. “He did not have all the answers and he would ask people what they thought about an issue. I was attracted by his willingness to listen to people. “I know that I owe President Clinton a great deal—I was the first Asian-American to be a member of a U.S. Cabinet— but I felt that obligation was not as important as what we should be doing in terms of finding direction for the country,” he said. “It was a tough decision, but I’m pleased today as I see him in office.” Mineta had many years of public service, but is arguably best known for being the man who, as Secretary of Transportation, on September 11, 2001, ordered every civil aircraft to be grounded for the first time in U.S. history. When he left the post in July 2006, Mineta had been the longest-serving Secretary of Transportation ever—an achievement made all the more remarkable by the fact that he had been the only Democrat in a Republican government (from 2001). Mineta jokes that he got more mockery for being a Californian in an overwhelmingly Texan administration. He is now looking forward to the new government rebuilding some of the relationships that have been previously neglected. “In the last eight years, I have had the general feeling that the U.S. has not been working well with many of our partners, and this administration sees rebuilding those relationships as part of its task,” he said. “I think we will find more and more initiatives coming about and I hope that as President Obama will go to the next APEC meeting, he might possibly also come to Japan as part of that trip. “That would show how important Japan is,” he added. And for Mineta, that relationship stands above all the others. “The U.S. and Japan are friends, and it bears repeating that the U.S. has no more important relationship than the one it has with Japan,” said Mineta. “President Obama reinforced this by hosting Prime Minister Taro

Aso in Washington as the first foreign leader to visit the White House.” A good working relationship and friendship between Tokyo and Washington is “an absolute must,” he said, given the realities of the economic, political and strategic interdependence that has evolved since the U.S. became the first nation to sign a treaty that established a relationship with Japan. “The central need of our time, firstly, is peace,” he pointed out. “The U.S. and Japan know the value of peace, and we have devoted our resources to building

“The U.S. and Japan are friends, and it bears repeating that the U.S. has no more important relationship than the one it has with Japan.” Norman Mineta things up instead of tearing them down. Secondly, it’s the economy. Peace cannot exist without prosperity, and there is no prosperity without peace. We can have neither unless we work to achieve both.” Similarly, it will be far easier to solve the economic crisis that threatens to engulf the entire world if the two largest economies continue to work together toward that end, according to Mineta. He next turned to his third point, the question of democracy. “People with prosperity crave more freedom, and open societies are one of the best guarantees of peace and stability,” he said. “Keeping doors open is a principle that Japan attaches much importance to. “Our nations have sprung from different pasts, but they have been brought together by similar Julian Ryall is spirits of determination,” added The Daily Telegraph’s Tokyo Mineta. “Together, there is correspondent. nothing that we cannot do.” ■

July 2009 | The Journal | 29

David W. Powell What is the most important asset for your success? Is it a patent, a design, a technology, a business model? Most executives would say it is their employees and point to training

30 | The Journal | July 2009

programs to develop their technical and leadership skills. But what if I said your employees may need more m support to achieve their maximum potential for your customers, themselves themse and your company? y And thatt the reason has noth no thing to do with thei th nothing their skills? W Wh at I am talking about is the What gr row owing need to be growing better manage the p ph y ical and men ys physical mental health of employees and th their families as a st trategy to impro strategy improve the financial health of ourr corp corporations. Around t e world, gover th the governments and em e mployers shar employers share concern about grow gr ro ow wing healthcare health growing costs and prod pr o uctivity losses, lo productivity particul rly in light of aging populala larly lifest tions and lifestyle changes that have led us to eat more and exercise les less. Increasingly, co our ability to compete depends on addressing tthis concern. A culture of healt culture health provides for the delivery o of health and wellness p programs that enco encourage employees be to become engaged and accountable for th own health, their w which translates in higher producinto tivi tivity and lower health healthcare costs. Chronic disease is the leading cau cause of death and disability in bo both the United States and Jap Japan and is the leading driver o of healthcare cost escalation o . Demographics Demogra escalation. leave our aging populations at higher risk for chronic disease. There are a number of effective strategies to prevent pr and reduce the impact of chronic di disease on productivity, including the use of vaccines,

screenings for earlier detection and lifestyle changes. The good news is that the World Health Organization estimates that 80 percent of heart disease and stroke, 80 percent of type 2 diabetes, and 40 percent of cancer could be prevented if people would do just three things: eat healthy diets, be physically active, and not smoke. There is substantial evidence that promoting wellness and prevention makes good business sense. The Journal of Occupational and Environmental Medicine (JOEM) in 2001 reported that a company providing a comprehensive health promotion program to employees could pay for that program with a reduction of less than 7 percent in excess illness days. If the company were to reduce excess illness days by twice that amount, the program would actually provide a return on investment of $2 for every dollar spent. One example is smoking, which increases the risk of cancer, stroke and heart disease. According to the U.S. Centers for Disease Control and Prevention, in the U.S. cigarette smoking represents an annual cost of more than $193 billion when both productivity losses and healthcare expenses are factored in. A 2001 study by Japan’s Health Economics Research Institute estimates annual tobacco-related healthcare costs and lost labor resources in Japan at ¥7.1 trillion. There is a lot that can be done, including smoking bans in workplaces and innovative therapies to help smokers quit. In 2007, Johnson & Johnson Medical became one of the first companies in Japan to enact a complete ban on smoking by employees 1) at any time on any Johnson & Johnson location or property and 2) anywhere during official working hours.

ILLUSTRATION FOR THE ACCJ JOURNAL BY DARREN THOMPSON

A CULTURE OF HEALTH FOR CORPORATE COMPETITIVENESS

OPINION LEADER

デイビッド・W・パウエル 健康の文化と企業の競争力 Another example of the benefits of a culture of health is related to the productivity of overweight and obese workers. This is an area of acute concern in the United States, where fully two-thirds of the adult population is considered overweight or obese. The American Diabetes Association estimates that direct and indirect costs of obesityassociated conditions in the U.S. amount to $98 billion a year. As seen by the focus on the prevention of lifestyle-related diseases in Japan’s “Healthy Japan 21” plan, these issues are becoming areas of concern in Japan as well. Employees at Johnson & Johnson around the world are eligible for wellness and prevention programs. The goals of our programs are to improve the health and productivity of our workforce and, in turn, control healthcare costs. The program components often include an online health risk assessment, lifestyle and disease management counseling, health risk intervention programs, environmental and cultural support, financial incentives for participation, and access to fitness centers. A study of our employees in the U.S. published in the JOEM in 2000 showed our health and wellness program resulted in timeadjusted savings of $400 per employee per year and improved health status was achieved in eight high-risk areas, including cholesterol, blood pressure, and tobacco use. The bottom line is that these programs can bring significant health benefits to our employees and value to our customers and the business overall while reducing overall healthcare costs throughout the country.

成功へ導く最も重要なものは何でしょうか。特許や設

まる喫煙が挙げられます。米国の疾病予防管理センター

計、技術、それともビジネスモデルですか。大抵の経営幹

によると、米国における生産性の損失と医療費とを考慮

部は、最も重要なものは従業員だとし、技術やリーダー

した場合、喫煙は年間1,930億ドル以上の損失に相当し

シップの能力開発プログラムに力を入れているでしょう。

ます。また、2001年に日本の医療経済研究機構が行っ

しかし、あなたの従業員が顧客、会社そして自分自身の

た調査では、日本における年間の喫煙に関連する医療

ために可能性を最大限に発揮するには、それだけでは足

費と労働資源の損失は、7.1兆円に上ると見積もってい

りないとお考えになったことはありませんか。その鍵は

ます。職場での喫煙禁止や、革新的な禁煙治療の提供な

個人の能力開発や技術とは全く関係ないところにあるか

ど、実施可能な策は数多くあります。当社の日本におけ

もしれないのです。

る医療機器の事業会社は、2007年に敷地内での喫煙を

ここで言いたいのは、企業の経営状態をさらに改善す

禁止し、且つ就業時間中における敷地外のあらゆる場所

るための戦略として、従業員とその家族の心と体の健康

でも従業員の喫煙を禁止した日本で初めての会社の一つ

状態を今以上に上手に管理する必要性が高まっていると

になりました。

いうことです。特に、高齢化の進展や、食事量が増える一

健康の文化のもう一つの利点は、太りすぎ、および肥

方で運動量が減るという生活習慣の変化にともなって、

満を抱えた従業員の生産性に関するものです。米国では

世界各国の政府や雇用者は誰もが、医療費の高騰と生産

成人人口の実に３分の２が、太りすぎ、あるいは肥満で

性の損失に関しての懸念を抱いています。企業の競争力

あると見なされており、この問題に対する深刻な懸念が

は、この懸念にどれだけ対応できるかに左右されるとい

示されています。米国糖尿病協会によると、米国におけ

う傾向が高まっています。健康の文化が存在することで、

る肥満の状態に関連して発生する直接および間接的損

従業員自身が健康に関心と責任を持つことを推進するプ

失は、年間約980億ドルにも上ります。 『健康日本21』の

ログラムが組まれれば、生産性が高まり、医療費が減る

計画において、生活習慣に関連した病気の予防に重点的

ことにも繋がります。

に取り組んでいるように、こうした問題点は日本でも大

慢性疾患は、日米における死亡および障害の原因の第

きな関心を呼ぶものとなってきています。

一位であり、医療費が高騰する最大の原因にもなってい

世界中のジョンソン・エンド・ジョンソンの従業員は、

ます。統計的な観点からも、高齢化が進む両国民は高い

健康推進および病気予防プログラムに参加することがで

慢性疾患のリスクにさらされているといえます。慢性疾患

きます。このプログラムは、従業員の健康と生産性を高

による生産性への影響を防ぐ、あるいは軽減するための

めると同時に医療費を抑えることを目標としています。オ

効果的な戦略としては、ワクチンの利用、早期発見のた

ンラインの健康リスク評価、生活習慣および病気管理の

めの検診、生活習慣の改善などがあげられます。そして朗

ためのカウンセリング、健康上のリスクに対する診療、職

報としては、世界保健機関（ＷＨＯ）が、健康な食生活、

場環境における支援、参加を促進するための金銭的イン

適度な運動、禁煙というたった3つの事柄を実践するだ

センティブ、そしてフィットネスクラブなどが含まれてい

けで、心臓疾患や心臓発作の８割、2型糖尿病の８割、そ

ます。米国内の従業員に対して調査を行ったところ、この

して癌の４割が予防可能と予測していることです。

プログラムにより、従業員一人あたりの節減コストが年間

健 康を推 進し、病気を防ぐことが、ビジネス面でも

400ドルに上り、コレステロール、血圧、および喫煙など

大きなメリットに なるという実 質 的 な証 拠 がありま す。2001年の学術誌Journal of Occupational and Environmental Medicineには、 「従業員に対し包括的 な健康推進プログラムを提供している企業では、超過病 欠日数が約7%削減され、それによってプログラムへの投 資費用が相殺される」という報告があります。さらに、そ

の８つのリスク分野において健康状態が改善されたとい う結果が得られたのです（2000年の学術誌Journal of Occupational and Environmental Medicine）。  従業員の健康増進、顧客に対する価値、企業の競争力 強化、さらに国全体の医療費削減ということが、これらの プログラムの本質なのです。

の倍の超過病欠日数の削減に成功すれば、健康増進プロ グラムに投資した金額1ドルごとに、2ドルの投資効果を

ジョンソン・エンド・ジョンソン株式会社

David W. Powell is President of Johnson &

得ることになるというのです。

代表取締役社長

Johnson K.K.

例として、癌、心臓発作、そして心臓疾患のリスクが高

デイビッド・W・パウエル

July 2009 | The Journal | 31

MBAs:

Taking Care of Business FOR THE FAST TRACK TO SUCCESS, TAKE A TOP QUALIFICATION. By David Umeda

M

BA programs remain a viable means to lead corporations into the future. At the critical initial stages, GMAT scores provide universal ground to aid global programs in choosing the best-qualified candidates. According to GMAT CAT.com, the average GMAT score for the class of 2008 applying to the London Business School was 682, the median 680, and the middle 80% range 620-740. In the end, among the 1,807 applicants, 21% were accepted into the program. The median score is slightly higher for the MBA Programs at Harvard (720 for 6,716 applicants), Wharton (710 for 5,663), Stanford (720 for 4,868), MIT Sloan (710 for 2,944) and Yale (710 for 2,220). According to the Graduate Management Admission Council, an international organization for schools offering MBA degrees, more than 75% of its members reported an increase in demand for places on their programs in 2008. Yet, the allure of higher education in business is not limited to the quality of the learning materials, lectures and research. It’s more about connecting with future colleagues and collaborators, and having the experience relate to localized and regional issues. GradSchools.com, the most comprehensive online resource of graduate school information, lists 25 higher education institutions providing an online or campus business administration

32 | The Journal | July 2009

degree in Japan. MBA Programs.org, the No. 1 MBA programs guide, indicates that a Japanese MBA can be earned at Aoyama Gakuin University (Shibuya), Hitotsubashi University (Kunitachi), Keio Business School (Hiyoshi), International University of Japan (Niigata) and Waseda University (Shinjuku ward). QS TOP MBA, a leading global career and education network, places the latter two universities, along with Ritsumeikan University (Kyoto), as the Japan-based institutions in its 2008/9 top 200 business schools around the world preferred by most international employers (HR officers and line managers with recruitment responsibility). The Globis Management School (GMS) is one of Japan’s largest business schools, having turned out more than 30,000 professionals from its Tokyo, Osaka and Nagoya campuses, and its e-learning program. Since April 2009, Globis University offers its International MBA Program (IMBA) entirely in English. The IMBA curriculum emphasizes creation and innovation, as well as practicality. The IMBA also features a unique, diverse student body with an enthusiasm for interactive learning. IMBA students learn through case studies and other methods, delivered by lecturers with rich international business experience. At Temple University, Japan Campus (TUJ), the renowned Fox School of Business and Management provides a highquality MBA program with an executive concentration. It is

MBAs: TAKING CARE OF BUSINESS

© THE NEW YORKER COLLECTION 1986 JAMES STEVENSON FROM CARTOONBANK.COM. ALL RIGHTS RESERVED.

the only fully accredited American MBA degree in Japan and taught by distinguished professors from the U.S. and around the world who have either a Ph.D. or a terminal degree in their specialty fields. The McGill MBA Japan program, offered on the campus of Sophia University (Yotsuya), is a two-year 60-credit program delivered to the same standards as the full-time MBA program offered on McGill’s Montreal Campus in Canada. It has received significant international attention for its strong global perspective, the dynamic structure of its program, and the accomplished students bringing life and experience to the program. The University of Phoenix provides Japanese and international students with degree programs in some of the fastestgrowing fields including Business, Global Management, Technology Management, Information Systems, Education, and Healthcare. All is supported by a state-of-the-art virtual learning platform containing some of the best academic resources and professional tools in the world. Anaheim University’s Akio Morita School of Business in Minato Ward is named in honor of the late Sony co-founder, and has an American MBA program offering cutting-edge online learning for professionals. Launched in 1996, The Duke MBA – Global Executive (The Fuqua School of Business) was the world’s first, and remains the leading, truly global MBA program for senior executives. Candidates can live and work anywhere in the world while pursuing their MBA. A typical class is comprised of 80 to 85 students from around the world with managerial experience in a variety of fields. Each class is divided into two sections of 40 to 45 students. The ENPC MBA-Tokyo (Ochanomizu) was founded by Ecole Nationale des Ponts et Chaussées—one of the most prestigious and elite institutions in France—in collaboration with leading Japanese companies and the Tokyo Institute of Technology. The Kenichi Ohmae Graduate School of Business is the only one in Japan providing distance education services and

is accredited by the Ministry of Education, Culture, Sports, Science and Technology. Its education platform is a knowledge center with the aim to guide business leaders through the complexities and speed of managing in the 21st century. MBA in Globalization candidates receive personal instruction from Kenichi Ohmae and other world-class management executives from multinational corporations; and may participate in accelerated debates on management strategy that analyzes problems facing businesses today. The AMT GROUP (Yotsuya) offers customized seminars and individual counseling in management skills and graduate school applications’ training that give people the capabilities, expertise and insights needed to achieve success in the global marketplace. By participating in training designed to address specific areas of performance, managers and key staff can significantly improve their business effectiveness. The purpose is “Developing Global Thinkers”; by offering a holistic approach to global management training, AMT aims to help raise participants’ self-awareness, expand their vision, demystify foreign behavior, and enhance their business skills. The Gallup Organization (Azabudai) in Japan helps entities boost organic growth by increasing customer engagement and maximizing employee productivity through means that include seminars related to findings from published surveys of 10 million employees and 5 million in-depth interviews. The Japan Market Expansion Competition (JMEC) is a business-training program designed to strengthen the skills of up-and-coming business executives while fostering the development of foreign businesses in Japan. Supported by a dozen foreign chambers of commerce—including the American Chamber of Commerce in Japan—along with the European Business Council in Japan, JMEC is designed around a competition to write the best business plan. Participants in the program get both classroom and hands-on training, while project clients receive a professional business plan at a fraction of the cost of hiring outside consultants. Dale Carnegie Training (Shibuya) has evolved from one man’s belief in the power of self-improvement to a performance-based training company with offices worldwide. They focus on giving people in business the opportunity to sharpen their skills and improve their performance in order to build positive, steady and profitable results. The University of Southern California, Marshall School of Business, IBEAR MBA provides a one-year program attracting a diverse range of Pacific-rim experienced midcareer, bilingual, bicultural professionals from 12 or more countries who study in Los Angeles and also get involved in five-month projects with sponsor firms involving two weeks of fieldwork abroad. When it comes to higher education and business, institutions in Japan remain committed to providing opportunities that meet a steady demand despite the prolonged economic slowDavid Umeda is down—or, perhaps, because of the need to correct Senior Editor at Paradigm practices that had led to the subprime debacle to begin with. ■

July 2009 | The Journal | 33

Bubble Lessons J

apan and America are on equal footing now. This was not always the case. Throughout the 1990s, Americans were seemingly entitled to justified superiority. After all, the fabled Japan economic miracle machine had failed, had gone from bubble to bust. Against this, America’s model of capitalism went from strength to strength—or so it seemed, until the credit and debt crisis hit. Booms turn into bubbles turn into bust. Looks like both the old-style Japan Inc. model of capitalism and the U.S. free markets approach ended up leading to the same result. Economic bubbles are extremely complex phenomena, but Japan in the late 1980s and America in the past decade shared many similarities. Gold-flaked sushi was served in the Ginza in 1989 and I definitely did get the same dish in New York a couple of years ago. For an economist, all bubbles are money and credit phenomena. Essentially, the relationship between money and credit growth and real economic growth starts to get out of whack. In this respect, the Japan bubble and the U.S. bubble have important similarities—but also great differences. Have a look at the table—Money Matters. Here I have calculated the marginal financial multiplier. How much finance— straight loans or forms of credit that soothe investor nerves such as derivatives, structured products, asset-backed securities—is needed to make one unit of GDP? Before the big financial deregulation drive that started in the mid-1990s, America needed $3

34 | The Journal | July 2009

of finance to make $1 of national income (GDP). Of that $3 of finance, $1.80 was straight bank loans and $1.20 was other credit (sometimes called “shadow banking”). After deregulation started, this multiplier increased; and between 1996 and 2006 America needed to mobilize $6.10 of finance to create $1 of GDP. At the peak—in 2007—that multiplier shot up to almost $8 of finance needed for $1 of GDP. You can see that a huge gap opened up between finance and the real world. Good for the bankers and financers; but when you look at this cold-heartedly, the economic efficiency of finance actually declined—ever more dollars of financial creativity was needed to make GDP grow. By 2007, Americans for the first time ever spent more money on their brokers and financial advisers than they did buying cars. In Japan, the bubble brought a similar gap between finance and real economic growth. However, the magnitude was much smaller than in the U.S. Specifically, at the peak of Japan’s bubble in 1987, the nation needed only $4.80 of finance to make $1 of GDP, compared to the $7.90 needed in the U.S. at its bubble peak. So while the economics is similar, the absolute magnitude of the U.S. bubble was bigger. But there are two other important bubble differences. You see that Japan’s bubble was primarily driven by straight bank loans, while the “other credit”—the shadow-banking world of derivatives and structured finance—barely expanded. Not much

JESPER KOLL WRITES

Money Matters

deregulation, not much financial innovation; just a plain old expansion of plain vanilla bank-credit growth. Not so in America. You see from the table that the big part pushing up the U.S. financial multiplier was the “other credit” component—lots of innovation and creativity, whether subprime mortgages, or things called names such as “dual switch back knock-in swaptions.” So the second difference is that Japan’s bubble was Zen-like in its financial simplicity, while that of the U.S. was complex, multilayered and hyper-creative. The third difference is local versus global. The Japan bubble was a local phenomenon. It was Japanese bankers, lending to Japanese companies, against Japanese real estate collateral. There was no non-Japanese buyer of these assets. Indeed, throughout the late 1980s, foreign investors were steady sellers of Japanese stocks. In contrast, the U.S. bubble was very global. The BIS (Bank for International Settlements) estimates that perhaps as much as two-thirds of the securities created on U.S.-based assets ended up being sold to non-U.S. investors—Japanese pension funds, German insurers, China’s sovereign wealth fund, Brazilian mutual fund investors. Japan was local, the U.S. very global. The point of all this is to make clear that, actually, the Japan bubble and the U.S. bubble—while sharing a similar pattern of boom, bubble, bust—are actually very different in magnitude, complexity, and global versus local. This suggests that

U.S.

1985-95

1996-06

2007

Loans

1.8

2.3

2.1

Other credit

1.2

3.8

5.8

Total

3.0

6.1

7.9

Japan

1980-85

1985-90

1987

Loans

1.2

2.1

3.7

Other credit

0.5

0.9

1.1

Total

1.7

3.0

4.8

SOURCE: JESPER KOLL, BOJ & FED

Marginal Loan and other Credit Growth Multiplier – Ratio to GDP Growth

the lessons learned from Japan may actually have only limited application for the U.S. But there is, after all, some good news in this. The very fact that the U.S. bubble was global actually may turn out to be the saving grace that allows America to escape the kind of “lost decade” experience of stagnation and deflation that Japan went through. In Japan, the hit from the bubble collapse—the negative wealth effect, the asset write-downs, the capital shortage, the surge in the budget deficit—all had to be taken directly by the Japanese people. In contrast, America has “spread the pain” across the globe. Given that America is not an export-dependent economy—it remains a massive importer—this lays the founJesper Koll is President and dation for a recovery that, in my CEO of Tantallon view, could well be much more Research Japan. lasting and substantial than what we have seen in Japan. ■

July Ju Jul uly 2 u 2009 009 0 | T The h J he Jo Jou Journal ou urna al | 35 35

HIGHER EDUCATION Special Advertising Section

Thought Leadership for Japan’s Future: Educational End-runs around Difficult Times Quality control and corporate best practices were, lest we forget, among Japan’s famed exports during the brief decade of the 1980s, until postBubble imperatives for systemic reform hit with painful clarity—in banking, corporate governance, and national economic strategies, among others. A looming question as Japan faces daunting challenges going forward—due not only to a rapidly aging society and the outright decline in its workforce, but to historically low productivity at home and the rise of competitive giants abroad—is whether educational reform has kept pace with the needs of a more globally engaged Japanese economy and society. What forces are at work to ensure Japan’s future “thought leadership,” and what role does education play therein? Perplexing educational trends have emerged in recent years. As recently as a decade ago, Japan led in the number of students seeking studyabroad opportunities in the U.S., for instance. India, China and South Korea have now surged ahead, with Japan in fourth place and its numbers having dropped dramatically from over 47,000 students a year in 1997, to fewer than 34,000 last year. Numerous factors have converged into a “perfect storm” scenario to explain this sobering trend—which is an across-the-board decline in study-abroad from Japan, not just to the U.S. Factors leading to lesser numbers of Japanese studying abroad range from an outright decline in 18-year-olds and a surprising concomitant rise in universities located in Japan (currently 765)—such that high school graduates could, in theory, now find a college seat waiting and eager for them to matriculate—to significant changes in the economy and employment cycle. With near full-employment in recent years—rudely interrupted by the recessionary meltdown since September 2008—students needn’t venture abroad to broaden their skill sets; and many had lined up their entry-level career slot by the end of their Junior year in college, making any “Junior Year Abroad” experience a risky, far less attractive consideration to pursue. Now, at a time of an increasingly global economy abroad, and a matching need for Japan’s future corporate leaders to gain international exposure in order to compete with greater fluency—both in English and managerial acumen—the emerging trend has been to stay in a comfort zone at home in affluent Japan, eschewing the risk of venturing into new and life-altering educational overseas adventures.

36 | The Journal | July 2009

Yet, the risk to Japan is a return to insularity; and the risk to the all-important Japan-U.S. relationship is that it will not be nurtured to grow and flower over the decades to come. Fortunately, at polar opposites, American students coming to Japan—despite rising interest in China, and while the number remains relatively small overall—are actually on the rise; and there is increased interest on American university campuses to study the Japanese language. The portrait of Japan’s educational future is not, thankfully, all doom and gloom. Numerous new international programs have sprouted at Japanese universities—some actually requiring study abroad—and a competition is under way to be recognized by the government as one of 30 “Global Universities” defined by a magical 30% or more of international students and faculty, increased course offerings in English, and commitment to raising the stature of Japanese educational institutions in global rankings. From the Prime Minister’s Office on down, with strong initiative and support from the Ministry of Education, Culture, Sports, Science and Technology, a national effort is under way to increase the presence of international students in Japan from the current 130,000 or so to a targeted 300,000 per year. Meeting this ambitious goal will require concerted improvements in infrastructural support that responds to the needs of—and more successfully attracts—students from abroad; once met, the internationalization target will likely signal, and instigate, a ripple effect throughout Japanese society. What of the needs of the corporate sector—both Japanese and American – and their shared interest in securing graduates as new employees based in Japan? An irony of economic downturns in the past has been a dramatic increase in candidates seeking advanced degrees—including MBA training. While not a panacea, the anticipated rise in Japanese MBAers and other graduate degree-seekers, both from the U.S. and in Japan, bodes well for the longer-term “thought-leadership” to emerge and bolster the competitive edge of business—foreign and domestic—in Japan.

David Satterwhite, Ph.D. Co-Chair, ACCJ University Briefing Committee Executive Director, Fulbright Japan

International Christian University Graduate School Tel: Fax: E-mail: Web:

0422-33-3232 0422-33-3688 gsg@icu.ac.jp www.icu.ac.jp/

We are living through exciting times in this Age of Information, witnessing rapid advances in science and technology. ICU’s Graduate School has the determination to actively participate in this progress by maintaining expertise in fundamental fields, while opening doors to explore frontiers of innovative research in newly emerging areas. To better prepare for present-day challenges and strengthen the quality of education, we believe that modern graduate education should offer opportunities to explore the depth of each discipline, but at the same time emphasize breadth across disciplines to allow students to contribute to advances in interdisciplinary research. Our new Graduate School of Arts and Sciences, integrating the current four divisions, will start offering programs from April 2010. The Master’s level programs, enriched with new courses, (1) introduce a more liberal approach to graduate education by promoting transferable skills; (2) offer school-wide interdisciplinary courses; and (3) support studies in innovative fields spanning across multiple disciplines. The new Ph.D. program will offer a wide range of research fields flexibly defined by the expertise of each member of our experienced faculty. Students will concentrate on advanced research while participating in other educational and research activities outside their field.(Dean of Graduate School, Prof. Grant R. Pogosyan)

With real-time content produced in-house, and leading training delivery systems, the Kenichi Ohmae Graduate School of Business goes beyond the boundaries of traditional education.

McGill MBA Japan Program Tel: E-mail: Web:

03-5215-1383 Philip.oneill@mcgillmbajapan.com www.mcgillmbajapan.com

McGill’s two-year program, taught by professors flown in from the Desautels Faculty of Management of McGill University in Montreal, Canada, is among the top weekend programs for working professionals anywhere in the world. Studying while you work lets you bring new outlooks, skills and mindsets that you can apply right away to the business challenges you face at work. The McGill MBA Japan program brings together students from over 18 different countries who are working in industries ranging from manufacturing, finance, consulting, government, through to IT and not-for-profit organizations. McGill brings this truly diverse, global learning environment on the campus of Sophia University. McGill MBA Japan program leads to a degree from McGill University: ranked among the world’s top universities. The turbulent global business environment demands knowledge, strength of character, and flexibility—along with a real understanding of the pressing issues organizations face today. Find out how the McGill MBA Japan program can help you invest in your world, your ideas and your future. Find out how McGill can help you re-invent your career and your future by attending an Open House at Sophia, or by contacting McGill for an individual consultation. Tel: 03-5215-1383, e-mail Philip.oneill@ mcgillmbajapan.com or visit: www.mcgillmbajapan.com

Sophia University (Jochi Daigaku) Web:

Kenichi Ohmae Graduate School of Business Tel: Fax: E-mail: Web:

03-5860-5531 03-5297-1782 bbtuniv@ohmae.ac.jp www.ohmae.ac.jp/gmba/

The Kenichi Ohmae Graduate School of Business is the only graduate school of business in Japan providing distance education services and accredited by the Ministry of Education, Culture, Sports, Science and Technology. Its education platform is a knowledge center with the aim of guiding Japanese business leaders through the complexities and speed of managing in the 21st century. Rather than adopting the standard theoretical, academic approach, courses focus on the practical skills required to perform and produce results in the global economy. The Internet-, satellite-based distance education system enables MBA in Globalization students to receive personal instruction from Kenichi Ohmae himself and other world-class management executives of multinational corporations, throughout the two-year intensive program. Students may participate in accelerated debates on management strategy, analyzing problems facing businesses today—from where and when they like—and complete their MBA while continuing employment.

www.sophia.ac.jp www.fla.sophia.ac.jp/

Founded by the Jesuit missionaries in 1913, Sophia University is one of the pioneers in Japanese international education. Located in Yotsuya, a 5-min train ride from Shinjuku and within walking distance of the Diet, 12,000 students study in 8 faculties and 10 graduate programs. The undergraduate program at the Faculty of Liberal Arts (formerly the Faculty of Comparative Culture), and MA/Ph.D. programs in Global Studies are full-degree offerings taught in English, leading to degrees accredited by the Japanese Ministry of Education, Science, Sports and Culture. The university is well known for its international atmosphere, excellent language programs, and outstanding research—preparing students for a wide-range of careers in international and Japanese firms and organizations. Every year, over 400 Sophia students study abroad, while 300 students from 140 exchange partner universities come for hands-on experiences in Tokyo on an ideally situated cosmopolitan campus. The student-to-faculty ratio of 17 to 1 allows for small class sizes and personal attention, and students in all programs have many opportunities to experience diversity and close interaction. With a global mission to prepare students for today’s rapidly changing world, Sophia continues to educate “the whole person,” offering opportunities for students to grow intellectually and personally as “Men and Women for Others, with Others.”

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HIGHER EDUCATION | Special Advertising Section

Universities & MBA Programs

HIGHER EDUCATION Special Advertising Section

Temple University, Japan Campus Graduate Programs Tel: E-mail: Web:

0120-86-1026 tujinfo@tuj.ac.jp www.tuj.ac.jp

Temple University, Japan Campus (TUJ), is the oldest and largest foreign university in Japan. Founded in 1982, TUJ has developed into a nationally recognized institution offering an extensive range of educational programs. In addition to its core undergraduate and graduate programs that are accredited by the Middle States Association of Colleges and Schools, TUJ also offers an Englishlanguage preparation program; continuing education courses; and corporate education classes. MBA: TUJ offers the only fully accredited American MBA degree in Japan, recognized by AACSB International, the premier accrediting agency for management education programs worldwide. Classes on Saturdays allow you to earn this advanced degree without disrupting your work. Law School: Temple University School of Law offers the only year-round law program in Japan accredited by the American Bar Association. Classes in the evening enable working professionals to earn a master of laws degree (LL.M.), obtain a certificate of legal studies or audit courses. M.S.Ed. in TESOL: The longest-running program at TUJ, the Master of Education degree in TESOL is designed for anyone teaching English to native speakers of Japanese or other languages. This graduate program trains you in the practical techniques of teaching English as a second or foreign language and explores the theory behind those techniques.

University of Southern California Marshall School of Business IBEAR MBA Program Tel: Tel: E-mail: Web:

1-213-740-7140 (U.S.); 03-3568-3312 (Japan) ibearmba@marshall.usc.edu www.marshall.usc.edu/ibear

Over the years, many U.S. expats in Japan have transitioned back into the U.S. economy through the welcoming doors of the USC IBEAR MBA. IBEAR’s one-year length; global business focus; diverse, mature participants; and location in Los Angeles are ideal for this purpose. IBEAR accepts a maximum 56 mid-career, bilingual and bicultural professionals, with Pacific Rim business experience—coming from 12 or more countries. U.S. nationals are kept at one-quarter to maximize class diversity. Approximately eight Japanese nationals participate each year. Special Features - International Business Consulting Project IBEAR MBA teams work closely for nearly five months with sponsor firms on projects such as country-focused market-entry or regional business development strategies, offshore manufacturing feasibility, international sourcing, cross-border acquisitions and the establishment of joint-venture operations. Most teams spend two weeks on fieldwork. Past projects have required travel to Argentina,

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Australia, Belgium, Brazil, China, Colombia, England, France, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Mexico, Philippines, Spain, Russia, Taiwan, Thailand and Switzerland. Other IBEAR specific features include distinguished international executive luncheons, attendance at Marshall’s Asia/Pacific Business Outlook conference and Pacific Rim Entrepreneur Summit, and a strong international alumni network—colleagues worldwide who are genuinely interested in helping your business. Contact us today for more information at www.marshall.usc.edu/ibear

International Schools The American School in Japan (ASIJ) Web:

www.asij.ac.jp

Serving students from over 36 countries, The American School in Japan has offered a coeducational, college preparatory program since 1902. ASIJ’s Early Learning Center in Roppongi Hills caters for our youngest students, and was designed specifically to meet their needs—with a library, music room, indoor and outdoor play spaces, and an abundance of stimulating and imaginative materials in each classroom. ASIJ’s 5.5ha Chofu campus also features excellent facilities, including two athletics fields, three libraries and gymnasiums, and an indoor pool. A state-of-the-art performing-arts wing featuring a 420-seat theater, black box theater and digital video studio opened in 2005. This year saw the addition of a new outdoor learning space for elementary students. Over 160 highly qualified faculty members provide a challenging academic experience designed to fulfill our mission to “develop compassionate, inquisitive learners prepared for global responsibility.” High School Advanced Placement courses—and the challenge to students of all ages to passionately pursue excellence in everything they do—form the basis for a lively educational community. An inclusive program of co-curricular activities—including sports, drama, art, music and service clubs—complements classroom learning. Mary Margaret Mallat, ASIJ, 1-1-1 Nomizu, Chofu-shi, Tokyo 182-0031, Tel. 0422-34-5300, ext. 721; Judy Beneventi, Early Learning Center, 6-16-5 Roppongi, Minato-ku, Tokyo 106-0032, Tel. 03-5771-4344. E-mail (both): enroll@asij.ac.jp

Christian Academy in Japan (CAJ) Tel: Fax: E-mail: Web:

0424-71-0022 0424-76-2200 admissions@caj.or.jp www.caj.or.jp

Christian Academy in Japan (CAJ) equips students to impact the world for Christ. The school fosters a biblical worldview and provides an American-style program in English. CAJ’s more than 450 students come from a combination of missionary and business families, and represent over 27 countries. The school is governed by a board elected from six evangelical missions. Conveniently located in northwest Tokyo, CAJ offers an accredited, college-preparatory, Christian education. CAJ’s curriculum is designed

Makuhari International School Tel: Fax: E-mail: Web:

043-296-0277 043-296-0186 head@mis.or.jp www.mis.or.jp

Makuhari International School opened its doors to 175 foreign, dualnationality and Japanese returnee children in April 2009. We are the only recognized international school in Chiba Prefecture, as well as being the only Article One International School in the whole of Japan—formally recognized by the Ministry of Education. We provide a unique internationally minded educational experience based around the objectives found within the Japanese curriculum. At Makuhari International School, our children learn predominantly in English, along with taking Japanese or Japanese Studies classes. We provide small classes for children from Kindergarten up to Elementary school, and our overriding philosophy at Makuhari International School is that all children are unique and special. We provide a learning environment where children are supported and challenged, as well as encouraged, to become independent thinkers and lifelong learners—a school where children are valued and nurtured. Our specified-purpose designed and built school offers the very finest in modern physical resources, modern teaching technology, as well as a range of excellent indoor and outdoor learning environments.

Nishimachi International School Tel: Fax: Web:

03-3451-5520 03-3456-0197 www.nishimachi.ac.jp

Nishimachi is a co-educational, nonsectarian school, K-9, accredited by the Western Association of Schools and Colleges (WASC) and Council of International Schools (CIS). A diverse student body of over 440 students represents 25 countries. Nishimachi is conveniently located in central Tokyo, accessible by public transportation. Nishimachi International School has been offering an education in which the core subjects are taught in English and, at the same time, all students study Japanese daily. We believe that studying a

second language enables students to grow beyond a single culture. Nishimachi’s mission is to educate children to be international and independent thinkers. At Nishimachi we help students develop the skills and attitudes they need to live harmoniously and meaningfully in a borderless world. Starting in kindergarten, each student works toward specific goals as outlined by our schoolwide learning expectations. They become communicators, thinkers, responsible learners, collaborative workers, developers of quality work, and global ambassadors. They acquire skills such as adaptability, flexibility, and the ability to work with others cross-culturally. They analyze, interpret, and come to consensus. They master diversity and practice respect. Nishimachi is celebrating its 60th anniversary in the school year 2009–2010.

St. Mary’s International School Tel: Fax: Web:

03-3709-3411 03-3707-1950 www.smis.ac.jp

St. Mary’s International School has served Tokyo’s international community since 1954, accepting boys aged 5 to 18. The school has about 950 boys enrolled from approximately 55 countries. Such an international student body, rich in cultural and religious diversity, contributes greatly to the unique educational experience offered. St. Mary’s follows a U.S. curriculum and provides a college-preparatory program including the International Baccalaureate for the 11th and 12th grades. The school also has an English as a Second Language program. In addition to our core programs, specialist teachers and facilities also are available for art, swimming, choir and band, as well as for learning Japanese and several other languages. Our programs are specifically designed to meet the educational and developmental needs of boys. 1-6-19 Seta, Setagaya-ku, Tokyo 158-8668

TUC Early Learning Center Tel/Fax: 03-3400-1579 Web: www2.gol.com/users/tuc/tucelc/index.html TUC Early Learning Center offers a high-quality, early childhood program, which provides a safe, loving, stimulating and nurturing environment for ages two to five, in all areas of their development. We are primarily a school for native English speakers, with classes conducted in English. The school warmly welcomes families of all cultures and religious faiths. In a Christian, non-competitive community atmosphere, children can blossom to their fullest potential, while being exposed to many experiences that promote creativity—taking the initiative, valuing their independence, showing respect to others and for their environment, heightening their awareness and curiosity, and expressing genuine empathy toward those around them. Our staff consists of qualified and experienced teachers from a variety of international backgrounds.

July 2009 | The Journal | 39

HIGHER EDUCATION | Special Advertising Section

to prepare students for a life of obedient response to God and responsibility for His creation. Over 90% of CAJ graduates enroll in colleges and universities. Students at all levels take core academics and electives (including art, choral and instrumental music, and computer), explore the riches of Japanese culture in field trips and apply their learning through service projects. Advanced Placement and English as a Second Language classes are available, as is assistance for children with special needs. Students use a well-equipped, four-acre campus that includes a 400-seat auditorium; a gymnasium; and academic buildings housing a 25,000-volume library, science laboratories, computer laboratories and classrooms. CAJ is a member of the Association of Christian Schools International and the East Asia Regional Council of Overseas Schools.

Japan Bodybuilding Championships

1st Digital Publishing Fair 2009 16th TIBF 2009

July 5 www.abbf.biz/next-event.html

July 9-12 10:00-18:00 www.digi-fair.jp/; www.tibf.jp/

22nd INTERPHEX Japan July 1-3 10:00-18:00 (last day: -17:00) www.interphex.jp/english/ Asia’s largest pharmaceutical event involves more than 1,300 exhibitors, attracting over 55,000 visitors. The concurrent Technical Conference offers a large volume of sessions and seminars aimed to enhance knowledge on the latest trends. The 8th International Bio Forum & Expo Japan includes 250 sessions and seminars for enhancing knowledge on the life sciences. Pharma Pack brings together the products and technologies to solve current issues, such as malpractice and traceability. PHARMA í Japan specializes in pharmaceutical and cosmetic ingredients. There are also PHARMA Sourcing and Pharma IT. Tokyo Big Sight, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

Disney Tanabata Festival July 1-7 www.tokyodisneyresort.co.jp/index Tokyo Disneyland is hosting its own Star Festival. Guests write wishes on cards that will be suspended from a centerpiece in the World Bazaar zone. Mickey and Minnie are dressed as Hikoboshi (Altair) and Orihime (Vega), respectively—the legendary star-crossed lovers, separated by the Milky Way, who can meet once a year on the seventh day of the seventh month in the lunar calendar. Tokyo Disneyland, Chiba, Urayasu Station, Tozai Line

40 | The Journal | July 2009

The Asian Bodybuilding and Fitness Federation (ABBF) was formed in 1959, and was the first IFBB-affiliated Continental Federation. The ABBF has since grown from six to 40 National Affiliates, and is proud of its membership in the Olympic Council of Asia and the General Assembly of Asian Sports Federations. Okayama (for all weight categories), south Honshu, Okayama Station, Sanyo Shinkansen (4 hr, 15 min)

7th OFMEX 2009 20th ISOT 2009 July 8-10 10:00-18:00 www.ofmex.jp/english/ www.isot-fair.jp/english/ According to organizers, Japan is the world’s leading lifestyle market. The International Office Machines & Equipment Expo Tokyo and the International Stationery & Office Products Fair Tokyo are Asia’s largest, involving 600 exhibitors from 20 countries/regions, attracting over 67,000 visitors. Concurrent fairs to OFMEX are the 4th Office Security Expo Tokyo and the 1st International Office Furniture Expo. Concurrent fairs to ISOT are the 4th International Variety-Gift Expo Tokyo, 3rd Design Accents Expo Tokyo, 3rd Hobby & Craft World, 1st Baby & Kids World, and 1st Novelty & Premium Goods Show. Tokyo Big Sight, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

The Digital Publishing Fair is a new-media event targeting Japan’s fast-growing electronic publishing, online publishing and database service markets that are predicted to be worth some ¥3 trillion by 2015, according to organizers. Attendees include publishers, editorial production professionals, printers, rights agencies, software importers, PC retailers, video/ record stores, wholesalers/distributors, corporate communication executives, advertising agencies, and more. The Tokyo International Book Fair is Asia’s leading publishing trade fair and the largest international book fair in Japan, which is the world’s second-largest publishing market. Over 760 exhibitors from 30+ countries/regions, attract more than 61,000 registered visitors from around the world. There are six concurrent specialized fairs and four special exhibit zones. Numerous seminars cover the latest industry trends. Tokyo Big Sight, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

Tokyo Toy Show 2009 July 16-19 (open to public: 18th & 19th) 9:30-18:00 (18th: 9:00-17:00; 19th: 9:00-16:00) www.toys.or.jp/toyshow/ This international venue is where new products are introduced to market inside and beyond Japan, and negotiations for the Christmas and year-end sales season take place. Over 100,000 visitors enjoy hands-on play with 36,000 items from over 135 companies. Tokyo Big Sight, West 1-4, Odaiba, Tokyo Waterfront, Kokusaitenjijo Station, Yurikamome

EVENTS LINE-UP

Harry Potter and the Half-Blood Prince July 17 premier http://harrypotter.warnerbros.com/

Harry (Daniel Radcliffe), in his sixth year at the Hogwart’s School of Witchcraft and Wizardry, discovers an old book that allows him to learn more about the dark past of primary antagonist Lord Voldemort (Ralph Fiennes). The Warner Bros. mega-hit is directed by David Yates, who was at the helm of the Order of the Phoenix (2007), and will be the director for the last two of author J.K. Rowling’s installments, Deathly Hallows: Part I (2010) and Part II (2011).

JFW-IFF July 22-24 10:00-18:00 (last day: -17:00) www.senken-ex.com The 700 exhibitors at the trade-only Japan Fashion Week-International Fashion Fair showcase men’s and women’s apparel products ranging from costume jewelry and fashion accessories, to footwear, fur & leather garments, garments, handbags & leather products. Tokyo Big Sight, West, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

to celebrate the 75th anniversary of the Japan American Football Association (JAFA). Tokyo Dome, Suidobashi Station, JR Chuo-Sobu & Tokyo Metro Mita Lines; Korakuen Station, Tokyo Metro Marunouchi & Nanboku Lines; Kasuga Station, Toei Oedo Line

Tenjin Matsuri Marine Day July 20 National holiday also known as Ocean Day.

July 24-25 www.jnto.go.jp/eng/ One of Japan’s three grand festivals is considered the world’s greatest boat festival. Osaka’s Tenman Shrine is dedicated to Sugawara-no-Michizane (845-903), the patron god (aka Tenman Tenjin) of learning and art. Kagura music when paying homage to the gods and bunraku puppet theater are presented around the city. Some 3,000 people dressed in the imperial court style of the 8th-12th centuries march beside portable shrines, and then board 100 boats near Tenmabashi Bridge to sail upstream. At dusk, the vessels are lit up with fires; and the riverbanks have pavilions where you can enjoy the cool evening air watching the fireworks display, then cheering and applauding Osakan style as the boats return.

Total Eclipse July 22 www.seejapan.co.uk The longest total eclipse of the 21st century (6:39) won’t occur again until June 13, 2132. The narrow corridor through Japan’s Ryukyu Islands is providing the best viewing. “The Sky at Night” BBC team will be onboard the SuperStar Libra—a 709ft, 740-cabin, 1,480-passenger full-fledged cruise ship— filming off the coast of Yakushima, where the eclipse lasts 3:57, from 10:55.

Notre Dame Japan Bowl 2009 July 25 www.und.com/sports/ College Hall of Fame (2008), former U.S. Collegiate National Championship (1988) and NFL coach Lou Holtz returns to lead the Fighting Irish Legends, alumni of Notre Dame University, against the Japanese national team in this classic American football match up, which is the highlight of an eight-day visit to Tokyo

Sumidagawa Hanabi Taikai July 25 www.jnto.go.jp/eng/ Along Tokyo’s Sumida River, hundreds of thousands—many dressed in traditional summer yukata and cooling themselves with uchiwa (flat) or sensu (folding) fans—enjoy hanabi in the several tens of thousands lighting up the evening skies over the old district (Taito-ku and Sumida-ku). Two vantage points are from downstream of Sakurabashi Bridge to upstream of Kototoibashi Bridge; and from downstream of Komagatabashi Bridge to upstream of Umayabashi Bridge. Throngs especially emerge out of Asakusa Station. Because the river is narrow and has a terrace with many closely built David Umeda is structures, the maximum Senior Editor at Paradigm diameter of fireworks is one gosundama (15cm).

July 2009 | The Journal | 41

ACCJ UPCOMING EVENT

Participants at the ACCJ Kanreki Special: Faces of CSR Symposium held in September 2008. This year it’s the Green Marketplace Forum.

Green Marketplace Forum: The Future of Where We Live & Work and How We Get Around Wednesday, September 30 (8:30-18:00) — Four Seasons Hotel Tokyo at Chinzan-so The Green Marketplace Forum (GMF) is an interactive event that explores the future trends and business challenges and opportunities around core areas of sustainability—integrated economic, social and ecological needs and opportunities. This GMF will focus on Green Design/Building and Green Mobility/ Transportation as they relate to our lifestyle and the many changes resulting from efforts to achieve a Carbon emission-free society. The GMF brings us together as policy-makers, thought leaders, organization leaders, innovators, entrepreneurs, experts, students and citizens—and provides us with a process to begin moving from dialogue to action in these core areas of our lives. The GMF builds on the success of last year’s Kanreki “Faces of CSR” event that attracted 264 people to hear keynote addresses by Lord Michael Hastings and former Minister Yoko Kamikawa; ask questions of a panel of Japan leaders such as Mr. Christopher LaFleur of JPMorgan, Mr. Peter Sykes of Dow Chemical Company,

42 | The Journal | July 2009

Mr. Eiji Wakiwaka of BP, and Mr. Tom Pederson of Shinsei Bank; and engage in a facilitated group dialogue and the sharing of best practices around Authenticity, Diversity, Energy & the Environment, and NPO Collaboration. The launch of the GMF will be held at the Four Seasons Hotel Tokyo at Chinzan-so on Wednesday, September 30. This event is led by the American Chamber of Commerce in Japan’s CSR Committee with support from the ACCJ Environmental Committee, the ACCJ ACRE (Architecture, Construction and Real Estate) Committee, and the ACCJ American Automotive Industries Committee. We are also engaging with other Chambers of Commerce, the Keidanren, and the EU-Japan Centre for Industrial Cooperation. The GMF Task Force would like to extend a special thanks to the Four Seasons Hotel Tokyo at Chinzan-so, who has come on as our extremely generous Grand Sponsor for the event.

OUT AND ABOUT

ACCJ Event Highlights

JMEC

The Japan Market Expansion Competition (JMEC)—cosponsored by the ACCJ—announced the winners of its 15th annual program in an awards ceremony at the Tokyo American Club on June 5th. ACCJ President Tom Whitson presented prizes to the winners. Seventy-two participants from 15 countries formed 11 teams that were coached to write comprehensive, ready-to-implement business plans addressing specific objectives in the Japanese market for companies.

The winning team (from left): Yoshiko Sugita, Deborah Murao, Daisuke Fujisawa, Dan Herbert, Ru Sun (not pictured: Jun Tezuka)

TONY MCNICOL

Jeffrey R. Immelt

GE Chairman and CEO Jeffrey R. Immelt, a member of President Barack Obama’s Economic Recovery Advisory Council, spoke at the Conrad Tokyo hotel on May 28 to ACCJ members and their guests about the U.S. and global economic situation, the changing role of government as partner and regulator, and the direction of the U.S. administration. The ACCJ Journal will feature the event in the August issue.

July 2009 | The Journal | 43

Embassy of the United States of America Tokyo, Japan To the American community in Japan: As we celebrate our Independence Day, it is my honor as Chargé d’Affaires of the U.S. Embassy in Japan to send a message of gratitude to Americans living and working in Japan, and to our Japanese hosts. Each year, the approach of the fourth day of July on our calendar gives Americans a reason to reflect on our singular history and the creation of our nation. The words of the famous preamble of our Declaration of Independence have a special place in the hearts of all Americans over generations: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” Though written in 1776, those timeless words continue to inspire the human spirit today. When President Barack Obama visited the National Archives, the building that holds our Constitution, our Declaration of Independence, and our Bill of Rights, he went there because, as he said, “… we must remember this enduring truth: The values and ideals in those documents are not simply words written into aging parchment, they are the bedrock of our liberty and our security. We uphold our fundamental principles and values not just because we choose to, but because we swear to; not because they feel good, but because they help keep us safe and keep us true to who we are.” Speaking as “someone whose own life was made possible by these documents,” the President underlined that “our values have been our best national security asset—in war and peace; in times of ease and in eras of upheaval.” The citizens of the United States are grateful for our many friends around the world who advance shared ideals of freedom, justice, and democracy. Japanese and American citizens enjoy and value common freedoms today, such as a free press, freedom of worship, and rule of law. Commitment to these values underpins our enduring and productive alliance. On this occasion of America’s birthday, I wish to express my sincere appreciation to the Japanese people, our gracious hosts. I hope that the over 3,000 members of the American Chamber of Commerce in Japan, from more than 1,300 member firms, will join me in celebrating our freedom and our friendship with the people of Japan.

44 | The Journal | July 2009

James P. Zumwalt Chargé d’Affaires ad interim U.S. Embassy Tokyo

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Expert, Professional Communications Services ensuring business continuity through an economic downturn Porter Novelli* is a global communications consulting firm that devises and executes decisively effective strategies based on business-oriented examination of its clients’ communications activities. Its brand partner in Japan is Focused Communications.

Focused Communications Co., Ltd. Tel. 03-5157-0033 E-mail: info@focused.co.jp * A wholly owned subsidiary of Omnicom Group, Inc., a strategic holding company managing a portfolio of global market leaders.

Happy 4th of July! St. Mary’s International School has served Tokyo’s international community since 1954, accepting boys aged 5 to 18. The school has about 950 boys enrolled from approximately 55 countries. Such an international student body, rich in cultural and religious diversity, contributes greatly to the unique educational experience offered. St. Mary’s follows a U.S. curriculum and provides a college-preparatory program including the International Baccalaureate for the 11th and 12th grades. The school also has an English as a Second Language program. In addition to our core programs, specialist teachers and facilities also are available for art, swimming, choir and band, as well as for learning Japanese and several other languages. Our programs are specifically designed to meet the educational and developmental needs of boys.

St. Mary’s International School 1-6-19 Seta, Setagaya-ku, Tokyo 158-8668 Tel.: 03-3709-3411 Fax: 03-3707-1950 www.smis.ac.jp

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West Virginia Japan Office 3-24-17 Nishiki, Naka-ku, Nagoya 460-0003 Tel: 052-953-9798 Fax: 052-953-9795 Web: www.westvirginia.or.jp info@westvirginia.or.jp

Happy 4th of July Johnson & Johnson K. K. Consumer Company 5-2 Nishi-kanda 3-chome, Chiyoda-ku, Tokyo 101-0065

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Welcome Ambassador-designate John V. Roos

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Tel 03-3438-0833 www.asia-strategy.biz keith.henry@asia-strategy.biz

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Ropes & Gray LLP congratulates John Roos, on his appointment as U.S. Ambassador to Japan.

To learn more about Ropes & Gray’s IP Litigation, Private Equity, Life Sciences, and other award winning law practices, visit ropesgray.com. Ropes & Gray LLP Yusen Building 2F 3-2 Marunouchi 2-Chome Chiyoda-ku, Tokyo 100-0005 Japan Phone: 03-6259-3500 © 2009, Ropes & Gray llp

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85 years of doing first class business in a first class way in Japan Asset Management Investment Bank Securities Services Treasury Services www.jpmorgan.co.jp

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© 2009 JPMorgan Chase & Co. All rights reserved. J.P. Morgan is a marketing name for JPMorgan Chase & Co. and its subsidiaries and affiliates worldwide.

Wishing all Americans in Japan a Happy July 4th

Ken Corporation Ltd. Office Leasing Department 1-3-10 Nishi Azabu, Minato-ku, Tokyo 106-0031 Tel: 03-5413-5611 www.ken-office.com

GE

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COSMO would like to extend our Fourth of July greetings to the American community in Japan

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COSMO is one of Japan’s foremost strategic communications consultancies. For almost 50 years, COSMO has used its global experience and domestic expertise to deliver communication solutions for multinational and Japanese companies. COSMO develops and manages multi-faceted campaigns involving issues management, advocacy and public affairs, key opinion leader research, corporate positioning, media outreach, consumer communications, CSR, cross border consulting and the development of editorial materials. COSMO’s network includes long standing relationships with key media in business and industry sectors, and unparalleled relationships with government and business leaders. COSMO’s areas of focus are healthcare, food and food science, and services. Cosmo Public Relations Corporation Azabukaisei Bldg., 1-8-10, Azabudai, Minato-ku, Tokyo 106-0041, Japan Tel. 03-5561-2915 / Fax. 03-5561-2912 www.cosmopr.co.jp

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Congratulations to the People of the United States of America on the Fourth of July & Welcome Ambassador-designate Mr. John V. Roos

DANA JAPAN, LTD.

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Marking 150 Years of U.S.-Japan Diplomatic Relations Text and photos by William Bishop

O

ne of my favorite pastimes is to set off with camera in hand and without a plan—to let the many side streets and back alleys of Tokyo take me on a journey of discovery. On just such a walkabout in March, I came upon the historic Zenfukuji Temple in Azabu Juban. After looking around the grounds, I set off across the parking lot when—in a rather nondescript location—I literally stumbled upon a stone monument erected in commemoration where, on that spot, on July 7, 1859, the first American Legation in Japan was established. I hadn’t thought much about my “discovery” until May 28, when I read that President Barack Obama had tapped John Roos, a California-based lawyer and relatively unknown player in U.S.Japan circles, as the next U.S. Ambassador to Japan. Should the Senate approve his nomination, Mr. Roos will take the helm of U.S. policy on Japan. This unexpected announcement has created a flurry of opinions among Japan experts about the meaning behind and the significance of the nomination. With the exception of Michael Armacost (1989-1993) who was a career diplomat, U.S. ambassadors to Japan over the past 30 years have been well-connected politicians who have had close personal relationships with the sitting President, including Mike Mansfield, Walter Mondale, Tom Foley and Howard Baker. Indeed, one of the greatest assets of the most recent U.S. Ambassador to Japan, Tom Schieffer, was his close personal relationship with President George W. Bush. It is clear that with the President’s ear, Mr. Roos will bring similar First American Legation in Japan assets to the table. established here on July 7, 1859.

Zenfukuji Temple, Azabu Juban

The Obama Administration views the Japan-U.S. security alliance as the cornerstone for peace and stability in Asia. This point was made crystal clear when newly confirmed Secretary of State Hillary Clinton made visiting Japan her first priority. President Obama quickly reaffirmed the importance of the U.S.-Japan bilateral relationship by placing Prime Minister Taro Aso at the top of his list for visiting heads of state. Considering this level of demonstrated commitment to maintaining and strengthening U.S.-Japan relations, there is little doubt that the Obama Administration believes the appointment of a U.S. Ambassador to Japan with a close personal relationship to the President is a proven formula for sustained success that has proven its worth in recent decades. Interestingly, the appointment of the next U.S. Ambassador to Japan also marks the 150th anniversary of U.S.-Japan diplomatic relations. Townsend Harris, the first United States Consul General to Japan (1855-1861), is credited with negotiating the Treaty of Amity and Commerce—known as the Harris Treaty—on July 29, 1858. Its mutual ratification on July 4, 1859 heralded the opening of the Empire of Japan to William Bishop, foreign trade, commerce and cultural exchange. an ACCJ Vice The U.S.-Japan relationship has had its ups President, and downs, but has grown stronger over the is Director, past century and a half. As with all substantial Government & Public Affairs at relationships, it continues to require time and Nippon Becton attention from both sides of the Pacific. Recent Dickinson demonstrations of mutual commitment bode well Company, Ltd. for the next 150 years of U.S.-Japan relations.

July 2009 | The Journal | 61

Outdoor Season

The sun is shining, the beer is on ice, and the BBQ is heating up nicely. Yep, nothing heralds the start of summer like the smell of sizzling meat on a grill. For Eric Hladilek, founder and president of California Patio Inc. (www.californiapatio.jp), this season is a state a mind. With outdoor living as his way of life, Hladilek’s mission is to convert the Japanese from environmentally unsound charcoal—and, let’s face it, a lot of extra hassle building the grill’s fire—to time-saving propane gas. Hladilek is based in Nagoya and established California Patio to import, distribute and sell gas BBQ grills that are commonly used overseas, but not here. “I am trying to introduce Japan to the ease and benefits of gas grilling,” says the Californian native. “I have encountered obstacles such as the difficulty of end users in buying propane gas,” he explains. “Many propane stores do not want to sell it in small containers for BBQ use because any accident is the propane store owner’s responsibility.” Hladilek has resolved this issue by designing and manufacturing an adapter (patent pending) for his gas grills using the smaller cassette gas cans widely available in Japan. This innovation also has a broader appeal. “My adapter is selling well on its own to folks with RVs who need propane gas to cook and heat, but have trouble purchasing the propane, too,” he says. Forego putting the BBQ away at the end of summer. “I’m also working on importing a propane patio heater. The heaters domestically produced in Japan retail at six times what they do overseas,” says Hladilek. “Getting approval to sell these has been very difficult due to strict standards, but I plan to have these heaters available by the fall.”

Club Lounge The ANA InterContinental Tokyo has undergone a multi-million dollar facelift, and unveiled Japan’s largest club lounge. The renovated 600m2 space on the 35th floor is about three-times larger than the previous area and is reserved for guests on the Club InterContinental floors. Mt. Fuji in the distance and the Tokyo cityscape of the Imperial Palace and iconic National Diet complement the redesign targeting weary business travelers with “residential comfort.”

62 | The Journal | July 2009

The Club InterContinental lounge is demarcated into six serviceable areas: a welcome reception, library, relaxation space, dining room, bar and meeting facility. The lounge also provides shower suites, handy for early arrivals and late departures. The ANA InterContinental Tokyo is recognized by industry watchers as a hotel with a competitive corporate rate, an attractive proposition in a market currently squeezed by a reduction in international

business travel and a glut of luxury hotels. Regarding the decision to invest in the expanded business facilities, “More than 50% of guests staying at our hotel are from overseas on business trips. There are also a lot of foreign-affiliated companies around our hotel that patronize us,” explains Maaya Osawa, who manages PR and communications at the hotel. Plans are also afoot to refurbish the Tokyo property’s Club InterContinental guest floors, a total of 198 guest rooms.

FDI PORTFOLIO

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The city of Yokohama launched in April a new incentive scheme aimed at attracting

business. Running for three years, the program provides a subsidy of up to ¥100

million per year to firms renting facilities for a new office or an R&D center in any of the five designated business districts. Firms making larger profits are entitled to greater subsidies on a progressive scale. An eligible company can receive the equivalent of approximately 50% the amount of its corporate inhabitant tax for up to three years. The five districts are the waterfront Minato Mirai 21, areas in the vicinity of Yokohama, Kannai and Shin-Yokohama Stations, and Kohoku New Town. Premises can be used only as corporate headquarters or an R&D unit. Only companies with more than 100 employees and an ordinary profit of ¥100 million or more can apply. The subsidy scheme is run by the Yokohama Business Development Division of the Economic & Tourism Bureau.

Milly in Tokyo New York women’s wear label Milly has opened its first freestanding flagship store in Tokyo. Meanwhile, plans for a New York store have gone on hold, with Milly President & CEO Andrew Oshrin citing the economy as the reason. The 79m2 Tokyo boutique opened at the Omotesando Hills shopping mall in the spring, housing exclusive lines including a small collection of cocktail dresses. The store, designed by Tokyo-based D Brian Architects, is modeled on a Parisian apartment—accented with etched and faceted mirrors, vintage fixtures and signature pink carpeting. The nine-year-old contemporary sportswear brand also has a wholesale

business in Japan, selling to about 50 stores through a distribution deal with

ITOCHU Corporation, a sogo shosha (general trading firm). The new store offers a venue “where customers can get the full Milly experience and even get some exclusive product,” says Oshrin. While about 4% of Milly’s overall operations is in Japan, business here is expected to jump about 10% for the 2009 fiscal year, according to WWD.com, an authority for news and trends in fashion, beauty, Contact Nicole Fall at nicole@ and retail. Oshrin estimates fivebyfifty.com if the new store will realize you have ideas about $1 million in retail for this column. sales for the fiscal year.

July 2009 | The Journal | 63

IT & TELECOMMUNICATIONS Special Advertising Section

Serving the Business Letting the experts localize your global ambitions.

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n this prolonged economic stretch of deep downsizing and drastically tighter budgets, nothing responds more immediately to a company’s bottom line than information communications technology (ITC). Yet, as the Information, Communications and Technology Committee of the ACCJ knows, informed choices require shifting through the overwhelming volume of data—and advice—out there. On March 9, the ICT committee hosted a presentation entitled “Making the Most Out of Information Technology in Challenging Economic Times.” The event featured Dr. Rand Morimoto, president, Convergent Computing, and renowned author and public speaker on IT strategies. Dr. Morimoto aimed to share the experiences of other IT managers and executives, and provide guidance on how IT managers not only survive in the current global economic environment, but can also thrive in the wake of global challenges. The committee stated that Dr. Morimoto not only understands the challenges of IT environments with limited resources, strict governmental regulations, and policies and standards “pushed down” from their corporate headquarters, but also has solutions on how other IT managers and executives have been able to leverage the most of their efforts despite these challenges. The power of the World Wide Web continues to raise issues that impact revenue for online businesses. On June 24, the Intellectual Property Committee of the ACCJ addressed the concern of “Is All ‘Fair’ in Love and War on the Internet?” The interconnectivity and global nature of the Internet poses great challenges to protecting and managing intellectual property. The problem is acute with music and movies and—as software becomes more an online service than a packaged product—the opportunities for piracy grow. The committee posed the question of what is the appropriate balance between content owners and consumers—who should decide the rules? Jesse Feder, director of International Trade and Intellectual Property at the Business Software Alliance (BSA)—who oversees BSA’s global efforts to improve levels of intellectual property protection and

64 | The Journal | July 2009

market access for computer software—addressed issues related to “fair use” in the U.S. and their implications for the current debate in Japan. Before joining BSA, Mr. Feder served as a senior policy advisor in the United States Copyright Office. During his tenure there, he participated in the negotiation and drafting of a number of trade agreements, as well as numerous elements of domestic copyright legislation. He headed the Office of Policy and International Affairs for two years. We all long for convenience, to have what we need available at the click of a mouse. Yet, security remains a growing challenge as our lives become managed more online. The Healthcare – Healthcare IT Committee hosted an event on June 26 entitled “Making Medical Information a Reality.” It addressed the focus of how striking the right balance between increased ICT usage in healthcare and protection of personal medical records has been a challenge for governments around the world. In March 2009, the Ministry of Health, Labour & Welfare (MHLW) published its fourth edition of the “Security Guidelines for Health Information Systems.” Professor Ryuichi Yamamoto, MD, Ph.D.—associate professor at Interfaculty Initiative in Information Studies, Graduate School of The University of Tokyo—has been a member of the Medical Guideline for Privacy and Security Working Group led by MHLW since 2003, and has played a key role in assembling these guidelines. The speech aimed to cover an explanation of the fourth edition of the guidelines and what we should take into consideration on the development of healthcare IT in Japan. The country may be the second-largest economy in the world, but it remains an imperative on how best to tap the value of ICT services when conducting business in Japan.

David Umeda Senior Editor at Paradigm

APC Japan, Inc. 03-6402-2001 www.apc.com www.apc.com/jp

APC is a global leader in critical power and cooling services, providing industry-leading products, software and systems for home, office, data center and factory-floor applications. Backed by the strength, experience and wide network of Schneider Electric’s Critical Power & Cooling Services, APC delivers well-planned, flawlessly installed and maintained solutions throughout their lifecycle. Through our unparalleled commitment to innovation, APC delivers pioneering, energy-efficient solutions for critical technology and industrial applications. In 2007, Schneider Electric acquired APC and combined it with MGE UPS Systems to form Schneider Electric’s Critical Power & Cooling Services Business Unit, which recorded 2008 revenue of €2,6 billion (including APC-MGE sales of $3.7 billion) and employed 12,000 people worldwide. APC solutions include uninterruptible power supplies (UPS), precision cooling units, racks, physical security, and design and management software—including APC’s InfraStruXure® architecture, the industry’s most comprehensive integrated power, cooling and management solution. Schneider Electric, with 114,000 employees and operations in 100 countries, achieved sales of €18,3 billion in 2008.

Business Associates K.K. Tel: Fax: Web:

03-5715-3315 03-5715-3318 www.ba-net.co.jp www.ba-net.co.jp/english/plaza-i/foreign.html

Business Associates, founded by Japanese certified public accountants with expertise in IT, accounting and taxation, designs systems that help business grow and empower clientele to achieve their business objectives through proprietary software solutions. Plaza-i is the only ERP package developed by a Japanese company geared for foreign corporations operating in Japan. Unlike imported software with limited application to Japanese business parameters or domestic programs that cannot completely support international operational procedures, Plaza-i remains the only bilingual, multicurrency ERP package—developed for over 20 years—that fully supports foreign corporations here. Plaza-i’s built-in bilingual capability is 100% compliant. Japanese users’ screens operate in the vernacular yet produce reports in English, while foreign staff can work using English commands and menus. Plaza-i comes at a price not inflated by typical fees for imported ERP packages. We provide genuine value for your software investment, Plaza-i’s multi-currency capability—not typical in Japanese ERP packages—supports foreign companies who typically import products from their parent companies. Plaza-i’s aging schedule function and other software features define your ideal single ERP package. Whether entering the Japanese market for the first time or looking for a better and more reasonable ERP system in Japan, you owe it to your staff—and your bottom line—to contact us today.

KVH Co., Ltd. Tel: 03-5772-5818 Fax: 03-5772-5685 E-mail: sales@kvh.co.jp KVH Co., Ltd. is a leading integrated communications and IT management service provider established in Tokyo in 1999. Through our facility-based optical-fiber networks and data centers, KVH provides comprehensive IT management solutions—developing and managing network and IT infrastructure through the entire planning, consulting, design, implementation and operations processes. KVH serves as a single point of contact and ownership for fully managed regional network operations throughout the Asia-Pacific region, including a

local presence through affiliates in China and India. In alliance with our global partners, KVH provides a value-added, strategic alternative for both Japanese and multinational companies, by offering seamless and flexible solutions tailored to their important and specific IT needs. KVH solutions are implemented in an efficient operational structure using the latest technology incorporating global best practices, and are monitored on a 24/7 basis. In addition, KVH’s bilingual Service Desk associates respond to customer needs and inquiries on a 24/7 basis. KVH serves over 1,700 corporate customers in a variety of industry segments, including financial services, manufacturing, pharmaceuticals, media and e-commerce, meeting the operational needs of local and multinational customers in the region.

Kyodo Public Relations Co., Ltd. Tel: Fax: Web:

03-3571-5257 03-3569-0862 www.kyodo-pr.co.jp

Kyodo PR is one of the largest listed and independent public relations agencies in Japan engaged in all aspects of public relations since 1964, including overall counseling, media relations and promotional support. After 45 years of conducting pioneering public relations activities, we have established solid media networks, which are currently utilized to cost-effectively serve over 200 national and international retainer and on-project-basis clients from various industries. The relationship between Kyodo PR account executives and the press has been built on over four decades of constant information exchanges; thus our officers clearly understand the special interests and expectations of Japanese media, as well as their typical practices and procedures. For instance, news releases are not just sent out— some are hand-carried to key journalists to enhance comprehension and eventually secure coverage. Kyodo PR has specialized departments in Web, TV, Crisis Management, SP, IR and International Operations to conduct specific PR tactics. We utilize all our resources on behalf of small, medium, large domestic, as well as multinational, clients through offices here and in South Korea, China and Belgium. For more detailed information, please contact German Saa at g-saa@kyodo-pr.co.jp

Porter Novelli Japan/ Focused Communications Co., Ltd. Tel: 03-5157-0033 E-mail: info@focused.co.jp Expert, professional communications services are crucial, effective measures that can ensure business continuity through an economic downturn. For IT companies in particular, digital PR is one of the keys to helping your business survive and thrive. Porter Novelli Japan provides its clients strategic support for their external and internal communications, including digital PR. Porter Novelli Japan has been strongly supporting IT clients—those in such industries from semiconductor and network devices, to software and consumer electronics—with excellent technology understanding and media reputations. Porter Novelli Japan provides its IT clients integrated marketing communications services—including strategic consulting and planning, digital PR and ads, media relations, seminar development, collateral development, and more. Established in 1972, Porter Novelli is a global communications consulting firm. One of Porter Novelli’s most remarkable features is its ability to devise and execute decisively effective communications strategies based on continual business-oriented examination of the client’s communications activities. Porter Novelli is a wholly owned subsidiary of Omnicom Group, Inc., a strategic holding company that manages a portfolio of global market leaders.

July 2009 | The Journal | 65

IT & TELECOMMUNICATIONS | Special Advertising Section

TEL: Web:

Gretchen Shinoda DIRECTOR, CAREER COUNSELING AND SERVICES, INTERNATIONAL UNIVERSITY OF JAPAN Text and photos by Tony McNicol

R

ural Niigata is hardly the most obvious place for one of Japan’s leading graduate schools. Minami-Uonuma is an area famous for its prizewinning koshihikari rice and splendid hakkaisan sake, but it is also home to the International University of Japan. Reputed as yuki-guni (snow country), the region experiences some of the heaviest precipitation in Japan. On campus, covered walkways keep the elements at bay, the snow piling with regularity above head height. Sohei Nakayama founded the university in 1982 with a small group of other Japanese industrialists, deliberately choosing a location far from the bustle of Tokyo, but not remote geographically. He wanted students from all around the world to live together, learn about each other, and make connections relevant for their future careers. Then, as now, all classes were

66 | The Journal | July 2009

taught in English. “It was a unique program then, and a big risk that has paid off,” says Director of Career Counseling and Services Gretchen Shinoda. “We are the original international university in Japan.” The initial enrollment was 100 students. This year, there are 278 graduating, taught by 34 faculty members and supported by 38 staff. The average age of the students is 28. “We are so small here that we are kind of a family,” says Shinoda. Shinoda is an IUJ graduate (1989), and assumed the career counselor position in 1995. Her Japanese husband, whom she met in Oregon when they were undergraduates, works at the university as a professor of U.S. and Japanese politics. They have built a Pacific Northwest-style house a short drive from the campus, and their daughter Erika attends a local elementary school. “We have dedicated our professional lives to this university,” she says.

BIOGRAPHY Gretchen Shinoda ■ Director, Career Counseling and Services, International University of Japan ■ Age: 45 ■ Raised in: Eugene, Oregon ■ Education: Lewis and Clark College, Portland (BA Education); International University of Japan (MA International Relations) ■ Languages: English, Japanese, a little German ■ Hobbies and interests: Scuba diving, tennis, spending time with family. ■ Family: Husband Tomohito and 11-year-old daughter Erika ■ Favorite quote: A current IUJ student from Cambodia told me: “If you don’t take responsibility for your mistakes, you miss an opportunity to change.” Love that!

A striking feature of the university is the international makeup of the student body. This year, the 29 Japanese students are joined by 242 graduates from 45 other countries. “It is like a mini United Nations,”

BUSINESS PROFILE

SNAPSHOT International University of Japan ■ Role: Provide graduate education in English for students from around the world, and supply companies in Japan and abroad with employees/summer interns committed to Japan ■ Established: 1982 ■ Number of Staff: 34 faculty, 38 other staff ■ Address: 777 Kokusai-cho, Minami Uonuma-shi, Niigata 949-7277 ■ Tel: 025-779-1104 (campus) 03-5770-1711 (Tokyo office) ■ E-mail: info@iuj.ac.jp ■ www.iuj.ac.jp

says Shinoda. IUJ’s more modest claim to fame is holding the Guinness World Record for the most nationalities in a sauna at the same time: people from 50 countries. The record was broken on the university’s 25th anniversary in 2007, and a celebratory plaque is proudly displayed in the canteen. IUJ has two graduate schools: International Relations and International Management. A major part of Shinoda’s work is helping students find summer internships and employment in Japan, including with ACCJ member companies. Given that a professional careers counselor is still quite a novelty in Japan, Shinoda has faced difficulties in dealing with the Japanese business culture. “I feel like a pioneer,” says Shinoda. That said, IUJ graduates are in high demand in the finance and governmental sectors, education, IT, and commerce and industry.

The Graduate School of International Management’s two-year MBA course is the only Japanese MBA program ranked in the Economist Intelligence Unit’s top 100 business schools. Working within an American system, students arrive in September and graduate 21 months later. Many students undertake a two- to threemonth internship between their 1st and 2nd years. Nigerian Rowland Uzokwe is on a Masters of E-business Management track, and also has taken several MBA classes at the Graduate School of International Management. An employee of Nigeria’s Oceanic Bank International, he is particularly interested in Internet security and preventing cyber fraud. His bank has plans to expand into Europe and Asia. Cellphone penetration in Nigeria is close to 50%, compared to just 8% for computers, he explains. “I want to encourage my bank to start mobile banking.” IUJ is a private university accredited by the Japanese Ministry of Education, Culture, Sports, Science and Technology. Other funding comes from industry, private donations, and foundation/organization scholarship support. Many of the Japanese graduates are sponsored by employers as part of their mid-career training. The Indonesian and Malaysian governments also sponsor students, as does the JICA (Japan International Cooperation Agency) and other organizations.

The university hasn’t been immune to the economic downturn. Lehman Brothers was a major recruiter, and prospects overall in the finance sector have suffered. In response, IUJ is now targeting such industries as IT and mobile communications, according to Shinoda. Admissions is also working hard to attract a broad range of students, in particular women, into the MBA program. The aim is to increase the number of female students from 30% to 45%. To this end, they set up this year a mentor program with 135 alumni volunteers to lend support to current students. The university also introduced a special scholarship for women, as well as some support for Japanese nationals and former JET (Japan Exchange and Teaching Programme) teachers. “We really feel we could be a bridge between their background and interests, and their careers,” says Shinoda. Many graduates go on to work for foreign-owned companies in Japan. “We want to get more exposure with U.S. companies in Japan,” says Shinoda. “If companies are looking for foreigners who are developing their Japaneselanguage skills and are committed to Japan, our students are ideal,” she Tony McNicol says. “We are hoping to is a freelance journalist based stop being the best kept in Tokyo. secret in Japan.” ■

July 2009 | The Journal | 67

BEHIND THE BOOK

Creative Capitalism A Conversation with Bill Gates, Warren Buffett and Other Economic Leaders Edited by Michael Kinsley Simon and Schuster, 315 pp, $26 Reviewed by Tom Baker The world may have grown ever richer since the late-18th century Industrial Revolution, but mass poverty persists. In light of that paradox, should we be content to have capitalism continue along its established course, or is it time to try something new? The question is provoked by a 2008 speech in which Bill Gates said the world “is not getting better fast enough.” In a typical capitalist system, production of goods skews toward those making the strongest purchase demands. Gates argued that this market characteristic benefits the rich at the expense of the poor, saying, “Diseases like malaria that kill over a million people a year get far less attention than drugs to help with baldness.” The Microsoft multibillionaire urged the creation of a not-strictly-for-profit “creative capitalism” to correct the imbalance. In the book Creative Capitalism, edited by Time magazine columnist Michael Kinsley, more than 40 economic thinkers, including Richard Posner, Robert Reich and Lawrence Summers, debate Gates’ suggestion. The dominant figure in the discussion turns out to be the late Milton Friedman (1912-2006), the 1976 Nobel Laureate in Economic Sciences. His 1970 essay condemning corporate philanthropy as a misappropriation of stockholders’ profit-seeking investments is cited by many of the contributors, both pro and con. Another major idea espoused by many economists in the book is that, in the words of New York University Prof. William Easterly, Gates has made a “false accusation … that traditional capitalism fails to help the poor”

since “… as firms expand their production to meet more of rich people’s needs, they hire more unskilled labor to do so—driving up the incomes of poor people.” This may be true—but there is room for tinkering around the edges. Examples include the microfinance and social business models advanced by Muhammad Yunus, recipient of the Noble Peace Prize 2006, and the intriguing new species of businesscharity hybrids called low-profit, limited-liability corporations (L3Cs).; and the intriguing new species of business-charity hybrids called low-profit, limited-liability corporations (L3Cs). A more common practice is the use of branding to attract socially conscious consumers. People Tree, for example, sells ecologically sound and “fair trade” merchandise through small retailers across Japan, including its own two shops in Tokyo. The essays in Creative Capitalism are long on theory and short on examples, yet you can’t be too hard on a book that candidly admits its limits. The contributors are drawn mainly from journalism and academia, rather than from the front lines of the business world, as one or two of the economists point out. Also, many of the contributors express frustration over the lack of a clear definition of “creative capitalism.” The lesson to take away from the book, perhaps, is that an ethical ideal is for a company to be on the lookout for ways in which it can use its unique assets, such as distribution networks or technical skills, to do good in ways that are not a drag on the company’s main functions. On the other hand, merely giving away cash, a non-unique asset, probably would set off Tom Baker is Friedman-esque alarms should it lack a clear a staff writer at The Daily connection to such benefits as good public relaYomiuri. tions or long-term market building. ■ We are giving away 3 copies of Creative Capitalism. Simply e-mail editor@paradigm.co.jp by July 15. The winners will be picked at random. Winners of Globalization: Richard May, Japan Consumer Marketing Research Institute; Eric W. Sedlak, Jones Day; Aska Kuwabara, ACCJ.

July 2009 | The Journal | 69

Advocacy Update ACCJ Viewpoints are the core products of ACCJ Advocacy. An ACCJ Viewpoint is a brief paper, generated by a committee, that expresses the Chamber’s official position on a specific issue. Viewpoints are primarily used to express opinions on current policies, policies under consideration by the Japanese and/or U.S. governments, and policies under discussion in bilateral or multilateral forums. They are also used to raise new concerns about issues not currently on the Japanese government agenda. Ensure Regulatory Policies and Procedures that Treat Customers of American Vehicle Importers Fairly

Sustain Economic Growth Through Measures To Ensure Liquidity for the Corporate Sector

Achieve Transparency in the Rulemaking Process Through Greater Access to and Participation in Shingikai

Banking and Finance Committee

Legal Services Committee

Valid Through December 2009

Valid Through December 2009

Recommendation

Recommendation

Recommendation

The American Chamber of Commerce in Japan (ACCJ) urges the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), the Ministry of Economy, Trade and Industry (METI) and the Government of Japan (GOJ), to ensure that regulatory policies and procedures treat customers of United States (U.S.) vehicle importers fairly. Specifically, the ACCJ urges the GOJ to:

The American Chamber of Commerce in Japan (ACCJ) applauds the consideration being given by the Government of Japan to measures to promote liquidity in the corporate sector through several programs aimed at ensuring a stable market for commercial paper and at facilitating lending by banks and financial institutions. The ACCJ believes the general approach and proactive measures under consideration would bolster Tokyo’s position as a world-class financial center, and would demonstrate Japan’s commitment as a leading economy to taking swift and effective measures against the global financial crisis. While lauding these proposals, we respectfully urge the Government to ensure, as it finalizes these measures, that they are available to a broad cross-section of the corporate sector, and to all financial institutions that serve businesses and consumers in Japan. Such measures should be open to Japanese subsidiaries of foreign companies, as well as domestic issuers, in keeping with Tokyo’s role as a competitive international financial center. We also urge a transparent process for seeking comment and input on these measures as they are finalized.

The American Chamber of Commerce in Japan (ACCJ) strongly urges the Government of Japan (GOJ) to make the procedures governing the establishment, composition and operation of study groups and advisory councils that govern the process of public comment regarding rules and regulations specific to the various industries (collectively known as “shingikai”), more uniform and transparent. Affording a broad range of industry participants and individuals a meaningful opportunity to participate in this process, through involvement in the deliberations of the relevant shingikai, submission of comments, and assurance that comments will be duly considered by the GOJ, will result in well-informed policies and legislation. In particular, leading U.S. companies and other foreign companies and organizations conducting business in Japan should be invited to serve as full members, not just observers, of relevant shingikai deliberating rules or regulations that materially impact their operations in Japan.

American Auto Industries Committee Valid Through November 2009

1.

2.

3.

Maximize the regulatory harmonization of automobiles between Japan and the U.S. by working with global standards bodies such as the World Forum for Harmonization of Vehicle Registrations (WP-29). The ACCJ believes the adoption of global standards will benefit all manufacturers and countries by lowering costs, improving the technical quality of automobiles, and providing customers with better purchase choice. Ensure transparency in the creation and implementation of Technical Guidelines (Guidelines) and eliminate unique requirements on low volume automotive importers, their dealers, and their customers. Streamline and reduce automotive related taxes that place an unfair burden upon automotive owners, including the “temporary” Supplemental Acquisition and Consumption Taxes that have been imposed for over 30 years.

Released ACCJ Viewpoints can be read in full in the Advocacy section of www.accj.or.jp 70 | The Journal | July 2009

ACCJの 「意見書」 は、特定の問題に対してのACCJの公式見解を表明する委員会が作成した簡潔な提言書であり、提言活動の 中核を成しています。現行の政策や、 日本又は米国政府で検討中の政策、二国間もしくは多国間で協議中の政策についてだけで なく、新たな関心を高めるために現在日本政府の課題となっていない問題についても意見を述べています。

米国製自動車輸入業者の顧客への

経済成長維持のため企業の資金繰

審議会への参加機会の大幅な増大

基準の策定、施行の公平性の確保

り対策を要望

を通じた透明性の高い立法過程へ

について

銀行・金融委員会

の到達

アメリカンオートインダストリー委員会

2009年12月まで有効 英語正文

法務サービス委員会

提言

提言

提言

在日米国商工会議所（ACCJ）は、国土交通省、経済産

在日米国商工会議所（ACCJ）は、日本政府がコマーシ

在日米国商工会議所（ACCJ)は、日本政府に対し、様

業省、及び日本政府が、米国からの自動車輸入業者の顧

ャルペーパー（CP）市場の安定化や銀行・金融機関によ

々な業界に特有の規則に関する民間意見の集約過程を

客を公正に取り扱う基準、施策を施行するよう要望する

る貸付の促進などを目的とする対策により、企業部門に

取りまとめる研究グループや諮問委員会（総じて「審議

ものである。特に、日本政府に対して以下を申し入れる。

おける流動性を高めることを検討していることを歓迎す

会」として知られているもの）の設置・構成・運営を規律

１． 自動車基準調和世界フォーラム（WP29）等の世

る。現在検討されている対策は全体として、東京が国際

する手続きについて、その一層の統一性と透明性を図る

界標準機関との協調により、日米の自動車基準調

金融センターとしての地位を強化し、日本が経済大国と

よう強く要請する。関連審議会の検討への関与、意見の

和を最大限にすること。ACCJは、世界基準の採用

して世界金融危機に対して実効的な対策をいち早く講

提出及びその意見が日本政府によって適切に検討され

ずる強い意志があることを示す効果があるとACCJは考

ることの保障などを通じ、上記の意見集約過程に産業

える。

界の多くの関係者及び個人が参加できる意味のある機

今回の対策案を評価する一方で、こうした対策の最終

会を設けることは、広い意見を踏まえた政策及び立法を

決定を行うにあたり日本政府に要請したいのは、日本で

可能にさせるものである。特に、日本において事業を行

法人・個人向けに営業するすべての金融機関およびあら

っている有力な米国企業及びその他の外国企業・団体

ゆる分野の企業がこれらの措置を利用できるようにする

は、日本における運営に重大な影響を及ぼす規則を検

ことである。東京が競争力のある国際金融センターとし

討する審議会において、単なるオブザーバーではなく、

ての役割を維持するためには、CPを発行する国内企業

正式のメンバーとして役割を果たすために招請されるべ

と同様に海外企業の日本子会社もこれらの対策を利用

きである。

2009年11月まで有効 英語正文

は、すべての国々の製造者のコスト低減、自動車の 品質技術の向上に寄与し、顧客に対しての車両購入 の選択幅を広げるものであると考える。 ２． 技術指針（ガイドライン）の作成、採用における透 明性の確保と、少数台数輸入業者、販売会社及び その顧客に対する独自の要件の撤廃。 ３． 既に3 0 年以 上課せられている「 暫定」自動車 取 得税と消費税を含む自動車保有者に対して不公平 な負担を課している自動車関連の税金の簡素化と 軽減。

2009年12月まで有効 英語正文

できるようにすべきである。また対策案の最終決定に際 しては、透明性のあるプロセスにより要望・意見を募集 することを希望する。

ACCJが公表した意見書の全文は、www.accj.or.jp のアドボカシーセクションでご覧頂けます。 July 2009 | The Journal | 71

IN THE FINAL ANALYSIS

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Integrity, a passion for excellence, commitment and clemency

e warmly welcome President Obama’s nomination of John Roos to be the next United States Ambassador to Japan. As a top-notch lawyer with an outstanding educational and professional pedigree, we expect him to be right at home with our leaders and members. As a strong supporter of the President from the very beginning of his campaign, we know he will have the attention of the White House. And as a major player in the Silicon Valley business scene, we believe he will be interested in the activities of our entrepreneurial members in the technology field. We’ll get him a copy of our Internet Economy White Paper as soon as it is finalized. Change in Japan has always seemed to be incremental, at least in my experience here over the last 20 years. But there are factors that will almost certainly cause the pace to accelerate as Mr. Roos takes up his duties in Tokyo. Japan’s election this summer is one. The relationship of the American administration with the Japanese leaders who emerge from this process will be critical. Another is the worldwide recession that has reordered national trade policies, and could impact the Japanese and American role in the Asian region. The ambassador-designate is not a member of the Japan policy club whose members have built careers as experts on the JapanU.S. bilateral relationship—a relationship that Ambassador Baker often described as excellent but high maintenance. Clearly he is an accomplished and intelligent leader, and his lack of a strong identification with established approaches to issues in the relationship should mean Mr. Roos will be able to bring freshness and creativity to what can sometimes seem a rather stale policy debate. In our January 2009 Viewpoint entitled “Increase Focus on Prevention, Early Detection and Wellness,” we argued for an increase in screening for breast and cervical cancers. Our recommendation calls for required screening during the “specific health checkups” (tokutei kenshin) for women in high-risk age groups. Currently, screening for both types of cancer is at a rate of around 20%. We haven’t finished with this effort, but we have made progress. The Ministry of Health, Labour and Welfare announced in late May that it will provide coupons to women in the most vulnerable age groups that can be used at medical facilities nationwide. MHLW estimated that over 7.5 million women would receive the coupons and that this program is expected to increase the screening rate to around 50%. We will continue to advocate for inclusion of screening in the regular checkups, and we think that the issuing of coupons this time will make it difficult for the Japanese authorities not to continue with the Samuel H. program in the future. ■ Kidder is ACCJ Executive Director.

July 2009 | The Journal | 73

74 | The Journal | July 2009

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