This quote was the title of the speech given by on November 13, 2019 Dr Yoichi Funabashi, Chairman of the Asia Pacific Initiative, which was referenced in a recent Ditchley Foundation event on the role of Japan in a changing world. It captures the rapid change of mentality caused by the demise of the ‘liberal international order’ and arrival of China and the US as two (unreliable) ‘elephants’. Japan, Singapore and other trading nations have grown rich on a stable multilateral order that no longer exists.
The Ditchley event gathered an impressive range of Japanese and foreign diplomats, academics and a few of us lowly business types to opine on the future of Japan in a changing world. The discussion looked at Japan within Asia, its role vis a vis the West and its own evolution. The ‘small countries’ was my first takeaway – and with it the need to get the WTO back on track and for all countries not called China or the United States to think seriously about their political, economic and security collaborations.
Other takeaways included:
- Japan has an opportunity to export its stakeholder capitalism. The West is looking for a replacement to the neoliberal orthodoxy that has broken our economies, delivered searing inequality, low productivity and destroyed the planet. Japan’s consensual, long-term stakeholder approach has weathered its demographic downturn and kept inequality low and populism at bay. There are obviously cultural and historical complexities, but it’s worth adding it to the shortlist that currently only seems to include Sweden.
- It could also be a global leader in tech and healthy ageing
We assume the US will win on any new ‘tech’ area, but US demographics are far less extreme and ‘age-tech’ is is not yet a priority there compared to Asia and Europe. European countries have an opportunity here but individually don’t have have the technology lead (think robots and infrastructure), or market size (until the EU actually operates as a single market). - China is the elephant in the room. Japan’s proximity to China and orientation to the West gives it a unique role as a local partner that can help maintain a strong and stable Asia that is integrated to the West. Japan’s vision of engagement with the West was more than just economic; political and security aspects (including soft security and climate change) were part of the agenda.
- Keidanren seems serious about the SDGs. Business group Keidanren has made a big effort to integrate the UN SDGs into a country-wide vision; expect to see their Society5.0 model crop up in conversations in boardrooms across Japan. They’re hardly model citizens but do have the ability to deliver integrated change at scale, vital if we’re not going to fry our planet.
- There is a big opportunity in unlocking human capital. Japan famously has very few natural resources and imports most things, and as such it has invested in its people. An opportunity for Japan will be to continue to unlock the power of women (‘womenomics‘ which can claim some success) and older people, who still face mandatory retirement at 60.
- The young in Japan seem ambivalent about international travel. We heard a few times that fewer Japanese were traveling, for example to go and study abroad. Japanese employers don’t seem to value foreign degrees the way that for example South Korean firms do.
Lots of food for thought here. I was struck by how relatively sensible Japan seems to be compared to the political hot mess in the US and UK . And how much opportunity Japan has to contribute as a small – or ‘middlepower’ country – in a world desperately in need of grown ups.
