With Japan’s domestic market expected to shrink because of the low birthrate and graying society, Japanese companies are expanding into overseas markets. Hiring people with experience abroad is simply part of their global strategies.
Japanese students who remain in Japan are finding themselves in a seemingly no-win situation. If they study abroad, they will miss the early recruitment drive by companies in Japan. But if they stay at Japanese universities, they find themselves taking a backseat to foreign students here in gaining employment.
In addition, companies view Japanese university students as vulnerable to adversity and overly eager for job security.
Translation of an interview with legendary Japanese game designer, Keiji Inafune, where he announces his resignation from Capcom. If anyone doubts that Japan’s “soft power” is in jeopardy, this is an important data point.
KI: Even when I submitted my letter of resignation, nobody contacted me about it. (laughs) There should’ve been a, “Hey Inafune, do you have some time?” or, “What do you mean by this? I want to hear it straight from you.” Nothing. Zero.
4G: …You’ve got to be kidding.
KI: Well of course, my actual staff asked me not to quit, but you would think that someone from management would want to at least try and stop someone with such skills from leaving, or even ask about it.
KI: That’s fine, though. I expected that. But for a company whose whole business is making and selling games, you’ve got to think that development would be the key point. If you ignore development, the company can’t stand, so that’s the way things currently are.
I can’t say that I haven’t been able to make lots of different things, but I would’ve liked for the development-side to be more trusted in making games.
4G: It isn’t?
KI: No. Not a single member of the board of directors understands games. I didn’t ask to be a board member, but if you don’t have someone who understands games in the position of making those final decisions, there winds up being a business-side that doesn’t understand games and development-side that wants to make games. I feel that’s the biggest problem Capcom will be facing.
4G: So what are the cons of using western developers?
KI: First, you can’t just leave them alone. Even with technical skills, they often lack adequate ideas and concepts for utilizing those skills. That’s exactly why I’m such a good match for them. (laughs) They don’t have to be a top-notch development studio. I just want to work with a team that has good potential and a positive work attitude.
KI: So if I can, I want to change the Japanese game industry. I don’t want to abandon it. After I leave Capcom, I don’t want to, for example, just work for EA, Activision, and Rockstar. That would be abandoning Japan.
All of this is very familiar if you studied Japan in the ’90s. In fact, we’re [USA] doing worse than the Japanese did. Our monetary policy is a bit more aggressive, but our fiscal policy has been less aggressive. We have a larger output gap than they [Japan] did, and we’ve had a surge in unemployment that they never had, and our political will to act has been exhausted much faster than theirs was. On the current track, we’re going to look at Japan’s lost decade as a success story compared to us. What we should be doing is a really big dose of stimulus on all of these fronts. Throw the kitchen sink at it. But if you ask me for ways to solve this problem that lives within the constraints of policymakers who don’t want to be bold, I don’t know that I have an answer for that.
Thus Japan’s 20-year malaise has been a comedy of policy errors. Listening to people like ex-bank governor Mieno and veteran politician/finance bureaucrat Kaoru Yosano gives a big hint why, i.e., there is a severe lack of critical thinking and a severe allergy to trying something new — particularly as regards restructuring/reorienting Japan’s economy — in Japan’s policy circles. For most of the last 20 years, the Japanese government has spent most of its time just hoping the problem would go away.
The only encouraging progess was made between 2003 and 2007, when the Koizumi Administration cleaned up the banking sector NPLs and attempted to restructure Japan’s economy. Japan’s stock market bottomed in April 2003 at 7,600 and rallied to over 18,000 (137%). Since then, Japan has slipped back into malaise, deflation has returned and trend growth in government debt is accelerating, while stock prices have plummeted 58%.
To get Japan out of its current funk, Mr. Takenaka believes that a one-time massive infusion of fiscal stimulus is needed to eradicate a demand-supply gap still in the tens of trillions of yen range, spending the money on Haneda Airport and other clearly beneficial infrastructure projects, while pushing up growth in Japan’s M2 +CD money supply to 5%~6%–with the DPJ abandoning clearly unattainable election promises for something that actually works.
James Fallows, one of my favorite journalists, who is currently at The Atlantic, was interviewed on Bob Edwards’ radio show. Fallows’ opinions and insights are really valuable to me because he lived in Japan in the 1980s for a number of years, and recently moved back from China where he had been for a number of years in this decade. So he’s had significant personal experience living in both Japan and China- something which most pundits or journalists don’t have.
You can download the audio here:
The Japan vs. China portion starts at 11:30 on the podcast.
Bob Edwards: So what about this rivalry between Japan and China?
James Fallows: The… you and I have over the years discussed Japan and China from time to time. Probably the two most different seeming places I have ever lived have been Japan and China in the sense that, yes they have a similar-based diets, similar belief systems, similar writing systems- all the rest. But Japan has been a rich country now for a century and a half and prides itself on order, discipline, precision. China is still on average a very poor country, and it’s the most disorderly place you’re ever going to see. In Japan people stop at the stoplights even at 2 AM and there is no body else there. In China, they don’t stop [at the stoplights] even if it’s 3 PM and there’s a million people running them down. And so there is an interesting rivalry in that as a sign of how much richer Japan is, China only this year is passing Japan as an economy, even though China has ten times as many people. So Japan is ten times richer per person. But there is no love lost between them at all. On Chinese public TV almost every night you see a documentary about the rape of Nanking, or the Japanese occupation. This is hammered home non-stop – the Japanese offenses. The Japanese are not as sensitive to this as they might be and their politicians have kept going to the war shrines which really infuriates the Chinese. And so I think it is a source of instability in that part of the world and it may be a reason that Japan stays allied with the US longer than they might otherwise just because their [Japan’s] relationship with the US, while complex, is more friendly than their relationship with China overall- despite the cultural connections.
Bob Edwards: Does that mean China is more open to innovation?
James Fallows: Yes, in this sense. I think that it [China] is certainly more open to foreigners and foreignness in every way and I’d explain it like this way: it’s kind of a cliche but true nonetheless that China is sort of like the US culturally. They [China and the US] are both big continental nations with different ethnic groups. The Chinese officially have fifty-six ethnic minorities, or fifty-five after their main ethnic group. And with the idea that there are a lot of people glued together by a common government, a common language, etc. Whereas Japan it’s homogeneity, it’s tightness, it’s closed-ness. And this has made China, over the years, more open to foreign scholars, foreign marriages, foreign companies. China has been wide open to foreign investment over the last 30 years which Japan has been more of a fraught place. So China is very, very open to innovation on the personal, ad-hoc scale. Japan has been much more successful as a source of high-end invention and advancements because their universities are basically good and China’s [universities] are basically terrible. But as an ‘open’ place, Americans find China more open, despite it’s Communist government, and Japan much more tight and hard to penetrate.
Bob Edwards: Even though it’s a democracy.
James Fallows: Even though it’s a democracy, and one of the few democracies that makes us [Americans] feel better about our own.
Bob Edwards: *laughing*
James Fallows: They [Japan] have had a sequence of failed prime ministerships and one party in power for most of the post-war period until now.