In 2011, I became engaged in a project comparing some key Korean industries to their Japanese competitors. While doing this project, I realized more and more that Korea was eating Japan’s lunch. At first, I couldn’t believe it. Hyundai was taking market share from Toyota in the US and European markets? Samsung was treating Sony like a ninety-pound weakling? And looking beyond Korea, Apple was acting as we used to expect Sony to act. Samsung and Apple were battling it out in the smart-phone market, but there were no serious Japanese contenders. Sony had only a single-digit market share. What was going on, I asked myself.
To answer my own question, I began spending more time in Japan talking to old friends and new acquaintances in business, government, academia, labor, and the media. What I found was disturbing. The old cooperation and communication between government and business seemed to be mostly dead. Despite lots of talk and some efforts, the economy had not taken many steps toward becoming rebalanced. There was also a kind of “nothing can be done” mood in place of what I remembered as the old Japanese spirit of optimism and perseverance summed up in the much-used rallying cry of “Gambatte!” Particularly among young people, pessimism was rampant. I found myself worried for their future, for the future of the children of my Japanese friends, and for the future of the country that had so much been a major part of my life. I was also approaching my seventy-second birthday, and was increasingly conscious of the passage of time and the fact that I had been watching and working in or on Japan for fifty years. What could I do to warn the country and help it reverse course?
I decided to write this book—in some ways a second bookend to my long involvement with Japan—in the hope that my experience might produce some insights and suggestions that Japan could use to restore its former vitality. The story opens in the year 2050, when Japan has, in fact, been fully restored. It is the world’s leading country in a wide variety of technologies and arts, as well as in business, innovation, and clean energy. Students around the world no longer want to go to Harvard or Stanford; rather, they want to study at Tokyo University or Kyoto University. Patients around the world no longer flock to the Mayo Clinic; rather, they go to the Meguro Clinic in Tokyo. This is very different from the way things looked in 2015. Of course, the question is: What happened?
The rest of the book tells the story of “what happened.” But first it emphasizes the point that “what happened” is potentially possible and fully believable. After all, Japan has reinvented itself twice in the past century and a half—once in the Meiji Restoration of 1868, when Japan opened itself to Western influences after centuries of isolation, and again after World War II. So we know that Japan is capable of revolutionary change. Japan can do it. The question now is only how to do it again.
The previous reinventions took place after moments of great crisis. So it is logical to conclude that the third reinvention will also require one or more crises. As it happens, Japan is already facing several severe crises, which are outlined in chapter 2. Most important in the short run is the threatening collapse of the economy in the wake of the failure of Abenomics. In addition, chapter 2 also introduces some conjectured crises, such as an Israeli attack on Iran and the withdrawal of the US Seventh Fleet from Japan, which are easily possible to imagine. These and other crises result in a national emergency and the creation of an Extraordinary National Revitalization Commission representing all sectors of the society, and which is charged with the task of once again reinventing the country.
Chapter 3 turns to the question of Japan and the international scene. For many years Japan has become accustomed to being sheltered under the American security wing, and many Japanese cannot imagine that this situation would change. But the fact is that it will. So it is important to understand that Japan’s major problems will have to be faced in the context of a world in which the US security assurance will be more limited than it has been since 1945. In this chapter, America adopts a policy of withdrawing its military forces from Japan to the second island chain, and Japan is forced to become a much more substantial geopolitical and diplomatic power, although the US does not entirely disappear from the scene.
Chapter 4 begins to deal with Japan’s key problems as I see them. The first is not the economy. That, of course, is a major issue and the most immediately palpable, but the truly existential issue facing Japan is its demographics. The country is dying; I cannot even add the qualifying adverb slowly, because the rate of population aging and shrinkage is rather rapid. Today’s 124 million Japanese could become as few as 88 million in the thirty-five years it will take to reach 2050. It is not too late to turn this around. Other countries like Sweden and France have done it. But in just a few years it will be too late. So Japan must very quickly take the steps that other countries have already shown can work. Mainly this will require a dramatic change in the role of women and the attitudes of men, as well as in immigration policies.
Chapter 5 deals with Japan becoming a bilingual nation with English-speaking ability similar to that of countries like Finland, Poland, and Germany. At first glance this may not seem to be a high-priority issue like demographics, but it has a huge bearing on demographics, which in turn has a huge influence on other issues facing Japan. If Japan could speak English well, the country would attract highly talented people from abroad as long-term residents and even, perhaps, as citizens. It could easily stay up-to-date on the latest developments in science, technology, business, finance, and everything else. Thus it is essential that Japan become highly capable in English.
Chapter 6 attacks the need for Japan to promote and become a global leader in innovation by reducing the high risk attached to entrepreneurial activity in Japan. Chapter 7 looks at how Japan could become energy-independent by means of developing its many potentially inexpensive domestic energy sources. Chapter 8 suggests how Japan might modernize its corporate structures and systems with particular emphasis on equal status and treatment for all employees, and Chapter 9 reinvents the structure of the Japanese economy to get rid of the monopolies, barriers to competition, regulatory roadblocks, and powerful interest groups like the farm cooperatives and the medical association. Finally, chapter 10 foresees a fundamentally decentralized and democratized Japan organized along federal lines like Germany and the United States.
It is my hope that future Japanese will remember me as a friend who offered some small but useful suggestions.
In closing, I should emphasize that this book was completed in April, 2015. All events described until that date are real and actually occurred. After that time, all events mentioned are entirely my own forecasts and conjecture based on my experience and understanding of history and of global trends.
CHAPTER 1
Tokyo, 2050
It’s spring 2050, and you’re embarking on a business trip to Tokyo, a city you haven’t visited for thirty-five years. You board your All Nippon Airlines flight in Washington, DC, and after a smooth ride of about two and a half hours find your Mitsubishi 808 supersonic jetliner circling Haneda Airport in preparation for landing.
Though it is not the world’s first supersonic jetliner, the 808 is almost twice as fast as the Anglo-French Concorde of the 1970s, carries more than three times the Concorde’s passenger load, and has almost