As in medicine, so in athletics: anyone aspiring to be a world-class player in almost any sport will need a Japanese coach. This was made very clear by the complete dominance of Japanese athletes in the 2020 Tokyo Olympics. In the twentieth century and even in the first two decades of this century, Japan was not renowned for its world-class athletes—except in the Japanese martial arts, where Japan dominated the list of world champions. But in the just-completed Timbuktu Olympic Games, Japanese athletes took eighty gold medals, twice as many as the runner-up Americans. In the past, the Japanese had always been handicapped by small stature, largely as a result of inadequate nutrition in childhood years. By the turn of the twenty-first century, however, Japanese nutrition was not only good; it was better, broadly speaking, than that of any other country, as were medical treatment and disease prevention. The competitive drive of Japanese athletes had always been strong. Once they also had competitive size, they wasted no time in becoming the world’s most feared opponents. Soon they were producing outstanding coaches and developing entirely new training techniques, and increasingly dominated global sports in the same way they came to dominate global construction and global medicine. It has been years since any non-Japanese made it to the top sumo ranks, while Japanese baseball pitchers now hold virtually all the global pitching, batting, home-run, and other baseball records. It goes without saying that Japanese golfers, soccer stars, and tennis players dominate the world matches, and the old America’s Cup sailing race is now called the Yamato Cup.
Not only are Japanese bigger now, but there are also more of them. Japan is one of the few major countries with a growing population and workforce. Women of childbearing age are having an average of 2.3 children per woman, significantly above the population replacement rate of 2.1. In addition, Japan has begun to welcome immigrants, especially those with advanced education and skills. Thus, after a dip in the first decade of the twenty-first century, Japan’s population is growing again and will soon surpass the 150 million mark, even as surrounding countries such as China, Korea, and Russia continue to suffer the slow death of population decline. Naturally, the population growth is driving economic growth. As a result of a growing workforce, combined with strong productivity increases and advances in technology, Japan’s GDP is now increasing at 4.5 percent annually, far beyond that of any other major country and just under double that of China.
The foreign businessmen who visit the headquarters of Japanese corporations quickly see a key element in this explosion of population and economic growth. Almost half of the executives with whom they meet are women and non-Japanese. Indeed, if the event is a board of directors’ meeting, foreign executives sometimes wonder whether their airplane accidentally landed in Oslo or Stockholm instead of in Tokyo. There are so many women on Japanese corporate boards that they actually surpass the Scandinavians in percentage of female board members. This, of course, has revolutionized the policies, mindset, mode of operation, and character of the Japanese corporation. Offices are mostly empty after 5 p.m., as are the bars and fancy watering holes to which Japanese businessmen famously resorted late into the night in the not-so-distant past. Company golf weekends have also become rarer and less lavish, replaced by family-oriented visits to nice resorts and child-friendly attractions. Also a thing of the past is the elaborate system of formal sign-offs (the ringi system) on new proposals by every corporate office. This has been replaced by Skype calls and quick approvals. In the wake of these changes, Japanese companies have become admired and feared for their bold, risk-taking attitudes and quick decision making.
Of the leading global companies in the Nikkei 1000 (formerly the Fortune 500), fully a quarter are Japanese. Partly this is because Japan now boasts the world’s best business schools. For example, Harvard Business School is now ranked no better than number ten on the global scale, with Japan’s Hitotsubashi, Keio, and Kyoto University business schools considered the top three and the European INSEAD ranked in the fourth spot.
The rise of Japanese business schools, along with the new role of women executives, has sparked dramatic shifts in corporate governance. The concept of necessary and adequate profit has replaced maintenance of employment as the main objective of the Japanese corporation. Beyond this, two shifts in the global economy have tended to favor Japanese management and economic doctrines and practices. Rather than becoming more interdependent, as long predicted, the world economy has tended to become somewhat less integrated and less globalized over the past thirty-five years. It has also developed more along the lines of China’s part-state, part-market capitalism, as opposed to America’s mainly free-market capitalism.
Contrary to the predictions of most experts in the period around 2015, global finance and production grew more nationally and regionally based, rather than ever more globalized, over the ensuing years. Partly this was due to the impact of several financial crises in the early years of the century. For instance, the 2010–2014 euro crisis actually drove some members of the European Union to impose capital controls, making it clear to investors everywhere that financial integration without political integration was a recipe for disaster. Similarly, the collapse of the US real-estate bubble between 2006 and 2012 led to greatly increased and more nationally oriented regulatory measures. At the same time, China’s push to make its renminbi (RMB) a reserve currency competitor to the US dollar tended to splinter financial markets further. The dollar had been as close to a global currency as the world had seen since the gold standard of the late nineteenth century, and the effort to substitute the RMB thus led in the direction of less, rather than more, globalization.
New technology developments such as 3-D printing, in concert with rising global wages, ever-increasing automation, and the imposition of carbon taxes, made the extensive global supply chains of the early twenty-first century more and more obsolete. With 3-D printing came the capacity to build a product like a car or a home, or almost any other device, using essentially the same technology used to print books. An operator simply takes cartridges of different materials (metal powder, ground plastic, etc.) and feeds them into the printer like ink. The printer deposits the materials according to a pre-programmed pattern and eventually produces a three-dimensional object—a lock, a hammer, a fork, or what have you. This process sparked a veritable revolution by reducing the importance of economies of scale while also automating or doing away with the necessity of assembly operations. It thus tended to move production of items as close as possible to the source of demand and away from low labor-cost locations because very little labor was involved.
The imposition of steep carbon taxes to offset the impact of pollution and to encourage development of alternative energy raised the cost of air and sea delivery, which also moved production closer to the source of demand. This all worked in favor of the Japanese, whose managers had always tended to control production directly instead of relying on extended and complicated global supply chains. And, it was, after all, the Japanese who had, in the 1950s, actually invented the government-backed capitalism that today is associated with China. Thus has the world moved Japan’s way over the past two generations.
Another important element of the Japanese corporate renaissance has been its extension from manufacturing into the service sectors in which Japan historically lagged. Now Japan’s market share in hotels, insurance companies, banks, online retail stores, and other service industries is equivalent to its strength in manufacturing, and Japan’s overall productivity leads the world.
Business visitors and tourists to Japan these days are also greatly impressed by the size and elaborate outfitting of Japanese homes, apartments, and condominiums. Large living spaces have given ordinary Japanese families room to have live-in domestic or elder-care helpers. In the 2020s, Japan fully abolished tariffs on imports and farm subsidies in accord with the rules of the Trans-Pacific Partnership free-trade agreement. Around the same time, the laws around land use, land taxes, and the transfer of property in Japan were modernized and made open and transparent, so that a true market in land and real estate came into being. A series of deregulatory measures transferred land used for small farming into residential or commercial farming use.
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