Japan to Return to Growth by 2020 – if Driven by “Values”
08/04/2015 Tokyo, Japan
Could Japan see a return to growth in the next five years? And what would drive this growth?
These were the big questions asked by Ken Shibusawa, founding partner and chairman of Commons Asset Management, and CEO of Shibusawa and Company at the IESE MBA 50th anniversary celebration in Tokyo last month.
Shibusawa gave a talk entitled: "Engaging elements of humanity in capitalism for the 21st century," in which he described the emergence of a new model of capitalism more closely aligned to society’s common goals. Japan’s economic fortunes, he said, could be improved by adopting this new model – a challenge to future generations of Japanese business leaders.
2020: A Year for Change?
Japan’s so-called "lost decades" – the economic downturn that began in the early 90s – could be set to come to an end in the next five years, said Shibusawa. In 2020 the Olympic Games will be coming to the country, however, he added: "it’s also the year when the baby boomer generation will be retiring, and stepping aside to make room for the next generation."
The challenge to this generation, he said, is to find a model for "sustainable growth, which has been a 'side issue' for the last 30 years – and one that will require the creation of new and different systems."
This challenge would be hard to overcome, he warned. "I have two pieces of bad news: the demographic evolution of the country hinders the creation of this sustainable economic system, and the new protagonists – who were educated and trained during the bubble – won’t have the money they would have had during the growth period."
Working Toward the Common Good
Shibusawa cited the "original values of capitalism" as key to stimulating sustainable growth: a joint commitment to company profits and to broader society benefits.
"My great grandfather was part of the early years of the First National Bank of Japan, and he explained that the bank was like a river of money, which flowed far enough to affect social reality. This new form of capitalism must restore ideas like this," he said.
Peeking out of the Box
Shibusawa pointed to some of the issues currently holding Japan back. Difficulties in capturing value, he said, were amongst the factors that continue to hamper growth.
"I’m an investor, and for me, investment means buying when you believe that the market price of something is lower than you believe it is worth and selling when the price is higher. But people still think that price is equivalent to value. We have an entrenched mindset that says if something is expensive it has high value – we need to change this way of thinking."
For business leaders, he said, this means leaving the comfort zone: thinking outside of the box.
"We Japanese tend to feel comfortable inside our box, where we’re born, where we grow up and work. We are convinced that only those of us inside create value and those outside are on their own."
"But from outside there’s a better perspective to see how factors like corporate social responsibility harbor great potential to create value. Just by peeking out of the box, we can easily find answers to the questions that seemed to have no solution from within it."
Shibusawa was the keynote speaker at an event celebrating 50 years of the IESE MBA. Also at the celebration was IESE Dean, Professor Jordi Canals, who summarized the story of the IESE MBA since its inception 50 years ago. He talked about the continuing developments that nourish the MBA program, and ensure that it remains "at the forefront of innovation and internationalization" in global business education.
Celebrations will continue this year to mark the 50th anniversary all over the world. Upcoming events will be held in Singapore, Miami, New Delhi, London, Barcelona, Santiago de Chile and Sao Paulo.