The ills of Japanese economy: Seperating the reality from perceptions

We live in a world, where every one can expreess their views. Such views can also be heard or read by almost any one across the globe. This blog is just another example of the capability we have thanka to Internet. We group this broad expanded capability as Digital Technology.

Thanks to DT, I received a news clip from Nikkei Weekly, a Japanes weekly news magazine. from one of my contacts from Japan.  The article is written by a consultant who works for a consulting company on Asian issues. He is also a visiting scholar at UC, Berkeley. It is a well written article, but makes several points, worth further analysis.  I note these comments, to bring  attention to some of the common perceptions or misperceptions we have about other cultures and their tolerances/preferences as they pertain to the current economic woes faced by every nation.

With Japan Stuck in the doldrums, it is time to get destructive By Michel ZilenZiger, Nikkei Weekly,  April 26, 2010.

Comments by Sipractice (May 4, 2010)

“Cultural components of societies either aid or block rapid adoption of new technologies”

The statement above is very much true. I address this in my book – The System Approach: A Startegy to Survive and Succeed in the Global Economy  – as the impediment to change, faced by mono cultural societies such as Japan, Germany, France, etc. But, the resistance for change by such societies, is a general attribute and especially for change that has the potential to highly destabilize the established norms. In that sense it is not restricted to “adoption of new Technologies”, as the author would like us to believe.

Also his focus of new technology pertains specifically to adoption of IT pro-actively. This should be distinguished from the adoption of new physical technologies. Indeed Japan has been at the fore front of adopting such new technologies, for example in the design and manufacture of consumer electronic products. Even the Hybrid car by Toyota is a huge break away from tradition in a highly change resistant automotive culture. The High Speed train system in Japan is a change of the kind rest of the world can only admire.

 “A second point relates to the notion of work in Japan. Most Japanese are told to endure and persevere. They are told to work harder, not smarter, which is what computers and technology allow companies to do.”

The above, I have to say is “grandma’s tales”. Computers and IT (technology) do not allow companies to work smarter. This is what the guys who peddle computer applications solutions want us to believe, and something the whole world has become suckers for! Computers and IT don’t make us work smarter any more than the shovels make us dig deeper and faster. Every worker can be used to work harder, by smart guys. These smarter guys give us the computers and IT to get their “things” done faster and hence take on more “things” to do. This is like the old work lords who gave us shovels to dig deeper and faster. Then they put the time and motion study to clock your work and pay you by the hour. Those who did not cut the muster were let go. Today the same work lords clock your time (and mine) through a myriad of schemes and metrics. The few who can keep up with the rat race, survive. The rest go home or to a lower paying job. That is unless, you decide to become smarter yourself, challenge the status quo, define the problem as a whole – as a system – and get it done using others (with and with out computers). This makes America a nation of work lords and computer driven slaves, with room for a few who can break the mold, through “System Thinking”. This should not be passed on under the illusion of a smarter working society. Nor should we believe that Japanese with their slower rate of adoption of computer systems at work place, should be thought of as less smarter working society.

 “ ….. a worthy employee should be at work until the wee hours – or else he isn’t giving his work sufficient attention. This measure of “effort” has long been in need of reconsideration, but until the underlying “culture” changes, the flexibility of Japanese firms will continue to lag.”

Another mistaken common tale. All worthy employees, world wide work till wee hours (12 hour work days and 7 days a week). Tied to their PDAs, they even work 24 X 7. Any notion that only Japanese work long hours and the IT rich work force of USA, UK or India, work much less is to be questioned for its validity. It might be true that some Japanese may spend more time at their work place, for fear of being culturally austracized, whether there is work to be done or not. This fear driven by cultural constraints may need to be addressed, for sure. But it is not the same as reconsideration of the measure of “effort” at the Japanese work place.

The author may be more valid, that burdened by the forces of Computer and IT, work force world wide toil long hours on increasing number of tasks. It may well be necessary to “reconsider the notion of effort to accomplish specific tasks”. Instead there should be more focus towards system and solution and their accomplishment for the society as a whole.

 “Japanese firms are willing to accept technology if it automates a system or process, but they become far more reluctant if the technology actually changes the system.”

I am not sure if the author has a clear understanding of what a “system” really means? I guess, what he is implying is that Japanese are eager to automate manufacturing processes, but they are not as readily willing to automate their information processing solutions (Systems). The later employs far more middle class workers! Sure, they can be computerized, if some one is willing to re-invest the profits for new products and solutions, which in turn employs the displaced workers. In the US the share holders benefits have trumped over such egalitarian approach to IT use. In Japan, absent such drive for new employment, the staus quo – to preserve current employment – continues. Neither US model nor Japanese approach are tenable. But, it does not make US approach to lay off workers at will – thanks to IT solutions – any superior than the Japanese approach – to preserve middle class employment at all cost.

 “Very often in Japan, change has been welcomed when it appears to be incremental rather than destructive.”

This might be freudian slip on the part of the author! Destructive change is neither desirable nor welcome. The Western world, particularly US and UK have been suffering under the grip of “destructive” change brought on by DT applications. It has rewarded a few at the cost of employment and standard of living of the many. These IT driven changes are quantum or large scale, only as far as they pertain to cost reduction through efficient replication of solutions already known and perfected. In that sense, their impact has only been continuous and incremental. In-depth understanding of the realities of the Western World and the impact of IT in it is essential. With out such understanding, to suggest that “only incremental change has been welcomed in Japan”, might be seen as the typical condescending and superficial view of a Western writer!

 “Now that the nation is stuck in the doldrums, however, more innovative and “destructive” technologies need to be given a chance to unlock hidden resources and untapped talents. Does your company have the courage to think “different” and act different?”

Despite the differing path and arguments, the author arrives at a conclusion which we all can agree upon: All companies of the developed nations need to “think different and act different”. In the past three decades, most of these companies have gone after the “easy money” of replicating known solutions – in terms of physical goods and their production – using IT applications as the back bone for such effort. This has resulted in untold amount of profits through geographic or regional expansion, mergers and acquisition and risky business models (to make money from betting or differential credit swaps). In the process much of the middle class – more so in USA than in Japan – has paid a heavy price. Now it is time to challenge these companies to think and act “different”, with a greater emphasis on organic growth through new physical products and solutions.

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