The Meltdown of the Japan Model: The Reality of the Nation’s Manufacturing Industry
KAWATO Akio / Former Japanese Ambassador to Uzbekistan and Tajikistan
January 18, 2018
The wealth produced by the manufacturing sector has long been the mainstay of the Japanese economy. Today, though, home appliances and personal computers are primarily manufactured by Chinese and Taiwanese firms, while companies like Samsung and Apple control production industries for television sets and smartphones. Even in humble products like vacuum cleaners, we see the British venture firm Dyson carving out a growing slice of the pie.
＜A depressing picture＞
A look at the heavy electric machinery sector shows that Japan’s Mitsubishi and Hitachi—to say nothing of the beleaguered Toshiba—are falling behind their global counterparts like Siemens and General Electric. Japanese firms, which once traded on the strength of their trustworthiness, are seeing their reputation dragged down by the likes of Kobe Steel and Nissan, found to have taken quality-control shortcuts and misrepresented the capabilities of their products. (While it appears that the products themselves have caused no quality-related incidents, and the standards themselves may in fact be unreasonably strict, the reputational damage remains.)
Even in the automotive sector, thought to be a Japanese stronghold, Chinese and American competitors are making bold strides in electric vehicles, pressing Japanese automakers to respond to a new paradigm in the industry. And in robotics, another area where Japan is still thought by many to be a leader, it turns out that even the celebrated Pepper—a conversationally capable android found in many Japanese storefronts—gets its “brain” from a French IT firm and its body, built in Shenzhen, China, from Foxconn—the Taiwanese electronics manufacturer that purchased Japan’s consumer electronics maker Sharp in 2016.
Japan shows little skill in designing entirely new systems from scratch. Rather, the country’s expertise lies in taking existing things and “polishing” them to a higher level of quality or finish. And Japan falls far short in its communicative abilities in English—which impacts its capabilities to compete against China and the West in areas like finance or computer software. This linguistic shortfall also prevents the country from leading moves to combat cyber terrorism, a field that will be considerably more important in days to come.
The Japanese manufacturing sector now stands at a key crossroads. But the choices that must be made differ for each industry and each company. The firms that make no efforts to understand their markets and the conditions at their plants—those helmed by the “elite managers” of the past, who can only steer their companies according to the charts they have always used—will inevitably taste failure. And even celebrated companies that have a viable vision for the future, if they have allowed themselves to grow too large, will find that they can no longer focus sufficient human and financial resources on their most promising product areas. They will end up losing to their Korean and American competitors.
Also worth noting is that the firms that primarily take their marching orders from Japan’s government and public corporations may be major operations, but they fall far short in the human-resource connections they need to succeed in business on a global scale. Their inability to grasp market needs and lack of marketing capability dooms them to failure in global competition. Emblematic of this are the domestic heavy equipment manufacturers that have long depended on orders from Japan’s electric utilities and the consumer electronics makers that only bothered to develop cellular phones for NTT Docomo.
I should note that during the postwar years, most Japanese companies were what would now be labeled “black” employers—demanding endless hours of overtime work in order to boost their productivity. They effectively built much of their success with cheap labor. After the 1985 Plaza accord made the yen twice as strong against the dollar, though, we saw the rise of China, particularly from the 1990s onward, as the primary source of cheap labor. American companies with no factories of their own, and little more than the ideas for bold, innovative designs, came to purchase top-quality parts from Japanese and other sources and have them assembled by Taiwanese electronics manufacturing service firms like Foxconn and TSMC at their Chinese plants. This left little room for Japanese manufacturers to thrive. Japan’s economy—or, more accurately, the country’s corporate workforce—was faced with the need to refashion itself from the ground up.
＜Hopeful signs＞
Conditions were not so gloomy for everyone, luckily. Fujifilm, for example, foresaw the shift to digital photography and retooled its business at an early stage, unlike the US film giant Kodak, which went bankrupt in 2012. The heavy equipment maker Komatsu, helmed by executives who had worked their way up from the construction sites, moved early on to prepare itself for a global rollout of its products. Toray pivoted its business to products like Heattech fabric, developed jointly with Uniqlo, and carbon fiber. The fiber manufacturer Seiren delved into the chemical properties of silk to reinvent itself as a pharmaceutical player. And the home-use product maker Iris Ohyama is becoming a major force in the home appliances industry by coming up with product lines that create all-new areas of demand.
Japan’s makers of vital components for home electronics and mobile phones also continue to show a comfortable supremacy in those fields. Chinese and Korean manufacturers would be hard-pressed to produce superior products without the parts they procure from companies like Murata Manufacturing and TDK. To this day Japanese firms account for more than a third of global electronic component production. Japan also retains the lead in the production of manufacturing equipment needed to turn these parts into finished products, and when it comes to industrial robots—which can complete complex tasks in the blink of an eye, even if they cannot yet converse with humans—Japanese players like Fanuc and Yaskawa are global leaders. In the age of the internet of things, Japan may not come out on top in the development of computer programs that can manipulate data on the massive scales involved, but Sony and Keyence will likely continue creating the sensors that will increasingly be installed in items and attached to our own bodies as part of the IoT.
＜Nationalist thinking in the economy will become obsolete＞
In the end, though, we must ask ourselves how much longer we will divide companies by their nationality, rejoicing over our own country’s corporate successes and lamenting its failures. If blockchain technology permits unified reckoning of all financial accounts, and robotics advances raise productivity and lower the prices of goods, we can see the advent of an era when all people worldwide enjoy greater affluence in equal measure, regardless of where individual companies are located.
Akio Kawato is Former Japanese Ambassador to Uzbekistan and Tajikistan. This is a partially modified version of the article that first appeared in the December 19 edition of Newsweek Japan.
＜A depressing picture＞
A look at the heavy electric machinery sector shows that Japan’s Mitsubishi and Hitachi—to say nothing of the beleaguered Toshiba—are falling behind their global counterparts like Siemens and General Electric. Japanese firms, which once traded on the strength of their trustworthiness, are seeing their reputation dragged down by the likes of Kobe Steel and Nissan, found to have taken quality-control shortcuts and misrepresented the capabilities of their products. (While it appears that the products themselves have caused no quality-related incidents, and the standards themselves may in fact be unreasonably strict, the reputational damage remains.)
Even in the automotive sector, thought to be a Japanese stronghold, Chinese and American competitors are making bold strides in electric vehicles, pressing Japanese automakers to respond to a new paradigm in the industry. And in robotics, another area where Japan is still thought by many to be a leader, it turns out that even the celebrated Pepper—a conversationally capable android found in many Japanese storefronts—gets its “brain” from a French IT firm and its body, built in Shenzhen, China, from Foxconn—the Taiwanese electronics manufacturer that purchased Japan’s consumer electronics maker Sharp in 2016.
Japan shows little skill in designing entirely new systems from scratch. Rather, the country’s expertise lies in taking existing things and “polishing” them to a higher level of quality or finish. And Japan falls far short in its communicative abilities in English—which impacts its capabilities to compete against China and the West in areas like finance or computer software. This linguistic shortfall also prevents the country from leading moves to combat cyber terrorism, a field that will be considerably more important in days to come.
The Japanese manufacturing sector now stands at a key crossroads. But the choices that must be made differ for each industry and each company. The firms that make no efforts to understand their markets and the conditions at their plants—those helmed by the “elite managers” of the past, who can only steer their companies according to the charts they have always used—will inevitably taste failure. And even celebrated companies that have a viable vision for the future, if they have allowed themselves to grow too large, will find that they can no longer focus sufficient human and financial resources on their most promising product areas. They will end up losing to their Korean and American competitors.
Also worth noting is that the firms that primarily take their marching orders from Japan’s government and public corporations may be major operations, but they fall far short in the human-resource connections they need to succeed in business on a global scale. Their inability to grasp market needs and lack of marketing capability dooms them to failure in global competition. Emblematic of this are the domestic heavy equipment manufacturers that have long depended on orders from Japan’s electric utilities and the consumer electronics makers that only bothered to develop cellular phones for NTT Docomo.
I should note that during the postwar years, most Japanese companies were what would now be labeled “black” employers—demanding endless hours of overtime work in order to boost their productivity. They effectively built much of their success with cheap labor. After the 1985 Plaza accord made the yen twice as strong against the dollar, though, we saw the rise of China, particularly from the 1990s onward, as the primary source of cheap labor. American companies with no factories of their own, and little more than the ideas for bold, innovative designs, came to purchase top-quality parts from Japanese and other sources and have them assembled by Taiwanese electronics manufacturing service firms like Foxconn and TSMC at their Chinese plants. This left little room for Japanese manufacturers to thrive. Japan’s economy—or, more accurately, the country’s corporate workforce—was faced with the need to refashion itself from the ground up.
＜Hopeful signs＞
Conditions were not so gloomy for everyone, luckily. Fujifilm, for example, foresaw the shift to digital photography and retooled its business at an early stage, unlike the US film giant Kodak, which went bankrupt in 2012. The heavy equipment maker Komatsu, helmed by executives who had worked their way up from the construction sites, moved early on to prepare itself for a global rollout of its products. Toray pivoted its business to products like Heattech fabric, developed jointly with Uniqlo, and carbon fiber. The fiber manufacturer Seiren delved into the chemical properties of silk to reinvent itself as a pharmaceutical player. And the home-use product maker Iris Ohyama is becoming a major force in the home appliances industry by coming up with product lines that create all-new areas of demand.
Japan’s makers of vital components for home electronics and mobile phones also continue to show a comfortable supremacy in those fields. Chinese and Korean manufacturers would be hard-pressed to produce superior products without the parts they procure from companies like Murata Manufacturing and TDK. To this day Japanese firms account for more than a third of global electronic component production. Japan also retains the lead in the production of manufacturing equipment needed to turn these parts into finished products, and when it comes to industrial robots—which can complete complex tasks in the blink of an eye, even if they cannot yet converse with humans—Japanese players like Fanuc and Yaskawa are global leaders. In the age of the internet of things, Japan may not come out on top in the development of computer programs that can manipulate data on the massive scales involved, but Sony and Keyence will likely continue creating the sensors that will increasingly be installed in items and attached to our own bodies as part of the IoT.
＜Nationalist thinking in the economy will become obsolete＞
In the end, though, we must ask ourselves how much longer we will divide companies by their nationality, rejoicing over our own country’s corporate successes and lamenting its failures. If blockchain technology permits unified reckoning of all financial accounts, and robotics advances raise productivity and lower the prices of goods, we can see the advent of an era when all people worldwide enjoy greater affluence in equal measure, regardless of where individual companies are located.
Akio Kawato is Former Japanese Ambassador to Uzbekistan and Tajikistan. This is a partially modified version of the article that first appeared in the December 19 edition of Newsweek Japan.
The English-Speaking Union of Japan
「日本」モデルのメルト・ダウン 製造業の実相
河東哲夫 / 元駐ウズベキスタン大使兼タジキスタン大使
2018年 1月 18日
日本の経済を支えてきたのは、製造業が稼ぎ出す富。しかしこの頃は、家電、パソコンの多くは中国や台湾企業に売りに出され、テレビや携帯電話もサムソン、アップルなどに席巻されている。電気掃除機まで英国のベンチャー企業、ダイソンが幅を利かせる。東芝は言うに及ばず、三菱や日立の重電部門も世界では、シーメンスやＧＥのはるか後塵を拝する。日本の企業は正直が取り柄だったのに、神戸製鋼所や日産等は製品の性能を偽っていたり、品質検査をごまかしていた―製品は問題を起こしていないようなので、基準設定の方に非現実的なところがあったのかもしれない―ことが明らかになっている。安泰に見える自動車も、米国や中国の企業に電気自動車という新しいパラダイムを強いられて、新規まき直しの戦いに臨んでいる。ロボットは日本が「進んでいる」と思っている人が未だに多いが、対話ロボット「ペッパー」の頭脳はフランスのベンチャーが開発したものだし、身体部分は台湾の鴻海－シャープを買収した企業―が、中国の深圳で組み立てている。
日本は大きな新しいシステムをゼロから考案するよりも、今あるものを「磨く」ことに長ける。しかも、英語力に決定的に欠ける。だから金融や、コンピューター・ソフトの制作では米欧中の後塵を拝し、今ますます激しくなっているサイバー・テロの防止策についても、世界の議論を引っ張れない。
日本の製造業は今、大きな曲がり角にある。しかし状況は、各分野、そして各企業で異なる。市場・工場の現場を知る努力をせず、これまでの枠の中でつつがなくやっていくことしかできない「優等生」的経営陣しかいない企業は、軒並み駄目だ。また、いくらヴィジョンがあっても、大きくなり過ぎ、いろいろなものを作り過ぎている有名大企業では、有望な商品にヒトとカネを集中できず、韓国や米国の企業に負ける。
そしてもう一つ。政府や公営企業からの指示や注文に依存してきた企業は図体は大きいものの、世界での人脈を欠くために、グローバルな競争では市場のニーズも把握が不十分、かつ営業力を大きく欠く。それは、国内の電力会社の注文に依存してきた重電諸企業、そしてＮＴＴドコモを向いてしか携帯を開発していなかった家電各社のことである。
戦後の日本企業はみなブラック。残業に次ぐ残業で生産性を上げ、実質はチープ・レーバーでのし上がって来たのだが、１９８５年のプラザ合意で円レートを二倍に押し上げられた上、９０年代には中国という本場のチープ・レーバーが出現、自分の工場はなくとも頭だけで斬新・画期的な商品を設計する米国企業が日本などから最良の部品を注文、中国の工場でこれを組み立てる鴻海やＴＳＭＣなど台湾の組み立て受託専門（ＥＭＳ）企業と組んだから、日本企業はたまらない。日本経済は、と言うより日本の企業人材は、根底からの叩き直しを迫られているのだ。
幸い、状況はブルー一色ではない。富士フィルムはデジタルへの移行を予見して早くから業容転換をはかった好例だし（米国のコダックは倒産している）、コマツでは現場からたたき上げた社長達が商品をグローバルに展開する態勢を早くから作って来たし、東レはヒートテックや炭素繊維に軸足を移し、セーレンは絹の成分に眼を付けて繊維から薬品企業に脱皮、そして生活用品製造販売のアイリスオーヤマは新しい需要を自ら創出する意気込みで、今や家電の新たな雄になりつつある。
そして家電や携帯電話でも、部品の分野では日本の優位が変わらず、中国や韓国の企業も村田製作所やＴＤＫなどの先端部品なしには、優良な製品を作れない。日本の企業は、電子部品の世界生産の３分の１以上をまだ占めている。そして、これら部品を組み立てて最終製品にするための機械の生産でも日本は優位を維持しているし、人間との会話はできなくても複雑な作業を迅速にできるロボットの分野では、ＦＡＮＵＣ、安川電機などが世界の先をいく。これからのＩｏＴの時代、日本は多量の情報を処理するプログラミングでは負けるかもしれないが、モノやヒトに装着するセンサーの開発では、ソニーやキーエンスなどが頑張っていくだろう。
もっとも、こうやって国に分かれて、企業の浮沈に一喜一憂する時代はいつまで続くだろう？ ブロックチェーンで決済を一元化、そしてロボットで生産性が上がり、モノの価格が下がっていけば、企業がどの国にあろうが、世界の人々は一様に豊かになるのでなかろうか。
（筆者は元駐ウズベキスタン大使兼駐タジキスタン大使。本稿は2017年12月19日付日本版Newsweekに掲載されたものに一部手を加えたものである。）
日本は大きな新しいシステムをゼロから考案するよりも、今あるものを「磨く」ことに長ける。しかも、英語力に決定的に欠ける。だから金融や、コンピューター・ソフトの制作では米欧中の後塵を拝し、今ますます激しくなっているサイバー・テロの防止策についても、世界の議論を引っ張れない。
日本の製造業は今、大きな曲がり角にある。しかし状況は、各分野、そして各企業で異なる。市場・工場の現場を知る努力をせず、これまでの枠の中でつつがなくやっていくことしかできない「優等生」的経営陣しかいない企業は、軒並み駄目だ。また、いくらヴィジョンがあっても、大きくなり過ぎ、いろいろなものを作り過ぎている有名大企業では、有望な商品にヒトとカネを集中できず、韓国や米国の企業に負ける。
そしてもう一つ。政府や公営企業からの指示や注文に依存してきた企業は図体は大きいものの、世界での人脈を欠くために、グローバルな競争では市場のニーズも把握が不十分、かつ営業力を大きく欠く。それは、国内の電力会社の注文に依存してきた重電諸企業、そしてＮＴＴドコモを向いてしか携帯を開発していなかった家電各社のことである。
戦後の日本企業はみなブラック。残業に次ぐ残業で生産性を上げ、実質はチープ・レーバーでのし上がって来たのだが、１９８５年のプラザ合意で円レートを二倍に押し上げられた上、９０年代には中国という本場のチープ・レーバーが出現、自分の工場はなくとも頭だけで斬新・画期的な商品を設計する米国企業が日本などから最良の部品を注文、中国の工場でこれを組み立てる鴻海やＴＳＭＣなど台湾の組み立て受託専門（ＥＭＳ）企業と組んだから、日本企業はたまらない。日本経済は、と言うより日本の企業人材は、根底からの叩き直しを迫られているのだ。
幸い、状況はブルー一色ではない。富士フィルムはデジタルへの移行を予見して早くから業容転換をはかった好例だし（米国のコダックは倒産している）、コマツでは現場からたたき上げた社長達が商品をグローバルに展開する態勢を早くから作って来たし、東レはヒートテックや炭素繊維に軸足を移し、セーレンは絹の成分に眼を付けて繊維から薬品企業に脱皮、そして生活用品製造販売のアイリスオーヤマは新しい需要を自ら創出する意気込みで、今や家電の新たな雄になりつつある。
そして家電や携帯電話でも、部品の分野では日本の優位が変わらず、中国や韓国の企業も村田製作所やＴＤＫなどの先端部品なしには、優良な製品を作れない。日本の企業は、電子部品の世界生産の３分の１以上をまだ占めている。そして、これら部品を組み立てて最終製品にするための機械の生産でも日本は優位を維持しているし、人間との会話はできなくても複雑な作業を迅速にできるロボットの分野では、ＦＡＮＵＣ、安川電機などが世界の先をいく。これからのＩｏＴの時代、日本は多量の情報を処理するプログラミングでは負けるかもしれないが、モノやヒトに装着するセンサーの開発では、ソニーやキーエンスなどが頑張っていくだろう。
もっとも、こうやって国に分かれて、企業の浮沈に一喜一憂する時代はいつまで続くだろう？ ブロックチェーンで決済を一元化、そしてロボットで生産性が上がり、モノの価格が下がっていけば、企業がどの国にあろうが、世界の人々は一様に豊かになるのでなかろうか。
（筆者は元駐ウズベキスタン大使兼駐タジキスタン大使。本稿は2017年12月19日付日本版Newsweekに掲載されたものに一部手を加えたものである。）
一般社団法人 日本英語交流連盟