Japan, Inc.’s long year
Kai Ryssdal: On Sunday, Japan will mark the one-year anniversary of the Fukushima earthquake and tsunami — 16,000 people were killed by best estimates. Billions of dollars in damage. Disruptions, literally, to the global economy. Just think about Honda and Toyota sales the past year.
But as catastrophes like that play out over time, the economic costs become less clear. And sometimes turn into benefits.
Marketplace’s Scott Tong was in Japan last year, just after the earthquake. We sent him back a couple of weeks ago.
Scott Tong: It’s been a long 12 months for Japan, Inc. But even before the earth shook, foundations were weak. Take the longtime electronics giant Sharp. It’s endured several disasters this past year, starting with the quake and tsunami. Those prompted power shortages, so Sharp cranked out fewer TVs and LCD panels. Then, floods in Thailand knocked out component makers. Another whammy came when Japan’s currency soared, making exports pricey and uncompetitive — just in time for Sharp’s 100th birthday party.
Sharp tour guide: This is production facility to manufacture mechanical pencil in 1921.
At the company museum, our tour guide touts historic company inventions like the Eveready Sharp pencil. Sharp has also pioneered TVs, solar panels, a talking calculator.
Tong: OK. Can I press? “Ichi, ni, san…”
But now it’s counting company losses: $4 billion last year. Sharp stock has fallen 20 percent. And for shoppers in Tokyo, Sharp these days seems dull. Here’s 24-year-old Yusuke Akimoto.
Yusuke Akimoto: I don’t buy Sharp products almost five years. So I don’t know, like, what’s going on there right now.
Sharp faces two big problems. First, TV prices have cratered, killing profits. And there’s something called Galapagos Syndrome. Remember Charles Darwin’s finches — each bird developed a beak unique to its island? Well, Japanese producers evolved, but just for their island.
Hop the subway and you spot a distinct species of Japanese cell phone. It gets TV signals. It works as a debit card. But it doesn’t text very well.
Waichi Sekiguchi: It’s very high end, but you cannot sell outside of Japan.
Columnist Waichi Sekiguchi says companies like Sharp have developed market tunnel vision.
Sekiguchi: They pay attention to the domestic rather than foreign markets. That causes a problem in Japan.
Problem, because Japan’s aging though its market is shrinking. Meanwhile, invasive species are everywhere. The iPhone is the latest predator. So Sharp’s trying to evolve — diversify more into solar panels and air cleaners, at home and abroad. But big companies move slowly.
Still, that doesn’t mean that all of Japan, Inc. is necessarily past its prime. Newer firms are more nimble, like Japan’s e-commerce champion, Rakuten. Like Amazon, Rakuten.com lets you buy everything, including eggs. You can book a golf tee time, buy plane tickets, blog. In the year since the earthquake, Rakuten has leveraged a strong yen and acquired several companies abroad — it’s now the world’s No. 3 online retailer.
Like Silicon Valley firms, Rakuten offers lunch to workers, no charge, which brings us to the old saying about the nonexistent free lunch. The catch: at Rakuten, employees have to speak English. CEO Hiroshi Mikitani has decreed what he calls English-nization. He even does his conference calls in English. The point: Rakuten, like Japan, must go global.
Hiroshi Mikitani: The walls are coming down. You cannot just sell your content to the U.S. or just to Europe or just to Japan. You need to be able to sell it globally.
English-nization has its critics. Honda’s CEO calls the idea quote unquote “stupid.” But Mikitani is not the backing down type. In fact, right after the tsunami, he quit a big-business lobby group when it supported the hugely unpopular nuclear power industry.
Mikitani: The fact that Japan is moving to a new Japan is very, very important for me. And I felt that I could not be a part of this organization any more.
Mikitani is a rare Japanese risk taker. He started out as an investment banker, but in the ’90s a previously deadly earthquake in his hometown of Kobe prompted soul searching and he started something new. This latest disaster, he figures, is spawning a new generation of entrepreneurs.
In Tokyo, I’m Scott Tong for Marketplace.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.
Thanks to our
Your support keeps us going strong, even through