The setting and the rising of the sun? by Utz Reiff on 03-Feb-2011

J apan, like the UK, currently faces a number of challenges. An ageing population, the economic downturn (although most observers would rate Japan’s position as far more favourable compared to the UK), international competition, the political situation, social problems, etc.

In a recent piece of "back of the envelope" research, the vast majority of UK businesses contacted that do not already do business with Japan do not and would not even consider it. They regard Japan as too challenging and the risk of having their ideas taken too great. When the world economic climate was in the boom phase, the attraction to work with Japan was considerable and all the hassle considered – by a few – as worthwhile. Now it is just considered as hassle as other countries in the region strive for supremacy – like China, Vietnam and South Korea, for example.

In fact, China has recently overtaken Japan’s position as the #2 trading nation worldwide in terms of GDP – not GDP per head, but it is widely considered that even that will change positively in the coming years.

Japanese manufacturers are still regarded as being in the forefront of innovation, technology and quality – consider Sony, Hitachi, Nissan, Panasonic. However, it was only a few decades ago that Japanese products were regarded as "cheap" and with the developments coming from other regional players, we can see the dominance of quality also being severely challenged – not to mention value.

Observers comment that part of the problem is that Japan has somewhat re-closed its doors as a result of the economic situation. Companies do not communicate effectively in the western media. They are often only seen in headlines when there is a disaster – take the recent car recalls. Despite some stunning stories of innovation and success, they seem unwilling (or unable) to talk to the press and develop effective media relations. This has cost them dearly in terms of corporate reputation and directly to the bottom line. If they continue to do nothing effective, the situation can only get worse.

The Japanese government is keen for organisations to be more international and open. It will be interesting to observe whether they are able to take the bull by the horns and do something about it before they also lose the battle for good stakeholder relations and corporate reputation. If other countries crack this option before Japan manages to start, the country’s problems will be orders of magnitude worse than they are at this time.

For further information contact Utz Reiff:
e: utz@pan-net.net

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