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In Business
Thursday 8.30-9.00pm,
Sunday 9.30-10.00pm (rpt)
Programme details 
29 January 2009
Listen to this programme in full
Peter Day
Down Japan

After Japan's huge property bubble burst in 1990, the country was pitched into the "lost decade" -- ten years of economic depression, and the world's second largest economy still may not have completely recovered. Peter Day asks what the rest of the world can learn from the now familiar-sounding Japanese experience.
About this programme by Peter Day

The more I go to Japan, the less I understand it. And that includes my last visit a few weeks ago, the first for almost 10 years.

Interviewing people is one of the problems. Foreign business people meeting Japanese executives often come away from an initial meeting thinking that the deal is almost completed.

They’ve complied with the etiquette: done the formal exchange of business cards, admired each other’s job title (as the Japanese are busy working out how senior their western visitor actually is) and then gone through the elaborate exchange of nothings deemed a necessary prelude to substantive exchanges.

But then things seem to have gone very well; the proposition is set out, the Japanese executives listen keenly: “Hai! Hai! They interject.

Emboldened, the foreigner sweeps on: talking deals, timing, maybe even prices. “Yes, yes,” say the Japanese, on home turf.

The meeting ends, and the visitors depart happy at the way things have gone: nothing signed, but clear progress. This Japan business isn’t as difficult as people make out.

But in fact nothing has happened at all, apart from polite Japanese enthusiasm of the moment. That ”hai”, “yes”, has nothing to do with dealmaking. It’s just a nod of fact of misunderstanding in many cases. The real work is still to be done.

Japanese media interviews are often similarly misleading. No matter how immaculate the English of the interviewee, it’s an innate Japanese tendency to agree with the questioner.

So Japan often appears to be a mirror reflecting back the image of the visitor to him or herself.

With this in mind. I went to Japan late last year to try and see whether there were lessons for the rest of the world now what happened there 19 years ago.

In the 1980s, Japan had a ridiculous property bubble, bigger than anything we have had. It burst with a vengeance in 1990, effectively bankrupting the banks, though they were kept going.

They and the authorities did not know how to deal with it, dithered for years, and induced economic and psychological deflation which is still not out of the system in Japan.

The result was the "lost decade" of the 1990s, which Japan slowly came out of in the new millennium; no economic growth at all, a big stock market crash which did not result in huge domestic economy impacts in a such an amazingly rich (and consensus driven) country, frightened of conflict ... just a great grey embrace of safety which still seems to be there.

Behind that bubble burst is something more profound: a whole society (with an island mentality deeply suspicious of foreigners) built on a hugely successful recovery economy from WWII, influenced and inspired by the USA.

But a recovery economy: protectionist, ridiculously hardworking, same party in power for almost 40 years, complete corporate lack of interest in shareholders, with companies mainly interested in market share and market success, hugely cartelised and driven by preserving employment, and a complex intertwining of politicians, business, and the all-important civil servants.

Until recently, Japanese cabinets had to make unanimous decisions, or the power on a certain issue passed to the bureaucrats. Why ? Well a distinguished professor once put it to me that the whole structure of post-war Japan was based on obscuring who held the reigns of power in order to disguise the Emperor's role in WWII.

The miracle Japanese car and electronics companies, the ones we all know about, are far from typical in their international mindedness and their astonishing efficiency.

And my conclusion this time? Japan is still pretty incomprehensible, as you can hear in this week’s programme.
About In Business

We try to make ear-grabbing programmes about the whole world of work, public and private, from vast corporations to modest volunteers.

In Business is all about change. New ways of work and new technologies are challenging most of the assumptions by which organisations have been run for the last 100 years. We try to report on ideas coming over the horizon, just before they start being talked about. We hope it is an exhilarating ride.
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