Fri. Jan 21st, 2022


In the first business week of the new year, Asahi Breweries said it was changing the recipe of the country’s top-selling beer for the first time in almost four decades. The new very dry cans even includes a science chart which drinks help to visualize the epochal shift in taste.

But Asahis was just one of many January statements of Great Change in Japan. The run-up to the new year has already caused a huge spasm of decision-making and huge commitments to self-improvement. The world’s third largest economy looks a lot like someone who recently joined a gym.

It is worth considering the trail of binge, inactivity, regret and panic that has driven Japan to the membership counter. One immediate trigger is that the country is finally moving past its (delayed) Olympic year and, like a post-Christmas blue tea being drawn in a family row, pondering whether the promised bonhomie was worth the tinsel, effort and credit card bills . Japan after the Olympics knows how hard he smiled and sucked in his stomach to project the best profile while the world watched: now that it can finally exhale, the frown is (for example, by closing its doors to foreign students and researchers ) and flab (represented by a listless economy) is indispensable.

But those times have brought about a much deeper sense of crisis: not so much that mistakes have been made or that dysfunction abounds, but that enormous resources and viable opportunities for self-improvement have been squandered over many years by both public and private sectors. From the failure to digitize and globalize sooner to the reluctant transformation of workplaces, education, hierarchies and management: the pain of getting in shape now is predictably greater for its postponement. The sound of Japan adjusting the dumbbells, setting itself targets and promising Big Change is loud, but not quite loud enough to drown out the anxiety that it has left things far too late.

Of the many exercises Japan has set up for itself this year, four stand out. The first is Prime Minister Fumio Kishida’s so-called “Vision for a Digital Garden City Nation” – a broad policy drag network focused on long overdue efforts to digitize education and medical systems, and to drag other key pieces of bureaucratic infrastructure into the digital age. The most ambitious target in this is the plan to recruit, either from its own shrinking and aging population or from a pool of foreign talent who are currently unable to enter the country, 2.3 million digital experts over the next five years and offers them the dream job of extending digitization to the emptiness of rural Japan.

A second resolution is to push even harder to establish Tokyo as a talent-magnetizing, fund-raising and regionally dominant global financial center. This has to happen despite the dwindling weight of Japanese stocks in global terms, a legal system that many foreigners now define by treating former Nissan boss Carlos Ghosn and a continuing absence of evidence that anyone outside the Tokyo Metropolitan Government really a global financial center.

The third, which has been in the works for some time, is the major reorganization of the Tokyo Stock Exchange in April – an exercise aimed at (via new standards) a widespread plague of 2 185 names currently listed in the First Section in a more investable, higher-quality six-pack of “prime” stocks. Landmark, line-drawing things in theory, but qualification for “prime” has been diluted since its concept. Companies that do not currently meet management, free-float and other criteria will in any case be able to join as long as they promise to meet them at some deadline-free point in the future. The Nikkei recently reported that about 90 percent of current first-division companies will make it into the leaner, mean prime market.

A fourth promise of national self-improvement is to establish what is tentatively called the International University of Excellence and is a project aimed at placing Japan’s research universities on an equal footing with global peers. The funding will come in part from the newly created ¥ 10tn university fund which is scheduled to start investing in the coming months.

In common with anyone’s January gym membership, the declared ambition and early enthusiasm is commendable. The question, as always, is how long everything that is sustained passes the first pulled muscle and becomes more attractive as excuses for procrastination. But a bigger concern for Japan is that, even if it is sustained, the incremental good that these projects will do is now declining in the long run. Asahi turns his recipe into desperation as beer consumption in Japan declines almost two decades – a slump that corresponds to the relentless decline of the younger population. Fitness may be possible; aging is unstoppable.

leo.lewis@ft.com



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