Hiroshi Mikitani about how Japan should become more competitive
Hiroshi Mikitani: presentation of his new book 競争力 = Competitiveness
Today Hiroshi Mikitani, Founder and Chairman of Rakuten, gave a talk at the Foreign Correspondents Club about his Japan Association of New Economy (JANE) and about his new book authored with his father entitled (競争力 = Competitiveness). Mikitani is also member of Prime Minister Abe’s Competitiveness Council.
Overall Mikitani explained some very reasonable sounding suggestions for changes towards overcoming Japan’s current 15 year stagnation. He made clear, that the No. 1 reason for Japan’s stagnation is not lack of technology or lack of innovation, but is due to insufficient quality of top managers/executives of Japanese companies. Therefore most of Mikitani’s suggestions for improvements focus on increasing the quality of top executives at Japanese companies both via education and also via bringing in more non-Japanese competition. Mikitani also emphasized his close relationship with Prime-Minister Abe, he mentioned having had dinner yesterday with Prime-Minister Abe, and expressed is confidence in Prime-Minister Abe’s abilities and his power to execute. One of the questions the audience asked during Q&A was that similar suggestions for improvements have been heard over many years, and asked whether this time these suggestions will be implemented.
Mikitani is Representative Director of the Japan Association of New Economy (JANE).
Japan Association of New Economy (JANE) has three focus areas:
- Global standards
Mikitani emphasizes that the major reason for Japan’s stagnation is not lack of innovation, but top management with low capability and no vision. – Japan’s No. 1 problem are Japan’s executives.
To increase the competitiveness of Japan:
- Japan does not lack technology, but global business management capability and business innovation
- Current system protects top management with low capability and no vision. Top management needs to be renewed.
- Efficiency of industries must be increased via competition
- Japan must overcome the present Galapagos-like social environment
- Japan must select Key Performance Indicators (KPI) and measure improvements in competitiveness against these KPIs. Must set targets, and measure progress.
- Corporate tax rate in Japan should be lowered, and should target to be the lowest level of developed countries
Japan must improve global expansion and must improve quality of management:
- Join TPP
- Accelerate introduction of International Financial Reporting Standards (IFRS)
- Increase quality of top business managers and human resources
- Attract top talent from around the world: reduce tax progression, introduce stock based remuneration
- Educational reform: improve English education, improve IT education, cultivate strategic thinking
- Encourage study abroad
- Increase company’s global expansion capability, eliminate Galapagos regulation
- Terrestrial digital media broadcasting (“Chi-Degi”, One-Seg)
- Communication networks, NGN
- Radio spectrum
- Open up capital markets, bring market mechanisms into corporate management:
- Ban extreme anti-takeover measures, ban poison pills etc
- Reduce cross-shareholding
Japan needs education reform and needs to cultivate world-class business people:
- Japan’s education system is ranked on 43rd position (out of 144) by the World Economic Forum (2012).
- Quality of management schools is ranked on 80th position (out of 144) by the World Economic Forum (2012).
Hiroshi Mikitani submitted detailed materials to the Industrial Competitiveness Council Meeting on January 23, 2013. These materials can be downloaded here: http://jane.or.jp/img/english/pdf/jane20130129.pdf
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