Books : Kenichi Ohmae - Beyond National borders

Kenichi Ohmae - Beyond National borders

Japan must abandon its long history and mindset. The dangers of synthetic nationalism are reflected remorsefully in the fact that Japan could have benefited from cheaper quality foreign products. Japan is the second largest financial power in the world and Japan is wealthy, 120 million hardworking and well-educated citizens. For 40 years Japan has sustained a population of 100 million. Is Japan a producer of wealth? Is Japan a consumer of wealth? Countries rich in natural resources are suffering. In 1980s OPEC nations realized oil and ores were not enough to fuel economic growth. Japan has made up for the mineral poverty by transforming its economy based on manufactured goods. Japan geography is 80% mountainous forcing imports. Japan imports raw goods and converts them to value added goods. Japan is not a welfare state mandating that “those who work eat”. Japanese farm 10 million tons of fish and can maintain supply rates indefinitely. Japan associates with Oil rich Arab countries, but not Israel; Japan considers Korea and Taiwan rivals; Japan courts Indonesia and Malaysia; and Japan aids the Philippines and Thailand. The world is divided into two types of countries: Countries rich in resources and countries with strong markets for manufactured goods.

Wealth is realized by shifting from natural resources to advanced technology. The Swiss became the model for business visionary ventures. The Swiss model included a well-educated workforce, 3 large banks funding and stabilizing financial funding for projects, and profitable manufacturing operations. The problem is Japan is a superpower unaware. Japan mindset of isolation and ignoring non self-referential content prevents important information from affecting decision makers. In a race to become efficient and powerful Japanese companies often have no idea how their manufacturing prowess hurts foreign industry and in large part they ignore their Asian neighbors.

Food: Japan is 80% dependant for food and energy. 670,000 Japanese workers build 11 million cars a year. In 1984, Japan paid 6.756 billion of American agricultural produce. Japan is the biggest importer of American beef in the world. Japan is a Class A customer of the America farmer. If the dollar strengthens, the US government must subsidize the US farmer, as survival means, as exports slow and product costs more for foreigners. A strong dollar in the 80s caused a recession for the American farmer. Japan was forced to shop elsewhere: Argentina, China, and Australia. Liberalizing Japanese beef industry would have flood the market with cheap Australian beef. A move against the US beef industry. The Japanese government reduced the Japanese agricultural population from 35 percent to 6 percent. Even if Japan does not own foreign land, Japan needs to have access to countries with lands capable of producing food. The Japanese rice industry is inefficient. The Japanese government buys 2/3 of the rice produced, subsidizes billions in cost, and forces the consumer to pay 5 to 6 times the world price.

Mindset: Egocentric, self referential, Japan only focus is a weakness. Dangerous illusions: Japanese focused on Japan, concerned about themselves, and feels threatened that Korea would damage Japanese markets. Japanese profit margins could be higher but the pressure to compete with low cost Korean cars slims up the gap. Japan and Korea are in a foot race where Korea. Japan does not have to compete in the same market as Korea and can find other advanced technology sectors where Korea is not ready too compete. Japanese were concerned about angering America; US media exaggerated trade imbalances; US car industry leader Iacooca stirred up strong anti-Japanese emotion; politicians espoused protectionist doctrine and made false promises to those fearful of a layoff while simultaneously increasing the bill for the taxpayer. Japan wanted things to become quiet. The Japanese felt making the criticism disappear was more important than solving problems. An aggressive voice clarify the disagreements between the two nations was minimal. Japan sought to change its image by producing high quality products, as reflected in Honda statement, “the products will speak for themselves”. Japanese cars were cheap; the product of advanced automation increased production four fold without any labor increases; the cars were cheap enough that without import tariffs and fees, Japanese cars would have sold at a ¼ of the cost of US cars. US rhetoric demanded Japan opens its markets. Japan preached a double standard of free trade but open its markets slowly. Japan age of influence sought by human strength to change the earth’s disparities and injustices and move man into the next level of civilization.

National borders are irrelevant. Companies and consumers were behaving as if they were ignorant of national interests. Japanese purchased Coca cola drinks, shaved with Shick razors, blew their noses on Kleenex, and ate US oranges. Emotions of nationalism emerged as Japanese media depicted the Japanese industries as being criticized. Yet, the Japanese wanted the best and the cheapest products regardless of origin. The “cheaper and better products but no imports” dichotomy resulted in foolery by government and industry into accepting inconvenience and inefficient, however, consumer would put personal benefit ahead of national interest. In America, the US uses to many people for simplistic tasks and fails to take advantage of full automation. Global competition means reduction in labor content by not passing on escalating wages as increases in product price. The Japanese created a second demand channel by increase quality, maintaining price, and exciting America car owners with value.

There is no trade imbalance between Japan and the US. Japanese worry that Americans are angry about the trade imbalance and taking American jobs. However, Japanese are buying large amounts of American good that are hidden in the trade imbalance numbers. Here is how the ledger balances. American companies in Japan count for 300 out 3,000 companies and their sales total around $43.9 billion; names like IBM, Texas Instrument, NCR, Xerox, Coca Cola, HP, AMP, and Molex. Japan import $25.6 billion dollars in goods and combine the two numbers then America has $69.9 billion in product presence. On the other side, the US imports $58.8 billion in goods from Japan and buys $12.8 billion worth of goods produced by Japanese companies in America with a total of $69.9 billion. The conclusion, American companies have been very successful inside Japan. Both Japanese and American companies want quietness and wish to remain hidden. Japanese per capita import spending is $598 a year verses $298 in the US.