http://www.nytimes.com/2012/05/30/busine...-ways.html


New York Times, May 29, 2012
"Notoriously insular, corporate Japan has long been wary of embracing
Western-educated compatriots who return to the homeland. But critics say
the reluctance to tap the international experience of these young people
is a growing problem for Japan as some of its major industries - like
banking, consumer electronics and automobiles - lose ground in an
increasingly global economy."

"Discouraged by their career prospects if they study abroad, even at
elite universities, a shrinking portion of Japanese college students is
seeking a Western education. At the same time, regional rivals like
China, South Korea and India are sending increasing numbers of students
overseas - many of whom, upon graduation, are snapped up by companies
back home for their skills, contacts and global outlooks."

Not that Japanese companies always do everything right, but it's pretty typical for the US business press to tell Japanese companies (and the government) that they're doing everything wrong and need to be more like the US (note that this is currently working out fabulously for the US itself). The NYT in particular is infamous for doing this. The woes of the Japanese economy and its backwards ways have been exaggerated, not least by Japanese industry and its government, so that other countries don't hassle them about lowering trade barriers or contributing more money to stuff like the US' boondoggle wars. In short, I'd advise you to take the NYT's story with a grain of salt.

Here's a good summary by my favorite author on the subject: http://www.theatlantic.com/international...des/71741/

Quote:Not that Japanese companies always do everything right, but it's pretty typical for the US business press to tell Japanese companies (and the government) that they're doing everything wrong and need to be more like the US (note that this is currently working out fabulously for the US itself). The NYT in particular is infamous for doing this.

I saw a funny article which said that Japanese companies need to increase their executive pay to the ridiculous levels seen in the west in order to be competitive. I really hope that Japan doesn't end up believing in damaging lies like that.

Quote:The woes of the Japanese economy [...]have been exaggerated

Other than a few places like Greece, it feels like this everywhere. It makes me laugh when I see headlines like "GDP annual growth at 0.1% - Economy on the brink of depression". It's absolutely crazy.

I like your article. It'd be nice if economists in news media could move away from droning on about nebulous, over-generalised indicators of the economy like stock indices and GDP growth figures and start focusing on reality.

while I take Fallow's article with a reactorful of salt (see what I did in there?), I so agree with Quufer's post

'need to be more like the US'

Wow. Just wow. Same criticism I see on the video gaming/anime landscape. Too childish/cartoonish/unrealistic. NintenSony should quit consoles and just make games for Ios/Android. Blahblah.

I support Japan for what they are. And they want it to become a Western-wannabee?

P.s.
Seems like Uncle Sam didn't learn when he shoved nuke power to Japan decades ago.

P.p.s.

And oh, when the west imposed decontrol measures and dragged the Philippines on WTO, our local farmers suffered from cheap imports.

And screw IMF/WB for suggesting an ASIAN/ASEAN Union single currency model. Boohoo.

Just as a note, the linked article, though it appears under Fallows' byline, was actually written by Eamonn Fingleton (whose blog link appears at the bottom of the article). Fallows writes more about China these days than Japan, but both have their heads screwed on straight about the Far East in general.

I'm sure there's some truth to the article, but in general it was pretty narrow minded and general jumping on the "japan is very provincial" band wagon. Be sure to read the comments for some more nuanced discussion.

You think Fingleton has his head screwed on straight about Asia?

I love his predictions in the 1990s, even after the bubble, that Japan was going to surpass the US economy.

That aside, which is a huge indicator that he doesn't know anything about economics, it'll be nearly impossible to find a Japanese business professional or a Japanese economist who agrees with that Atlantic article. It's unbelieveably ignorant about basic economics and the situation of the Japanese economy, it's amazing it got published.

The western bubble burst in 2008 and I think we're going to have the same sort of "stagnation" for decades here as well. Economists will rattle on psuedoscientifically about how things are bad (while solving nothing), while quality of life will continue to rise as normal. Isn't that the same thing that happened there?

The greater increases in wealth in the west were mostly gobbled up by executive classes siphoning off huge amounts of wealth as can be seen by dramatic increases in inequality. Normal citizens here haven't seen their lives improve any more than Japan's.

I'm not sure what your objection to the article is.

We've already discussed the Fingleton article. I'm sure you can search the archives somewhere to find out what others and I posted about how he lacks a basic understanding of economics.

dizmox Wrote:Normal citizens here haven't seen their lives improve any more than Japan's.

Maybe where you live, but not in the US.

http://hdr.undp.org/en/media/HDR_2011_EN_Table1.pdf

Getting back to the NYT article.

It's really baffling to me how nearly all major Japanese companies are falling over each other to release press release after press release about how they need to focus less on the shrinking domestic market and focus more abroad...they talk about how they need to improve English, bring in more women, bring in more foreign ideas (including some companies openly say they want to bring in more foreigners*), and so on...

But the reality is that Japanese students have been seeing for years that if they go abroad, they will only hurt their chances of landing a good job with a Japanese company, so they respond in kind by not going abroad.

How many empty press releases are Japanese CEOs going to release before they actually start changing their hiring practices?


* Including a lot of companies who put those statements in their annual reports just to satisfy vague CSR requirements without actually targeting foreigners...ie they go to the Boston Career Forum and then require potential interviewees to have native level Japanese.

Quufer Wrote:Not that Japanese companies always do everything right, but it's pretty typical for the US business press to tell Japanese companies (and the government) that they're doing everything wrong and need to be more like the US (note that this is currently working out fabulously for the US itself). The NYT in particular is infamous for doing this. The woes of the Japanese economy and its backwards ways have been exaggerated, not least by Japanese industry and its government, so that other countries don't hassle them about lowering trade barriers or contributing more money to stuff like the US' boondoggle wars. In short, I'd advise you to take the NYT's story with a grain of salt.

Here's a good summary by my favorite author on the subject: http://www.theatlantic.com/international...des/71741/

I hate to post in a thread four times in a row, but once you improve your Japanese, you should start reading the Japanese press. I really hope that you don't think these kinds of negative articles are unique to foreign views of Japan.

I've observed the decline in foreign student numbers from Japan with my own eyes. In fact only two kinds of Japanese students seem to still go to study abroad: those who are sent on a two-year "mission" to acquire one or two Masters, usually from 外務省 or 通産省, and women who want to leave Japan and marry a foreigner. The risk of not getting a job back home is real, and lifetime career track hires are becoming less common.

Kitakitsune Wrote:We've already discussed the Fingleton article. I'm sure you can search the archives somewhere to find out what others and I posted about how he lacks a basic understanding of economics.

Yeah, I posted in that thread too. I'm not saying that the guy's arguments are flawless, but I do agree with his underlying message that such simplistic judgments shouldn't be so easily accepted. Economics isn't a science, and the tendency of economists to make sloppy conclusions from dubious data would make a real statistician cry. The field has extremely shaky foundations, the theories aren't exactly verifiable, the predictions are rarely accurate and its spokespeople often have a political agenda. For every economist who says one thing, there's one that says the opposite. With all that in mind I struggle to understand why anyone would give them too much credence when they speak of doom and gloom that repeatedly ends up not corresponding to reality. At any rate, looking at a graph and saying "we lost a decade" and making unnecessarily fatalist claims about the current state of things is the kind of commentary I'd expect from a Daily Mail intern.

By the way, the HDI index is a rough measure to compare countries with starkly different qualities of life. It has no meaning when applied to compare countries as similar as the US and the UK, for instance. Regardless, the HDI for America only gained 0.03 compared to Japan's between 1990 and 2011, so not exactly a stunning leap.

Back on topic: I asked my girlfriend and she said that for the less academically elite people studying abroad at least, there's the stereotype that they spend all their time partying instead of studying. Certainly, some ojousamas and obocchans seem to treat it like a form of extended vacation. Seeing the cream of the crop at the Boston Career Forum being courted by the most high profile businesses however, I feel perplexed why someone who was educated at Oxford would complain of such difficulties. Maybe some Japanese managers doing hiring would feel threatened by it, but surely there's plenty of more international firms he could apply to.

The Oxford guy did get multiple job offers at Boston from non-Japanese companies but none from Japanese companies.

But the whole point is that Japanese kids are consciously refusing to obtain their education abroad because it only hurts their chances of getting a job back in Japan with a Japanese company. Primarily because they are seen as not being able to "fit in" with Japanese culture. At the same time, every Japanese CEO and the Japanese business press are going on about the need to "internationalize". It doesn't add up.

Quote:But the whole point is that Japanese kids are consciously refusing to obtain their education abroad because it only hurts their chances of getting a job back in Japan with a Japanese company.

But the parochial attitudes of hiring managers isn't new, is it? I think that the number drop between 2004 and 2009 can more simply be explained by the fact that studying abroad is very expensive and people just don't have as much 余裕 lately. I wouldn't say students are avoiding studying abroad at all, indeed, more Japanese students study abroad than British ones, even when scaled by total country population.

http://www.telegraph.co.uk/education/exp...rseas.html

There are lots of young Japanese people who are curious about the outside world and recognise the insularity of the previous generation. I don't think the business press and these CEOs are pretending to think they need to internationalise - I'm not sure what they'd stand to gain from that. A lot of the old guard who'd prefer to avoid change no doubt remain, but I think change will eventually come.

dizmox Wrote:I think that the number drop between 2004 and 2009 can more simply be explained by the fact that studying abroad is very expensive and people just don't have as much 余裕 lately. I wouldn't say students are avoiding studying abroad at all, indeed, more Japanese students study abroad than British ones, even when scaled by total country population.

Considering that the reputation of Japanese universities is decidedly mediocre in all international rankings (except for 東大 and 京大) while British universities are doing extremely well, I think it's unsurprising that British students are not studying abroad more relative to Japanese students.

Also given the strong Yen, studying abroad has become a lot more affordable---and I can assure you that there is a very strong correlation between the strength of a currency and how many students go abroad. The weaker Pound has been a blessing for UK unis and has dissuaded British students from going abroad. Brazilian students are going abroad in droves.

In short, we should see more Japanese students abroad, but we see fewer and fewer, so the reasons must be found in Japan.

The thing about the UK is that there is a perception that receiving a degree abroad will increase your chances of getting a job and this is why the number of British students studying abroad is increasing every year even though the economy is struggling and the cost of education is rising abroad.

The opposite trend is going on in Japan. Even with the 円高 trend.

dizmox Wrote:A lot of the old guard who'd prefer to avoid change no doubt remain, but I think change will eventually come.

Me too, I'm just wondering how bad things need to get in Japan before changes start showing.

Kitakitsune Wrote:In short, we should see more Japanese students abroad, but we see fewer and fewer, so the reasons must be found in Japan.

Yeah, true. Maybe you're right that the stronger yen is a more important factor than the economic downturn here. But I think the reason for the drop in numbers must lie elsewhere, since companies' attitudes aren't getting worse at least afaik.

Kitakitsune Wrote:The thing about the UK is that there is a perception that receiving a degree abroad will increase your chances of getting a job and this is why the number of British students studying abroad is increasing every year even though the economy is struggling and the cost of education is rising abroad.

I think it's more to do with the fact that university tuition fees here recently rose threefold from previously very reasonable levels, so a lot of people are finally starting to open their eyes to the possibility of very cheap/free study in the EU.

There's still the worry among more career minded young people that foreign institutions just aren't well known here yet. They'd graduate and try applying for jobs back home, but likely no company would have heard of the university they went to, regardless of the quality of its undergraduate education. I doubt this phenomenon will go away soon since it's unreasonable to expect employers to be familiar with all the universities in Europe. I'm sure some Japanese people who didn't go to Oxford or Harvard run into the same issue when they apply to domestic companies.

Even the number of Japanese people studying at elite universities are down.

In 2010, there were only 5 Japanese students studying at Harvard. Only 1 Japanese student entered Harvard in 2009 while there were nearly 100 each from South Korea and China.

The only possible reason for this is that Japanese students are recognizing the negative impact studying abroad will have on their careers. There is no doubt about the recognition of Harvard, Yale, and other Ivy League schools in Japan.

It's not just students either. Japanese workers are also recognizing the negative impact being sent abroad on a work assignment will have.
http://jp.wsj.com/japanrealtime/blog/archives/1869/

2 year old article about Japanese students staying domestic. Mentions the stats about 5 kids at Harvard. Graph comparing Korea, China, India, and Japan is the most interesting part.

http://blogs.wsj.com/japanrealtime/2010/...versities/

Quufer Wrote:Not that Japanese companies always do everything right, but it's pretty typical for the US business press to tell Japanese companies (and the government) that they're doing everything wrong and need to be more like the US (note that this is currently working out fabulously for the US itself). The NYT in particular is infamous for doing this. The woes of the Japanese economy and its backwards ways have been exaggerated, not least by Japanese industry and its government, so that other countries don't hassle them about lowering trade barriers or contributing more money to stuff like the US' boondoggle wars. In short, I'd advise you to take the NYT's story with a grain of salt

While its true that the US economists may be exaggerating the importance of Japan's 'lost decade',(bc they are comparing it to staggering US growth during that period..) Japan does have enormous economic problems. The largest of which is its debt-to-GDP ratio, by far the largest in the developed world.

For all the apocalyptic talk in the us this election cycle about the direness of our situation, and all the debt clocks and people hoarding gold, our debt is nowhere near Japan's proportionally. That's all fine now, and these 2 countries have the world's reserve currencies so they can break the rules... But at least in America we know this isnt going to last, and are having the discussion. The general public in Japan thinks their current lifestyle is sustainable.

There are some students that go abroad to the US for schooling, but they are almost never in their undergrad years, as has already been pointed out. The biggest chunk are actually doing it in their Graduate/Professional years. A lot of politicians in Japan go and study at places like Harvard, Yale, Brown, etc. for a masters/law degree. But this is still small.

But the public will continue to complain about the falling Japan and the fact that "OMG we're failing because we're not international! We must send more people abroad." followed by empty releases and head nods by politicians. Hell, I think they just got done recently creating some new scholarships and funds to try and encourage people that want to do it. But as kitakitsune (and maybe others I missed) has stated, no one wants to do it because it hurts their chances. I'd say the max anyone will ever see is study abroad. The university I studied at would send students abroad for a year in their second year. This is really the only way you can do it since people now job hunt in their Junior/Senior years. The amusing thing that I have noticed though is that a lot of students that come back from these programs tend to leave Japan or express great distaste for the general Japanese culture (ie: they want to flee it ASAP).

I keep wondering when this [archaic] train that is Japan's business sector is going to finally come off the tracks.

dtcamero Wrote:The largest of which is its debt-to-GDP ratio, by far the largest in the developed world.

The only thing I will point out is that Japan has the largest debt-to-GDP ratio for sovereign debt. Where as the country with the most foreign debt is the US.
I have a very loose understanding of economics but my understanding is that sovereign debt is a lot less poisonous in the long run because its internal. Basically most of the debt that Japan holds is held by the public of Japan, be it Japanese companies, investors, or citizens. When/Should Japan ever default on their loans, the only people to be burned are likely those in Japan. Where as if the US were to ever default on debt, it'd ripple through the global markets.

This is primarily why the Japanese Yen has grown so strong in the past 2-3 years. Because their debt burden is so insulated they are viewed as safe cash havens. Hence people started buying up lots of Yen when other currencies (like the dollar) started to waiver. Its interesting that it hasn't recovered though even after multiple injections by the BoJ to try and devalue the Yen and even after the US has started to appear more "stable-ish." I also believe (don't quote me) Japan might hold little in the way of other foreign countrys' debt as well and that aids to their stable appearance.

Quote:But at least in America we know this isnt going to last, and are having the discussion. The general public in Japan thinks their current lifestyle is sustainable.

Compared to the US, Japan's public leads an Ok life. Its the Americans that believe their lifestyle isn't going to change really. Its changed some already, such that most area starting to believe/realize that owning a house in their lifetime might be impossible. Owning a big gas guzzling car, might be impossible. Being stinking rich, might be impossible.

In Japan this has been the case for nearly a decade. Thanks to Japan's culture, no one has an issue with their kids living at home and so many people still live with their parents and work. Most realize there are not all that many good jobs any more, hence the decrease in going abroad and the insane focus on job hunting. Something like 40-50% of young Japanese work 派遣(dispatch) style temp jobs. They'll likely never have a 正社員 position. They won't own a house, won't have a car, but might be able to afford some nice things here and there. This is a bit of the reason why many aren't having kids either.

It just sounds amusing to me to hear that Americans "know" their current lifestyle isn't sustainable, when the media and everything I see says otherwise. While the Japanese general public is apparently blind to the fact.

vix86 Wrote:When/Should Japan ever default on their loans, the only people to be burned are likely those in Japan. Where as if the US were to ever default on debt, it'd ripple through the global markets.

Partly true, but demographics make inevitable that Japan's savings rate will decline (we're already seeing this), and at some point domestic savings will not be enough to roll over the debt. That's when they will have to tap foreign investors for JGBs, and that's when it will become tricky. Also, Japan is unlikely to openly default. The BOJ would just print money like mad to reduce the value of the debt. Japanese public debt is a house of cards that nobody wants to touch first.

vix86 Wrote:This is primarily why the Japanese Yen has grown so strong in the past 2-3 years. Because their debt burden is so insulated they are viewed as safe cash havens. Hence people started buying up lots of Yen when other currencies (like the dollar) started to waiver. Its interesting that it hasn't recovered though even after multiple injections by the BoJ to try and devalue the Yen and even after the US has started to appear more "stable-ish." I also believe (don't quote me) Japan might hold little in the way of other foreign countrys' debt as well and that aids to their stable appearance.

For the moment, Japan is seen as a safe haven. But Japan is the second-biggest holder of US and Eurozone debt after China, so they will be affected by any "misfortunes" there.

vix86 Wrote:In Japan this has been the case for nearly a decade. Thanks to Japan's culture, no one has an issue with their kids living at home and so many people still live with their parents and work. Most realize there are not all that many good jobs any more, hence the decrease in going abroad and the insane focus on job hunting. Something like 40-50% of young Japanese work 派遣(dispatch) style temp jobs. They'll likely never have a 正社員 position. They won't own a house, won't have a car, but might be able to afford some nice things here and there. This is a bit of the reason why many aren't having kids either.

Spot on.

vix86 Wrote:It just sounds amusing to me to hear that Americans "know" their current lifestyle isn't sustainable, when the media and everything I see says otherwise. While the Japanese general public is apparently blind to the fact.

Not so sure that Americans know this. A majority of Tea Party voters live or count on Medicare, the number-one unsustainable budget item---you don't change this, you might just as well not worry about the rest---and still clamour for smaller government and tax cuts.

But it's true that the Japanese don't seem to have any sense of crisis. The government officials I meet appear fully content with managing decline.

Interesting tidbit from the FT yesterday: ¥1000 invested in the Topix in 1985 would be worth exactly the same today, including inflation/deflation and dividends.