Still a lot to learn from JapanFor years, we as a nation have believed that it would be unwise to follow Japan’s lead as far as the economy is concerned.
Japan experienced a number of crises in the 1990s - a collapse in asset prices, a real estate meltdown, a severe stock slump - that sent its economy into a tailspin, leading observers to dub the period “the lost decade.” Japan has recovered in many respects, but its economy hasn’t been the same since. The country’s prized electronics company, Sony, fell behind its Korean rival Samsung Electronics a few years back. In terms of gross domestic product, Japan surrendered its title as the world’s second-largest economy to China last year. Japan’s stature from an international perspective is diminishing daily as the U.S. and China dominate the world stage.
Yet Samsung Electronics Chairman Lee Kun-hee said this week that “we have a lot to learn before we can overtake Japan.” Lee made the comments ahead of a flight from Seoul to visit Japanese executives in his first overseas trip this year. Samsung Electronics outpaces Sony in revenue, net income and market capitalization, but it lags behind the company in overall technology. Nevertheless, many observers point to this as evidence that Korea has outpaced Japan from a business standpoint.
But Japan should not be taken lightly. It remains a global force in the areas of parts and components, and its smaller companies have a lot of potential. Japan-based Toray Industries, for instance, is the world’s top carbon fiber producer, accounting for 30 percent of global output. It holds patent to numerous technologies in transforming raw carbon to fibrous material for use in various information-technology related products and ultralight and strong carbon filament that can substitute steel. Without Toray, even Samsung Electronics would have to stop its production lines. Japan is home to many of these indispensable manufacturers.
It would have also been easy to write off Toyota after it issued massive recalls last year and came under immense criticism for its handling of safety issues, leading to lawsuits and settlements. But Toyota remains strong: the Camry is still a top seller in the United States.
Koreans tend to discount the Japanese, which in large part stems from lingering bitterness and anger over Japan’s occupation of the peninsula in the first half of the 20th century.
But we should not let resentment blind us from recognizing Japan’s economic potential. We would be wise to learn from our economic opponent.