Lost in translation? Doing business in Japan

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In this blog by The Airport Economist Tim flies into Tokyo to find that the world’s third largest economy may be making a comeback under ‘Abenomics’ and there’s more than meets the eye in Japan than just sumo and sushi.

I first lived in Tokyo as a four year old just when the nation was on the cusp of ‘the Japanese miracle’. My father was taking a sabbatical at Keio University in the heart of Tokyo and a very generous Japanese family moved out of their home so an Australian family of six (us!) could move in for a whole six months! That was my first taste of the extraordinary Japanese hospitality and generosity. And what was the most exciting thing to do for a four year old boy in Japan? Take the bullet train of course! The bullet train or ‘shinkansen’ which had been built for the 1964 Tokyo Olympic Games and we took it to Osaka for the 1970 Expo.

Interestingly, Expos were well attended in those days as it was before the great exodus of Japanese tourism around the globe. There was little travel outside of Japan in 1970, so looking at the German, Australian, New Zealand or Brazil Pavilions at the Osaka Expo was the first taste the Japanese got of the world around them. There were also few foreigners in Japan so as a western little boy (with red hair as a child) I was a subject of intense curiosity whilst sitting in the shinkansen or the Tokyo subway trains.

Of course, Japan had some glory years economically speaking after the tragedy of World War 2 and in the 1970s and 1980s Japan was considered the world economic super and the main rival to America in terms of trade and international competitiveness. Japanese companies like Toyota, Honda and Sony became household names from Sydney to San Francisco and Japan invested heavily in the Asia Pacific region and around the world. Luckily, Australia had got on the bandwagon early and signed a commerce agreement with Japan in 1957 – just 12 years after the end of World War 2 – and later an Investment agreement (the Nara agreement) in 1976 to build stronger ties with Japan and Asia in general.

Tim Harcourt is ‘The Airport Economist’

But by the 1990s, Japan was unable to continue its spectacular growth and it experienced deflation and two decades of little or no growth. And Japan’s ageing population (Japan is literally ‘running out of husbands’ and some small rural towns are depopulating) haven’t helped matter. Prime Ministers Shinzo Abe has therefore introduced ‘Abenomics’ to help stimulate the economy through the ‘three arrows’ of fiscal stimulus, monetary stimulus and structural reform. With no inflation to speak of, he feels he can still stimulate and encourage more spending in Japan, especially with unemployment still relatively low at 3.3 per cent.

But for all Japan’s growth woes, it’s still the third largest economy in the world and a very rich country with a sophisticated business culture and discerning cashed up consumers. Entrepreneurs like Mike Woodrow of Vet Products Direct have described Japanese consumers “as some of the most sophisticated well informed shoppers in the world with a great eye for detail and presentation whilst Grant Thornton Japan expert Richard Gruppetta is very excited about “a new generation of Japanese entrepreneurs who are not as reserved as their predecessors but just as talented.”

Later on in life as an adult, I returned to Japan for another Expo, this time not in Osaka but in Nagoya in the Aichi prefecture. It really was a ‘tale of two expos’ some 30 years apart! But Aichi Expo was held at time when Japanese tourists had already explored the world so why go to a New Zealand Pavilion when you’d already been to New Zealand itself? I found out it the modern expo was all about technology with companies like Toyota showing off their latest advances. After all, the Japanese miracle is all about technological advance and even today research and development is important as Japan gets the most research funding than any other country in the world and has the most Nobel Prizes winners in Asia.

And at the Aichi Expo, one technological advance surprised even the most sophisticated business traveller. A robot was dressed a flight attendant and asked to help people with directions around the Expo site. ‘She’ was so life-like that some men folk (perhaps after a few too many Asahi beers) even made some unwelcome advances to which the robot replied flawlessly: “Questions of a personal nature should be addressed to my manager.” There’s no way that could have been ‘lost in translation’!

The Airport Economist TV show on how to business in Qantas destinations in Asia and around the world is currently being shown on Qantas Domestic and International flights.

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Japan: 60 second tip on business etiquette