...Japanese industry decides that it needs to move away from making things people usually like to buy. Whiskey Tango Foxtrot:
Many economists and business executives say they hope that Toyota's trauma will be the unsettling blow that Japan needs to understand that its reliance on manufacturing and industrial exports, which served the country so well after World War II, is no longer wise.
Yukio Noguchi, a professor of finance at Waseda University in Tokyo, said Japan must finally evolve into a postindustrial, service-based economy -- a painful transition that the United States and Great Britain underwent in the 1980s. Others said Japan should focus exclusively on high-end, high-profit products, like robots and fuel cells, rather than mass-produced goods subject to quality-control issues
This is a joke, right? As many in the Coalition of the Sane in the U.S. are trying to revitalize industry, Japan wants to move to a bullshit-based economy? Because that's worked out so well in the long run. I mean, it's been really stable, and good for long-term economic growth.
This is either a massive overreaction or some really shitty reporting.
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Not that I know what Japan should do, but I can see the professor's point. Japan has become one of the richest nation's on earth. Normally a rich nation buys things from poorer nations. Like the U. S., like Great Britain in its heyday. But Japan continues to export. Now there are some peculiarities of Japanese culture. Extended families have traditionally provided welfare for relatives that we in the West would feel little responsibility for, and they do not have social security. So Japanese save a lot. The government has run deficits for a long time, but not enough to bring the economy out of its doldrums. Meanwhile, they are beginning to feel that they are running out of worthwhile public works. Also, in terms of imports, the Japanese like Japanese stuff. Sure, they like blue jeans and Hollywood movies and jazz. But faddish stuff and fashion aside, they like their own cultural artifacts, and they know how to make them better than anyone else. (They may also know how to make our stuff better than we do, but that only adds to their exports.) Can you imagine a Mexican firm trying to sell lacquerware to the Japanese?
So the way for their economy to grow is not to make more stuff, but to do things for each other, i. e., to become more service based.
Anyway, that's how I see what the professor is saying.
Ah, but Mike, given the Japanese past excellence in cars, they could develop a financial system that robbed twice as many people of twice as much money in half the time! I'm not sure how they'll involve tentacle porn, but it's guaranteed; that's just part of their genius.
By "service economy" you mean selling each other cheeseburgers, right?
Well, Japan has been economically stagnant for more than two decades now. But that was because they had an epic financial/real estate bubble which popped, and they never forced the big banks to deal with it. So yes, having Japan move away from mass-market manufacturing entirely would be a really bad idea. Either the reporter or Noguchi-san (or quite possibly both) is completely clueless here.
But you're not looking at it right. Since we were so clever as to quit, y'know, actually making anything, then it must be a good idea, right?
Like the Heineken commercial:
"I put a lime in my beer because Bob put a lime in his beer, and he put a lime in his beer because Jim put a lime in his beer, and ....."
Oh, one other thing. It has been a while since I lived in Japan, but they were very protectionist then. If they still are, that could be one reason that they are not importing enough.
min both japan and China have come in for criticism as they are accused of keeping exchange rates low to keep out imports and help their exporters.
not sure of the exact reasons the professor wants to move away from car production. could be that he feels that in the long term jobs will go to countries with cheaperlabour. therefore he may feel that japan needs ti move to an economy where the businesses rely on highly educated workers and which is usually a strebgth for highly developed countries but less so less developed countries.
This sounds very... Chicago school. Any idea what this guy's credentials are? Loss of manufacturing base has been a major contributor to downward mobility in the US. Not to mention "Made in Japan" is right up there with "Made in Germany" as something of a stamp of quality.
People save a lot and don't consume much when they are concerned about their future-especially during deflation. Provide a social safety net like in most of the EU and maybe they'll consume more. Over-saving is just as bad for any economy as over-consumerism.
It's not as strange as it sounds. You think "Toyota" and "Sony" for industrial production, but large parts of Japanese domestic industry is old-fashioned, inefficient and kept alive by a network of subsidies, tax breaks and inertia. A lot of those companies are only still in business because their banks - to whom they can owe more than the entire company worth - are reluctant to trigger a bankrupcy by demanding the outstanding money.
At the same time the service economy is lacking. There's an enormous shortage of things like day care (which makes it difficult for single parents to have real work) and nursing homes, for instance.
And Japan is punching well below its weight when it comes to "serious" knowledge industry; it has very few export-oriented software companies, for instance; the game industry is the only exception, and even that is built largely on the back of hardware sales.
The economy does need to find a better balance between different industries than is the case at the moment.
I heard about the pedal recall, but now a hybrid recall, the honda airbag recall and to think I could have had no idea if it affected my NON toyota car good thing I found more info here http://www.carpedalrecall.com
searched for my make, model, year and found my car had been recalled so look out! it could save a life maybe yours
don't understand how serious or what the car pedal recall is about?
just watch this video at the end it also shows how to stop a out of control car very useful
http://www.youtube.com/watch?v=NGe3EOJ-CMY
Toyota owners must seek justice. The company has run afoul of the law and shown absolutely no regard for the safety of their customers.
Toyota led a dizzying array of misdirections and lies and despite all the recalls and public apologies, must answer for its actions in court.
If you own a Toyota, you have a right to be there. Please visit this site to learn more about the company's lies and denials spanning nearly a decade and what you can do as an owner: http://www.toyota-class-action-lawsuit.com/
Good take on Toyota:
http://www.businessweek.com/lifestyle/content/feb2010/bw20100211_986136…
Don't forget Mike,
Japan is a shame-based society - and Toyota could be seen as having shamed Japan, if all the stories are true.
The comment on becoming post-industrial is probably just a mechanism to deflect shame, which "...rather than mass-produced goods subject to quality-control issues" reflects pretty well.
This is why I prefer evolution: evolution doesn't have a Captain Orr obsessively trying to improve something which already works well; it just tends to preserve what works and take advantage of it. So why on Earth, given that they already had accelerators and brakes that worked fine, would they mess with those and screw-up both?!
A finance professor saying that finance is a good thing? Why is this surprising?