A feature on “Investing in Japan” in yesterday’s Wall Street Journal (Dec 14, ’06, Pg 6) caught my eye with a very powerful and compelling graphic of the size of the economy.
It had a map of Japan with different regions and a comparison of their GDPs with different countries (See scanned map here).
The graphic immediately brought to mind a point I have made several times before about the indifference that most people have about Japan. In spite of the economic ascendancy of China and India (which is no doubt relentless and will continue for a long time), Japan remains the world’s second largest economy ($4.7 trillion in ’05 vs. $2.2 trillion for China*) and a showcase of leading-edge technology in mobile communications, displays, new materials and more recently solar and alternative energy (see Shin’s recent comment on my post about parking lot solar panels).
So it is surprising that not more people pay attention to what is happening there in terms of technology and innovation.
What drives this apathy?
No doubt distance is a barrier – but more than that, it may be a business culture that is still notoriously difficult to understand (in terms of decision-making and process) and formal behaviour that is inscrutable to most observers. I will shut up at this point as no doubt my good friend Shin will have something to say on this…(Shin, feel free to rip me apart if I am out of touch…)
Having said that, things are changing…In the last few years that I began visiting Japan once again (after a hiatus of almost five years), I have met VCs like Shin and Mori (who sound more like Silicon Valley than anywhere in Japan), have seen shoe-shine boys outside Tokyo station and have consistently found things cheaper than in London (not to mention the Japan-only models of products which are a style apart)
And slowly but steadily, more and more gaijins seem to be paying attention to what is going on in the country. I will certainly be watching for many years to come.
* Although on a PPP basis, China at $8.8 trillion is more than double Japan at $4.0 trillion; India is a shade below at $3.66 trillion