Japan Then & Now


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Pre and post war Japan...A success story

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Japan Then & Now

  1. 1. Japan – then and now May 2010 A M Choudhari
  2. 2. Historically <ul><li>Europe has a recent record longest time in history of having no war since 2 nd world war </li></ul><ul><li>Japan did not have any war for long 250 years from 1600 – Shogun period </li></ul><ul><li>Japan had rigid class lines with Samurai at top and farmers, merchants at bottom. But by educating your children you could move up. Now these are further thinner </li></ul>
  3. 3. Beginning and end of war <ul><li>On December the 7 th 1941: Pearl harbor was attacked by Japanese forces </li></ul><ul><li>British ships Prince of Wales and Repulse were sunk </li></ul><ul><li>Japanese took the Philippines and Hong Kong in a month’s time </li></ul><ul><li>In retaliation, 1 st atomic bomb was dropped on 6 th of August 1945 at 8.15 A M on Hiroshima and then on Nagasaki </li></ul><ul><li>The war was over </li></ul><ul><li>The Emperor Hirohito spoke to nation. For the first time Japanese heard him… on radio. </li></ul>
  4. 4. Effects of war on Japan <ul><li>2,750,000 Japanese soldiers died </li></ul><ul><li>Soviets seized southern half of Sakhalin island and still hold it </li></ul><ul><li>Soviets stormed into Manchuria and 500,000 Japanese soldiers were taken as prisoners and sent to Saiberia as bonded labour </li></ul><ul><li>In this process, many Japanese offered their children and orphans to Chinese. These children, now grown up, still try and manage to locate their old parents in Japan </li></ul><ul><li>32% of the population was de-housed in bombing </li></ul><ul><li>The US seized Okinawa which they returned in 1972 </li></ul><ul><li>Japan spends only 1% of GDP on defense now </li></ul>
  5. 5. Effects of war on Japan <ul><li>B 29 bombers had destroyed Osaka, Nagoya, Tokyo, Yokohama. Everything except few sturdy buildings was destroyed </li></ul><ul><li>4 out of 7 million left Tokyo </li></ul><ul><li>It was worse than 1923 Tokyo earth quake </li></ul><ul><li>Only 10% of the cars and 60 buses were running in Tokyo after the war </li></ul><ul><li>Sickness was rampant and tuberculosis was at 22% </li></ul><ul><li>Hospitals were short of medicines, bandages, cotton </li></ul><ul><li>Japanese burnt many important like news papers-photographic achieves, company records due to fear and suspicion </li></ul><ul><li>Inflation was high at 150% </li></ul>
  6. 6. After war <ul><li>Nobility was deposed </li></ul><ul><li>Ranking system was abolished </li></ul><ul><li>Diet gave equal rights to women and minorities </li></ul><ul><li>Established basis for divorce and marriage laws </li></ul><ul><li>More rights to individuals </li></ul><ul><li>Most important reason for change in social structure was that, land from large land lords was dispossessed </li></ul>
  7. 7. Post war <ul><li>Post war all Japanese struggled to rebuild nation </li></ul><ul><li>They bought technologies and bettered them </li></ul><ul><li>They bought steel making technology from Austria but were selling improved technology back after a decade </li></ul><ul><li>Most advanced research is carried out in National universities, but 80% burden is carried by private industries </li></ul><ul><li>High education helps in development </li></ul><ul><li>Today even though labour is expensive, it is educated </li></ul><ul><li>Today there is dis content that education system warrants earning high marks and leaves less time for original thinking and experimentation </li></ul><ul><li>Today Japan files 117 patents / 1000 population PA as compared to USA 70 and South Korea at 65 ( India, China at 0.5) </li></ul>
  8. 8. Industry after war <ul><li>New labour laws were passed </li></ul><ul><li>It became impossible to fire any one </li></ul><ul><li>25000 unions were formed and 5 Million joined </li></ul><ul><li>Long suppressed liberals went on strike and rampage attempting to storm the palace </li></ul><ul><li>Supreme commander General Douglas and the Diet banned strikes by public servants </li></ul>
  9. 9. After war <ul><li>Zaibatsu (large / powerful conglomerates) was banned </li></ul><ul><li>New tax laws came into force </li></ul><ul><li>Japan became egalitarian society </li></ul><ul><li>Earlier Japanese life was full of poverty and bitter struggle for survival </li></ul><ul><li>Now there is no poverty as it is known else where in the world </li></ul><ul><li>Today the middle class is 90%. There are very few rich or poor people </li></ul><ul><li>Japan today has 100% literacy </li></ul>
  10. 10. Japan then and now <ul><li>Pre war, few family owned companies like Mitsui, Mitsubishi, Sumitomo controlled 25% of paid up capital of Japan </li></ul><ul><li>These “ Zaibatsu” controlled politicians and decisions </li></ul><ul><li>After war these were disbanded and assets were frozen </li></ul><ul><li>Wealth and power were taken away from rich families </li></ul><ul><li>New banking laws were imposed </li></ul>
  11. 11. Economy after war <ul><li>Quality of Japanese goods before war was unknown to the world and limited to umbrellas, toys and Kimonos </li></ul><ul><li>“ Made in Japan” was printed on goods in smallest possible letters </li></ul><ul><li>Japanese economy grew at double digit from mid 50s </li></ul><ul><li>>20% saving rate and low inflation helped </li></ul><ul><li>Today > 99% homes have colour TV, washing machine and refrigerator </li></ul>
  12. 12. Industrial development <ul><li>Companies like Sony founded after war moved aggressively crating innovative products and still lead the world in their playing field </li></ul><ul><ul><li>Basic transistor was modified in to completely new kind of transistor with tunneling effect earning a Nobel for Leo Esaki </li></ul></ul><ul><ul><li>Walkman. Sold >20 Million in 70 models </li></ul></ul><ul><ul><li>World’s 1 st VCR ( Emmy award) </li></ul></ul><ul><ul><li>Trinitron technology for projecting in colour TV (Emmy award) </li></ul></ul><ul><ul><li>3.5 inch floppy disc </li></ul></ul><ul><ul><li>First hand held video camera </li></ul></ul><ul><ul><li>1 st CD </li></ul></ul><ul><ul><li>1 st film less camera </li></ul></ul>
  13. 13. More progress <ul><li>1964 Olympic games boosted development </li></ul><ul><li>Express ways </li></ul><ul><li>Bullet train – Shinkansen </li></ul><ul><li>Magnetic lavitation trains </li></ul><ul><li>Hotels, air ports, urban beautification </li></ul><ul><li>1972 – Japan hosted Winter Olympics </li></ul><ul><li>Boosted civic pride </li></ul><ul><li>Laws against noise polluting vehicles </li></ul>
  14. 14. Japanese management <ul><li>Belief in life time employment </li></ul><ul><li>Belief in equality </li></ul><ul><li>A graduate trainee can aspire to become chairman like Kenichi Yamamoto of Mazda motors </li></ul><ul><li>High employee involvement in decision making (Quality circles) </li></ul><ul><li>Famous Toyota management </li></ul><ul><ul><li>Lean manufacturing </li></ul></ul><ul><ul><li>Kanban </li></ul></ul><ul><ul><li>Kaizen </li></ul></ul><ul><ul><li>TPM </li></ul></ul><ul><ul><li>Pokayoke </li></ul></ul><ul><ul><li>Jidoka </li></ul></ul><ul><ul><li>Hejunka </li></ul></ul><ul><ul><li>5S </li></ul></ul><ul><li>Winning a Edward Deming ( American) quality award is the highest distinction a Japanese company thieves to attain </li></ul>
  15. 15. Japanese management <ul><li>In Japan there are no separate canteens for workmen and executives </li></ul><ul><li>No cabins for managers </li></ul><ul><li>All wear same uniform </li></ul><ul><li>Foreman has short meeting with workmen every morning to discuss plan for the day </li></ul><ul><li>There are Quality circles to resolve problems </li></ul><ul><li>They believe in finding solution at Gemba meeting ( work place) and not in a meeting room </li></ul><ul><li>An employee is recruited based on his qualification but later the growth is mainly performance based. </li></ul><ul><li>Average employee gives 8 suggestions a year </li></ul>
  16. 16. USA Vs Japan <ul><li>In the US, when there is a traffic accident, the lawyers take up to 35% from the victim to settle the insurance claim, the situation unknown in Japan </li></ul><ul><li>While the US was busy creating lawyers, Japan focused on creating engineers </li></ul><ul><li>In the US the businessmen often do not trust his colleague as he may become a competitor, not in Japan </li></ul><ul><li>In the US satisfying goal in life is comfort (most advertisements also project this aspect), whereas in Japan, company patriotism and Job satisfaction is equally important as money. </li></ul><ul><li>In Japan there are many holidays but no long vacations, even to school children </li></ul>
  17. 17. Equality <ul><li>Only few trains have 1 st class </li></ul><ul><li>Domestic airlines do not have 1 st class </li></ul><ul><li>Very few companies have private planes </li></ul><ul><li>Now Japan has rich people but not wealthy </li></ul><ul><li>It was difficult afford a car </li></ul><ul><li>Wealthy had to pay huge wealth tax, 85% tax and lost land in reforms </li></ul><ul><li>Even today, inheritance taxes are high </li></ul><ul><li>Graduated taxes rise sharply with income and make it useless for a company to pay high salary </li></ul><ul><li>Salary of the chairman is only 7 to 8 times that of newly joined executive </li></ul><ul><li>Japan has no multi millionaires </li></ul><ul><li>Companies do not give huge bonuses or stock options </li></ul>
  18. 18. Industrial growth <ul><li>Japan has more makes of civilian products than any where on earth </li></ul><ul><ul><li>9 auto makers </li></ul></ul><ul><ul><li>2 heavy truck makers </li></ul></ul><ul><ul><li>900 machine tool makers </li></ul></ul><ul><ul><li>600 electronic companies </li></ul></ul><ul><ul><li>7000 textile companies </li></ul></ul><ul><ul><li>Etc. </li></ul></ul><ul><li>Japanese believe in long term profits (capital investment) than short term </li></ul><ul><li>They invested in semiconductor plant and machinery when Americans and world was on decline </li></ul>
  19. 19. Business success <ul><li>Japanese believe in </li></ul><ul><ul><li>Good quality </li></ul></ul><ul><ul><li>Innovation </li></ul></ul><ul><ul><li>Large variety to suit different customer tastes </li></ul></ul><ul><ul><li>Design excellence </li></ul></ul><ul><ul><li>Construction class </li></ul></ul><ul><li>Largest producer in the world </li></ul><ul><ul><li>TVs(45%), 4 wheelers (20%), machine tools(40%), robots(45%), digital camera (45%), ship building(30%) </li></ul></ul>
  20. 20. Glimpse of Japan % figures indicate share of the world’s capacity 1 26 55 74 PCs / 100 persons 2004 5 22 75 76 Mobile phones / 100 persons - 2008 0% 24% 30% 1% Ship building 0% 3% 40% 15% robots industrial 0% 45% 45% 0% digital camera 0% 40% 45% 15% colour TV 4% 10% 20% 20% 4 wheelers 1% 12% 40% 8% machine tools India China Japan US
  21. 21. Japan today <ul><li>Japan has one of the highest life expectancy at 83 years </li></ul><ul><li>Lowest mortality rate under 5 years: 4/1000 (India 69) </li></ul><ul><li>Today Japan has high 22% of population over 60 years of age </li></ul><ul><li>Consumer price increase rate is low at 0.3% (India 7%) </li></ul><ul><li>Interest rate is low at 1.5% (India 8%) </li></ul><ul><li>2 nd highest GDP next to the US </li></ul><ul><li>High per capita at 34000 USD (India at 1000 USD) </li></ul>
  22. 22. It’s a success story