I spent a couple of weeks in Japan last summer and spent a lot of time thinking in the context of Japan being a lens through which we can divine insight towards where we are headed as a country in the future.
There are two major issues facing the Japanese economy. Nepotism of the old (there is a much more succinct word for this, but it escapes me) and the incredibly long life expectancy of the population. The nepotism of the old (someone please tell me the name for this) is causing issues in a few different ways.
The older government officials are notorious for taking private sector positions in the very industries they previously regulated. This happens so frequently there is actually a Japanese phrase to describe it (again I can't remember for the life of me what this phrase is). In America this happens, but isn't nearly as blatant or widespread. It Japan it is a near guarantee.
The older population in Japan has a stranglehold on influencing public policy. They are a huge block of voters who actually turn out for elections. They consistently vote for, or force politicians to push for, unsustainable short-term solutions to problems. Japan has a pension crisis similar to our social security problem. Everyone knows it is unsustainable, yet the older people vote for it and push the burden onto the young.
The young people entering the economy don't have the job availability they need. Old people aren't retiring as early as they once were and basically aren't getting out of the way for the young. People are living longer and need to work longer. As a result, young workers are forced to be underemployed and struggle to become part of the economy.
There is also the issue of failure being viewed as shameful. There is very little entrepreneurial activity going on in the country so they don't have this potential of creating jobs for the economy.
The long life expectancy is exacerbating all of the above issues. That said, Japan is a fascinating place, the projections towards the strain social security and medicare taking on our economy in the future are good proof that Japan may still offer insight towards our own future.
>The young people entering the economy don't have the job availability they need. Old people aren't retiring as early as they once were and basically aren't getting out of the way for the young. People are living longer and need to work longer. As a result, young workers are forced to be underemployed and struggle to become part of the economy.
I'm not sure if I'm misunderstanding your argument or not, but it sounds like you're saying that the more old people work, the fewer young people can, i.e. there are a fixed number of jobs. If this were truly the way economics worked, then it would be easiest to find in places full of lazy and/or incapable people. This isn't the case though.
As long as there exist services or makable things that people want enough to spend money on, there are always jobs to be done. Maybe the issue is in education, willingness to retrain, liquidity of job markets, or hurdles to starting businesses, but I don't believe that old people working means that young people can't.
If 99% of Japanese companies truly did hire old people into upper management who weren't as capable as younger people at doing their work, the other 1% would eat them alive.
If 99% of Japanese companies truly did hire old people into upper management who weren't as capable as younger people at doing their work, the other 1% would eat them alive.
"Doing one's work" in the modern world does not happen in a vacuum. If substantial segments of the market refuse to do business with you on the basis of your age, yeah, you're not going to be quite the stellar businessman.
When performance is measured by how much money you extract from a few organizations (think government contracting, think enterprise sales, think manufacturing), institutional prejudice can become one of the primary factors determining success.
Yes, that's a reasonable scenario for heavily regulated industries, some B2B and most government work. It doesn't really address my point about "running out of jobs", though.
Older people doing jobs of that sort in no way means that there's a shortage of work younger people could do... unless you're implying that Japanese people are both
1) unwilling to purchase goods and services outside of large industries that discriminate against young people
and
2) incapable of creating goods or services non-Japanese would pay for
When people say "jobs" they usually mean "access to an upwardly-mobile career path".
Most of the goods and services that I purchase, anyways, are enabled by some sort of expensive and heavily regulated infrastructure. Every physical object that I buy was produced by a factory and purchased at a large retail outlet. The main services I pay for are communication-related (cell phone, internet, etc. - huge infrastructure there), automobile maintenance-related, and liability-related (e.g. insurance), medical-related, and the occasional meal at a restaurant. The only ones of those that one can do as a small business are automobile repair and food services, neither of which are the first things I think of when I hear "upward mobility".
Basically every highly-upwardly-mobile profession relies on expensive infrastructure (communications), access to an enormous pool of money (insurance), good relations with government regulators (law, medicine, insurance, communications), access to a large distribution channel (retail), or manufacturing (retail). There are some peripheral service professions (advertising, real estate brokership, stock brokership), that rely on having a good relationship with a wealthy clientele, not to mention a good relationship with regulators.
Basically, upward mobility relies on existing infrastructure of some kind, and if someone who isn't you and doesn't like you controls it, you're fucked.
So, you know, they could write web apps, since no one really controls the internet. Maybe. And they probably won't get VC funding. Or get bought by a company, unless they're really profitable. Or get advertising deals.
It's only in web app land that 2) is possible without manufacturing, and the Japanese are at a steep disadvantage because of the language barrier.
What I'm getting at is that because of the severe social stigma associated with failure or being fired, companies are also very hesitant to hire new workers unless they are absolutely certain as a company they want to keep this employee for decades. As a Japanese company when you are force to let someone go you are signaling to society that this person is unfit for the workplace.
Instead of hiring younger workers, Japanese companies shuffle older employees around in the company. Entry level positions are often taken by older employees who were unable to perform at higher levels. Instead of rotating these older workers out of the company, they are often given entry level positions that would normally (at least in the states) go the young workers.
The Japanese is(was?) stratified into two distinct layers. The top layer is the large corporations that we all know about: Hitachi, Mitsubishi, etc. These are the companies that hired for life. They dont hire old people, except for those "descending from heaven". They hire young people that stay for life. The old people are the lifers that aren't fired, but clog the promotion ladder. Most people work for the second tier of subcontractors where pay is less and employment is less assured. Often family owned companies.
Disclaimer: I havent paid much attention to Japan for a decade, since my Brazilian-Japanese ex became ex. However, her family members spent a lot of years working for the second tier companies as "guest workers".
> The older government officials are notorious for taking private sector positions in the very industries they previously regulated. This happens so frequently there is actually a Japanese phrase to describe it (again I can't remember for the life of me what this phrase is). In America this happens, but isn't nearly as blatant or widespread. It Japan it is a near guarantee.
"The future will now be produced by cheap and abundant labour, not by mysterious oriental tech-wizardry (NB I am trying to describe an imaginary, not a reality!). "
This is an artefact of today, not the future. As has happened in the developed world the developing world will eventually see automation and robotics become cheaper than human labour. Possibly within the next decade or two. Once this point is reached and those countries haven't lifted themselves up they're screwed. They'll have a massive number of undereducated, illiterate and underemployed people.
This is not China's century as many people are saying. Robotics will turn vast numbers of people in to a liability, not an asset.
On the flip side, if robotics are taking care of mass production with very little human input, 3d printing and other emergent home technologies will create an explosion in artisan production.
We're about to see a shift in the material world similar to the way the open source world changed software.
I don't see how "open source" had all that big of an impact on software.
IMO, "open source" software fills the same roll as government spending on infrastructure. Basically, contributing a small amount of energy for a share of a public good has a net positive result. But, little changes from the perspective of a user or a developer.
Plenty of people use open source software, but when it comes to writing drivers for the next generation of GPU or the Ignition Timing software for the 2012 Honda civic the Open Source revolution has more or less fallen flat.
The history of UNIX was a little more complex than that. The average consumer could not afford a ex: a PDP-11 but there where relatively low cost systems available around the same time as GNU Linux showed up.
"Little changes" from the perspective of a developer? I'm going to have to disagree with you on this one.
If I'm not mistaken (please correct me if I am), a plurality (if not an outright majority) of web servers are run using an open source OS. jQuery/Prototype/MooTools together hold an obscenely high share of the JavaScript library market. The great majority of websites on the internet run some combination of PHP, Python, Ruby, many of those running open-source frameworks like Pylons, RoR, CodeIgniter, Kohana, web2py, Django, etc. A great number of developers code using Vim, Eclipse, or some other open source text editor.
And from the perspective of the user? It's hard to quantify this just by saying "Firefox" or "Chrome" or the "V8 JavaScript Engine". I think open source projects (like jQuery) benefit hugely from crowd sourcing their problems. By making their bug reports and code public, they allow someone like me to fork the project on GitHub, fix the bugs, and issue a pull request back to the master branch. They're basically fine-tuning their product without doing nearly as much work as closed-source shops without paying the person for fixing the problem. To the user, it looks like things get done quickly and bugs tend to come far less often (if the crowd sourcing is done right).
In my humble estimation, these are rather important considerations when judging the success of open source...and these are only web technologies.
After many years of software development I have briefly used Eclipse which sucked (IMO) and VIM which was slightly better than good old vanilla VI and nothing else on your list. (Note: as a developer.) Granted, I don't do a lot of web development but my point is just because there are some popular tools for your nitch does not mean there has been a fundamental shift in software.
BBedit was more useful for me than vim (at the time).
Recently I find Visual Studio is a nice IDE and last time I compared them Eclipse was clearly worse (it's been a few years). However, I have used a wide range of things from early versions of Borland Pascal and various things I can't even recall on old versions of Mac OS etc.
I've seen some curious robotics demonstrations out of Japan driven by a labor shortage and a stance against immigration. And a reluctance for young people to become salarymen. One was a human washing machine, which looked very much like a regular washing machine with the user's head poking out through a hole in the top. It had wheelchair access. IIRC the target market was care homes for the elderly. Another was a robotic fast food takeout place (tiny in comparison to a typical US fast food joint).
The 80's were Japan's time in the sun. I remember shock waves in the Valley when HP announced that it was no longer going to use US-made memory chips because Japanese ones were so much better. And a picture in Forbes Magazine open on a Tokyo sidewalk, saying that the real estate taken up by the magazine was worth $500,000K or some such astronomical number. General Motors announced that its goal was to make a car as good as a Toyota. And for us technical types the big shock was the Fifth Generation Computer Project was going to make Silicon Valley a backwater. Well it didnt happen that way. US semiconductor manufacturers learned to make chips, companies learned just in time inventory control and QC, and the Fifth Gen computer was overtaken by the PC, Moore's law, and the internet. (OK we did loose Detroit.) Then the 90's came and the Japanese economy tanked from the real estate bubble, insane infrastructure protects, and fiscal mismanagement, and never recovered dominance.
That's odd, I seem to recall Intel, AMD and IBM having major chip fabs in the US, Germany and Israel. Or are you talking about something different (I don't know much about mask steppers)?
There's a substantial amount of semiconductor plant still in the states. There's a huge Micron plant not far from me right now.
The quality and reliability surveys over the last eight years or so are not favorable to Toyota. US made cars are as good as any other, and the German brands have actually slipped a lot.
Japan remains one of the nicest places in the world to live. It is still a huge success story.
There are two interesting ideas on why Japan gets so dumped on as a failure, or "moribund".
1) While the Japanese people are doing fine, western banks and investors and businesses have consistently gotten soaked when trying to play Japan over the last 20 years. The people who write about Japan for the Wall Street Journal have a very different lens from an ordinary person.
2) The Japanese have strongly rejected the western liberal agenda, and it's working out rather well for them. Can't have people clued in on that, so write about "moribund" Japan. The Japanese remain nationalistic and race conscious. They believe in Japan as a unified cultural nation and reject immigration. This has a great deal to do with the high quality of life and personal safety in Japan. It also ties into how they maintain a public social welfare system that works comparatively well. They also believe in protectionist policies (rightly or wrongly), which do not appear to be doing a great deal of harm.
I get a really mixed picture which is all secondhand. As I said in another comment, my ex (10 years ago) was Brazilian-Japanese and several of my brothers and sisters in-law worked there as guest-workers in the second tier subcontractors. They weren't treated as true "Japanese" because they were born in Brazil. They were looked upon as ruffians.
I also see stories, mainly not mainstream, about disaffection among young people with the conformity, the bullying in school, the lack of opportunity if you are not a graduate of U of Tokyo.
And then there are the larger issues that you get with an aging population where the replacement rate is less than 1. Who pays the retirement bills? We are facing similar issues, but without the same urgency.
This isnt real criticism, just impressions. I would love to have a Japanese native jump in.
The finance people have a point. The high level of government services and comfort thereby provided are funded by unsustainable levels of government debt that are well beyond any Western country, and practically all of it is privately held. By old people.
At some point, the old people are going to start dying, and then there won't be anything to fund that debt anymore. So Japan will default. It will be the biggest sovereign default in the history of mankind. And of course, dead old people will be footing the bill. In the meantime, the birthrate continues crashing and the young in Japan will languish. This is why it's said that Japan will rot, but it will rot in isolation.
The big unknown that I'm interested in is how the collapse will take hold. There are two runaway trains that I can see. The first will be the debt. It seems likely that we will see a restructuring towards a bureaucratic economy that takes care of the old people, but eventually all the old people will die. Then we may have another runaway train if the mechanisms for defunding the services racket are in place.
There's comment made on the site under the post which I think is the most accurate, concise, spot on explanation of the difference between the Japanese market and the American market. Here it is:"Could Japan be a secret counter-example to the worldview that sees prosperity coming only from high growth? Maybe the Japanese have in many ways decided that they don't want high growth lives?"
I say the answer to that likely rhetorical question is YES. I've been traveling to Japan for business for 10 years and I think this difference in approach is the chief reason why most American firms never really 'get' Japan. Their business motives and market DNA are fundamentally different from America's devotion to growth and scale. In Japan it's not about growth, it's about consistency and quality, often even to the detriment of the business.
I think that's also why, in terms of tech startups, Korea & China & Singapore will ultimately leave Japan behind.
Labor prices went up to ours, people grew to want their pensions just like us, the old are living longer just like us, they now want the good things in life just like us.
In the short time since World War II, they have grown to have that good life. And in that they have become more and more plagued with the same benefits and detractions that we've been enjoying. During the time they were rapidly advancing, they had the same abilities as us, but a different lifestyle. And they beat us.
But what was the point of their growth? The point was to get to where we are. And now that they're the same as us, in the end, they'll just be the same as us.
China's the same. One day all of China will be just like America. And then they won't be competitive. Until then, they'll eat our lunch because although they can do the same things as us, they just don't yet have our standard of living.
Curious coindidence – I was thinking about this the other day, wading through Gibson's _Neuromancer_. The novel, just like earlier Stephenson fiction, paints a not-too-distant future entirely dominated by "Nipponese" brands and cultural artefacts. _Neuromancer_ was published in 1984. A lot has changed ever since.
43 comments
[ 4.6 ms ] story [ 110 ms ] threadThere are two major issues facing the Japanese economy. Nepotism of the old (there is a much more succinct word for this, but it escapes me) and the incredibly long life expectancy of the population. The nepotism of the old (someone please tell me the name for this) is causing issues in a few different ways.
The older government officials are notorious for taking private sector positions in the very industries they previously regulated. This happens so frequently there is actually a Japanese phrase to describe it (again I can't remember for the life of me what this phrase is). In America this happens, but isn't nearly as blatant or widespread. It Japan it is a near guarantee.
The older population in Japan has a stranglehold on influencing public policy. They are a huge block of voters who actually turn out for elections. They consistently vote for, or force politicians to push for, unsustainable short-term solutions to problems. Japan has a pension crisis similar to our social security problem. Everyone knows it is unsustainable, yet the older people vote for it and push the burden onto the young.
The young people entering the economy don't have the job availability they need. Old people aren't retiring as early as they once were and basically aren't getting out of the way for the young. People are living longer and need to work longer. As a result, young workers are forced to be underemployed and struggle to become part of the economy.
There is also the issue of failure being viewed as shameful. There is very little entrepreneurial activity going on in the country so they don't have this potential of creating jobs for the economy.
The long life expectancy is exacerbating all of the above issues. That said, Japan is a fascinating place, the projections towards the strain social security and medicare taking on our economy in the future are good proof that Japan may still offer insight towards our own future.
I'm not sure if I'm misunderstanding your argument or not, but it sounds like you're saying that the more old people work, the fewer young people can, i.e. there are a fixed number of jobs. If this were truly the way economics worked, then it would be easiest to find in places full of lazy and/or incapable people. This isn't the case though.
As long as there exist services or makable things that people want enough to spend money on, there are always jobs to be done. Maybe the issue is in education, willingness to retrain, liquidity of job markets, or hurdles to starting businesses, but I don't believe that old people working means that young people can't.
If 99% of Japanese companies truly did hire old people into upper management who weren't as capable as younger people at doing their work, the other 1% would eat them alive.
"Doing one's work" in the modern world does not happen in a vacuum. If substantial segments of the market refuse to do business with you on the basis of your age, yeah, you're not going to be quite the stellar businessman.
When performance is measured by how much money you extract from a few organizations (think government contracting, think enterprise sales, think manufacturing), institutional prejudice can become one of the primary factors determining success.
Older people doing jobs of that sort in no way means that there's a shortage of work younger people could do... unless you're implying that Japanese people are both
1) unwilling to purchase goods and services outside of large industries that discriminate against young people
and
2) incapable of creating goods or services non-Japanese would pay for
Most of the goods and services that I purchase, anyways, are enabled by some sort of expensive and heavily regulated infrastructure. Every physical object that I buy was produced by a factory and purchased at a large retail outlet. The main services I pay for are communication-related (cell phone, internet, etc. - huge infrastructure there), automobile maintenance-related, and liability-related (e.g. insurance), medical-related, and the occasional meal at a restaurant. The only ones of those that one can do as a small business are automobile repair and food services, neither of which are the first things I think of when I hear "upward mobility".
Basically every highly-upwardly-mobile profession relies on expensive infrastructure (communications), access to an enormous pool of money (insurance), good relations with government regulators (law, medicine, insurance, communications), access to a large distribution channel (retail), or manufacturing (retail). There are some peripheral service professions (advertising, real estate brokership, stock brokership), that rely on having a good relationship with a wealthy clientele, not to mention a good relationship with regulators.
Basically, upward mobility relies on existing infrastructure of some kind, and if someone who isn't you and doesn't like you controls it, you're fucked.
So, you know, they could write web apps, since no one really controls the internet. Maybe. And they probably won't get VC funding. Or get bought by a company, unless they're really profitable. Or get advertising deals.
It's only in web app land that 2) is possible without manufacturing, and the Japanese are at a steep disadvantage because of the language barrier.
Instead of hiring younger workers, Japanese companies shuffle older employees around in the company. Entry level positions are often taken by older employees who were unable to perform at higher levels. Instead of rotating these older workers out of the company, they are often given entry level positions that would normally (at least in the states) go the young workers.
Disclaimer: I havent paid much attention to Japan for a decade, since my Brazilian-Japanese ex became ex. However, her family members spent a lot of years working for the second tier companies as "guest workers".
This totally happens here, and there is a term for it: http://en.wikipedia.org/wiki/Revolving_door_(politics) (Revolving Door)
Almost everything you said about older people in Japan can be said about the USA as well.
This is an artefact of today, not the future. As has happened in the developed world the developing world will eventually see automation and robotics become cheaper than human labour. Possibly within the next decade or two. Once this point is reached and those countries haven't lifted themselves up they're screwed. They'll have a massive number of undereducated, illiterate and underemployed people.
This is not China's century as many people are saying. Robotics will turn vast numbers of people in to a liability, not an asset.
We're about to see a shift in the material world similar to the way the open source world changed software.
IMO, "open source" software fills the same roll as government spending on infrastructure. Basically, contributing a small amount of energy for a share of a public good has a net positive result. But, little changes from the perspective of a user or a developer.
GNU has impacted users lives.
http://en.wikipedia.org/wiki/File:Unix_history-simple.png
PS: Ok, I get that people feel the need to down vote when they have an emotional reaction, but how was that anything but a truthful statement?
If I'm not mistaken (please correct me if I am), a plurality (if not an outright majority) of web servers are run using an open source OS. jQuery/Prototype/MooTools together hold an obscenely high share of the JavaScript library market. The great majority of websites on the internet run some combination of PHP, Python, Ruby, many of those running open-source frameworks like Pylons, RoR, CodeIgniter, Kohana, web2py, Django, etc. A great number of developers code using Vim, Eclipse, or some other open source text editor.
And from the perspective of the user? It's hard to quantify this just by saying "Firefox" or "Chrome" or the "V8 JavaScript Engine". I think open source projects (like jQuery) benefit hugely from crowd sourcing their problems. By making their bug reports and code public, they allow someone like me to fork the project on GitHub, fix the bugs, and issue a pull request back to the master branch. They're basically fine-tuning their product without doing nearly as much work as closed-source shops without paying the person for fixing the problem. To the user, it looks like things get done quickly and bugs tend to come far less often (if the crowd sourcing is done right).
In my humble estimation, these are rather important considerations when judging the success of open source...and these are only web technologies.
Recently I find Visual Studio is a nice IDE and last time I compared them Eclipse was clearly worse (it's been a few years). However, I have used a wide range of things from early versions of Borland Pascal and various things I can't even recall on old versions of Mac OS etc.
Depends. If they can keep labour cheap enough, they won't be underemployed.
I don't worry about future under-education in the now-developing countries. Education is all the rage in most places.
No they didn't - the chips are now made in Singapore or Malaysia with Japanese plant. When did you last see a US mask stepper?
GM make a car as good as a Toyota? I think their current goal is to make a car as good as a Fiat.
The architectural design and first implementation were carried out at the STI Design Center in Austin, Texas
In March 2007 IBM announced that the 65 nm version of Cell BE is in production at its plant in East Fishkill, New York
The quality and reliability surveys over the last eight years or so are not favorable to Toyota. US made cars are as good as any other, and the German brands have actually slipped a lot.
There are two interesting ideas on why Japan gets so dumped on as a failure, or "moribund".
1) While the Japanese people are doing fine, western banks and investors and businesses have consistently gotten soaked when trying to play Japan over the last 20 years. The people who write about Japan for the Wall Street Journal have a very different lens from an ordinary person.
2) The Japanese have strongly rejected the western liberal agenda, and it's working out rather well for them. Can't have people clued in on that, so write about "moribund" Japan. The Japanese remain nationalistic and race conscious. They believe in Japan as a unified cultural nation and reject immigration. This has a great deal to do with the high quality of life and personal safety in Japan. It also ties into how they maintain a public social welfare system that works comparatively well. They also believe in protectionist policies (rightly or wrongly), which do not appear to be doing a great deal of harm.
I also see stories, mainly not mainstream, about disaffection among young people with the conformity, the bullying in school, the lack of opportunity if you are not a graduate of U of Tokyo.
And then there are the larger issues that you get with an aging population where the replacement rate is less than 1. Who pays the retirement bills? We are facing similar issues, but without the same urgency.
This isnt real criticism, just impressions. I would love to have a Japanese native jump in.
At some point, the old people are going to start dying, and then there won't be anything to fund that debt anymore. So Japan will default. It will be the biggest sovereign default in the history of mankind. And of course, dead old people will be footing the bill. In the meantime, the birthrate continues crashing and the young in Japan will languish. This is why it's said that Japan will rot, but it will rot in isolation.
The big unknown that I'm interested in is how the collapse will take hold. There are two runaway trains that I can see. The first will be the debt. It seems likely that we will see a restructuring towards a bureaucratic economy that takes care of the old people, but eventually all the old people will die. Then we may have another runaway train if the mechanisms for defunding the services racket are in place.
I say the answer to that likely rhetorical question is YES. I've been traveling to Japan for business for 10 years and I think this difference in approach is the chief reason why most American firms never really 'get' Japan. Their business motives and market DNA are fundamentally different from America's devotion to growth and scale. In Japan it's not about growth, it's about consistency and quality, often even to the detriment of the business.
I think that's also why, in terms of tech startups, Korea & China & Singapore will ultimately leave Japan behind.
Labor prices went up to ours, people grew to want their pensions just like us, the old are living longer just like us, they now want the good things in life just like us.
In the short time since World War II, they have grown to have that good life. And in that they have become more and more plagued with the same benefits and detractions that we've been enjoying. During the time they were rapidly advancing, they had the same abilities as us, but a different lifestyle. And they beat us.
But what was the point of their growth? The point was to get to where we are. And now that they're the same as us, in the end, they'll just be the same as us.
China's the same. One day all of China will be just like America. And then they won't be competitive. Until then, they'll eat our lunch because although they can do the same things as us, they just don't yet have our standard of living.