One of the most infuriating obsessions of a certain generation of mostly male leaders is the concept that Japan must protect its manufacturing because of its monozukuri culture. At its base, the concept is that Japanese have an innate or learned ability to make objects. In its most admirable meaning, monozukuri is a dedication to time consuming, delicate or technically demanding manufactures. In its grossest form, the term means little more than "making stuff."
I probably do not have to tell you which end of the spectrum the Nippon Keidanren and the Ministry of Economics, Trade and Industry place their marks.
Hence the delicious irony in the wake of the flooding of the industrial parks of Thailand of the desperate demands from Japanese manufacturers with drowned Thai factories for thousands of temporary visas for their Thai workers. It turns out the Thai workers are the ones with the necessary manufacturing skills for the Japanese companies to keep operating, the Japanese workforce being the data managers. For the companies to survive, they needed their monozukuri workforce, which, for some reason, is Thai.
The devotion to the cult of monozukuri has also its flip side: "We Japanese are pathetic when it comes to services." Maybe unschooled, perhaps not rapacious -- but not pathetic, no. I can get so much done through my local convenience store that it frightens me sometimes. All the new owners of baseball teams are service industries, the latest being the DeNA software company, which is buying the truly pathetic Yokohama Bay Stars. Japanese financial institutions, after going through the wringer of the 1990s, are solid -- at least as long as Japanese government bond prices remain in nosebleed territory.
Monozukuri mania engenders such nonsense as "Japan must concentrate on cutting edge technologies and only the most painstaking technical tasks." Sorry to say this but that is where Japanese manufacturing is already. There is nothing north of the North Pole. As for biotechnology, nanotechnology, human-like robots...whatever...they are all fine and dandy...but give me further refinements of car navigation systems (Have you seen these darn things? They reproduce streets in 3-D, with renderings of the buildings. You could not get lost if you tried.)
The cult of making stuff is not just a Japanese phenomenon, of course. In the course of imitating the Japanese model of economic growth through exports, all the rapidly developing countries of Asia have, at least for some period during their development, obsessed about the percentage of GDP coming from manufacturing (Hong Kong and Singapore are now known for their services but initially they were major manufacturers).
When you are a developing country pushing hard to make stuff, you of course can sell some of your output at home. Being that yours is a poor country, however, the majority of what you manufacturer has to be sold to rich countries, which have to be open to your manufacturers. Throughout the postwar era, Japan and the countries of East Asia could benefit from a huge U.S. market and later on the markets of Europe.
Both of these regions are now in crisis, however. They are unlikely to pull themselves out of crisis for a long time. So where is all the previously valuable "stuff" going to go now?
It is refreshing, therefore, to read an essay like Suman Bery's Does India really need a National Manufacturing Policy?" offering an argument that making stuff -- especially in light of China's having taken the East Asian manufacturing model to its illogical conclusion -- may not be as important as some folks make it out to be.
As for Japan, until a certain generation and its ideas about the way Japan works passes on (Rakuten gave up on the Nippon Keidanren after the organization refused to support the separation of the transmission and power generation arms of utilities) we are stuck with a charming but dulling ideology, confusing government policy.
Why doesn't the finance industry use DSGE models? (cont.)
57 minutes ago