Technology and Innovation in Japan’s Grand Macroeconomic Strategy

Technology and Innovation in Japan’s Grand Macroeconomic Strategy

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Thank you very much. And thank you, everyone for joining us today. It's a great pleasure and honor to be joined by such a distinguished panel and such a distinguished number of people in the room. Today's session is about how technology entrepreneurship will contribute to Japan's emerging grand strategy. The title was inspired by a book by

the Yale historian John Lewis Gaddis, who wrote a book called On Grand Strategy. His key point was that a successful grand strategy requires that aspirations and capabilities be compatible. Great aspirations are fine, but to achieve them you need great capabilities.

So the question now is have Japan's aspirations changed? Uh, does Japan have the capabilities that it needs to achieve those aspirations? What are those capabilities? How will entrepreneurship and technology development contribute to those capabilities? Where do we need more private sector action, government action and where are the opportunities for investment? I answer some of those questions in my paper about this, but these guys will have a lot to say about that as well. In my paper, one thing I said was that the aspirations really haven't changed. Still peace and prosperity. And I'm happy to report that Takako does not agree with me on that. So if I can call on her to start out the discussion today. Thanks. Thank you very much, Robbie, for having me today. Let me just add,

I don't really disagree with you. I just think that the ways in which Japan can maintain its peace, peace and prosperity, there has been a slight shift or expansion in thinking that you cannot passively achieve that. There has to be more effort to create a more favorable environment for the country in order for that to happen. And I think that's the change in aspiration, and I'm a bit more worried about how exactly that is going to be accomplished. But that's something to discuss about right now.

And so I guess since I'm not an expert on technology or entrepreneurship and I can I do know John Lewis Gaddis, but I don't really know technology, I try to take the safe route and try to think about what are the geopolitical challenges that are caused by changes in technology. And I understand that today's topic is regenerative AI. It seems to be the bigger topic. So I would like to think about that in terms of international politics, which is my field. Unfortunately, the movie has not been shown in Japan yet, but I do think many people in the in other countries have seen the movie Oppenheimer, and there has been reference to what is called the Oppenheimer moment, and I that are we facing a change in technology that may go out of the scientists hands and we may turn around to hurt us, and whether or not we're facing that with the development of AI, obviously nuclear weapons and AI are different, that some might feel uncomfortable with the analogy.

Like one AI is not intended to blow things up, but nuclear energy wasn't quite just that either. And also the big difference is that mostly the nuclear, at least the Oppenheimer moment was driven by government and not by individuals or private sector as it is in AI. But I do think the the commonality is also very interesting and why that's the reason why people refer to it as Oppenheimer moment, is that it can be used for both peaceful and military use, and also the growth is exponential and growing at a faster speed than we expected.

And finally, I think this ties into today's topic that human agency and control is very important. Control among governments, I think, is the main actor at this point about nuclear weapons. But I think for AI, how to maintain human agency on issues of AI, how it could be used for human development and empowerment instead of being controlled by it, is a challenge today, and I'm not that familiar with that in terms of entrepreneurship or technology per se. So let me just say two things. One about the external and what

you meant by grand strategy. I think that Japan is trying to take the lead in developing some kind of global cooperation club, international cooperation on issues of AI. And I think, Paul, you can tell us what's going on at the G20, but I think the Hiroshima AI initiative at the time of the G7 summit is the direction that Japan is taking. I think domestically, it's interesting that Japan's approach to AI is sort of more in the middle in a way that it's more of a risk based, soft approach compared to the European model, which tends to be more holistic and hard law based. But I'm not really an expert on this. I'm not going to do that.

But finally, on education, I've been teaching for about a quarter century now. The first 18 years at the National Defense Academy of Japan, and I taught for five years at Columbia University in the US. And now I'm teaching at finally at a normal Japanese institution at Gakushuin University. But one thing that I think is really important for Japan's education, if I were to tie this in, is that some ways what we can do through AI is so much for Japan, and yet the potential has not been has not been fulfilled. And I say this because I think one there is almost like an English wall in a way that we might be missing out. The students might be missing out of some opportunities that are out there expanding rapidly, because a lot of things you can gain through the changes in technology or information technology is basically through English, and that's something that we are facing. But also, I think it's just that

different ways of thinking about education is very important. And I think. Um, that Japanese education tends not to be about empowerment or human agency. And that might be I'm hoping that new technologies are available to the students. I think it will be a challenge for us who teach to be able to get in a different mood and get the students to be in a different mode of things in terms of education.

But I think it could be a good opportunity for how to empower students, not just to be able to be controlled by or to access more information, but how to process that and how to empower themselves through the new AI. I think something that we have to educate for the next generation. And I'll stop here. Thank you. Thank you very much. Very broad approach. I like the idea of human agency changing our education of students toward the idea of empowerment, expressing different ideas.

There's a lot of social we call it anthropology in that too, because who says what to whom is clearly taught differently in different areas. I'd like to move next to some of the economics of all this, particularly to Professor Hotta. He's one of Japan's best economists ever. His microeconomic textbook is the best I've ever seen, and the title is very interesting microeconomics, market failure and government failure. Great idea.

Sensei, could you give us your views on particularly how the labor market will affect technology diffusion? Okay. Thank you. Well, in recent years, we often hear that the Japanese universities are behind the Chinese and American counterparts. And every year sort of a ranking is has been coming down.

Well, I would like to point out two factors which causes this relative slowdown of the Japanese research in universities. Now the the first is budgetary restraint on research. Well, so somewhat contradictory to my first observation in these days, every other year, just about every other year, we hear Japan, Japanese scientists win the Nobel Prize. And this reflects the huge

investment Japanese government made in the growth of the science and engineering departments of national universities during the 60s. And this in numbers, this expansion was just enormous. However, the relative growth of science and engineering, I think I'd like to shorten it as Sadie. Was reached its its cap in 1970. And then since then it has been growing. That means the.

Amount of government research fund allocated to the new fields like it. Has that been growing at the speed of the journal Science and Engineering? During the 60s. So that's one factor. Now, on top of it, I think the Japanese lifetime employment system is a cause of this slow growth of the Japanese research. For two reasons. One is that the traditional science and engineering positions of university. I've been really reassigned to the new fields. Like it's even if the total budget doesn't expand, if the existing positions are reallocated to the new ones, you know, new new fields can grow. But that didn't happen.

And this is because university positions are under the system of lifetime employment with seniority. Seniority. Seniority. Payment. So professors in traditional fields don't quit. Their pay. Keep going. Well, in the United States, the professors in traditional fields don't get increase in the pay. And so there is a natural, you know, turnover. And the second factor why a lifetime employment system seems to cause difficulty is the lack of mobility of researchers across universities. This is also caused by the

lifetime employment system. The lack of mobility occurs even at the visiting positions, which makes it difficult to fill the teaching gap once a faculty member is on leave. In the United States, professors can take a leave leave from the university to concentrate on research when he receives a salary from NSF when he gets an NSF fund. The salary can be paid out of the research fund. Then the university uses the freed up funds to hire another visiting professor to fill the teaching gap. This contrasts with Japan,

where a grand grand receiving a grand receiving professor cannot pay his own salary out of the grant, so he must continue teaching and attend the university committees. This grant system seems to reflect the lack of available visiting faculty members to fill the gap due to the lifetime employment system. Well, I'd like to discuss how to get out of this lifetime employment system later, but I think for now I'd like to conclude this. Okay. Thanks very much. And it's quite interesting to me that the Okinawa Institute of Science and Technology now ranked among the top ten in the world, even though it's only 15 years old, adjusted for size.

One of the reasons for this is when it was created the the politician behind it, Umekoji, insisted that the university not be under the jurisdiction of the Ministry of Education, and insisted that more than half of the faculty be foreign. So both those two things have immensely contributed to the vibrance of that particular university, even though it's a Japanese university. So there's a lot to be said for people moving around. Taijun, let me pass it to you next. As a extraordinarily creative entrepreneur, what do you have to tell us about how to mobilize talent and improve capabilities? Yeah. Thank you Robbie. And.

I'm an entrepreneur, but I'm not so optimistic about the current situation. And then there are two reasons. One is power shift and the second is inequality. For the last half a century, we have enjoyed the Pax Americana world and it's changing. It will be a sign of Pax Americana

and maybe 20 years, 30 years later it will be Paxinou Indoamericano. And as a person living in Japan, we will have to face the rise of the superpower China. China will return to be the superpower after three four centuries. And that's one thing. And another is the rise of inequality driven by the AI and other innovations. And, you know,

innovation is always a great thing. But there are many disruptive people always. And so when these two events happened together, almost always we see global scale World war and Ukraine one year ago. And now we see what's happening

in Israel and we know Taiwan. I don't know what's going to happen. So, sir, you know, as an entrepreneur, I'm trying to come up with what I can do and what we can do as a community startup community. Two major topics that I would like to highlight. So one is the Bowne Global Startup.

So the startups which are trying to do a business globally. And then there has been no much less such startups in Japan until very recently. But these days, especially in the last few years after Covid, people started to aim the global market. So that's one good trend because these startups down the road will connect all the different stakeholders from many other countries. So that's number one. And the number two is it's called recently it's called Impact Startups. And we just recently launched the

Impact Startup Association in Japan. And these startups focus on social issues because the you know, in the next decade we will have more social issues in the world. And then I think these startups will anyway address these issues such that we can alleviate the pain that we will have to face in the next decade. So these are two things I see some people from many people from abroad today.

And if you were to start a company from now, Japan is the best place because the government now is saying that we are going to have 150 unicorns. I think it's 100, I guess. And then they are saying that they are going on the committing like 100 billion USD. So that's a huge amount. Just recently, my friend who used to be the the CEO of one of the most successful startups, he quit the job and then started another company. And what I and he were agreeing is that. Going for the for the next several years or so. The best way is to raise capital

in Japan and make a global team and address the global issue. So okay, I stop here. Very good. Thanks very much. Raise money in Japan. It's cheap. Create a global team here abroad

many places and then have a global global startup. That's a. That's kind of cool. I like the idea the best way because you know the I, I, I've talked with all the private equity venture capitals in the world and um, Japan even compared with impact investors. Impact investment funds Japanese institutional investors are most patient capital providers in the world. Yeah, I can assure you so.

And it's a best place to be for people. And the only issue actually is a visa. And then I think it should be addressed. It should be more relaxed. And then I just agree with you. Sure. I think the policy of building unicorns, which means highly valued companies which don't necessarily have substantial revenues, doesn't get you anywhere.

I think you need elephants, not uniforms. You want to build billion dollar revenue revenue companies. And to do that, you have to go into major markets like the United States, perhaps like India. You have to move outside of Japan. In that respect, I do agree with you. I also have a response to your comments. It's a single word response that would solve the problem that you're referring to, and that is DARPA.

Dahmer was responsible for most of the technology innovation that's happened in the United States over the last 50 years. Britain has recently tried to create a DARPA based entity, and they hired a guy who used to work for a friend of mine who was over at DARPA. Japan needs a DARPA. Thanks very much. That's your university funding. Okay. Actually, there's an interesting thing happening right now, which is the government has announced a innovation center. They're starting in the old

maritime Self-Defense force research area in Ebisu. What they're going to have MIT, Tokyo University and the Japanese government contributing all the money to this. To start this, I've talked with my MIT friends. This is serious. Moreover, again, it's not going to be under the jurisdiction of the Japanese government. And to me, this is a. Excuse me, under the Ministry of Education, which means it will just be very, very flexible. So I think your idea of a DARPA

is very, very relevant. And that's the model that I think they have in mind as they're doing that. Paul, let me move over to you because you have some stuff to say about immigration and a number of the issues we've talked about here.

Thank you. I'm going to start from outside in, even though I would add that USAA and Mitsubishi brought me to Asia so I wouldn't be in in Asia without a Japanese influence. Years ago, I just came back from India. I was on the B20 Task force for the Future of Work, Skilling and Mobility for the G20 summit. So we spent ten months analyzing

how AI and robotics will transform everything in our lives. And we wrote the policy recommendations for the G20 leaders. And so here's a quick summary. And then I'd like to take it into Japan perspective. The speed of AI and robotics is much

faster than anything you're reading. Much faster. We just don't want everyone so worried. But we're trying to control the political forces. We're trying to control the economic forces. Summaries. There will be 50,000 black warehouses in America in two years from now.

No human beings. There will be 8 million transport jobs in America replaced in eight years. 94% of what an attorney does can be done by AI today. I just had legal contract written on ChatGPT pretty good and a lot less expensive than my attorney was going to charge me. But this is the speed we're moving and our conclusion is every job is at risk. Huge opportunities to solve energy

climate change, which by the way, we're moving to 1.7 to 2 Celsius. That's the conclusion we came out of G20. So you should be worried. The speed of this is phenomenal. Well, we recommended that every

worker will need to be re certified for their skills every 3 to 5 years for the rest of their life. Every worker. Because if they don't get reskilled, AI robotics will replace them. So every worker is going to have to continuously upgrade and evolve in this new environment. Huge, huge opportunities to do so many great things, but only if we reskill. And the first issue is we need to redesign education, but the teachers have to be retaught to teach, right? Even professors that are tenured. Right. So this is our big challenge. We're industrial, agrarian to

industrial took 120 years. This is less than ten. So everything in our lives will transform. That was our conclusion and we had very detailed recommendations. Some were made public, some were confidential. I'm an optimist, but everyone needs to watch this.

Now for Japan, I think the opportunity is this. We concluded that the large corporations, they're going to replace jobs with robots and AI because it's straight to the bottom line. And if you're an American CEO, you get rewarded for your 2 or 3 year survival rate. You don't care.

But SMEs, small medium enterprises and entrepreneurs and tech startups, they're nimble. They're going to they're going to grab technology and they're going to grab human talent and they're going to play with it. And so we recommended a massive increase of support for SMEs and startups in the G20, including Japan. It is a natural point. So SMEs and startups are critical to Japan's future. You need to drive this as a very

aggressive path forward. Factories are moving from China to Asean and India for, for political reasons, justified, I would say as a supply chain guy. But Japan has this opportunity. I'll be real quick. Japan has the opportunity to push some of that production to Southeast Asia and India and take back part of that production to Japan. If you combine robots eyes and foreign labor. Right. This is the key.

You have 8 to 9 million job shortages today going to 11 million very soon. So if you're willing to reconfigure and I know the government is actually trying to now, which is a really positive trend. Take Japanese talent and skill, unlock entrepreneurial energy, bring in foreign labor to blend and bring part of the manufacturing back linked with India and Asean to redefine the economy and the opportunity for Japan. This is something that's really a huge opportunity, but it requires radical thinking.

And the last comment is I'm looking at bringing Singapore startups into Japan with a certain Japanese political friends help. So micro robotics stores foreign labor matched with AI with skill upgrade and cultural adaptation. We've already met with chairman of Pasona Group, which is a great company, but in reverse. You need to have Japanese startups leave, build in Japan and expand into Asia and the US, right? As the other speaker said. So you can't be a great Japanese startup if you never leave Japan, right? So this is the future of Japan. I'm still an optimist, but everything we know and do has to be redesigned starting yesterday. Thanks very much. Let me call on my favorite radical,

Professor Hatta, who is quite radical on the types of reforms needed in labor markets that Paul just referred to. What do you think are the things that Japan could do to make labor markets more flexible, make technology move faster, get Japanese companies to be able to use foreign labor and then grow globally. Okay. Thank you. Well, earlier I mentioned. Well, by the way, I agree that the DARPA type approach is very important in modern technology. But during the 60s, we didn't have DARPA and we did only very peaceful engineering. But but enormous investment was made and that sort of was in a sense successful in many areas. So if we can add DARPA on top of it, I think it would be great. Now the coming back to this

labor mobility things, well, if I have time later, I might mention that how the lifetime employment system is is has been the major obstacles for spin offs, appearing of spin off companies and the unicorns and elephants. But just skipping that the my idea of restoring labor mobility. Is as follows A worker should be able to choose between the current lifetime employment contract. In another type of employment contract that guarantees a predetermined amount of severance payment. If the employee is dismissed before the contract contract the employment period. Now this seems like a common sense, but the reason why this was not introduced, this has not been introduced, is that the there is no guarantee that the civilians payment will be paid without without very time consuming court procedures.

So to to overcome that obstacle, I would like to propose that the to ensure the and to ensure that the civilians payment is paid without fail. A public fund like unemployment insurance fund should be created, which makes civilians payments to the dismissed workers while requiring companies to pay in contribution to the to its account in the fund. So when that company is at the verge of the bankruptcy, the company itself doesn't have to pay this civilians payment. This public fund will pay. But until then, the every year the companies have to continue to pay pay in contribution to this fund. That's my proposal. Okay.

Thanks very much. In my little paper on the matter, I also proposed some things about job changing in a different in addition to the severance pay. The idea is that what workers need partly is support for the transition period. So some kind of welfare payment, but also introduction to new jobs and training for new jobs. So my sense is that severance package should be built in a way that enhances skill creation. As as the severance package is announced and presented to Tejan, let me ask you, you have a very global workforce at your firm.

Yeah. It's magnificent. You were kind enough to ask me to come in and chat a few weeks ago, or a few months ago. I'm very impressed with the way this Japanese based group works with your global counterparts. How do you find those global

counterparts and how do you get them to work together? This is the template for the future of Japanese startups. So how do you how did you accomplish that? All right. Two things. One is to find a non-Japanese speaker co-founder. It is very, very crucial. If you fail to do this, it's very difficult because, you know, it's very difficult to set a company. And in the early days, if you have several Japanese speakers, you end up making everything in Japanese. Then the or the other people, you know, English speakers will never come to that place because you know, they have many other options.

So that's number one. And number two is to is the willingness to pay for the cost of diversity. I think people quite often talk a great things about diversity. Right.

But in my company so one side are Japanese, one side are Indian and one side are from Europe and the other places. And for the last several years we have continuously suffered from this, the conflicts of civilizations over cultures. It's still continuing. And then still I believe this is a good thing, because this where the make us be able to go anywhere in the world. But it's very tough. So, you know, if you are just a Japanese speaker thinking of starting a company in Japan and then to make a global startup, you have to be ready for that. But I think once you overcome this, it will be very easy. It's a it's going to be a great trip. Very good. So in a sense, these costs of

diversity are actually investments in acquiring new information. Okay. There's a wonderful book if I can recommend it. Maybe I have before called Social Physics by an MIT Media Lab guy, Alex Pentland is his name and what he he's a big data scholar, and he's looked at how teamwork works. And his conclusion is that effective teams have three characteristics. One is they talk a lot to each other.

They talk equally to each other. That is, everybody talks the same amount to everybody else. And third, everybody brings in external information. I showed a diagram to my students

at Tokyo University of Science a few months ago of a bad team. So five people, two are really talking to each other a lot, and everybody else isn't kind of talking to anybody else. And the guys who have all the external information are not talking to anybody. Okay. So I showed this diagram and I said is this a good team or not? I hadn't prepared them at all.

Everybody in the class said is a terrible team. So we know this. So then the question is how does management encourage information exchange diversity bringing in external information. Takako, let me ask you, you've worked at the Defense Academy here in Japan, at Columbia, now at Gakushuin. How is this issue of communication

among faculty members bringing in external information? How is it different at, say, the Defense Academy or Columbia? I've never really compared the two before, because the Defense Academy is not run by the Ministry of Education, and the goal is to train for officers, although there was no. There is still no obligation to serve, which is interesting that. But about 90% do end up serving. I guess I personally, if I can, I can't really speak for the university, but one thing that I observed, which was interesting, is that the National Defense Academy in Japan was designed to be taught by civilian faculty, mostly, and that's one thing that I think might be goes counter to people's expectations. So I think it was a very diverse faculty. 80% were science and technology reflecting the needs. But I think that's how external

information was brought in. But for me, I made it my own personal agenda in a way to try to open a window for the cadets going forward. Because since most of them are going to become officers, they're going to be leading a group right away. I wanted them to access information where they needed to. So what I had in mind was to try to provide them with how exactly to access information when they need to. So that's what I tried to do. And I think there's changes over

time at the Academy. I was there recently, two weeks ago. I was happy to see that when I taught there, only less than 10% I think were female. Now I think it's going towards 20%. So I think it's already getting more diverse and that altogether. I think the interesting aspect of the Defense Academy experience was trying to bring the external in Colombia. I don't really know if that's a comparison right there, but if I were to talk about my experiences, I'm very fortunate to be there. And I'm lucky that I'm not a

tenured professor. And that's a weird way to say it. But I left my tenure job at the Defense Academy to go to Columbia, and I think that gives me more freedom to teach the way I want to. And I teach at the International Center, and I'm trying to do something similar, which is to try to open the window and to the outside world and try to connect students interest to be more global as much as possible. And I'm not bound to have to go

to faculty meetings. I think I'm very lucky that I'm on my own and I can try to do new things, including teaching English. So I was actually interested in what you had to say, TJ about.

Like you have a global team, where do you find the Japanese members? Because I'm actually more optimistic about the people we have. I just don't know if they know about the options out there, aside from the typical places that they go job hunting. And I do think that if there's an aspiration to work where you have more agency in what you do, they might aspire to do new things while they're still in college and learn new things and get skills, but they just don't know that option. So I do hope that maybe opportunities like this, I'm very happy to be here to know what's out there for my students, for them to think about other things than just going to the typical job hunting, but and to try to see if they can expand their horizons. So that's my take on education. Thanks very much, Paul. Let me throw a little bit of a curveball to you. But before I do that, I want to

thank you for advertising my book. I did a book a couple of years ago about the importance of reskilling in Japan. It was called to Tohoku, or Sword and Shield. That is, in this new world of crazy job changes and technology change.

We've got to have people reskilling themselves every year. And it's not only a shield to keep yourself employed, but it's also sort of a sword so that you can go out and do new things. So thank you for doing that. The curveball I have is was inspired by a comment from a person who was on an advisory board that I was on recently, and she said to us at the advisory board, is this a Japanese woman in her, I guess, around 50 or so? And she said, boy, I'm glad I wasn't born male because as a female in Japan, I have many, many more opportunities to move around to get paid for skills that I acquired. So mobility actually has helped skill

creation among the labor force. Women in Japan, labor force of women in Japan. Could I ask you to comment on how you think mobility will help people improve skills, and how you think Japan might be able to implement that a little bit faster than they are now? Happy to put a plug in for your book. Yeah, reskilling is one. Mobility isn't a choice anymore. Everyone will be mobile. The average person will change jobs 12 times. Not for. Not one. So lifetime employment was a

nice thing to have in the past. Singapore spends 50 to 90% subsidy for any company that recycles their workers to upgrade their skills. The government of Singapore pays 50 to 90% across the board.

They're not stupid. It's an investment. I've been on some Singapore government advisory committees. It's all planned through in detail, but it is a beautiful investment and they get a return on that investment. But this is what Japan, America,

everyone has to start thinking about. And as a company, how do you keep employees and how do you reskill them and invest at the same time? It sounds like a dichotomy, but you have to do both. Mobility is the gift of the new economy. You have to move. You have to be nimble. That's why we think small medium enterprises and startups are key to stabilizing the economy and the whole industrial countries because they're more nimble, because they're more evolving, and because people will constantly upgrade. You can't be in comfort zone when you're in that smaller play, but that's 85% of the jobs in most of our countries, by the way. We forget that. So reskilling is essential.

Mobility is everyone starting now. And we have to embrace this change, right? I'm an optimist. But you know, real quick when when you look at Silicon Valley, you know what the magic is. It's everyone. It's every culture. It's every race, it's every religion, all sharing a radical dream. Japanese, Chinese, Indian, whatever American is by definition is all of that.

But it's the immigrants, too. And by the way, what was Masayoshi Son? He studied in America Horizon at Harvard, and then he came back as a radical. Right. So the point, the point is we need to go overseas. We need to blend. I started a company in India, logistics, parks, railroad, IT company. The first thing I did was hire foreign Indian talent to reenter India with new ideas and thoughts.

Right? Not traditional in India but outside India. Come back in and help rebuild. So this is so important for Japan to bring some foreign talent in, integrate it with the best of Japanese innovation. And you're one of the best on the planet with robotics and health care and so many things. And shouldn't Japan be one of the first countries to redesign education? It's a huge opportunity, right. And health care. So so I think mobility is important, but you have to bring in some foreign talent, not just for construction, not just for hotel and hospitality, which we're happy to help with, by the way, but but also to be entrepreneurs with you.

And Japanese talent to go overseas. I know a Japanese young executive, and he went overseas to Singapore with a big investment bank. And and then he said, I want to go work for a foreign company in Singapore. Why? Because I have a path that's defined in the Japanese company. But if I join a Singapore or a foreign company in Singapore, I can jump, I can maneuver, I don't have to wait 10 or 15 years. And that's exactly what he did. So I think the strength of Japan is, please bring in some foreign talent and take your great talent and unlock it and reward it.

And yes, as a country, reward the risks, because that's the whole new economy, right? Right. And no one perfects things. We used to do ten year budgets in in my, my when I came to Asia with Yusen Mitsubishi shipping arm. But it's too safe right. So so I think there's a lot of talent. There's one of the best technology plays in the world is in Japan. And the last two Prime minister, well, starting with Abe San and forward have talked about we need to move faster. We need to innovate for national security reasons.

We have to and for economic security reasons, we have to agree. And I will add what was mentioned earlier. This is the most dangerous period in the last 70 years. It really is. So we have to be really careful how fast we move and take advantage of unlocking potential. Okay, thanks very much. It's about time to go into Q&A, but as we do that before we get going, sensei, may I ask you to comment on what Paul has just said about Japan's openness to foreign workers? This is sensei.

Oh, thank you very much. First of all, I think we have to open up the country, and then we would like to welcome anyone Japanese going abroad and also foreign talents coming in, especially talented people. And I think this is happening. And one one thing that I also would like to add is that it's a this is a very good chance for Japan because we are losing population. In other words, you have mentioned that a lot of jobs are being taken over by technology, but if we are losing population, that's good. I mean, no one's going to be unemployed. Yes, yes. Yeah. So mobility again is a very key thing that we would have to add on.

And again, we would I would like to welcome many people coming in and start companies in Japan and also Japanese ventures going abroad and do their business abroad. Okay. Speaking of beautiful opportunities, there's a huge global problem now with forest fires. And a guy came to me a few weeks ago and said, I've got this great idea.

We're going to have global satellites identify where the forest fires are. Those those services exist already. But what they do is they inform fire departments around the world where those fires are happening and say, gee, you've got a fire, but they don't actually go and put out the fire. The problem is that the fire departments aren't close enough to actually get there and extinguish the fire. So what this guy wants to do is connect this global sort of fire identification system with an air force of drones that can pinpoint where the fires are, and go zap them before they get any bigger. The problem he's run into is his

company loves the idea, and they'll give him 20% of his time to work on this. Huh? No, you can't move like that. If you're going to do this, you got to do it aggressively and full time in double time. Triple time. And I don't see the senior guys having that sort of mentality about saying, okay, you've got a really great idea. We're going to fund this, get together with some of our friends and get it going.

So there's a sort of a mindset at the top that I think also needs to be a little more, call it entrepreneurial in this sort of thing. So let me now open things up to Q and A, it's time to get going. Good gosh, we got a lot of people. Let's start on this side and go to that side. Take three questions. One, two. Was there another one over there. Three okay. 1123. Please. Thank you.

I think people's, uh, optimism is important for social innovation or talent mobility. But unicorns and economic growth is a kind of American style, American dream style of optimism. So do you have any ideas on how to bring optimism to Japan or Japanese style of optimism? Maybe for Johnson or anyone. Hi, I'm Hiroshi Saito from Microsoft. I would like you for members to

get an opinion on this. Our CEO Satya says that with the implementation of this, general AI brings the world GDP up by 8 to 10%. How do you sense this number? 8 to 10%. Is it too big? Is it too small or just about right? Give me some. Thank you. My name is Yumi Sato and I organize a very aging economy forum. It's a.

We are trying to solve many problems of super aging country Japan and we organize Aztec art. It's many. There are many startups in Japan who trying to make good Aztec. And I like to introduce East Asia. Our good ethic and I like to make collaboration with Asia about the startup. You know, I know it's a startup. So how to get good Japanese technology to Asia? That's the question. Yeah. Very good. Thank you. Okay, so we have three very good questions. Maybe let's start with the third one. TJ,

can you tell us how to get Japanese good aging technology to Asia. So how do you I mean if you have a great product it's a global issue. And in China it is already very serious issue.

So if you have a good sales force, I personally feel that it's not that much difficult to sell things outside of Japan. And and sometimes, yes, it's as I said, if the the company is all Japanese, comprising of the all Japanese speaking people, it's very difficult to find a good English speaker or a good local language speaker. That could be one challenge, but once you crack this, I don't think there will be a big issue. That's what I see. Okay, so it sounds sounds like it's partly a language issue, I think. Paul, do you have an observation on this great Japanese startup? But it's kind of like domestic.

How do you get it into Asia? Marketing. Marketing? Because the skill that builds the technology isn't the same skill microphone than the skill that builds. Technology isn't the same skill that builds the market opportunity. Right?

So you have great technology now you have to have great strategy and people to market and build the relationship. Right. And then then the door immediately opens up. So I think you can take great technology and bring it overseas. But it's not the technology person selling. It's the marketing person. Right. It's the so so how how to Japan is,

you know, has some great companies for marketing, but it also has some that aren't very great. And you need to focus more on that marketing power to unlock Japan's potential globally. And a quick second comment is to Microsoft. You know, when you look at the speed of this, you know, quantum computing as you know better than I do, one complex computer program today on the best computers in America or China can take 500 years. Quantum computer can do the same formula in one day.

Now imagine I matched with quantum computing. We can cure cancer. We can deal with global warming. We can have hydrogen energy. So many beautiful things to improve the world. Or we have the singularity where that AI takes control of all of us around 20, 35 or sooner, which is what many predict.

We think maybe earlier than that. So. So again, it's as humans, what is the GDP potential? Is it 8 or 10? Sure, even more or less. But it's how we humans use that technology for good or bad, to unlock that potential. Of course, you know, that answer doesn't say on the GDP and the impact of this new AI on GDP. Do you have an opinion? Well. Two things, two things. One is that the elderly care the. In Japan, probably the most

needed innovation is an application of in elderly care. Because elderly care has been handled by the government. It's it's very inefficient. And in recent study in Kitakyushu, from the viewpoint of applying, they found that a significant amount of caregivers time was spent on administrative tasks, such as creating records and the containing the and contacting the next caregivers. Almost 50% of the time was spent

on this, and this is room for for the application of. And if we are successful in in developing this technology, I think the room for export of this service Japanese experience is enormous. And at your conference, when you introduced the what's happening in the Kyoto hospitals, I think it was the Kyoto Kyodai hospital on the floor of what's happening. It's just stunning what they're doing. And so if we can convert that into

a product, that would be great. On optimism. Takako. How do we become more optimistic as a country? I thought that question was so interesting because I have this slogan, like a magnet on my door that says, life begins at the end of your comfort zone. And I get that. But my students ask me, why does life begin at the end of your comfort zone? So what does Japan like? I don't know if it's Japanese style, but do. Maybe there's a tendency that you have to have a certain level of stability to be optimistic, and that you have to have a mindset that we've been talking about changes and diversity and job mobility.

It has to be somewhat considered to be a fun thing, not by necessity, because we have less people in Japan, and I'm not too sure what exactly the answer is to that. But I do think that one thing that I'm trying to do, and coming back to your comparison of universities, one thing that I thought about is that Columbia University especially, was a place where we experienced diversity and experienced how diversity is fun. Reaching out to new things is fun, so it's like a comfortable place to challenge new things, to be optimistic. So I hope that I can do something like that at where I am right now. That will be a chance for students to experience something diverse and different to being a certain comfort zone. But the challenge new things when they can. So I don't have an answer to the

optimism, but maybe there there has to be something about the level of stability. 10s be sure. I don't think optimism is so important for entrepreneurship, rather, I think passion is much, much more important. I'm very pessimistic person always. So yeah, but very passionate. Yes. Oh yeah. Okay. Very good. Actually, one of my young friends who just started at the Sloan School at MIT came back and talked a little bit about her experience and she said, this is so amazing. I know people from 61 different countries. What a wonderful thing for

somebody who grew up in Japan. Can we are there any questions from the web? None. Okay. Not at the moment. Let's move to this side. Okay. One. Two. Three. Okay, one. Thank you for these very inspiring talks. I'm Daniel Moreira.

I'm a professor at the National University in Japan in electronics, by the way, and I'm very touched by what professor and Professor Kakutani said about the lifetime employment and the lack of mobility. So I took an MBA here at Globis, and it was a wonderful experience. I got out of my comfort zone. And my question for you is, how can we encourage the other members of the academic life, academic environment in universities in Japan to get out of their comfort zone and go for reskilling and challenge new new approaches and new visions? Let's say, okay, very good. Over here. I think I had someone who we are in white. Yeah, here we are. Hi. My name is. Oh, sorry. Hi, I'm Sheryl,

I'm from LinkedIn, Japan. Thank you so much for your talk. So I'm really passionate to help people, to be empowered to basically chase their dreams and having their mission. And I think, as you've mentioned, lifetime employment in Japan, it's very top down approach and not allowing that. And Takako sensei, you mentioned empowerment is not a thing in education in Japan. So I kind of like wanted.

My question to you is what does the private sector and the government could do to change that, to really focus on empowerment and also humanity? Thank you. Okay. And back here. Hi, I'm Kayo, I work in risk management and I used to live in Singapore. And my question is to tell you and and Paul and it it is about what risks and opportunities do you see the weak Japanese yen having on the way you conduct your business or look to grow your business, whether for taejoon it is from Japan towards South East Asia, India and the rest of the world.

And for Paul, looking from Singapore, coming into Japan. Thank you. Okay. Very good. Let's let's see how do I allocate this. First on the getting academics out of their comfort zone. Should we abolish tenure for example. Any ideas on this? What do you think? Takako doesn't say. Well, all I can say that American universities.

The tenure system is lifelong. And in Japan, it's around 65. So it's not like either or question and that. So I think it's more of a question of mobility how much you can move to different universities. But I do think it's changing that

among younger academics there tends to be more job mobility. But um, but I to say, well, in the US, the pay at the accounting professor, pay of accounting professors and pay of English department professors hugely different and also at say, well, if a person becomes a professor he must have done something. But after that, if he stops producing, his salary is not reduced, but it's not increased, while all others pay keep increasing. And I think that type of interaction, of that type of flexibility in the Japanese pay system is a minimum thing we need to do. Okay on empowerment. Does anyone want? Anyone want to volunteer to talk about how government and business can improve empowerment of workers? T.J.. Yeah, to have more women in

government positions. Yeah. Um, because, you know, the. Oh, that's a problem. Japanese startups. Most startups are started by men, and then there are too many blind spots. So, um, die related startups. I think the very good topic, because that's there is much less competition.

Yeah, actually, it was interesting because when Prime Minister Kishida said he wanted to see 30% or more women in management positions, my response was, oh, are you going to have 30% or more LDP diet members who are women? That would be very interesting if he made that his proposal. Okay. Yen dollar. What to do? Well, 150 is a lot different than 112. Right it temporary. But remember, there's about $9 trillion of quantitative easing between the US, China, Japan and Europe that has to be rolled back.

So it's very hard for us to figure out what's happening in the global economy. You have a better idea? You have a better idea than I do. But what is that quantitative easing rollback do because that had never been done in history. So how long will this yen imbalance stay? We don't know a year or two years what. But this is an opportunity right?

If I, if I want to enter Japan, this is the way to enter Japan with the weaker yen and to arbitrage labor costs and and fixed and virtual assets. Right. So there's a window of opportunity for 1 or 2 years to really leverage a way to play this yen before it hits a new equilibrium. Again, back to where it was eventually. So I think that has to be part of the strategy and the opportunity. And remember, the Shogun period

was 400 years of stability, and Tokugawa San was one of my sponsors who brought me to Asia. Interesting story. But then the Meiji Restoration was risk. It was Western influence, but it was unleashing a different Japan. Right. So this is a new era for Japan to unleash itself on its terms in the new economy. Thank you very much. We've ended on an optimistic note. So that's that's great to hear. So thank you very much. All of our panelists. Please join me in thanking them and

we'll move on to the next session. Thank you so much.

2023-12-11 11:11

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