Vol.3 Do tough times bring opportunity?

August 25th, 2022 [No. 101 – 2022]

Maita Tatsunobu,
CEO of HR Business Partner Inc.,
Professor of Globis Graduate School of Management

Vol. 3. Do tough times bring opportunity?

1.    Japan’s digital transformation (DX)

2.    Finally, how much has Japan changed?

They say that tough times bring opportunity. It was surely the case in Japan’s history. After World War Ⅱ, Japan lost everything and was in ruins. But that enabled the Japanese people to build everything all brand-new, which became the secret of the success of Japan’s remarkable economic growth. Now that we are going through such a tough time due to the pandemic, will it bring us another opportunity?

1.    Japan’s digital transformation (DX)
In Japan, where a so-called “high-context culture”exists, people have been traditionally expected to work physically close to each other at one workplace. But the pandemic made this impossible, and tele-working suddenly became common.  It might have been deemed an opportunity for a drastic digital transformation. Such dramatic change might have happened if Japan were not as developed as it is.  Japan had already made a huge amount of investment in social infrastructure like the telecommunication system, which ironically made it hard to totally update and change that hard legacy.

Traditionally Japanese people appreciate the sense of value of “mottai-nai”. “Mottai-nai” means it is not good manners to dispose of anything as long as it works.In the recent past, this “Mottai-nai”concept was respected by the world from an ecological point of view.

From the DX standpoint, however, this traditional sense of value became an obstacle.In the early days of the pandemic, many companies suffered from too narrow Internet bandwidth (too little data transfer capacity) and had difficulty in holding video conferences for instance. Indeed it should have been a great opportunity for them to replace those old networks with brand new ones, but most of them thought such investment was “mottai-nai”.

The gloomy economic perspective of the time might have strengthened such thoughts. So they decided to be “patient”. Instead of investing in a brand new technical environment, people just decided to be patient with the old environment, believing such tough times would end sooner or later.

Nevertheless, business organizations have tried to transform their technical environment. However, public organizations and offices have been in a regrettable position. For example, public health centers, which have been acting as a hub of regional medical and healthcare services, had to use FAXES to share information of the pandemic with each hospital and clinic in the region.  The information included the number of the infected. Today, when we have nearly 200,000 people newly infected each day (as of July 23rd.), public health centers are working so hard to collect the information through… FAXES.

2.    Finally, how much has Japan changed?
After more than 2 years of the pandemic, how much has the workplace in Japan changed? As we have seen in this series, I regrettably have to say that Japan missed an opportunity.  A great opportunity. We have so much of a hard legacy that keep us from updating and changing; also we have such a complex culture that is not built for a new workstyle.

Now we are having the 7th wave.  It is caused by Omicron Variant B.A.5, which is so far more infectious than any other variant. But still so many people are commuting in crowded trains, and tele-working has been set aside to a certain extent. In every part of the world, people may tend to temporarily endure hard times and inconvenience during disasters, then once the cause is gone people like to get everything back to the status just as it was.

That is understandable, if people are satisfied enough with the previous precious status.  The tendency might be all right if it were the United States or other Asian countries where economies were growing. But Japan has been economically stagnating since the 1990s. It is famously called “our lost 30 years”.  For example, working people’s average salary has stayed the same for the last 30 years, while it has increased by double digits in most of the industrialized countries.

Various issues - social, political, economic, cultural and technological ones – are complicatedly connected to cause the status to remain the same, and no one seemed to have a clear solution.COVID-19, however, could have been used as a wild-card for Japanese politicians and business leaders to make drastic changes and renewal happen, which could have brought Japan back to growth again.

After more than 2 years of the pandemic, Japan seems proving that it is going to stay “the same” in the long run, while in other countries people are going forward or upward.