Japan’s low growth predicament – and what can be done about it

The inaugural WORKTECH Tokyo conference set out the challenges facing the Japanese workplace – and potential solutions from elsewhere to raise productivity. But could the seeds of Japan’s revival be found in its own past management successes?

WORKTECH’s first Tokyo conference took place on 5 April 2018 with the cherry blossom season in full bloom. It was picture-postcard perfect, but nobody present was fooled by the stylish façade given the scale of the challenges that the Japanese workplace now faces.

After its stunning industrial successes in the 1970s and 1980s, Japan has been struggling with a combination of low productivity, a shrinking labour force and a lack of creative confidence in recent years – and the search is now on to find new solutions to make the famously stiff, hierarchical and male-dominated Japanese workplace more flexible, adaptive and diverse.

Diminishing innovation

According to Shotaro Yamashita of furniture company Kokuyo, which hosted the conference at its Tokyo HQ, Japan’s current predicament is the result of the twin effects of diminishing innovation leading to low growth and changing demographics – the Japanese working population is shrinking without any plan to receive immigrants to alleviate the crisis.

Yamashita, who is editor-in-chief of Kokuyo’s WorkSight magazine, presented a sobering analysis to back up his call for the introduction of a more flexible work style and greater plurality to harness ecosystems of innovation.

If Japan is to change, he explained, it must adapt its ingrained ‘high-context culture’ that makes its workplace ill suited to agile working. High-context cultures are based around what you really feel about a situation and what is unspoken. So when your boss says you can work from home, in Japan you may not feel you can act on it.

An employee-friendly workplace?

There is some good news on the horizon. Yoshio Nakayama of the Xymax Real Estate Institute presented research into work style reform in Japan, which showed that 40 per cent of Japanese companies are now engaging with change – most typically in the direction of teleworking. The larger the corporation, the more active they are in teleworking. These firms cite enhancing productivity as the top reason to reform.

But Nakayama’s warning to WORKTECH Tokyo was that ICT-driven reforms only take you so far in addressing Japan’s low productivity. What is needed, he argued, is a more employee-friendly environment based on knowledge, health and comfort in which high-value intellectual work can flourish.

The trouble is that Tokyo, an office market that is twice the size of that of New York, has a large concentration of office stock that is now 30 years old and badly in need of adaption.

Global stock of new ideas

International speakers of the conference were given the role of introducing global perspectives to help the Japan workplace move forward – and there was no shortage of potential solutions on offer.

Primo Orpilla of Studio O+A, one of Silicon Valley’s most prolific designers, opened proceedings with a discussion of workplace typologies. Iolanda Meehan and Gijs Nooteboom of Veldhoen explained the merits of Activity Based Working. Swiss entrepreneur and educator Andreas Erbe, who is on the faculty of IE University in Madrid, introduced the discipline of design thinking. And WORKTECH Academy director Jeremy Myerson presented evidence from environmental psychology to show how knowledge worker performance around the world could be improved.

American experts Ben Waber of Humanyze and Ryan Fuller of Microsoft, each in their different ways, addressed the theme of data analytics. Waber’s message, in fluent Japanese, was that companies waste huge amounts of money trying to manage organisational change without collecting and visualising the right information. Fuller’s message to Japanese corporate leaders was equally blunt: do you know how your organisation actually works? ‘Typically the org chart shows you how the company is wired – it doesn’t tell you how the work gets done,’ he told the conference.

Bringing it all back home

Australian consultant James Calder bucked the trend in bringing ideas in from outside. He told his Tokyo audience that the Japanese workplace didn’t have to look far to find solutions to raise its game – important concepts were present within the country’s own back catalogue. Three of the great management innovations of recent times – the famous Toyota production system, the Kaizen concept of continuous improvement and the speed and flexibility of agile scrums – all originated in Japan. The task ahead, Calder explained, is to transpose these ideas from manufacturing to knowledge work.

Will the Japanese workplace make this leap of faith? Don’t bet against it.  A combination of demographic demands and determination to innovate successfully again is already spurring Japanese companies on to try new things.

A panel curated by Mayumi Ishizaki of Xymax revealed that the potential for transport gridlock during the 2020 Tokyo Olympics is concentrating minds on a more widespread introduction of flexible working, just as it did for London in the run-up to the 2012 London Olympics.

Takafumi Ohkawa of Mitsui Designtec Co described the results of a study of 3,000 workers in central Tokyo in partnership with the University of Tokyo. This indicated that there will be a rise in tech specialists offering deep knowledge within companies, more flexible networks will emerge as speed to market increases, and workers will require more meaning and social value from work – not simply a job.

‘A far cry from the rigid conformity of Japan’s workplace with its stress and burnout’

This is all a far cry from the rigid conformity of the Japanese workplace of the recent past, with its long hours, longer commutes and presenteeism, leading to anxiety, stress and burnout.

Japan now has no choice but to embrace a more flexible and diverse future, with more women and older people in the workforce.  But it must change in a way that is true to its culture and traditions. The intriguing part of the story is that the seeds for its own revival might well be found in adapting the industrial management theories of its past.

Read the WORKTECH Tokyo report in Japanese here.

See the WORKTECH Tokyo review site here.
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