The Nation of Long-Lived Companies, Japan

■ The Nation of Long-Lived Companies, Japan

Japan Post established in 1871, MIT in 1861, Stanford in 1891, and Keio in 1868.

I have been associated with institutions boasting over 150 years of history, entirely by coincidence.

Now, with the startup iU, I'm implementing with a vision aiming for the next 150 years. It's inevitable.

Spending more time in my hometown Kyoto, I explore shops that have been around for centuries: a 200-year-old pickle shop, a 300-year-old fan shop, a 400-year-old hand towel shop, a 500-year-old soba noodle restaurant, and a 1000-year-old tea shop.

150 years is considered young here, and 100 years merely childlike. I am fascinated by the management of these long-standing businesses.

In Japan, companies that have lasted over 100 years are referred to as "long-established," numbering between 30,000 to 50,000. This is unrivaled globally. There are 532 of these companies listed on the stock exchange.

More than 3000 companies have existed for over 200 years, comprising 56% of such enterprises worldwide. Germany follows with 800, and the Netherlands with 200.

There are 16 companies that have been around for over 1000 years. Germany has seven, the UK four, Italy two, and France one. Longevity is a hallmark of Japan.

Among these venerable enterprises:

41.5% are small and medium-sized businesses with annual sales under 100 million yen, the largest percentage but with the lowest rate of emergence at 1.69%.

Large corporations with sales over 50 billion yen represent the smallest group at 1.7%, yet they have the highest rate of emergence at 15.1%.

The sectors of retail, wholesale, and manufacturing constitute 45.5% and 25.1%, respectively.

There are numerous sake breweries and inns, and many have shifted to real estate.

Kyoto Prefecture has the highest rate of emergence at 4.73%.

A standout characteristic is their status as family businesses.

In Japan, 99% of business establishments and 86% of the workforce are employed in family businesses, and 53% of listed companies are family-run.

Most long-established companies are also family-operated.

While business studies often push for the separation of ownership and management for efficient governance, Japan embraces a different path.

Conversely, family businesses offer advantages such as efficient internal management, swift decision-making, and a focus on long-term gains.

The importance of low-cost funding from acquaintances and high corporate motivation are also increasingly recognized.

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Impressive Innovations at Sanjo City University

■ Impressive Innovations at Sanjo City University

I visited Sanjo City University in Sanjo City, Niigata Prefecture, and had the opportunity to discuss with President Ahmad Shahriar. This powerful new public university is fostering talent through industry-academia collaboration in a town known for manufacturing. It's commendable that such an institution has been established.

The university collaborates with over 100 local companies, providing all students with internship opportunities. They refine their skills by extensively using advanced equipment for grinding, welding, non-destructive testing, and 3D printing. The university also undertakes material development in physics and chemistry, thus supporting the R&D functions of the manufacturing town. Here, students grow through hands-on development and practice rather than traditional academic research, becoming valuable assets to local companies. The concept is clear and decidedly innovative.

Donations are increasing, and scholarships are being offered. The majority of students are male, while a neighboring nursing and medical school is predominantly female. The shared cafeteria fosters interaction. Despite being only in its second year, the university has already attracted the attention of Prime Minister Kishida, a testament to its well-executed design.

The greatest challenge faced during the university's inception was dealing with the Ministry of Education. Laughingly, it mirrors my experience with iU. When attempting to establish a school with a new concept, the lack of precedents poses significant hurdles. We have proposed to jointly create a groundbreaking graduate school that transcends Japan’s traditional educational frameworks—a daring and visionary project.

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Measures for Creators' Royalty!?

■ Measures for Creators' Royalty!?

The Copyright Subcommittee of the Cultural Council has begun its discussions this year.

The theme is "What are your thoughts on appropriate measures for returning royalties to creators?"

There are two main points:

1) The source of the royalties:

    Previously, the discussion focused on royalties from manufacturers to creators.

    That is no longer realistic.

    So, what possibilities are there?

    Internet businesses such as platforms

    Users of mobile devices and other telecommunications

    The general public, i.e., taxpayers

    The options vary depending on these stakeholders.

2) What is a reasonable amount of royalties?

If the reason is market failure, where the rightful compensation for content is lost, how much should it be quantitatively, and where is the lost profit flowing? The extent of the external economics/ripple effects of content should be demonstrated by data, and policies should be formulated accordingly.

Research and academic analysis are needed. This has not been done yet.

Additionally, "social understanding" is extremely important.

Once, the software and hardware, content, and device industries had a harmonious relationship.

Sony, Toshiba, Panasonic, and other hardware manufacturers used to own record and film production companies.

Eventually, they became adversaries, leading to today's situation dominated by American IT companies.

This issue is not only a matter of business strategy within the related industries but also pertains to national industrial policy beyond mere regulatory offices.

It also poses an educational question of how to treat the production and consumption of content as something valuable.　

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Finally, Moving from Internet Safety to Internet Creativity

■Finally, Moving from Internet Safety to Internet Creativity

The Ministry of Internal Affairs and Communications is shifting its ICT literacy policy from focusing primarily on safety measures like filtering to also encompass creativity and social interaction. They are currently preparing for a new conference. As the vice chairman of the Safe Internet Creation Promotion Council, I have also begun to partake in these discussions.

It has taken 13 years from the establishment of the Safe Net Council for the government's efforts to pivot from a negative to a positive approach. "At last," is the feeling I get. Back in 1995, at the Information G7 Summit in Belgium, a Japanese proposal dubbed "the digital age is for children" was adopted, which led to the first Jr Summit in Tokyo and the second at MIT. This was the catalyst for me to leave my government position and join MIT, pushing forward initiatives like one laptop per child.

Progress in Japan has been slow; in 2008, the Prime Minister at the time declared "mobile phones have nothing but disadvantages for children," which promoted a trend of distancing children from digital technology. Alarmed by this, I gathered like-minded individuals who believed in the overwhelmingly positive aspects of digital technology, and together we established the Safe Net Council.

The inaugural meeting included notables such as Masayoshi Son and CEOs of the three major telecom carriers, all key players in Japan's digital landscape. The common goal was not to distance children from technology but to find ways to responsibly integrate it into their lives. Yet, the movement did not initially go in this intended direction.

Two years later, I founded DiTT and launched a campaign promoting digital textbooks, networking schools, and one laptop per child as a positive movement. It was challenging; it took eight years for the legislation allowing digital textbooks to be passed and programming to become a mandatory part of the curriculum. The one laptop per child initiative was realized through the GIGA scheme. Without the pandemic, it might have taken another 25 years.

While I had hoped that the promotion of digital education and the Safe Net initiative would proceed hand-in-hand, I was unable to merge these efforts due to insufficient support. Now that every child has access to digital learning environments, the tide has finally turned, and it feels like we have reached a significant milestone. However, the challenges continue. The next big question is how to establish digital citizenship.

As digitization in schools advances, there will undoubtedly be disruptions and issues, but I trust in the capabilities of the sites and the students and wish to continue monitoring them. The focus of policy will shift towards the home, particularly addressing disparities. The challenge will move from being solely about education to encompassing communication issues—a shift from the Ministry of Education to the Ministry of Internal Affairs.

While safeguarding literacy regarding security and misinformation remains crucial, it is even more important to foster creativity and communication skills. Adults are not yet proficient; in some areas, children may surpass them. It's crucial that both children and adults use and learn from digital tools together. As technology evolves, so too must our approaches to education. There isn’t a one-size-fits-all method, especially as the platforms and tools continually change.

Ultimately, the aim of these policies should be to enhance the "user power" of the populace. Digital tools should be primarily useful, enjoyable, and safe—in that order. Up until now, there has been an excessive focus on safety, neglecting the importance of making digital experiences more beneficial and enjoyable. It's time to strengthen strategies that enhance creativity and empathy.

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