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.