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Japan’s New Year’s resolutions are bound to fail

In the first business week of the new year, Asahi Breweries fizzed that it was changing the recipe of the country’s top-selling beer for the first time in almost four decades. The new Super Dry cans even include a sciency graph helping boozers to visualise the epochal taste shift.

But Asahi’s was just one of many January declarations of Big Change in Japan. The run into the new year has already triggered a mighty spasm of resolution-making and grandiose commitments to self-improvement. The world’s third-biggest economy looks very much like someone who has recently joined a gym.

It is worth considering the trail of binge, inactivity, regret and panic that has driven Japan to the membership desk. One immediate trigger is the country finally moving beyond its (delayed) Olympic year and, like a post-Christmas bloatee drawn into a family row, pondering whether the promised bonhomie was worth the tinsel, hassle and wince-inducing credit card bills. Post-Olympics Japan knows how strenuously it had been smiling and sucking in its tummy to project the best profile while the world was watching: now that it can finally exhale, the frown (for example, closing its doors to foreign students and researchers) and flab (represented by a listless economy) are unmissable.

But the times have induced a much deeper feeling of crisis: not so much that mistakes have been made or that dysfunction abounds, but that enormous resources and achievable opportunities for self-improvement have been squandered over many years by both public and private sectors. From the failure to digitise and globalise sooner to the reluctant transformation of workplaces, education, hierarchies and governance: the pain of getting in shape now is predictably greater for its postponement. The sound of Japan sizing-up the dumbbells, setting itself targets and promising Big Change is loud, but not quite loud enough to drown out the fretting that it has left things far too late.

Of the numerous exercises that Japan has set itself this year, four stand out. The first is Prime Minister Fumio Kishida’s so-called “Vision for a Digital Garden City Nation” — a wide policy dragnet focused on long overdue efforts to digitise the education and medical systems, and haul other key bits of bureaucratic infrastructure into the digital age. The most ambitious target within this is the plan to recruit, either from its own shrinking and ageing population or from a pool of foreign talent currently unable to enter the country, 2.3m digital experts over the next five years and offer them the dream job of expanding digitisation to the emptying reaches of rural Japan.

A second resolution is to push even harder to establish Tokyo as a talent-magnetising, fund-enticing and regionally dominant global financial centre. This must happen despite the dwindling weighting of Japanese stocks in global benchmarks, a justice system many foreigners now define by the treatment of former Nissan boss Carlos Ghosn and a continuing absence of evidence that anyone outside the Tokyo Metropolitan Government really wants to be a global financial centre.

The third, which has been in the works for a while, is the great reorganisation of the Tokyo Stock Exchange in April — an exercise intended to whip (via new standards) a sprawling paunch of 2,185 names currently listed in the First Section into a more investable, higher-quality six-pack of “prime” stocks. Landmark, line-drawing stuff in theory, but qualification for “prime” has been diluted since its conception. Companies that do not meet governance, free-float and other criteria now will be able to join anyway as long as they promise to meet them at some deadline-free point in the future. The Nikkei recently reported that some 90 per cent of current First Section companies will make it into the leaner, meaner prime market.

A fourth pledge of national self-improvement is to establish what is tentatively being called the International University of Excellence and is a project aimed at putting Japan’s research universities on a par with global peers. The funding will partly come from the newly-created ¥10tn university fund which is scheduled to begin investing in the coming months.

In common with anyone’s January gym-joining, the stated ambition and early enthusiasm is laudable. The question, as ever, is how long all that is sustained beyond the first pulled muscle and as excuses for postponement become more attractive. But of greater concern for Japan is that, even if sustained, the incremental good these projects will do is now in long-term decline. Asahi is changing its recipe in desperation because beer consumption has been falling in Japan for nearly two decades — a slump that matches the relentless decline of the younger population. Fitness may be possible; ageing is unstoppable.


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