On April 16, the Hamilton Lugar School’s (HLS) 21st Century Japan Politics and Society Initiative (21JPSI)* hosted Prof. Ulrike Schaede for a public lecture entitled “Japan’s Caring Capitalism: Business Reinvention and the Economic Importance of Guardrails.” Prof. Schaede, an expert on Japanese business organization, strategy and management, is a professor of Japanese business at the UC San Diego’s School of Global Policy and Strategy (GPS).
In her remarks, Prof. Schaede argued that Japan’s economy is much stronger than most people think—especially when one looks at metrics other than GDP growth. She noted that in these times of fast-changing technologies and geopolitical transition, Japan’s system of slower, more balanced growth offers an attractive alternative to what she referred to as America’s “increasingly reckless” capitalism. Even so, since the collapse of the bubble, Japan has fallen into a cycle of negativity, fueled by benchmarking Japan against what America considers a “good” company or economy. This pessimism has legitimated the introduction of American business practices. The resulting financialization and short-termism are most visible in the rise of shareholder activism, an innovation system focused on startups and generating unicorns, and increased job mobility.
Prof. Schaede observed that American-style market discipline has helped Japan’s ongoing business reinvention and the shift from “Made in Japan” to “Japan Inside”, i.e., a strategic pivot into upstream materials and components to become the technology anchor of Northeast Asian supply chains. However, Japan can do better than a naïve adoption of American business practices. All told, Japan presents an alternative system of capitalism that has guardrails against uncertainties and is more caring of society. This system entails different trade-offs and cost-benefit calculations and is anchored on more balance. Prof. Schaede concluded that the result is a different type of “strong” economy in Japan.
The event ended with a lively Q&A session, where faculty and students raised questions about the impact of AI, what ideal “guardrails” would look like, the extent to which Japan’s approach and the U.S.’ approach are complementary or even mutually enabling, and a variety of other topics.
*The 21st Century Japan Politics and Society Initiative (21JPSI) was launched at Indiana University’s Hamilton Lugar School of Global and International Studies in 2018. Under the leadership of Founding Director and Hamilton Lugar School faculty member Adam Liff, from its base in the Midwest 21JPSI aims to invigorate and expand research, teaching, and programming on contemporary Japanese politics, society, and international (esp. U.S.-Japan) relations, and to educate, raise awareness, and debate policy responses to the various political, social, and foreign policy challenges that Japan faces today. For more information about 21JPSI and its upcoming events, please visit https://jpsi.indiana.edu/ and sign up for our event announcement mailing list.
Activities and opportunities for students like the event described would not be possible without external financial support. If you would like to support 21JPSI’s mission through a tax-deductible gift to the IU Foundation, please click here . (For the IU Foundation’s full disclosure statement, see go.iu.edu/89n.)