- Working Style Reform/New Working System for Advanced Professionals
- Corporate Governance
- Integrated Resorts
- Decommissioning of the Fukushima Daini Nuclear Power Plant
- Japan-US Relations
- Regional Comprehensive Economic Partnership (RCEP)
- Northern Osaka Earthquake
Working Style Reform/New Working System for Advanced Professionals
Amid calls for new ways of working that value performance instead of hours worked, a new system is required for advanced professionals. Rather than encouraging long working hours, the system mooted for advanced professionals provides a mechanism for valuing work styles that produce results, regardless of hours worked. The legislation currently under deliberation will determine a broad framework for the system, and enterprises will examine how best to operate within that framework. Some media reports have suggested that companies are wary of adopting the system, but the need for it is clear. Since the general framework of the system has not yet been determined, directors responsible for HR are likely to be taking a cautious approach, but business executives do not share this wariness.
Application of rules for upper limits on overtime will be delayed for SMEs. Some SMEs are having to turn down orders due to severe labor shortages, and managers would face considerable difficulties if employees could not work overtime in such circumstances. At the same time, they are struggling to recruit personnel, and the current SME management environment is quite challenging. A certain degree of consideration needs to be given to SMEs.
Debate over working style reform tends to focus solely on the working system for advanced professionals and rules for upper limits on overtime, but such reform poses the question of whether Japan can continue to maintain current styles of work. In other words, the starting point for discussion is stagnating levels of productivity over the past 20-plus years. Working style reform must proceed in parallel with legislative reform, including revision of ways of working and company mechanisms. Various issues have been noted in connection with the productivity of Japanese enterprises. In the midst of a rapid shift from manufacturing to services, service industry productivity cannot remain at current levels. Working style reform addresses the challenge of improving the productivity of Japanese enterprises.
Corporate Governance
Over the past few years there has been a complete change of atmosphere in the business community regarding corporate governance. The reasons for this include stronger calls for governance from investors and cases of governance problems undermining the very foundations of management. Within Keidanren, an overwhelming number of corporate executives take a positive view of the Corporate Governance Code and other corporate governance policies. General meetings of shareholders continue to reflect such trends and are taking a more constructive approach to direct dialogue with shareholders.
Integrated Resorts
Welcoming more foreign visitors to Japan is important not only from an economic perspective, but also in the sense of promoting wider appreciation of Japanese culture. Meetings, incentive travel, conventions, and exhibitions/events (MICE) and integrated resorts help to boost visitor numbers. Showcasing entertainment and other attractions is an effective way of promoting integrated resorts. However, I am also aware of the need to consider the social issue of gambling addiction in discussing introduction of casinos.
Decommissioning of the Fukushima Daini Nuclear Power Plant
Although it must have been a hard management decision for Tokyo Electric Power Company (TEPCO), I understand that the decommissioning of the Fukushima Daini Nuclear Power Plant is inevitable. Despite the machinery and equipment at the plant being sound and working properly, re-starting it would be difficult while TEPCO faces the problem of the Fukushima Daiichi plant, and this probably prompted the decision to decommission. Fukushima Daini is under normal management and will be decommissioned according to the usual processes. This decision has no direct impact on the question of restarting operations at other nuclear power plants.
Japan-US Relations
Retaliatory trade measures stemming from tariffs imposed by the US will not have any major immediate impact on the economy. However, subjecting Japan to import restrictions runs counter to the spirit of Section 232 of the US Trade Expansion Act, which deals with national security. The Japanese business community will formulate its response in close collaboration with the government.
President Trump runs his administration by unconventional methods. The people we speak with in the US on a day-to-day basis, on the other hand, share the views held by those of us in the business community. Rather than interacting solely with Washington, D.C., it is important to speak with governors and other state government representatives about rules and taxation. For this reason, Keidanren business missions to the US venture beyond the capital to visit many states for wide-ranging dialogue, and we will continue to reinforce these activities. Japan-US economic relations are deepening. They encompass factors such as job creation and development of extensive supply chains, and cannot be discussed solely in terms of trade. Moreover, it is importers who request exceptions to import restrictions, and companies need to engage in dialogue and cooperation in the course of their everyday business.
Regional Comprehensive Economic Partnership (RCEP)
RCEP encompasses a vast area including China and India. Although this creates challenges in negotiations, RCEP is a highly significant agreement that will also bring extensive rewards. Japan must make every effort to conclude an RCEP agreement approaching the level achieved for TPP11. Further progress on TPP11 is also likely, as Thailand and other countries show interest in joining, and it is important to integrate such developments into efforts to maintain and strengthen free trade systems.
Northern Osaka Earthquake
Although I am profoundly saddened by the loss of life and damage suffered, casualties and building collapses were limited in the context of a quake measuring lower 6 on the Japanese seismic intensity scale of 0-7. I believe this is evidence of steady advances in earthquake-proofing. Economic harm, including supply chain disruption, was less than in past large earthquakes, indicating the effectiveness of advance preparation and disaster-readiness. However, there is an urgent need for detailed analysis, including verification of the fault that caused the earthquake.