Tadashi Yanai is the guy behind Uniqlo, the low-key fashion phenomenon that is sweeping the world. He recently gave an interview to Keiko Katayama and Shota Shiroma of Japan Television Network (JTN). In the interview he spoke of his sense of crisis about Japan. This is a "rough" translation of the conversation.
Katayama asked him first about his charity project, the Fast Retailing Foundation, of which he is the president.
Yanai: "One of the activities of the Foundation is to support Asian University for Women in Bangladesh, which was established in 2008 to provide higher education to poor and refugee women, and many of its graduates go on to study at Oxford University, Columbia University, Sciences Po, etc., and are active in government organizations, like the World Bank, the World WHO, and global companies. Unfortunately, there is not a single graduate currently working in Japan."
Shiroma: I don't think they think of Japan as an attractive place to work.
Yanai: In the case of Japan, unfortunately, it has not grown in the last 30 years, and there is a strong sense that 'Japan is fine with the unilateralism of Japan,' but we have to become 'Japan in the world.' Japan will not be able to do it with only Japanese people from now on. How can a small number of young people take care of the majority of old people?
Shiroma: Labor shortages will also lead to the decline of national power, won't they?
Yanai: Not only the labour force, but also the intellectual capacity will decline. We need to bring in more intellectual workers and study together to increase the productivity of intellectual labour, both in Japan and overseas. I think we need to increase the number of immigrants in the middle and senior management population, or people who are doing research and development. I think the biggest problem is that there are not many of them.
Shiroma: I think that the Japan economy is now at its biggest peak in terms of whether moderate increases in wages and prices will take hold after emerging from deflation, but there are also places where wages are rising because there is a labor shortage due to the declining population, and people will not come to us unless they do so I think it's a problem that you can't fight in the first place.
Katayama: According to the National Tax Agency, the average salary of Japan employees in 2022 is about 4.58 million yen per year Japan. But actually, due to the devaluation of the yen from the era of 180 yen to the dollar a decade ago, we can say it has been effectively halved and is more like from 2-2.5 million yen. In other words, 'Japan is a country with an annual income of 2 million yen by global standards.' Last month, former finance minister Masato Kanda made the same point in an exclusive interview with Japan Television, and if you look at the long-term trend of the real effective exchange rate, which is said to be the strength of the yen, the value of the yen has decreased by 65% since it reached its highest point in 1995, and the value of the yen has fallen by one third. How should Japan respond to this situation?
Yanai: I think we need to be more aware of the fact that we have gone from a middle-class country to a country that is not a middle-class country, so we need to increase the number of people who like Japanese culture and want to work with Japanese people. I think we need to keep asking those people, 'Would you like to come to Japan and work with us?' I think we need to create a Japan society where when foreigners come to Japan, they can think, 'This is good,' or 'I want to live in a place like this.' So why don't you think of a way to make the transition from a long-term stay to a place where you can start working more smoothly? You have to come here for work rather than travel, or if you move to Japan with your family, it's clean, safe, everyone is kind, they greet you, and they accept you as a member. I think individuals and companies should start doing that. That's how it works.
Katayama: Japan is an island country, and there are places where only Japanese people have lived with a sense of internal calm. Unfortunately, the basis for accepting differences is a little low in Japan.
Yanai: If we don't learn to work with a small number of elite people, the people of Japan will perish. The population is decreasing, and the current labour productivity is low, even though everyone is working hard in Japan. If the population continues to decline, there is a possibility that people will not be able to receive services that are available in the public sector or services that are available in the private sector.
Shiroma: According to an international comparison of labour productivity published by the Japan Productivity Center, Japan's per capita labour productivity is $85,329 in 2022, ranking 31st out of 38 OECD member countries.
Katayama: So, Japan uses too many people in its "human wave" tactics. That's why there is no country with better service than Japan. Moreover, I think the service is free. However, the truth is that service is expensive, so as a company management, it must be done by a small elite group of people who have genuine hospitality. In other words, instead of relaxing with a large number of people at low wages, I think it is a matter of doing work with a small number of people at high wages."
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