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Why Japan's 'lost decade' wasn't lost

Monday, April 18, 2005 Posted: 11:50 AM JST

The past ten years in Japan are generally considered to be a "lost decade". Veteran Japan analyst James Abegglen, who coined "Japan Inc." and "lifetime employment", begs to differ in an interview with Anthony Fensom of the Daily Yomiuri. According to Abegglen it was a decade in which Japanese business was busier than ever.

"It was a vital decade and it certainly wasn't a fun decade, but to describe it as lost is simple nonsense. We were making a transition from extraordinarily high growth to maturity--demographic and industrial," he said. "We had to restructure industries--companies had overdiversified to a grotesque degree, losing market share and focus."

In the West restructuring involved high-profile mergers and acquisitions which produced mass layoffs and factory closures. Japanese firms, says Abegglen, achieved the restructuring "without blood on the walls" by shedding jobs through attrition instead of redundancies. This takes more time, but is a lot easier on the employees.

Writes Fensom: "But with Japanese manufacturers now having cleaned up their balance sheets, with debt levels half their U.S. rivals, the nation's firms are now steadily gaining in profitability.

According to Abegglen's consultancy, Asia Advisory Service K.K., firms listed on the First Section of the Tokyo Stock Exchange have clocked up double-digit growth in operating profit over the past three consecutive fiscal years, including an impressive 28 percent jump in net profit in fiscal 2004."

2001 interview with James Abegglen in Japan.inc

Asia Advisory Service K.K.
Kasumigaseki Bldg.
3-2-5 Kasumigaseki, Chiyoda-ku
Tokyo, Japan
Phone: (03) 5512-7847
Fax: (03) 5512-7848

Keywords: national_news

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1 comments so far post your own

1 | At 10:44am on Nov 21 2005, Akio Aoki  ( 青木 昭男 ) wrote:
Dear Abegglen san:

Excuse me for calling you up all of a sudden, but it was very nice to talk with you.
This morning I found your remarks on The Asahi Shimbun ( International Herald Tribune), which is very,very impressive to me.
It would be a great pleasure if you could spare time for me to discuss further.

Now I would like to introduce myself briefly;
In 1969 I graduated from Hitotsubashi University and joined Bank of Tokyo, and after 17 yrs work there, I joined Lehman Bros. in early 1986, and became independent in late 1992. Now I'm doing a boutique-style investment bank ( advisory service ) in Tokyo and Seoul.
Looking forward to seeing you soon.

Best regards,

A&I Strategic Advisory Service,Inc.
104-0033 中央区新川2-27-4-1701
携帯電話: 090-4378-3621
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The now legendary Sir Ernest Mason Satow (1843-1929) was a member of the British legation in Tokyo for twenty-one years. This classic book is based on the author's detailed diary, personal encounters, and keen memory. In it, Satow records the history of the critical years of social and political upheaval that accompanied Japan's first encounters with the West around the time of the Meiji Restoration. Fascinating.
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