revitalising corporate japan - pwc€¦ · the board director training institute of japan l. w. k....
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Revitalising corporate Japan- A prescription for growth -
PwC
PwC Advisory Japan
CEO
Shigeru Shiina
www.pwc.com
List of Interviewees -1
Tamotsu AdachiManaging Director,Co-Representative in JapanThe Carlyle Group
Akira ArimaPresident & Chief Executive OfficerNTT Communications Corporation
Nicholas BenesRepresentative DirectorThe Board Director TrainingInstitute of Japan
L. W. K. BoothFormer Executive Vice President
Takashi EnomotoCorporate Advisor,former Senior ExecutiveVice President, Executive Board MemberNTT Data Corporation
Yoshihide FujiiChief Executive OfficerToshiba America Incorporated
Carlos GhosnChairman & Chief Executive OfficerRenault-Nissan Alliance
Genri GotoPresident & Chief Executive Officer
Fumiko HayashiMayorCity Of Yokohama
Yosuke Jay O. HonjoPresident & Chief Executive OfficerITO EN (North America) Incorporated
Yumiko IidaEditorKyodo News
Yuuko IizukaManager, CorporateCommunications DepartmentSumitomo Forestry Company, Limited
PwC
Former Executive Vice President& Chief Financial OfficerFord Motor Company
Ian BremmerPresidentEurasia Group
Stephen ChurchResearch PartnerJapan Invest KK
Kanai DoiJapan DirectorHuman Rights Watch
Akiko DomotoGovernorChiba Prefecture (2001–2009)
President & Chief Executive OfficerKenko.com
Kenneth GrossbergDirectorWaseda Marketing Forum
Dr Kazuyuki HamadaParliamentary Vice-Ministerfor Foreign AffairsMember of the House of CouncillorsNational Diet of Japan
Professor Mariko HasegawaDean of the School ofAdvanced ScienceSokendai, The GraduateUniversity for Advanced Studies
Ray HatoyamaDirector & General ManagerSanrio Company, Limited
Sumitomo Forestry Company, Limited
Tsuguhiko KadokawaChairmanKadokawa Group Holdings
Akira KamiyaDeputy PresidentMitsubishi UFJ Securities Holdings
Seita KanaiRepresentative Director &Executive Vice PresidentMazda Motor Corporation
Yoriko KawaguchiMinister for Foreign Affairs(2002–2004),Member of the House of CouncillorsNational Diet of Japan
List of Interviewees -2
Mitsuhiko KawaiPresident & Chief Executive OfficerSenior Executive Managing Director& Chief Operation OfficerAmericas Business UnitMitsui & Co (USA) Incorporated
Professor David KennedyDirector of the Institute for Global Law and PolicyHarvard Law School
Takahide KiuchiChief EconomistNomura Securities
Eizo Kobayashi
Ambassador Seiji MorimotoExecutive DirectorAgriculture and Livestock Industries Corporation
Yoshihiko NakagakiSenior Board AdvisorElectric Power Development Co., Ltd. (J-Power)
Takeshi NiinamiPresident & Chief Executive OfficerLawson Inc.
Professor Kosuke OgawaHosei Business School ofInnovation Management
Ambassador Motoatsu SakuraiPresident, Japan SocietyFormer CEO,Mitsubishi InternationalCorporation U.S.
Professor Atsushi SeikePresidentKeio University
Masayuki ShibataFormer Vice President,Kanagawa BranchUrban Renaissance Agency
Toshiyuki Shiga
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Eizo KobayashiChairmanItochu Corporation
James KondoCountry ManagerTwitter Japan
Kathy MatsuiManaging Director, Chief Japan Strategist,Co-head of Asia Economics,Commodities and Strategy ResearchGoldman Sachs Japan Company, Limited
Kahori MiyakePresidentClaire’s Nippon Company, Limited
Gen MiyazawaGeneral ManagerYahoo! Japan
Shoichi OkaChief Executive OfficerJapan Industrial Solutions (JIS)
Atsushi SaitoPresident & Chief Executive OfficerTokyo Stock Exchange, Incorporated
William H. SaitoPresident & Chief Executive OfficerIntecur, KK
Eisuke SakakibaraProfessor, Aoyama Gakuin UniversityFormer Vice Minister of Financefor International Affairs,Ministry of Finance, Japan(1997–1999)
Naoya SakamaUrban Renaissance Agency
Toshiyuki ShigaChief Operating OfficerNissan Motor Company, Limited
Noriyuki ShikataDirector of Global Communications and DeputyCabinet Secretary for Public AffairsOffice of the Prime Minister of Japan
Simon SprouleCorporate Vice President,Global Marketing CommunicationsNissan Motor Company, Limited
Nobutaka SuzukiExecutive Vice President,Sales Department GroupAniplex Incorporated
David SwanManaging Director Japan and KoreaRobert Walters
List of Interviewees -3
Yo TakeuchiChief Financial OfficerDevelopment Bank of Japan
Ikuko TanakaDeputy Director General of Associationfor the Promotion of Electric Vehicles (APEV)Special Assignment, Chairman’s OfficeBenesse Holdings, Incorporated
Yukio ToyoshimaGeneral Manager,International Strategy DivisionGeneral Manager,Risk Management OfficeHitachi, Limited
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Hitachi, Limited
Akira TsuchiyaDirectorWorld Economic Forum, Tokyo
Kunio YodaPresidentMorito Company, Limited
Yukio YokoyamaChief Financial OfficerNissin Food Holdings Company, Limited
How did you feel about your first job?
% %Of Japanese under 30-years old…
Intelligence without ambition is a bird without wings – Salvador Dali
PwC Slide 5
described their positionas a “dead-end job”
Global average: 3%
felt business leaders werelooking for “creativity andinnovation” from their newgraduate recruits
Global average: 26%
Change already front of mind for Japanese CEOs
Business leaders in Japan recognise the need for change
PwC Slide 6
Source: PwC, Delivering Results — Growth and Value in a VolatileWorld: 15th Annual Global CEO Survey, 2012, Japan base: 169CEOs of which 45% are from companies with at least US$ 1 billion inrevenue in the last fiscal year and 73% are from organisations inbusiness for over 40 years.
The four realities
1The arrival of AsiaGlobalisation is a businessimperative and Asia is afocal point. New,aggressive competitors
3New models ofinnovationEntrepreneurship andco-creation re-energisethe innovation processes
PwC Slide 7
aggressive competitors
are emerging from Asia.
the innovation processesas corporations pursue
open models.
2Increasingbusiness complexityNew strategies are requiredto deal with the growinginterconnectedness in trade
and financial relationships.
4Ageing economicmetabolismJapan is the firstadvanced economy to facechallenges like an ageingsociety and transforming
the organisation to thrive.
Reality 1: The arrival of Asia
PwC Slide 8Revitalising corporate Japan: A prescription for growth
Reality 1: The arrival of Asia
PwC Slide 9
Real GDP Growth (2011)
Annual per capital income, GDP growth, population
Reality 1: The arrival of Asia
PwC Slide 10FDI growth to Asia
We are shifting control of thenetwork to Hong Kong. All of theoverseas offices have been placedunder the president of the HongKong office. He reports everythingto Japan but it is all under him.
Kunio YodaPresidentMorito Company,
Reality 1: The arrival of Asia
PwC Slide 11
The trained talents within localmarkets will be leveraged to expandinto other emerging markets. Such acycle will be repeated when we growour business in emerging markets.
Morito Company,Limited
Yukio ToyoshimaManaging DirectorHitachi Asia , Ltd.
Reality 2: Increasing business complexity
PwC Slide 12
Reality 2: Increasing business complexity
PwC Slide 13
Increasing business complexity
Reality 2: Increasing business complexity
PwC Slide 14
(Average of M&A from 2005–2010 as a % of GDP)
Business leaders face a much widerrange of strategic choices. “Wheredo you allocate R&D? Where do youdo designs, manufacture, procurethe parts and components, andwhere do you sell? The logistics arevery complex.”
Yoshihide FujiiChief Executive OfficerToshiba AmericaIncorporated
Reality 2: Increasing business complexity
PwC Slide 15
If the yen stays high, and Japanesecompanies are smart, they will buymore and more assets overseas, andtry to integrate them. That is wheretheir lack of ability to interfacebecomes a real problem.
Kenneth GrossbergDirectorWaseda MarketingForum
very complex.”Incorporated
Reality 3: New models of innovation
PwC
Reality 3: New models of innovation
PwC Slide 17
Global researcher views of leading countries in R&D
Reality 3: New models of innovation
We concluded that if you are going tostart new businesses in a maturecompany, you have to do it as aheadquarters function. This is acorporate venture system.
YukiyaNakagawaSenior Advisor
PwC Slide 18
Senior AdvisorIHI
Akira ArimaPresident & ChiefExecutive OfficerNTT CommunicationsCorporation
The model whereby products
taking hold.
The model whereby productsresearched in our research institutewere developed and manufacturedby Japanese manufacturers, thenreleased in markets worldwide,has already collapsed. Instead, amore open approach to innovation istaking hold.
Reality 4: Ageing economic metabolism
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Reality 4: Ageing economic metabolism
PwC Slide 20
Working-age population trend projections
Reality 4: Ageing economic metabolism
PwC Slide 21
Japanese women represent a ready source of highly skilled talent
One of root causes that prevent an improvement ofOne of root causes that prevent an improvement ofproductivity in the Japanese economy would be itslow metabolism. The system that forces lowproductivity companies to be out from the marketand that frequently makes new companiesestablished would only enable the Japaneseeconomy to improve the productivity. The policy ofzero interest rate would surely be effective for some
MasaakiShirakawaGovernorBank of Japan
Reality 4: Ageing economic metabolism
PwC Slide 22
the working population and productivity.
zero interest rate would surely be effective for somedegree, but the economy itself after all be defined bythe working population and productivity.
Economic rationality and logical approach
generally have.
Economic rationality and logical approachare required in the business world, but thecreativity and sensitivity are also critical.One of key factors for growth would besympathy and receptivity, which womengenerally have.
Bank of Japan
Fumiko HayashiMayorCity OfYokohama
Pivotal moment for corporate Japan
PwC Slide 23
Pivotal moment for corporate Japan
B USD
Current account balance
PwC Slide 24
Current account balance: JPY 9 Trillion (Oil import:JPY 15 T) (Year 2011)
Current account balance:-JPY 6 Trillion (Oil import:JPY30 T)
China Japan Germany Korea India
Trend of Japanese economy
The implication of futureof Japanese economy…
Bearish export
- Friction with China, Chineseeconomy slowdown
- Lengthened financial crisis in
PwC Slide 25
Real rate of economic growth
- Lengthened financial crisis inEurope
Levelled-off consumer spending
- Expiration of eco-car subsidy
- Cold winter
- Increase of tax rate
China JapanGer-many
Korea India US
JPY-USD Exchange RateJPY-EUR Exchange RateYear 2013…
12/16/2012 New cabinet,“Abenomics”
Policy of inflation target(2%)
- Large scale monetary relaxation
Immediate economic measures
- JPY 20 trillion investment(still largelyin the public sector)
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in the public sector)
Risks may remain in the domestic market
- Can boost the consumer spending?
Slide 26
Nikkei Average Index
Issues new government tackles:
globalization(TPP)
Aging population
Increase of consumer tax rate
Power (supply and demand)
Intelligently evolve how to work
Boldness andrisk-taking
Velocity Flexibility andadaptability
PwC Slide 27
Actionable insights
Transformthe organisation
Adaptinnovation
Grow leadershippipeline
Focus growthstrategy
PwC Slide 28
The heart of the matter is embracing change
PwC
Thank you.
www.pwc.com
Thank you.
PwC Slide 31
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