JAPAN: LOOKS TO THE FUTURE
Japanese Companies Ideally Positioned to Power a B2C Revival in 2018.
Japanese companies face a unique and envyinducing opportunity in 2018. Those that are prepared to take on more risk in the markets while channeling fund stockpiles towards workers have the chance to kick-start the business-to-consumer (B2C) sector, after years of relying on exports and the business-to-business (B2B) market. At the same time, artificial intelligence (AI) and robotics are playing an increasingly important role in the workplace, and companies with the foresight to adapt to unfolding technological developments will be in the driving seat when it comes to cheaper unit-per-cost manufacturing.
Japanese companies have built up inhouse fund stockpiles to levels now estimated to outstrip gross domestic product (GDP) by as much as a multiple of three. Those funds have been progressively squirreled away since the global financial crisis, mirroring moves by risk-averse individuals to remove funds from the markets and keep them in low-interest bank accounts.
But Japan now stands at a crossroads. The risk-off stance of both companies and individuals will be difficult to maintain amid a shrinking labor market, which has also seen a depletion of experience and talent as skilled labor retires without immediate replacement.
Japanese companies that empower younger workers with greater upfront returns, in terms of higher wages, can help fuel a selfperpetuating consumer boom.
This move would entail companies shifting away from the longstanding export and B2Bdriven economic model that has sustained Japan for decades, and reinventing themselves in a domestic-demand-driven B2C market. The ensuing multiplier effect would not only underpin statistics such as GDP but also boost loan demand and drive interest rates out of the deflationary zone.
Rise of the Robots
AI and robotics will also play a greater and more influential role going forward. Gone is the idea of robots as slave machines in production plants. CEOs interviewed for this special edition agree that robots of the future will be more intelligent, more adaptable, and eventually able to anticipate human needs more rapidly and more selectively than humans can.
Companies that develop and harness the effective use of such robots will be at the cutting edge of manufacturing by the end of the first quarter of the 21st century, particularly as they take in more young workers imbued with the values of the new millennium.
Industry leaders will be those that not only effectively utilize AI and robotic power but also prepare their staff for the emerging realities of this new world. Companies that develop managers and skilled labor capable of using robots as their servants, and not as their workplace masters, will also avoid the possible polarization in the workplace, where low-end labor may be forced to compete with robots for jobs.
2018 marks 10 years since the onset of the global financial crisis. Japanese companies have put this decade to good use, rebuilding balance sheets, creating new overseas markets, and replacing obsolete plants and equipment. It is now time to reopen the floodgates and power the potential of domestic growth.
AI-equipped robots such as Pepper (above) will have a huge role to play in driving growth over the next decade.