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Japanese business leaders cite challenges for 2020

  • January 3, 2020
  • , Jiji Press , 1:17 p.m.
  • English Press

Tokyo, Jan. 3 (Jiji Press)–Top Japanese business leader Hiroaki Nakanishi has emphasized that a key challenge for companies in the country this year will be whether they “can adapt without hesitation to changes in industrial structures brought about by the digitization” of the economy.

 

The digitization of the economy in which the movements of humans and goods are converted into data and new products and services are created through an analysis of the accumulated data, is “unstoppable,” Nakanishi, chairman of the Japan Business Federation (Keidanren), the biggest group of employers in the country, said in an interview at the start of the new year.

 

“Corporate managers have been tending not to take risks since the 2008 collapse of U.S. investment bank Lehman Brothers, but it’s the time for them to start taking risks again,” he said.

 

In a separate interview, Kengo Sakurada, chairman of the Japan Association of Corporate Executives, better known as Keizai Doyukai, said that top management officials’ sense of crisis is “extremely important,” in the wake of scandals at Kansai Electric Power Co. <9503> and the Japan Post Holdings Co. <6178> group.

 

“Constant supervision by (companies’) nomination committees in the selection of chief executive officers is crucial,” he added.

 

Many executives of Kansai Electric were found to have received lavish gifts, as well as cash, from a former official of a town hosting one of the company’s nuclear power plants, while improper sales practices have come to light for the Japan Post group’s “Kampo” insurance products.

 

Nakanishi said that the Japanese economy “is expected to remain on a path of stable growth” although the growth rate will not be high while uncertainty about overseas economies “is likely to increase markedly.”

 

Sakurada said that the momentum of Japan’s economic growth “may weaken this year.” The economy will likely stay on an expansion track as a whole, but the growth “will be patchier than ever,” he said.

 

“I’m not optimistic” about the U.S.-China trade war, one of the biggest destabilizing factors for the global economy, Sakurada said, stressing the importance for corporate managers to create business plans on the assumption that the U.S.-China battle for hegemony will continue.

 

Nakanishi called on the Japanese government to thoroughly revamp the country’s social security spending to dispel people’s concerns about the future. “The most important thing for the government is to show a vision on the handling of social security costs, which account for the biggest share of the state budget, amid the country’s aging society and sluggish birthrate,” he said.

 

On this year’s “shunto” labor-management negotiations, slated to start late this month, Nakanishi said that the momentum of wage hikes “should not be lost.”

 

Sakurada said that Japanese companies should have courage to act to produce results in innovation.

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