revitalising corporate japan - pwc€¦ · the board director training institute of japan l. w. k....

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


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


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

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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


PwC Slide 9

Real GDP Growth (2011)

Annual per capital income, GDP growth, population


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,


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


PwC Slide 13

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


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


PwC Slide 17

Global researcher views of leading countries in R&D


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

PwC


PwC Slide 20

Working-age population trend projections


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


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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