Gobi Perspectives #6: Sakura Madness Trumps CORONAVIRUS
March Madness, which comes in the form of college basketball in the US, manifests itself as a different type of spectator sport in Japan: cherry blossoms or sakura viewing (Hanami). The cherry blossoms bloom is unique here because of its scale — it is national — and Hanami is a centuries-old tradition — that cannot be stopped, not even by a pandemic.
Now that Japan has gone from bloom to blast, what are some of the potential policies the country can consider to jumpstart the economy when it reopens?
1. “Black Belt Middle Road” Strategy.
Disruption from the unexpected cross-border shutdown has forced a re-examination of the existing supply chain configuration among Japanese companies. Perhaps it is also a good time to explore how the value of corporate patents and inventions can be unlocked. Japan Inc has found it difficult to commercialize in-house inventions due to the relative lack of private entrepreneurship, an outcome of its straitjacket business culture. This might be a good time for Japanese corporates to act as black belt karate masters, using their brand or intellectual property, licensing it to overseas entrepreneurs, using a middle-of-the-road approach, ie co-investment instead of aid or debt, to create new products from latent corporate research.
2. Develop into a Medical Tourism Hub.
Japan is a tourist galore thanks to its Thousand Zen temples and Hundred Yen shops. It is also a very popular shopping destination for medical products, a result of its artisanal culture applied to cures, ranging from Western drugs to Oriental herbs (https://www.tsunagujapan.com/50-medicines-and-beauty-products-from-drug-stores-in-japan-picked-by-japanese-pharmacists). Fujifilm is a case in point, having transformed itself from an old school camera company into a health and beauty giant, thanks to its underlying competence in the chemicals sector. In fact, the healthcare sector is saddled with an oversupply of hospital beds: this can be an asset to attract overseas investment to develop a medical tourism hub, similar to Singapore or Bangkok.
3. Unlock Trapped Savings.
It is a well known fact that Japan has an aging population, but did you know that half of its US$17 trillion in financial asset is owned by seniors age 65 and older? This has created a booming industry — scammers who target the elderly — a phenomenon that has even been turned into a Netflix drama! Given the lack of investment opportunities in the prefectural regions, perhaps Japan can consider pooling these savings on a national level, investing them into overseas fintech platforms, where young consumers have rising earning power but lack of short-term savings?
Only Japan can decide what to do after it awakens from hibernation, but here is a haiku from our portfolio companies, summing up their wishes, during our Tokyo Hana Pitch event in 2017:
“Desert of Gobi,
Comes Youths from Afar Today,
Pitch at Hanami.
They Craved Attention:
Recommend Supply Bunny,
Off Peak, Or am I?”
