Japan must transform its economy in a way that mirrors the innovation ethos in places like Silicon Valley and Stanford University, Japanese Prime Minister Shinzo Abe said Thursday during a speech on campus.

As an example of how to encourage such creativity, Abe hailed a new partnership starting this fall with Stanford that will train the next generation of biomedical experts. In doing so, he urged a "fundamental change" in how Japanese society views the process of innovation, from how ideas originate to competition in the marketplace.

Japan Biodesign will be launched in collaboration with the Stanford Biodesign program and five higher education and research institutions in Japan. Faculty members will work together to create new interdisciplinary systems based on Stanford Biodesign. Stanford leaders will train and mentor their Japanese colleagues.

Abe, who is the first Japanese prime minister to visit Stanford, marveled at how the tech sector in the United States has "consistently evolved at top speed."

He said, "I want the best and brightest Japanese talent" to learn about Silicon Valley.

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Abe shared the Bing Concert Hall stage with Stanford President John Hennessy and George Shultz, the former U.S. Secretary of State and distinguished fellow at the Hoover Institution. Abe's talk, titled "Innovation, Japan and Silicon Valley Symposium," included an introduction and remarks by Hennessy and Shultz. The event drew a full house of invited guests and members of the Stanford community.

"It is a great honor" to be at Stanford, Abe said in beginning his remarks.

He noted that Japan is revisiting its regulatory and tax systems in order to encourage more economic dynamism and competition. "The Japanese people will benefit from innovation," he said.

The challenge, he acknowledged, has been the slow pace of innovation in Japan. Today, however, the Internet economy and big data are creating "enormous changes" in his country's economic approach, he said. "We have to catch up, or otherwise Japan will lose vitality," Abe added.

Cultural connections

In his introduction of Abe, Hennessy chronicled Stanford's long history and friendship with Japan and its people.

Japan, he said, is home to more Stanford alumni than any other Asian country, and when the university's doors first opened in 1891, the pioneer class included a Japanese student. Currently, 139 students from Japan are enrolled at Stanford.

Hennessey described Abe as focused on revitalizing Japan's economy and stewarding it toward a greater global role.

Shultz, who knew Abe's parents, shared recollections of poignant moments between Abe's politically prominent family and his own.

Abe joined a roundtable discussion after his speech with Michael McFaul, director of the Freeman Spogli Institute for International Studies; Stanford Board of Trustees Chair Steve Denning; Stanford School of Medicine Dean Lloyd Minor; Stanford political science Professor Emeritus Daniel Okimoto; Yahoo co-founder Jerry Yang; and Twitter co-founder Jack Dorsey, among other scholars and dignitaries. He also met with Stanford students before leaving campus.

Afterward, McFaul wrote in an email, "I think it is fantastic that Prime Minister Abe came to Stanford and Silicon Valley after his very successful visit to Washington. He demonstrated that deepening U.S.-Japanese relations requires not only strong government-to-government ties, but also deepening ties between our societies, including educational institutions like Stanford."

Abe's state visit to the United States this week included the first address by a Japanese leader to a joint session of Congress. Abe served as prime minister of Japan in 2006-07 and returned to the position in 2012.

'Working together'

On Tuesday, U.S. President Barack Obama said after a meeting with Abe that the two countries had made progress in trade talks on a massive 12-nation trade deal that would open markets around the Pacific Rim to U.S. exports. Both nations face domestic political obstacles to concluding the Trans-Pacific Partnership agreement.

"This agreement would expand the coverage of the free trade agreements for both Japan and the U.S. substantially," said Stanford economist Takeo Hoshi, director of the Japan Program at the Shorenstein Asia-Pacific Research Center, in an interview. "The U.S. and Japan have been working together to maintain peace and sustain economic growth in the Pacific Asia."

Hoshi said that Abe's visit to the Silicon Valley confirms that Japan is serious about transforming its economy from one based on exports to one focused on innovations.

"Going forward, we can learn a lot from Japanese experience and their reform attempts," said Hoshi, who is also a senior fellow at the Freeman Spogli Institute.

Hoshi spoke with The Associated Press just before Abe’s arrival to California, citing Silicon Valley as the ideal place for Japan to learn about innovation. He also joined KQED’s Forum to discuss the current state of the U.S.-Japan alliance. Later, he was interviewed by BBC Business about Abe's visit to Stanford.

Stanford Biodesign

Founded in 2001, Stanford Biodesign has pioneered a new training methodology in which interdisciplinary teams of engineers and physicians go through a rigorous process of carefully characterizing unsolved clinical needs before jumping to technology solutions.

For the Japan Biodesign program, the bulk of the educational activities will take place at the campuses of the partner Japanese universities.

Clifton Parker is a writer for the Stanford News Service.

The Walter H. Shorenstein Asia-Pacific Research Center honored Wall Street Journal reporter Jacob Schlesinger with the Shorenstein Journalism Award last Monday. Schlesinger received the award, which includes a $10,000 cash prize, for his work on Japan that spans nearly three decades.

Since 2002, the annual award has sought to recognize journalists who are outstanding in their field of reporting on the Asia-Pacific, and whose work has helped enhance Western understanding of the region. A jury selects the finalist, which alternates each year between an American and Asian journalist.

At an evening ceremony, Stanford professor Gi-Wook Shin presented Schlesinger with the award surrounded by supporters and friends including Michael Armacost and John Roos '77, (J.D. ‘80), two former U.S. ambassadors to Japan, who both came to know Schlesinger personally during their diplomatic posts.

Earlier in the day, Schlesinger delivered a keynote speech on Japan’s economy and the media. Stanford economist Takeo Hoshi and Shorenstein APARC associate director Daniel Sneider joined him on the panel, along with New York Times deputy executive editor Susan Chira.

Schlesinger was a visiting fellow at Shorenstein APARC at Stanford's Freeman Spogli Institute for International Studies. Under the advisory of then-Shorenstein APARC director Daniel Okimoto, he worked on a book manuscript at Stanford which became Shadow Shoguns: The Rise and Fall of Japan’s Postwar Political Machine.

“No foreign journalist has covered Japan longer, or understood its political economy more deeply, than Jacob M. Schlesinger…” Okimoto said in the award announcement.

Schlesinger is based at the Journal’s Tokyo bureau as Senior Asia Economics Correspondent and Central Banks Editors, Asia, and tweets with the handle @JMSchles.

He answered a few questions for Shorenstein APARC about Japan’s political and economic climate, as well as the changing face of media there.

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Schlesinger spoke on a panel with Stanford's Daniel Sneider and Takeo Hoshi, and The New York Times's Susan Chira, followed by a private evening reception.

You’ve covered Japan for the Wall Street Journal for nearly a decade on the ground, in the late 1980s and early 90s and again since 2009. What has changed, or remained the same?

When I first covered Japan in the late ‘80s and early ‘90s, there was huge interest in -- and also a fair amount of mistrust and hostility toward -- Japan. Americans feared that Japan’s economy was going to somehow “defeat” ours (though I don’t think that notion ever really made sense), and constantly accused Japan of unfairly taking advantage of the global free trade system, exporting heavily to us while keeping its market closed to our goods.

After the bubble burst, and, more recently, Japan’s trade surplus disappeared, the anger toward Japan dissipated. But so, in some ways, did the interest. There are far fewer foreign correspondents today in Japan than there were when I was first there 25 years ago.

I think that the rise of Prime Minister of Japan Shinzo Abe, and Abenomics, has revived interest in Japan a bit, but in different ways. People want to know if Japan will rebound, in part as a counterweight to China, which has really surged in economic and political influence in the time since I was last in Japan. That perhaps may be one of the biggest changes -- the fact that so much is now seen through the prism of China. For a time China simply overshadowed Japan but now it has actually, in some ways, revived interest in it. 

What are the greatest challenges you’ve found in explaining the state of the Japanese economy and U.S.-Japan relations?

As I say, one challenge has been in getting people interested, and in explaining to them why it matters. China in particular has become such a big story that Americans sometimes lose sight of Japan's significance as well.

Another challenge is that Japan is a country where change, even big change, often happens in slow, subtle, steady steps. Japanese rhetoric tends to downplay the dramatic and to cast things in indirect terms, which can make it harder to describe statements and developments in ways that are accurate, and will seem interesting to readers.

Can you describe Abenomics and its current status?

Abenomics is Prime Minister Abe's program to try and end Japan's long slump, sometimes branded the “lost decades.” The most concrete and effective action to date has been a much more aggressive policy of monetary stimulus, following Abe's shake-up at the Bank of Japan (the nation’s central bank), where he imposed new leadership. That might be able to lift short-term growth. But Abe’s ambition to raise Japanese growth over the long-run – to a pace near that enjoyed by the United States and other advanced economies – requires extensive structural reforms. Abe has talked a lot about implementing such reforms, but has so far been rather timid in what he has proposed and pursued.

Abenomics also hit a deep pothole in 2014, when Abe decided to proceed with a plan to raise the sales tax, a policy aimed at reducing Japan’s very large outstanding government debt. The depressing impact of the tax basically offset the gains from the Bank of Japan’s stimulus, and Japan last year fell into recession.

It now appears that Japan is slowly pulling out of the recession, and, to ensure that his stimulus polices now work at full force, Abe has delayed plans for a second tax hike that had been scheduled for this year. That may set back long-held goals to reduce government debt, but it should help the chief Abenomics goal of exiting the long deflationary slump.

I'd say overall that Abenomics has a decent chance of lifting Japanese growth a bit higher than it would otherwise have been, but that a dramatic change in Japan’s fortunes would probably require a more dramatic change in policies, something Abe has promised but hasn’t really shown signs of seriously pursuing.

Recently, the United States invited Prime Minister Abe for a state visit (in addition to leaders of other Asian nations). What issues would likely top the agenda?

Both countries are hoping, overall, that the visit will deepen ties between the two governments at a time of great change and challenge in Asia. Whatever one might think of Prime Minister Abe and his agenda, this visit does offer a special opportunity to expand relations, simply because he has now been in office long enough to make multiple trips to Washington as prime minister -- a rare feat over the past quarter century of Japan's notorious carousel politics. The Japanese government is eager for Abe to be able to address a session of the U.S. Congress, which could carry great symbolic significance. He would be the first Japanese leader to do so in more than half a century, since Prime Minister Hayato Ikeda in the early 1960s. That's a pretty long gap, when you consider that Japan has, over that period, long been hailed as one of America's most important allies.

In terms of specific issues, the chief economic agenda item is the Trans-Pacific Partnership free trade pact. It's an ambitious project attempting to set the economic rules for the Pacific economies for the 21st century. And while 12 countries are included, the United States and Japan are by far the biggest, and both sides are hoping that a bilateral agreement by the time Abe meets President Obama could give the broader deal sufficient momentum to be concluded this year.

On the military front, the United States and Japan are updating the terms of their mutual defense pact and hope to do so in ways that will give Japan's military more latitude to participate in joint operations.

While not part of the official agenda, Americans will be eager to hear what Abe has to say about history issues as the world marks the 70th anniversary of the end of World War II.

Abe and his aides have repeatedly challenged some of the established views of Japan and its behavior during the war, including recently directly asking the American publisher McGraw-Hill to change its account of so-called “comfort women,” women forced into prostitution under Japan's war-time military. Such statements and actions have irritated many Americans and stoked anger in China and South Korea. American officials in particular are concerned about deteriorating relations between Japan and South Korea -- the two principle U.S. military allies in Asia -- and are eager for Abe to try and do more to bridge the gap, particularly on history issues. 

Newspapers have played a large role in Japanese society; the nation boasts one of the highest readerships in the world. Where do you see the future of news media in Japan?

Japan, as you say, has one of the most -- perhaps the most -- literate and well-informed populations in the world. News readership and news viewership is extremely high. People are extremely knowledgeable about current events.

Oddly, for a country that is also very tech literate, digital media has been relatively slow to catch on in Japan. Most people still get their main news from print papers, or magazines, and there has not been -- at least not yet -- a real surge in new, credible online-only, or online-originated media sources to challenge the mainstream media, the way platforms like Politico, the Huffington Post, or BuzzFeed have popped up in the United States.

The Japanese media has also suffered from some serious setbacks to its credibility in recent years. There was tremendous soul-searching after the 2011 Fukushima nuclear disaster about whether the Japanese press had done enough, either before the accident, or in the immediate aftermath, to cover aggressively the flaws and mistakes in the country's nuclear energy policies.

More recently, over the past year there have been damaging battles, in varying degrees, over the accuracy, and independence, of three of the country's largest, and most-respected news organizations, the Asahi Shimbun newspaper, the Yomiuri Shimbun newspaper, and the NHK national broadcaster. I worry that the result, fair or not, could prompt further erosion in the credibility of the Japanese media. That's potentially a big problem at a time of great change, great political and policy debate -- and when the political opposition is so weak that the media arguably has a heightened role at this moment as a check on power.

You were a visiting scholar at Shorenstein APARC. How did your time at the Center impact your work?

The Center was a tremendous opportunity for me in so many ways. It is rare for a journalist to be able to break out of the steady deadline pressures of a newsroom, and soak up an academic atmosphere. Being at Shorenstein APARC was a fantastic way to do that. It offered the best elements of an ivory tower, without feeling isolated. It gave me chances to interact with policymakers there as visiting fellows, as well as some of the top experts in the field who were based there.

I have to give particular thanks to Dan Okimoto, who ran Shorenstein APARC at the time and Jim Raphael, who was director of research. When I was at Shorenstein APARC, I was researching and writing a book on Japanese politics. The feedback from Dan, Jim and others made it a much better work. But beyond the book, the depth and perspective that I gained from my immersion at Shorenstein APARC has helped shape my writing since then.