In Nikkei Shimbun, Takeo Hoshi examines 2015 to enter the implementation stage for the Abenomics growth strategy.  The revised New Growth Strategy released last year has narrowed the “third arrow” to ten reforms.  Out of the ten, Hoshi suggests to focus on four key reforms: 1) Accelerating industrial restructuring and venture businesses, 2) Promotion of innovation, 3) Enhancing women's participation and advancement, 4) Attracting talent from overseas.

Innovation is a vital component of economic development, and the United States and Japan provide clear examples of how a knowledge-based economy can lead to sustainable growth. But Japan has sometimes encountered obstacles in bringing its wealth of ideas into the global market. A conference at Stanford seeks to help shift that reality.

“Japan is changing,” said panelist Gen Isayama, founder of the World Innovation Lab. “We’re seeing entrepreneurs…but we need a new role model – new stars emerging in Japan to excite younger people.”

For two days, 21 experts from Japan and the United States gathered at the Stanford-Sasakawa Peace Foundation New Channels Dialogue to discuss innovation, promote exchange of best practices, and enhance connections between the two countries.

The conference was sponsored by the Sasakawa Peace Foundation (SPF) and organized by the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC), in association with the U.S.-Japan Council.

“The New Channels project is intended to open a new arena of dialogue between new voices, and a new generation of experts and policymakers on both sides of the Pacific. And to tie them back into the existing structure of alliance governance,” said SPF President Yuji Takagi, in his opening remarks.

“The complex challenges of today’s world provide even greater momentum to work together across sectors,” Shorenstein APARC Director Gi-Wook Shin added.

In its second year, the conference hosted more than 100 attendees from the San Francisco Bay Area, drawing students, scholars and industry and government people to Encina Hall for the daylong public forum on Jan. 22. The first and second panels focused on the state of innovations in Silicon Valley and Japan, the third and fourth panels examined how the two countries could better work together toward innovation-driven growth.

The first set of panelists started by discussing characteristics of Silicon Valley, and how it defined itself during the tech boom of the 1980s/90s, and led to the rise of the Internet and telecomm industries that rapidly spread around the world.

Silicon Valley is often identified for its innovative ideas, and its ability to convert those ideas into market-ready goods and services. Panelists said that networks and open access to venture capital drive that ability to push ideas through quickly, an essential characteristic in today’s real-time world.

“It’s never been easier to start a company,” said Patrick Scaglia, a consultant at Startup Ventures and former senior executive at Hewlett Packard.

Silicon Valley continues to attract entrepreneurs and potential investors, and is positioned to continue to do so. Scaglia noted that 47.3 million dollars was invested in startups last year alone, the highest seen since 2009.

Areas currently being pioneered by Silicon Valley entrepreneurs include medical and mobile technologies. Norman Winarsky, president of SRI Ventures, pointed to breakthroughs in robotics and wearable devices, showing a clip from a TED talk on bionic prosthetics. Additional predicted trends include a return to hardware and possibly greater entrepreneurism coming directly out of universities, particularly from students.

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(Left photo) Tak Miyata (left), a general partner at Scrum Ventures, talks with Ryuichiro Takeshita (right), a corporate affiliate visiting fellow at Shorenstein APARC. (Right photo) Japan Program Research Associate Kenji Kushida leads a discussion on Japan's innovation ecosystem. A gallery of photos from the public forums can be viewed here.

Japan has historically produced successful entrepreneurs such as Konosuke Matsushita (founder of Panasonic Corporation), Akio Morita (founder of Sony Corporation), and Soichiro Honda (founder of Honda Motor Company), but large firms have come to dominate the economy. Recently, however, the country has been producing a cadre of successful startups, some of which have already grown to become quite large. For example, Japanese companies Rakuten and DeNA have commanded the e-commerce space, and similarly, Mixi in the social media space.

Panelists noted that more Japanese startups are going global compared to a decade ago. Yusuke Asakura, a visiting scholar at Stanford’s U.S.-Asia Tech Management Center, pointed to companies that produced applications like Metaps, an Android monetization app, and Gumi, a social networking gaming app.

But Japan hasn’t reached its greatest potential due to various barriers – market, institutional, and cultural. Mr. Isayama said, at the moment, there aren’t enough ventures and risk capital in Japan. Greater accessibility to both could propel startups more fully into the global market.

C. Jeffrey Char, president of J-Seed Ventures, said another obstacle was the quantity of mergers & acquisitions (M&A).

“If there was more M&A, it would actually improve the ecosystem a lot more – it would turbocharge it,” he said. “Because when investors get their money back quicker and when entrepreneurs get paid off quicker, a lot of times they will go and start another company.”

If greater M&A existed in Japan it would create a “benevolent cycle” of funding and inject the momentum necessary to support an environment for entrepreneurial success.

Networking, labor mobility, and a highly skilled workforce are additional components that aided in Silicon Valley’s success, and areas that Japan could learn from. Government support for entrepreneurs is rising; the third arrow of ‘Abenomics’ policy aims to jumpstart growth based on a number of measures, including diversification of its workforce through increased immigration and female participation.

Offering an additional point, Professor Kazuyuki Motohashi, the Sasakawa Peace Fellow at Shorenstein APARC, suggested that cultural differences might pose one of the biggest challenges to U.S.-Japan collaboration.

Americans are more likely to embrace failure as an essential part of the creative process; Japanese typically don’t celebrate failure as much nor valorize the entrepreneur to the same degree.

“We don’t have to change the culture,” Motohashi said. “The important [thing] is to overcome these differences and develop a mutual understanding.”

Teaching younger generations about the entrepreneurial mindset could also improve societal attitudes toward risk-taking. Former U.S. Ambassador to Japan John Roos said celebrating the entrepreneur was the most important factor in creating a vibrant innovation ecosystem in Japan. “In the end, if you have the proper mindset, you can overcome everything else."

A detailed summary report of the New Channels Dialogue will be released in the coming months on the Shorenstein APARC website.

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Panelists pose for a group shot outside Encina Hall. A conference agenda, final report and listing of the panelists can be viewed here.

Tokyo-based reporter Jacob Schlesinger will receive award for his journalistic work and achievements spanning three decades

Stanford University’s Walter H. Shorenstein Asia-Pacific Research Center (APARC) is pleased to announce Wall Street Journal reporter Jacob Schlesinger as the 2014 recipient of the Shorenstein Journalism Award.

Schlesinger has been selected for his excellence in reporting on Japan’s economy, trade and politics, over a more than three-decade career in journalism. A Japan watcher since the late 1980s, Schlesinger incisively covered the nation at its economic height, the ‘boom’ period, through its ‘bust,’ as the financial system collapsed in the 1990s, and now, into an era that has seen signs of economic revival.

Commenting on the selection of Schlesinger for the award, Professor Daniel Okimoto, one of the leading American experts on Japanese political economy and a former director of Shorenstein APARC, said:

 “Through the years, followers of Japan have had the benefit of being kept informed by a succession of first-rate journalists based in Tokyo, such as Bill Emmott (The Economist), author of “The Sun Also Sets,” and Gillian Tett (Financial Times), author of “Saving the Sun.” No foreign journalist has covered Japan longer, or understood its political economy more deeply, than Jacob M. Schlesinger (Wall Street Journal), author of “Shadow Shoguns.”

The Shorenstein Journalism Award, launched in 2002, is given to journalists who are outstanding in their reporting on Asia, and who have contributed significantly to Western understanding of the region. The award was originally designed to honor distinguished American journalists for their work on Asia, but since 2011, Shorenstein APARC re-envisioned the award to encompass Asian journalists who pave the way for press freedom, and have aided in the growth of mutual understanding between Asia and the United States. The award alternates between Western and Asian journalists.

The most recent award recipients were Aung Zaw, the founder of Burmese publication the Irrawaddy, and a pioneer of press freedom in that country, and Barbara Demick, the Los Angeles Times correspondent in Beijing and the author of ground-breaking studies of life in North Korea.

Schlesinger has covered Japan for the Wall Street Journal for nearly a decade. He is currently the Senior Asia Economics Correspondent and Central Banks Editor – Asia for the Journal, based in Tokyo. He came first to Japan as a reporter in the late 1980s, covering tech, trade and politics, and then reporting on Japan’s stock market crash and financial crisis, and the fallout that carried on through the mid-1990s, a period known as “the lost decade.”

Schlesinger then worked for 13 years in the Journal’s bureau in Washington DC, covering politics and the U.S. economy. He was part of the Journal’s team that was awarded a Pulitzer Prize in 2003 for the “What’s Wrong” series about the causes and consequences of the late-1990s financial bubble.

Schlesinger returned to Japan as the Japan editor/Tokyo bureau chief in 2009, overseeing the coverage of the historic transfer of power to the Democratic Party of Japan, and the triple disaster of the massive earthquake of March 2011 and the tsunami and Fukushima nuclear disaster that resulted. He has since closely followed the return to power of the conservative Liberal Democratic Party, and its leader Shinzo Abe, and his administration’s economic stimulus policy, known as ‘Abenomics,’ as well as growing tensions within the region.

Schlesinger is the author of the book, “Shadow Shoguns: The Rise and Fall of Japan’s Postwar Political Machine,” widely recognized as one of the most important works on Japan’s politicians, parties and the dramatic changes in its political order. Published in 1997, the book was hailed by Foreign Affairs as “a fascinating and penetrating tale.” He wrote the book while a visiting fellow at Shorenstein APARC.

Schlesinger will receive the award at a special ceremony at Stanford’s Bechtel Conference Center on March 9. He will also lead a panel discussion earlier that day examining the coverage of Japan’s economy, from boom to bust and back again, with Susan Chira, a former Tokyo correspondent and now deputy executive editor of The New York Times and Professor Takeo Hoshi, a prominent economist and director of Stanford’s Japan Program.

Please click here for the full press release.

Contact: Lisa Griswold, communications coordinator at Shorenstein APARC, with any questions about the award or the March 9 events.

Prime Minister Shinzo Abe dissolved Japan’s lower house of parliament in November, and held an early election on December 14. The vote kept the status quo – the ruling Liberal Democratic Party retained its majority in the Diet, winning two-thirds of the seats.

In a Dispatch Japan Q&A, Daniel Sneider, associate director for research at the Walter H. Shorenstein Asia-Pacific Research Center, discusses the election results and weighs the outcomes for the Abe administration.

“For Abe, this election was all about power, and retaining power.

“With this victory, Abe should have staved off any serious challengers, barring external events that dramatically change the perception of his government.”

Sneider said the question remains what Abe will choose to do with his ‘somewhat rebuilt’ political clout.

The full article is available on the Dispatch Japan blog, and in Toyo Keizai, a Tokyo-based economics/politics publication, in Japanese and English.