Visions - Summer 2019 - 16

CELEBRITY SPOTLIGHT INTERVIEW

Hugh Patrick

Chairman, Center on Japanese Economy and Business at Columbia Business School,
and Robert D. Calkins Professor of International Business Emeritus

Established at Columbia Business School in 1986 under the direction of Hugh
Patrick, Robert D. Calkins Professor of International Business Emeritus, CJEB
promotes knowledge and understanding of Japanese business and economics in
an international context. The Center is a research organization widely recognized for
its international programs, which provide prominent speakers from the public and
private sectors a forum for collaboration and reflection on Japan, the United States,
and the global economy.
What is the connection between SCOA and the Center on
Japanese Economy and Business?
SCOA and Sumitomo Corporation have been major supporters of CJEB from when we first established it in 1986. At that
time, we began our US-Japan Discussion Group, with senior
members in New York from the American business community, the Japanese business community, and faculty who are
specialists on Japan at Columbia Business School. We meet
four evenings a year, twice in the spring and twice in the fall,
at the SCOA president's residence in New York. We also have
a range of other interactions, including when SCOA staff participate in CJEB luncheon seminars and evening programs at
Columbia. Additionally, I meet with the Sumitomo Tomodachi
program students whey they come to New York.

How did the CJEB start?
When I first joined the Columbia Business School, we had
two young assistant professors specializing in Japanese
management. I wanted to help their research by providing
funding for them to trips to Japan, and to have an institute
to support our efforts, so we decided to establish the Center
on Japanese Economy and Business. We developed a
strategy to implement our vision of educating Americans
about the Japanese economy and its business systems,
and we needed outside funding in addition to Columbia's
support. We required $400,000 a year - a lot of money in
the mid-1980s - for five years, to establish the Center and
demonstrate its value. I decided to approach several major
Japanese companies. I knew the Sumitomo representative
in Washington, who introduced me to SCOA President
Sadao Taura. I had lunch with Mr. Taura and the President of
Sumitomo Corporation, Mr. Ito, who happened to be visiting
New York. I explained why Japan needed an institution like
CJEB in the U.S., why Columbia was the best place for this
project, and that we needed $400,000 a year for five years.
However, I was a little flustered, and I did not know how
much to ask for from Sumitomo. Mr. Taura and Mr. Ito said
they would think about it. A few days later, Mr. Taura called
me, and was rather apologetic, saying that establishing this
center was a really good idea, but their budget has limits, so
Sumitomo could "only" provide $200,000 each year for five
years! I was overwhelmed and overjoyed; I had not dared to
ask for that much!

From all you have studied, historically and recently, how does Japan size up in today's global economy?
Japan is a comfortable, safe, relatively high income, advanced democratic nation, with a well-educated, skilled, well-motivated
labor force, high savings rates, the rule of law, and well-developed markets. It has a good macroeconomic situation now: very
low unemployment, stable growth in GDP/capita, no deflation, though far from the 2 percent CPI target.
Japan's near term economic future will continue to be good; with slow, stable, macroeconomic performance, but without
achieving the 2% CPI growth target anytime soon. What is more interesting and important in the long-run is the high degree
of quiet structural and other changes throughout the economy. This is true everywhere; in financial and capital markets, in the
corporate sector and corporate governance, labor markets, and in the slow reduction of large wage and job gaps between
regular and non-regular workers. Also changing are the roles of work participation rates of women - unmarried and married.
Gender difference continues to be strong.
The young generation have many of the same values as their grandparents - hard work, performance oriented, group
oriented, sense of responsibility, strong sense of being Japanese. And some of their values have evolved from those of the
older generation - differences in the work-life balance, role of nuclear family, and a sense of satisfaction and even complacency.
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visions

Summer 2019

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Visions - Summer 2019

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