Japan’s Economy To Gain Traction In 2022

The Asian economic powerhouse is poised for a resurgence in the coming year led by its most dynamic companies.

Like most countries, Japan struggled to find its economic footing in 2021, as it continued to deal with pandemic-related restrictions and prevailing supply chain disruptions around the world.

Despite the challenges brought on by the Covid-19 pandemic, the world’s third-biggest economy is poised to recover, supported by the 56 trillion yen (US$493 billion) economic stimulus unveiled by newly-elected Japa­nese Prime Minister Fumio Kishida in Novem­ber. The package will offer cash handouts to families with children under 18, support small businesses and implement measures to off­set rising fuel prices. The country’s largest spending reflects the government’s resolve to boost growth and redistribute wealth to households.

“Growth is on course to regain momen­tum, supported by macroeconomic policies and progress in vaccination,” the Organisa­tion of Economic Cooperation and Develop­ment said in a report in December. “Signifi­cant progress in vaccination and falling rates of infection are now supporting the resump­tion of stronger consumption growth and lifting investment, as supply chain disrup­tions are resolved. A new economic policy package will boost activity.”

While the Japanese economy is expected to accelerate its expansion in fiscal 2022 to 3.4%, corporate leaders must remain vigi­lant amid the lingering impact of Covid-19. The nation’s corporate CEOs will have to remain steadfast and be prepared for the unexpected, Yuzaburo Mogi, Chairman and Honorary CEO of Kikkoman Corporation, says. CEOs need to be forward-looking and be able to anticipate what lies ahead and act decisively, he adds.

Guided by this philosophy, Mogi has spearheaded Kikkoman’s overseas expan­sion since the 1970s. Today, the company’s main soy sauce product is enjoyed in over 100 countries, with around 75% of the group’s profits coming from its international business.

As supply chains normalize, Japanese firms are also looking to tap the growing demand for electronics devices and components. One company that’s emerging stronger from the pandemic-induced slump is THK Co., Ltd.—a supplier of industrial machinery, robotics and automation solutions.

THK is benefitting from robust electronics demand driven by advances in automation and robotics, and a boom in the automo­tive industry as the switch towards electric vehicles gains pace. The firm aims to leverage digital technologies, such as artificial intelligence, Internet of Things and robotics, to boost the efficiency of its manufacturing processes over the next three years.

The strong rebound in the electronics and automotive sectors also bodes well for Alps Alpine Co., a Japanese manufacturer of sen­sors, touchpads and switches. With a mission to “perfect the art of electronics,” the group’s global network of 100 companies supply components and devices to the automotive, infotainment, and related logistics services industries.

Japan’s economic resurgence in the com­ing years will be underpinned by its inherent strengths and the resilience and innovation of its dynamic companies. The long-term outlook for the Land of the Rising Sun is look­ing brighter than ever.

Back To The Future Of Bold, Hands-On Management

One of Japan’s most senior business leaders talks about what makes a good corporate executive amid an environment of constant change.

Since becoming President of Kikkoman Corporation back in 1995, Yuzaburo Mogi has been the public face of the company. He took on the dual role of Chairman and CEO in 2004. Having helmed the company’s day-to-day operations for more than 15 years, Mogi was appointed Honorary CEO in 2011 and retained his post as Chairman of the Board. Regardless of his title, Mogi will always be known as the leader who trans­formed Kikkoman into a global household name.

“Data don’t make decisions; people do.”

Mogi is not only one of the most senior business leaders in Japan, he is also one of the most respected. A key proponent of internationalization, he persuaded his com­pany in the early 1970s to do something radical: build a factory in the U.S. Mogi then spearheaded the development of a network of production plants and sales subsidiaries around the world. Today, Kikkoman’s main product—soy sauce or shoyu in Japanese— is enjoyed in over 100 countries. “Roughly 75% of our business profit comes from our overseas business,” Mogi proudly says.

After expanding rapidly in North America and Europe, Kikkoman plans to enter new markets. “We see new horizons beckoning,” Mogi says. “We are looking to expand our sales in Asia, and then develop the South American and African markets in the years to come.”

With the world facing unprecedented challenges due to the Covid-19 pandemic, Mogi—who is seen as one of the boldest and most internationally savvy executives in Japan—believes corporate leaders need to be steadfast and be prepared for the unexpected. “The most important quality for a chief executive is to be forward-look­ing,” Mogi says. “Not just thinking about the future but being able to see what lies ahead and navigate accordingly. There are always so many possibilities. You must decide which path is best for your company.”

Mogi says CEOs also need to be decisive leaders. “An executive needs the ability to decide. That means, examining information, evaluating it, and making clear judgments—in other words, decision-making ability. A CEO needs to be able to both guide and persuade employees and to create a con­sensus in the company in order to get things done. Not by issuing orders, but by leading people in a certain direction.”

Given the rapidly changing business envi­ronment, Mogi says the job of CEOs will be extremely difficult in the next two decades. “The next 20 years will be much more challenging than the past 20 or 30 ever were. Think of what the pandemic taught us. There are all sorts of risks we didn’t think of before and can’t even see now.”

While technological advancements will help CEOs navigate the future, Mogi says corporate leaders need to harness these technologies to make the best decisions. “There are things we couldn’t adequately measure before and data we didn’t have before that are now available. Because we have much more data to work with, we have a slightly better view of the future than we did in the past. And yet it is still difficult to make good decisions.”

Mogi believes that one important thing has not changed and won’t change anytime soon: “In the end, it’s still the CEO’s job to decide what the future will look like for their organization. Digital tools, AI systems, and big data can help, but at the end of the day someone has to make a decision. Data don’t make decisions; people do.”

Yuzaburo Mogi, Honorary CEO and Chairman of the Board

Yuzaburo Mogi is a descendant of one of the founding families of Kikkoman, which is among the oldest continually running businesses in Japan. Mogi holds an MBA from Columbia University.



THK Gears Up For Post-Pandemic Recovery

THK stays ahead of competitors as global demand recovers post the pandemic.

THK Co., Ltd.—which pioneered the devel­opment 50 years ago of the world’s first Linear Motion (LM) Guide that has become an integral part of today’s industrial machin­ery—is looking to benefit from electronics-related demand, advances in automation and robotics, along with the boom in the automotive industry amid the growing switch to electric vehicles.

“Our performance is extremely strong, driven by rising semiconductor demand, and following a tough time under Covid- 19,” says Akihiro Teramachi, CEO and Presi­dent of Tokyo-based THK. “We are forecast­ing significant growth in both revenue and profits.”

“Our focus on market share is one of our strengths, and we will continue with this approach.”

Digital Transformation

To boost productivity and efficiency, Teramachi aims to tap digital technologies such as artificial intelligence, Internet of Things and robotics in THK’s manufacturing processes over the next three years.

“Robots work 24 hours per day, 365 days per year, and you don’t need to take the impact of Covid-19 into your calculations,” Teramachi says.

Following the release of Omni THK, a communication platform designed to sup­port customer purchasing processes, the company launched OMNIedge—an IoT predictive service—in January 2020 as the Covid-19 pandemic started to wreak havoc in the global economy. The platform allows sensors installed on THK components embedded in the clients’ performance monitoring equipment to collect and ana­lyze data, enabling it to predict faults and minimize malfunctions automatically, with­out human intervention.

Big Data

Many THK products are already in operation across a variety of industries. By attaching sensors to such products, the data gener­ated is becoming increasingly dense, facili­tating more accurate analysis.

“This is big data,” Teramachi says. “We have established a diagnostic threshold on the safety side enabling us to send out early warnings. The more data we collect, the more analysis we can execute, leading to shorter lead times.”

The recovery in the economy is boosting THK’s sales for the new platform, with the automotive industry emerging as an impor­tant client for OMNIedge.

“We have picked up business from a large number of automotive-related makers,” Teramachi says. “In addition, operations at many of these companies are becoming increasingly global, and we are now being asked to install our products in factories in each country where they operate.”

Golden Anniversary

Having celebrated its 50th anniversary in 2021, Teramachi believes the company has survived the last five decades because its ability to innovate and produce industry-leading products helped it maintain its top market share.

Maintaining a dominant market share is important for Teramachi because it helps THK stay abreast of the clients’ wants and needs. The information the company gath­ers from clients enables it to develop and propose follow-on products.

“Of course, sales and profits are important for us, but our primary objective is market share,” he says. “Our focus on market share is one of our strengths, and we will continue with this approach. Over the next 50 years, we will transform our corporate structure to become a manufacturing and innovative services company, based on OMNIedge and Omni THK, and will pursue further growth.”

Akihiro Teramachi, Chief Executive Officer and President, THK

Akihiro Teramachi graduated from Keio University in 1971 and joined THK Co., Ltd. in 1975. He became a Director in 1982 and Vice President in 1994, before becoming CEO in 1997.





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