I wrote up this article to be published in a marketing journal, and after a lot of editing it was whittled down into something quite different, but much more suited to a marketing journal! I have included the edited down version at the end for comparison!
What the 2020 Olympics means for Japan
The 1964 Tokyo Olympics put Japan on the map internationally, gave the country the self confidence to become a global economic and cultural force, kickstarting 3 decades of phenomenal growth. By the time 2020 comes around, 56 years will have passed by and Japan will be more or less 3 decades past its economic peak. Where can Japan get to in the next 7 years and what does this mean for businesses and brand in Japan?
Much of the international reaction to Tokyo being named as host city for the 2020 Olympics has cast the news as a welcome fillip to a torpid economy and ravaged national psyche. Those of us who experience life in Japan first hand have become accustomed to the contrast between the reality on the ground and the Japan-on-the-ropes narrative depicted by international news channels, and so we see the 2020 Games results through a slightly different lens.
There is no doubt that winning the bid is great news for the mood in Japan, and connected to that the economy too, but it is not a prop for a train-wreck economy, rather another positive factor in the developed World’s most consistently performing nation. During the so-called “lost decades” since Japan’s economic bubble burst, the country and its society have not done so bad:
- GDP has been stable at more or less the same level it reached in the early 90s after the post war “economic miracle”
- life expectancy has risen to lead the World (in contrast to the opposite trend in life expectancy in the US and elsewhere) largely through improvements in healthcare provision
- Japan has clocked up 21 straight years as the World’s #1 creditor nation, owed around $3.2 trillion, enjoying a large trade surplus up until the the Tohoku earthquake
- Japan regularly tops academic quality-of-life studies that factor in prosperity, access to high quality services including but not just healthcare, diet etc
- Japan has retained the relatively small wealth gap so important to a healthy, cohesive and robust society
Better informed voices on the Japanese economy compare its consistent affluence to countries like Swtizerland, only Japan has 127m people and is the World’s 3rd biggest economy. Japan’s GDP vs government-debt-ratio of 220% usually underpins the “bug looking for a windshield” view of its economy, and indeed this is nothing to boast about, but unlike similarly challenged western economies, 95% of that debt is owned by people vested in the ongoing stability of Japan’s currency and finances, namely Japanese citizens. The Japanese banks that intermediate this relationship are closely tied to the government too, so it is no surprise that in times of doubt investors jump on the safe bet that is the Yen.
However, just like all huge, real countries Japan has its issues, a situation finally addressed by government policy with Prime Minister Shinzo Abe’s “Abenomics” – a policy quiver of 3 “arrows” aimed at revitalising the economy through a combination of investment stimulus and structural reform that will make it easier for international businesses to invest in Japan and catalyse innovation. Introduced early in 2013 and still work in progress, these measures have already succeeded in stimulating a 40% jump in the value of the Nikkei stock index, huge gains to Japan’s exporters as the Yen has been driven down by intervention by the Bank of Japan, accompanied by a wave of optimism in the business community connected to Japan, not least those of us here.
So far the biggest positive effect of Abenomics has been psychological. Despite its remarkably strong performance, not least given the horrific earthquake and tsunami in 2011, there remains a huge amount of untapped potential locked up in the professional know-how, technology, creative culture, inventiveness, diligence and social stability in modern day Japan. But since the goal of “catching up” in the post-war era was more than surpassed, there has been a lack of collective vision for how Japan can be part of inventing the future, and thus that potential remains ungalvanized. Abenomics has ticked all the boxes so far, but it has not put forward a clear and inspirational vision for a common national agenda. There is no broad appetite in Japan for nationalistic aggression, nor does Japan go for the personality politics that refuels the national dream as elections do for the US, so there is a real danger that Abenomics fizzles out into the passive pessimism that preceded it.
From the point of view of the rational observer it is clear that one of Japan’s roles is that of the pathfinder society for demographically mature nations as they adjust to their new found top-heaviness, and everything that comes with it. Far from ‘managing a decline’, the opportunity is to invent the solutions that make this transition a positive experience for young and old alike, and then export those solutions to those nations that follow Japan into the same territory as they are destined to, starting with the US, China and Western Europe. There are plenty of smart business people in Japan who perceive this and are investing in it, but it is not easy to coin a positive collective vision around this, and yes, the politicians here are not groomed as inspirational visionaries.
So it is against this backdrop that Japan accepts the honor of hosting the 2020 Games, rewarded for being the economic and social “safe pair of hands” that the Tokyo bid successfully proposed to the IOC panel. It is no wonder Prime Minister Abe described the result as more joyous than his 2012 election result, since the Olympics provides the motivation for the infrastructual investment program that is already at the heart of Abenomics, but more importantly fills the ideological void in Japanese politics, and can unite the nation around a common theme that is global in outlook.
Aside from promoting and facilitating participatory sport, the Games offers Japan the chance to project a new and positive role for itself in the world, and with it a new national self-consciousness, just as I believe the London Games did for Britain. The benefits for Japanese people will be multi-faceted, and no doubt there will be a queue of construction contractors offering to turn the stunning vision for the new national stadium and other facilities into a reality:
However, I believe that it is consumer brands that have the biggest advantage to gain from the recasting of Japan. It was Japanese manufacturing brands that changed the perception of Japan during the 70’s and 80’s, and despite the renewed strength of Toyota, NISSAN, Canon and other category leaders today there is no doubt that the decline of brands like Sony and Sharp have become synonymous with the supposed decline of Japan as well.
Much of Japan’s brand strength goes unseen: most of the significant parts of the iPhone are made in Japan for instance, only to be assembled in China; Japan is one of the few countries to have a trade surplus with China, shipping so many of the essential high quality parts and manufacturing machinery used in Chinese labour intensive economy; the fact that Toyota will soon make more from its OEM deals supplying hybrid drives to foreign car manufacturers than it makes from Prius sales; Canon own the patent for the inkjet printer module that is used in 80% of inkjet printers globally.
To an extent Japan has benefited from this stealthiness, but every society needs to invent new icons of its success otherwise it starts to believe in the myth of its own failure. As Japan’s Olympic vision percolates around the World it will provide Japanese brands with the confidence and impetus they need to show themselves in a new light. Among these will be the manufacturing brands already known to global consumers, but I predict a wave of service and retail brands to eminate from Japan under this new halo.
For anyone who has visited Japan well knows, it is the kingdom of customer service and the same attention to detail and incremental improvement to management processes that has underpinned its manufacturing succes is now being applied to retail. The rival 7eleven and Family Mart convenience store networks, both Japanese based companies, now boast 75,000 stores between them, most of them in Asia, and are investing heavily in service innnovations such as home delivery for the elderly and web & mobile based ordering.
The hugely successful fashion retailer UNIQLO is beginning a broad store roll out in the US where it plans to differentiate its service based on Japanese etiquette, bringing every store manager to Japan to be trained UNIQLO’s own brand of curteousness and service attitude.
In digital spheres, the Japan-based social app for mobile LINE, inspired by the aftermath of the 2011 earthquake, is already being touted as Asia’s answer to Facebook rocketing to 230m users in a little over 2 years, and is expanding rapidly in Asia, Europe and South America with its uniquely cute visual appeal. For these brands and those that follow from Japan, the aura of a vibrant, clean, stable and futuristic Tokyo will rub off positively.
The affiliation between Brazil and Japan as host nations will also strengthen the relations between these two already interlinked cultures. Brazil is home to the biggest population of expatriated Japanese after an emigration program a century ago, and the south american juggernaut is so obsessed with Japanese manga and anime that when anime TV show theme song vocalists tour Brazil they play to crowds of 100k people. The consecutive Olympics will reinforce this two way corridor for industrial investment and consumer brands alike that is being pushed strongly by both governments as well as brands and corporations on both sides.
For international brands looking to grow their businesses in Asia, the consumer confidence that was already growing off the back of Abenomics in 2013 will offer the chance of long term sustained growth within a well regulated and increasingly open-for-business Japan. The ones that will succeed will be those that succeed in understanding the zeitgeist as it evolves with renewed urgency and execute with sensitivity to the subtleties of Japan’s fast-progressing digital platforms.
The draft above was refocused on “What Tokyo 2020 means for Marketers” and featured in the international marketing industry journal MediaPost.
The announcement a few weeks ago that Tokyo is the winner of the bid to host the 2020 Olympic games was a great achievement for Japan — and proof of Asia’s ongoing position as a global cultural powerhouse.
London 2012 was widely recognized to be the most successful games of all time, both athletically and in returns for those brands that chose to buy into its marketing juggernaut. But will Japan, a country supposedly past its economic prime, deliver the same opportunities and potential rewards?
When Japan last hosted the Olympics in 1964, the Tokyo games put the country firmly on the international map. Worldwide attention and investment offered the nation the self-confidence to become a global economic and cultural leader, in the process kick-starting three decades of phenomenal growth.
By the time 2020 comes around, 56 years will have passed since Tokyo ‘64, and Japan will be nearly three decades past its supposed economic peak.
While Japan’s worldview and international reputation have been largely clouded by the idea of “lost decades,” the country’s biggest problem is not a poorly performing economy. In fact, the national economy has performed better and more consistently than any in the developed world over the last two decades, and living standards here continue to improve.
The truth is — Japan has been suffering from from a “where next?” malaise. Having caught up and then some with the rest of the world leading up to the 1990s, Japan’s nationhood seemed to have lost direction. For a country that invented the future in the 1970s and 80s, the fall from grace of national icons such as Sony and Sharp has led to a lack of national self-confidence and increased introspection.
So the Tokyo 2020 win is just the psychological shot in the arm the nation needed, unlocking huge potential for Japan’s businesses and brands on a national and global scale. Although slightly under the radar, the country is still a manufacturing Goliath. It is one of the few countries to have a trade surplus with China — producing most of the significant components of iPhones, for example.
Japan’s service industry is the most refined in the world, and is poised to go global. Indigenous organizations such as retailers like FamilyMart and 7Eleven are already flexing their international wings, and local retail fashion sensation UNIQLO has big ambitions on the global scene.
These globally minded service brands are putting Japanese values of politeness, attention to detail and efficiency at the center of their international brand strategies. These values are spreading — adding to the crucial characteristics that will contribute to a refreshed Japan Inc. image.
History tells us that Japan does not tend to invent new realms of global business like the Web and smartphones. Instead, it has historically caught up fast and added a new dimension of competitiveness to the market, as in the case of the automotive industry.
So perhaps Japan’s time for Web services is coming. Japanese social platform LINE has reached a staggering 230 million global users in just two years — breaking all records in the process, and showing that a digital user experience can be both intrinsically Japanese and have global appeal at the same time.
Based on its growing international interests and pro-growth economic policies, national sentiment is already strong in 2013 and the expected YEN3trn boost to the domestic economy will only strengthen that.
Tokyo 2020 will reveal a stunning image of a sophisticated metropolitan nation, solving first world issues through technology and progressive policy while doing just fine economically. This positivity will offer fantastic opportunities to both Japanese and international brands that choose to associate themselves with it.
Quick off the mark as ever, Coca-Cola has already begun to associate itself with the Games, reminding consumers of a long association with the Olympics — surely just the beginning of a newfound interest in “brand Japan” for many others as well.
Going forward, the greatest rewards within Japan will come to those brands that successfully interweave fresh and relevant narratives into the emerging consciousness and digital landscape of Japan’s new era. The key to success is forgetting what you think you know about the Land of the Rising Sun to embrace one of the planet’s most exciting and forward-thinking countries.
This same process of reimagining is just what Japan’s consumers are now doing themselves, and as Japan takes the center stage, the opportunities to share in this success may be endless.