This is the third and final part of the proposal I sent to the national strategy commission of the government of Japan (The start of the proposal can be found here).
Developing the Process and Environment that Addresses the Larger Picture
- A society that can “do more with less” must be created. Thus, innovation through the development of an entrepreneurial mindset is the only solution.
- Diversity, in all its forms, must be encouraged at every level.
- Creativity, innovation, and entrepreneurial activities all impart some level of risk. Therefore a better concept and understanding of risk must be developed in Japan.
- Successful and innovative companies from around the world, and from Japan immediately after WWII, all share the quality of strong teams. To help mitigate risk and to execute innovation effectively, team work becomes increasingly important.
Innovation through an entrepreneurial mindset
Jean-Baptiste Say, a French economist in the 1800s simply defines entrepreneurship “as a shift of economic resources out of lower and into higher productivity and greater yield.” Since Japan’s population is already decreasing, it must utilize entrepreneurial values to maximize their productivity and efficiency through innovation.
It is important to understand here that “entrepreneurship” does not imply starting a “venture”. Entrepreneurship is a way of thinking – a mindset – which is useful to solve a myriad of problems. It is a way to increase value and efficiency, as well as being able to differentiate “wants” and “needs” within a global market.
In the long run, by promoting innovation and entrepreneurship, this mindset will improve government, large businesses, and even create some new ventures. Most importantly, it will create new, taxable, high margin, and yen resilient industries which will reduce the deficit, create positive trade, and create a multitude of new jobs.
Diversity does not simply mean a wider variety of races and ages, or more women in the workforce. These are, of course, very important elements, but diversity also means increased cross-fertilization between differing disciplines; it means drawing on a wider range of resources and allowing them to work together to solve a problem. Without diversity, innovation through entrepreneurship, improved risk management and teamwork will not take place.
Risk and Failure
Japan perceives “risk” as an additional burden or tax. However, if it is understood and implemented correctly, risk improves numerous processes.
Risk is a relatively complex topic that comes in several different, relative forms. These include measuring risk, risk taking, risk mitigating, risk preparation, risk response, and risk management. For larger corporations and businesses, how one mitigates and prepares for risk is important with regards to corporate governance. Similarly, during natural disasters or cyber-attacks, being able to respond to risk and risk management becomes very valuable.
It is also incorrect to assume that “failure” is the antithesis to “success,” for the antithesis to “success” is really “inaction.” Failure is one of the most insightful and important learning experiences. Almost all successful entrepreneurs around the world have failed at least once prior to their success. Past failures enable individuals to become wiser, as they understand their limits and gain the necessary experience for success.
Innovation through an entrepreneurial mindset and successful risk management are strongly dependent on the premise of good teamwork.
It is often said that the Japanese are efficient and good at teamwork. However, I believe this assumption to be incorrect. The Japanese, in fact, excel at group activities, but not teamwork. The fundamental difference between the two is the sense of ownership. Given the same task, the team with the right incentive, ownership, responsibility, and authority will accomplish more than a group of people following the guidance of one leader. Team members have a mutual and vested interest in supporting each other’s strengths and weaknesses, assuming equal responsibility, and sharing both risk and burdens. The reverse is true of groups – especially Japanese groups – where people only look out for themselves in an age based hierarchy, and simply “do their job,” or what is minimally necessary to get the job done.
In conclusion, incentives and financial reallocation will not solve the current demographic and financial dilemma. Innovation through entrepreneurship is the only solution available, since it will revitalize old and generate new, taxable industries that are global and yen resilient. Since determining which industries to support or which company to back is inherently dangerous and usually incorrect, it is more important to create a process in which these ideas can be effectively executed and flourish.
Your comments are always welcome and could potentially be included in the next version of the proposal!
Special Advisor at Cabinet Office (Govt. of Japan)
Named by Nikkei as one of the “100 Most Influential People for Japan,” Saito began software programming in elementary school and started his own company while still in high school and was named Entrepreneur of the Year in 1998 (by Ernst & Young, NASDAQ and USA Today). As one of the world’s leading authorities on cybersecurity.
After selling his business to Microsoft, he moved to Tokyo in 2005 and founded InTecur, a venture capital firm. In 2011, he served as the Chief Technology Officer of the National Diet’s (Parliament) Fukushima Nuclear Accident Independent Investigation Commission. Later that year, he was named as both a Young Global Leader and Global Agenda Council member for World Economic Forum (WEF) and subsequently been named to its Foundation Board. In 2012, Saito was appointed to a council on national strategy and policy that reported directly to the Prime Minister of Japan.
Saito also advises several national governments around the globe. In Japan, he has served as an advisor to Japanese ministries; the Japan Society for the Promotion of Science; the National Institute of Advanced Industrial Science and Technology (AIST); the Information Technology Promotion Agency (IPAS); the 2020 Tokyo Olympic and Paralympic Games, among others. He is currently the Special Advisor to the Ministry of Economic Trade and Industry (METI) and the Cabinet Office for the Government of Japan.
He went to medical school at UCLA and Harvard Kennedy School; serves on various boards of Global 2000 companies; frequently appears as a commentator on TV and is the author of seven books in addition to writing several weekly newspaper columns. His management book, The Team: Solving the Biggest Problem in Japan, was published by Nikkei BP and became a best-seller in 2012. In 2016, Saito received the Medal of Honor from the Government of Japan for his work in the field of education.