Is Japan, Inc. Efficient?
Growing Chikan and Lack of English Skills Make Difficult for Mr. Abe’s Goal to Reach 600 Trillion Yen Economy
January 18, 2016
Akira Kondo
 House of Councillors, The National Diet of Japan. Can Mr. Abe fix the country's troubled economy?
Japan is unique. While you are stepping into one of crowded train stations, you may become curious about eye-catching weird posters, sometimes erotic, that are displayed, especially at the bottom of an escalator or stairs. They are the typical posters that try to prevent frequently occurring public molestation, which is commonly called, “Chikan,” in Japanese language. It is very common that you may watch Chikan-related news on TV at least many times a day if you can understand Japanese. Though most foreigners are having difficult time to understand the language while in Japan, the Japanese are also reluctant to speak English. In fact, most Japanese do not speak English even they have gone through a six-year mandatory English class through high school. When you want to ask for a direction while you pick a nicely dressed businessman on the street, the chances are he would speak to you with his minimal English vocabulary, plus his artificial smile at you. Possibly, he would be a molester as well. Although Chikan and English skills are not related to each other, in terms of economics, however, they would generate some impacts on Japan’s productivity.
Mr. Abe’s New Three Arrows
Last year, Abe was re-elected to the ruling party and he introduced new three arrows or goals as it seemed the original three arrows were lost. The first goal is to promote economic growth, the second is to push up the low birth rate, and the third is to increase nursing facilities for the elderly. All together, the government is targeting its economy to grow by 20 percent from the current level to a 600 trillion yen in a nominal gross domestic product (GDP) term by around 2020 while keeping its population at around 100 million. 
Japan’s nominal GDP, 1994 – 2014 (Production approach). Mr. Abe is targeting its economy to grow by 20 percent from the current 490 trillion yen to a 600 trillion yen in a nominal GDP base by around 2020. To reach that goal, the economy needs to grow around 3 percent annually to reach the 600 trillion by 2021. | Source: Cabinet Office of Japan
That sounds interesting goals for “Abenomics” after missing the original three arrows. The second goal highly depends on economic growth, which is the first goal, and the third goal probably depends on how government and private sector can work together to accommodate aging people in the aging society. Again, the first goal of economic growth is the difficult part. In fact, it is the continuation of the original third arrow of the new growth strategy.
Efficiency
In order for Japan, Inc. to reach 600 trillion yen in a nominal GDP term by around 2020, we first need to know a basic aggregate production function for a long-run growth. GDP is the function of the capital and labor efficiency. Therefore: GDP = f (K x LE) where, once again, K is capital, L is labor while E is “efficiency” or so called “total factor productivity (TFP), and LE together is labor efficiency; therefore, Y = K (LE) <===> Y/L = (K/L) E where Y is GDP or productivity while Y/L is simply GDP per capita or productivity per person. <To learn more about production function, read “Applying Cobb-Douglas Form of Production Function to Analyze China’s Transformation into an Investment-Driven Economy over the Past 30 Years> Though this article is not about solving mathematical equation, the important thing to understand is that promoting “efficiency’ leads to an economic growth. The efficiency includes education of the labor force, better technology, stable social stability, and so on while growing Chikan activities probably generate inefficiency.
Japan’s Manufacturing Productivity (1991-2014) | Source: Japan Productivity Center. Its average productivity growth rate between 1991 and 2014 is 1.45 percent while however it only grew 0.27 percent on average between 2005 and 2014. Did growing Chikan activities negatively impact Japan’s productivity?
Therefore, the greater the efficiency is, the greater the output will be. Education is probably the big part of efficiency to lead the long-run economic growth. Why not Mr. Abe aims one of his arrows to education? Growing Chikan activities surely have negative impacts on the efficiency. No one believes they can create efficiency in Japan, Inc. Then why not Mr. Abe shoots a bunch of arrows to those molesters and to eliminate them?
Education in Japan
Therefore, let’s look at today’s Japan as you are traveling there to see if there is greater efficiency or not. Over past years, foreign tourists were flooded across the islands of Japan. Many tourists love Japan and its sincere hospitality at shops, restaurants, and hotels. You may think the Japanese are very hard working and good at welcoming foreigners. That is true because they have had meaningful mandatory education systems in their childhoods and lived in a civilized society. However, that meaningful education does not simply translate into the Japanese’ abilities to speak English or to work efficiently. Foreigners’ biggest disappointment when traveling in Japan is probably that Japan is not English friendly. From the street sings to Trip Advisor’s recommended popular restaurants’ menus, English is most likely not written or written poorly instead. That being said, chances are very low that you see meaningful English translation in the menu when you step into a popular local ramen restaurant (though the Japanese are friendly enough to help you decide the noodle you would like to try). Within Asian region, the Japanese are probably one of the least to speak English while neighboring Koreans, Malaysians Chinese in big cities, and so on all speak meaningful English. Interestingly, the Japanese often complain that the Chinese-speaking English was not easy to understand when they talk to the Japanese staff in a shop. However, the one who actually does not speak or understand English is likely to be Japanese. They do not have much exposure to global English, which were spoken by non-English speakers, while they believe they know English. Despite six years of mandatory English lessons in schools, they only speak very minimal vocabulary with an artificial smiling face at you. 
(L) EF English Proficiency Index 2015 | Source: Education First. Japan’s English skills are below its neighboring Korea’s. China ranked the last in the table; however, the Chinese in a big city, like Shanghai, speak meaningful English nowadays. (R) Global Ramen Restaurant… English menus in Japan tend to show clumsy translations as well as many typos.
Japanese people tend to become shy, but kind, if you speak to them in English. A notable situation that you may realize such Japanese behavior is when they deliver a business presentation in English. Unless the Japanese company hires a professional presenter, the Japanese presentation tends to become quite boring and very serious. The speaker generally offers no smiling in his face, or no emotion, and just shows a series of sentences on the Power Point slide, which he just reads aloud without any eye contacts. Once it turns to a Q&A session, he smiles back to you when you throw a question to him. While he may not be sure what you have asked, he would walk toward you and give you a bunch of papers that shows data and figures to let you understand with his artificial smile and without communicating.
Therefore, those Japanese are not becoming so called “global persons,” what the Japanese government would like today’s young Japanese to be. However, that never has happened yet probably because of Japan’s education system. Even with six years of mandatory English program in Japan, today’s young Japanese are not capable of communicating and facing with foreigners in English. Rather they are trying to away from English language as they make Japan, Inc. away from global. Nowadays, the Japanese government is trying to fix this problem by letting the Japanese to learn English from earlier ages and promote more English learning programs to make young Japanese to be global. If that happens, the government believes that Japan, Inc. is becoming global, leading its productivity to improve through greater efficiency in communicating with the world. (However, these negative ideas do not reflect all the Japanese. Still, there are some Japanese fluently speak English and friendlily talk to you without any hesitation. What the article describes is that Japan’s education may not be efficient enough to positively impact its economic growth.) Unique Chikan Society
You may be very curious when you see erotic posters in train stations while traveling in Japan. They are preventing frequently occurring public molestation. Everyday, the young and old Japanese are seeking opportunities to satisfy their sexual demands. It is common that a schoolteacher set a hidden camera in his handbag to follow a high school girl on an escalator in order to enjoy up-skirt photography or videography. On a crowded train car, a nicely dressed businessman dodges people toward a young woman to peek her and attempt an obscene act throughout his train ride. You may even hear such news that a business executive person set a camcorder in a female dressing room in his office. A traffic accident even happens when a driver is carefully observing a high school girl through the car windows while driving without looking at front. One of the funniest things on Japanese TV news is that it always broadcasts a series of Chikan-related topics almost everyday. Such news even appears on a front page of a nation-wide newspaper. Those who are arrested are often schoolteachers, college professors, policemen, Japan’s self defense forces members or can be anyone. On a flip side, Japan is safe in terms of a number case of murder. However, Japan is not certainly safe for females thanks to growing molesters. 
Typical posters for preventing public molestation or known as “Chikan” in Japanese language are displayed at most stations across Japan. Those posters are especially displayed at the bottom of stairs or escalators to prevent up-skirting photography. No other country has such posters everywhere. Will Japan be soon called “Chikan nation?”
Quiet and shy Japanese silently like to satisfy their sexual needs. It is the reason that any smartphones purchased in Japan do not have a manner mode for a camera app. While in a corporate or educational presentation, the Japanese tend to take photos with loud shutter sound while foreigners take them without it. It does not mean the Japanese are rude to disrupt the presentation. In fact, their smartphones cannot snap a photo without the shutter sound to prevent public molestation events or secret filming. Otherwise, the number of public molestation in Japan would skyrocket and the country would be known famously as a Chikan nation.
Those molesters are surely not working efficiently at their work desks as they always seek any molestation opportunities for next days on crowded train cars. Again, even business executives and college professors also participate in public molestation. If such a number of public molestation increases across the islands, Japan’s productivity surely falls off through the deterioration of efficiency. How come Japan is becoming like that now? Are the Japanese’s coward Chikan activities coming from their stressful work environment? Probably. Japan’s two-decade-long deflationary-period may have lowered work motivation. Today’s young Japanese were all born in the deflationary era, when the real wages were declining, prices goods and services were low, and zero interest was earned in the banking account. Stock markets had no sign of recovery. In such depressed economic environment, today’s Japanese are facing an inflationary economy led by consumption tax hike and weaker domestic currency. It is a shock for those Japanese who had lived in a deflationary period and had not seen any price hikes in a grocery store.
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