Blueprint for Japan 2020
Joichi Ito (Neoteny)
Oki Matsumoto (Monex)
Blueprint for Japan 2020
100
Feb 1999
PERCENTAGE
July 2000
• Entrepreneurship is
not socially accepted
80
60
※The graph on the left
Percentage “yes” on item: People you know
respect those starting a new business
40
ITALY
50
40
30
20
USA
CANADA
UK
ITALY
0
FRANCE
10
ERMANY
※The graph on the right
Percentage “yes” on item: Fear of failure would
prevent you from starting business
60
JAPAN
• Japanese Afraid
to Start Companies
70
(%)
CANADA
GERMANY
FRANCE
USA
0
UK
20
JAPAN
Blueprint For Japan 2020
Condition of Diversity (1)
Blueprint For Japan 2020
Condition of Diversity (2)
LDP
related
LDP
unrelated
Ruling
Party
1955
2002
PNC
(In U.S.)
DNC
※
4%
•Japanese society have a bias
for Academic Background.
32
%
The name-brand university graduates that
occupy 4% in all university graduates occupy 32%
in all presidents of Japanese listed companies
Name-brand
University Graduates
Others
The circle inside is all University Graduates.
The circle outside is all Presidents of Japanese listed Companies
Bad Influence of
Press Clubs
Circulation of Newspapers
“Me too” contents of
Japanese newspapers


Journalists are shut out by
violation
70% of date source of Japanese
major newspaper are from
Press Clubs
Abandonment of Agenda
Setting

Adhesion between government
and journalists
1200
1000
(10 thouand)
Blueprint For Japan 2020
Condition of Democracy (1)
800
600
400
200
0
U.S.A. today
WSJ
Nikkei
Mainichi
Yomiuri
Rate to the smallest number
300%
250%
• A vote in some districts have
double value
to one in other districts.
200%
150%
100%
50%
0%
Kanagawa
14
Kanagawa
7
Tokyo 22
Shimane
2
Kochi 3
Shimane
3
Blueprint For Japan 2020
Condition of Democracy (2)
Unsuccessful Successful
140000
120000
•
Those who got less poll than
the unsuccessfuls were elected.
100000
80000
60000
40000
20000
0
The Japanese G overnm ent B alance S heet (Trillions of Yen)
41 Accounts payable
13
Short-term Government
Securities
112 securities held by the public
39
Accounts receivable
22 Government bonds held by the public 230
Loans receivable
286 Postal savings
260
Money in trust
22 Public pension liabilities
797
Allowance for doubtful accounts -2 Advanced received
18
Tangible asset
176 Reserves
28
Intangible asset
0 Insurance reserves
107
Investment
42 Others
16
Others
2
Total Assets
701 Total liabilities
1508
•
The difference between
Assets and Liabilities is
806 Trillions of Yen
<Insolvent!>
75
65
• The young generations
that will pay 806 trillion yen
do not vote very much
in national elections.
PERCENTAGE
Blueprint For Japan 2020
Condition of Democracy (3)
55
45
35
25
20
～
24
25
～
29
30
～
34
35
～
39
40
～
44
45
～
49
50
～
54
55
～
59
60
～
64
65
～
69
Over
70
Rate of
Market Capitalization to GDP
PBR of
TSE listed Companies
12000
(Billions of Dollar)
Blueprint For Japan 2020
Condition of Capital Markets (1)
10000
8000
6000
4000
2000
0
Japan
U.S.
PBR < 1
PBR > 1
Market Capitalization GDP
※ Market Capitalization of Japan is derived from TSE.
Market Capitalization of U.S. is derived from NYSE and Nasdaq.
Blueprint For Japan 2020
Condition of Capital Markets (2)
Case of a large Japanese bank:
Without any reduction of capital, about 20
billion dollars of public money was injected.
On an annual announcement of some billion
dollars of newly borne write-off for bad loans,
the share price stays the same level.
The share is still trading with the market
capitalization of the bank to be about 20
billion dollars.
Blueprint For Japan 2020
Condition of Capital Markets (3)
Japanese do not invest much into Stocks
U.S.
%
11.9
32.1
Trillion Dollar
34.1%
%
0%
1420
Trillion Yen
7.2
54%
Japan
20%
Cash & Deposit
40%
Bond
60%
Investment Trust
80%
Stock
100%
Insurance
Others
Blueprint For Japan 2020
Diversity - Analysis
Diversity is not recognized in Japan
Needs to prevail the sense of diversity
Needs for educational reform
Needs for more to communicate in English
………
Blueprint For Japan 2020
Democracy - Analysis
Democracy is not established in Japan
Needs for the election system reform
Needs for the media to become independent
Needs for more disclosure of the nation state
………
Blueprint For Japan 2020
Capital Markets - Analysis
Capital Markets is not working in Japan
Needs for the independent SEC
Needs for the reallocation of resources
Needs for transparent corporate governance
………
Blueprint For Japan 2020
What to do?
One idea is to create new indices,
…not GDP, not Market Cap.
Japan Diversity Index
Japan Democracy Index
Japan Capital Markets Index
…and we track them.