The rise of stakeholder capitalism is one of the major trends that will likely characterize the post-COVID global economy. As the pandemic crisis has exacerbated socioeconomic disparities and racial tensions across the world, there are increasing pressures on companies to shift from the shareholder capitalist model that prioritizes corporate profits and shareholder returns to the stakeholder capitalist model that maximizes returns for employees, customers, the community, and the environment.
In response to the COVID crisis, the World Economic Forum started the “Great Reset” initiative to redesign the existing economic systems based on stakeholder principles. My colleagues and I at Deloitte joined this effort and published a report titled “Driving Growth Using ‘Practical Wisdom’: Japan’s Perspectives,” which summarizes views of Japanese leaders engaged with the WEF and puts forth recommendations on Japan’s own “Great Reset” measures.
At the heart of the recommendations is a concept of “practical wisdom.” In putting together the report, we interviewed Japanese leaders who are part of the Regional Action Group for Japan. Many interviewees shared a view that the country has traditionally practiced stakeholder capitalism. Specifically, having long championed altruistic values and the philosophy of “sanpo yoshi” (three-way satisfaction among sellers, buyers, and the society), Japanese businesses have a wealth of knowledge in practicing multi-stakeholder management styles that promote long-term value creation for employees, customers, and the community.
Against this backdrop, the report suggests that Japanese firms leverage such “practical wisdom” to promote stakeholder capitalism for the post-COVID world. For instance, it recommends that businesses adopt purpose-driven management centered on sustainability and environmental efforts.
Meanwhile, Japanese leaders did not reach a clear conclusion as to how to communicate Japan’s practical wisdom to the global audience. They expressed concerns that it could be difficult for foreigners to understand the cultural nuances of Japan’s stakeholder tradition. In the following piece, I explain how the so-called “Shibusawa Doctrine,” a business philosophy established by Eiichi Shibusawa, could help the country promote its practical wisdom. (Read the next piece)
Note: Deloitte Tohmatsu Group, in collaboration with the World Economic Forum, published a report on Japan’s vision for the Great Reset. The vision includes four pillars: resetting attitudes, resetting business culture, resetting the economy, and resetting the global collaboration framework. For more details, please visit here.
Senior Consultant, Deloitte Tohmatsu Consulting Dr. Minami joined Deloitte after working at the Sigur Center for Asian Studies at the George Washington University, the American Enterprise Institute, the Canon Institute for Global Studies, and Waseda University. In these roles, he conducted policy research on issues such as international security, East Asian politics, and US-Japan-China relations. At Deloitte, he conducts geopolitical and economic research for both internal members and external clients. In addition, he has been involved in projects on corporate cybersecurity strategy, China's foreign direct investment, and industrial park development in Vietnam. He is also a fellow at the World Economic Forum, where he helps organizes the Regional Action Group for Japan, a community of Japanese business leaders and policymakers. In that role, he contributed to the report "Driving Growth Using 'Practical Wisdom': Japan's Perspectives," which was published by the WEF in collaboration with Deloitte in January 2021. Based on inputs from the RAGJ community, the report makes recommendations on Japan's post-COVID recovery strategies. He has written in outlets such as The Japan Times, The Diplomat, and the European Journal of International Relations. He has also given lectures at the Elliott School of International Affairs, The George Washington University and the Foreign Service Institute, the U.S. Department of State. He has a PhD in political science from the George Washington University and a BA in political science from Macalester College. Selected Publications "Why a ‘Phase One’ Deal Won’t Solve the US-China Trade War," The Diplomat, December 13, 2019. "Is Populism Finally Coming to Japan?" The Diplomat, July 31, 2019.（Reappeared in The Japan Times) "Abe and Modi: Nationalist Leaders versus Nationalist Leadership," the Rising Powers Initiative, the Sigur Center for Asian Studies, December 2014.