Posted: 29 Jan. 2021 3 min. read

’Shibusawa Doctrine’: Japan’s Stakeholder Approach for the Post-COVID Era

Series – Unpacking Japan’s Great Reset (2)

As the international community seeks to promote stakeholder capitalism under the World Economic Forum’s “Great Reset” initiative, world leaders are drawing lessons from Japan’s “practical wisdom” and its multi-stakeholder traditions. Meanwhile, there remains a question as to how Japanese leaders could effectively communicate such “practical wisdom” to the global audience. (See the previous piece )

I suggest that Japanese leaders should promote the so-called “Shibusawa Doctrine” to explain the country’s stakeholder approach. The doctrine is named after Eiichi Shibusawa (1840-1931), a prominent industrialist widely known as the “father of Japanese modern capitalism.” He led the introduction of Western capitalism to Japan after the Meiji Restoration (1868).

Shibusawa’s business philosophy stands in contrast to the “Friedman Doctrine,” a school of thought championed by Nobel-winning economist Milton Friedman that promotes shareholder capitalism. Unlike Friedman, who argued that corporations should only focus on maximization of profits and shareholder returns, Shibusawa claimed that firms must assume social responsibilities. The Japanese leader suggested that companies must take into account both ethical and financial considerations, pursue private interests through realization of public interests, and adopt sustainable business models for long-term value creation.

Shibusawa’s thoughts have greatly influenced Japanese business leaders in the modern era and form the foundation of the country’s stakeholder approach. One example is Konosuke Matsushita, founder of Panasonic, who famously maintained that companies must be “public entities of society” (shakai no koki) and serve societal purposes. Shibusawa’s philosophy is even more important today as the world suffers from the pandemic crisis and urgently needs rethinking of the existing economic systems.

Moreover, experts attribute Japan’s economic successes partly to Shibusawa’s influence. Renowned management scholar Peter Drucker argued in his Harvard Business Review article, “Behind Japan’s Success,” that Shibusawa’s management philosophy contributed to the rise of Japanese businesses after the World War II.

In fact, even before the COVID crisis, scholars were starting to draw lessons from Shibusawa. After the 2008 financial crisis, international scholars came together to publish Ethical Capitalism: Shibusawa Eiichi and Business Leadership in Global Perspective, arguing that his thoughts could offer an alternative economic model to the existing capitalist system that led to the financial collapse.

The world again finds itself at a crossroad amid this pandemic. Japanese leaders could steer the direction of the global economy toward stakeholder capitalism by promoting the country’s “practical wisdom”: the Shibusawa Doctrine. This would be Japan’s unique contributions to the “Great Reset.”


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.

World Economic Forum Report

The Regional Action Group for Japan - Driving Growth Using 'Practical Wisdom': Japan's Perspectives


Daisuke Minami, PhD

Daisuke Minami, PhD

Deloitte Tohmatsu Group

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.