We’re #3 … and we don’t care

Avis Rental Cars used to have a slogan capitalizing on its status as the second ranked company in its industry “We’re #2 and we try harder”. I was reminded of this commercial recently when I read that China will overtake Japan as the second largest economy in the world by next year. This is far sooner than predicted and created the expected celebration in China.

Surprisingly Japanese reacted to this news with apathy and resignation rather than the determination to succeed that characterized Japan’s rise from the destruction of WWII. Why do citizens of Japan no longer care about the loss of their hard won position in the global economy they way that Americans have been anguishing about the possibility of being dethroned in the future ?

One reason I think is the dismal view that Japanese young people have of the future and their low Subjective Wellbeing (SWB) according to studies done over the last ten years. Japanese adults though are also anxious about their future and are uncertain as to how to address the challenges Japan faces. Unlike in the post-war era when the problems were very clear and consisted of how to bring Japan back from total devastation, the country now looks to maintain its prosperous lifestyle in a changing world.

Ezra Vogel’s pioneering work in 1979 “Japan as #1” profiled the country as it entered its greatest period of economic success. That the book’s title now appears ironic and its basic theses such as the flexibility of Japanese workers to changing conditions is suspect shows how much the world has changed for Japan since the economic bubble burst in the early 90’s.

The election of Yukio Hatoyama and the Democratic Party was a vote for change in leadership but not a mandate from the people for the difficult decisions needed to resolve Japan’s economic stagnation. In fact this week the new administration backtracked on one of the signature reforms of Prime Minister Koizumi’s regime, the privatization of the Post Office. This much needed reform was championed by Koizumi’s grandfather when he was the head of the Post Office and finally undertaken in his grandson’s administration only to be revoked by the next reform government to take power.

This illustrates the depth of difficulty in moving the country and its people to address the challenges of a resurgent China and a multi-polar economic future.