Lessons from the Land of the Rising Sun

With Tokyo at its heart, Japan contributed more to world economic growth than the US between 2007 and 2012. Picture: Getty

With Tokyo at its heart, Japan contributed more to world economic growth than the US between 2007 and 2012. Picture: Getty

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With Japan in expansive mood, now is a great time to strengthen our links with the world’s most innovative nation, says James Tulloch

Japan recently responded to a Foreign Office consultation by saying that quitting the EU could cost Britain tens of thousands of jobs at Japanese companies because they view the UK as a “gateway” to Europe, adding it “expects” the UK to remain a major EU player.

Japan's economy remains in flux. Picture: Getty

Japan's economy remains in flux. Picture: Getty

Tokyo’s intervention in the “other” referendum debate ruffled Westminster feathers but also poses intriguing questions for Scots. How would Japanese firms react if we quit the Union? And if Scotland voted Yes, then rUK voted Out, would Japan first look north or south for that gateway?

More immediately, as 2013 marks 400 years of British-Japanese relations, and coincides with a Japanese economic revival that’s well outpacing our own, this was a timely reminder of the importance of Asia’s “other” giant, outshone and overlooked in recent times.

“The reason that the Japanese comment as they do is that 110,000 jobs in the UK are dependent on Japanese investment,” observed Peter Wilson, outgoing director of Asia-Pacific at the Foreign Office, before launching the Asia Scotland Institute’s series of “ambassador briefings” recently. These provide expertise and experience to Scottish audiences, the keystone of the institute’s mission to promote awareness, understanding and collaboration between Scotland and Asia.

Time to nurture ties

Many of those jobs will be related to sectors creating tomorrow’s world – such as biotech, energy efficiency, robotics or transport – in which Japan excels. The Japanese filed more patent applications (427,417) than anyone else in 2011, over a fifth of the world’s total. Jobs like those at Mitsubishi Electric’s planned R&D facility in Livingston focused on air conditioning and renewable energy heating – jobs attracted by Scotland’s “excellent universities” and “highly educated pool of talent” in the words of the company’s research head, Dr Kazuhiko Tsutsumi.

Now is a particularly opportune time to nurture such ties, promoting Scottish talent and centres of hi-tech excellence. Japanese companies are in expansive mood, looking abroad for growth as their domestic market ages and shrinks amid concerns over Japan’s enormous debt pile. They spent a record $84.6 billion on overseas purchases in 2012. Meanwhile, the country’s banks are increasingly active overseas. All of which has contributed to the startling trend, noted by another recent Asia Scotland Institute guest speaker, Professor Danny Quah of the LSE, whereby from 2007 to 2012, Japan contributed more to world economic growth than the US, second only to China, which speaks of extraordinary resilience and resolve.

Scotland should be looking outward

Scotland, which faces similar demographic challenges to Japan, should also be looking outward, argues Peter Wilson. He says: “About 10 per cent of our SMEs across the UK export: we need to bring that up to about 20 per cent to be in parallel with other countries in Europe. There are many examples of Scottish companies that do this very well, but we need others to follow.”

The particular challenges that SMEs face entering Asian markets will be addressed by Lord Green, minister for trade and investment, at the next Asia Scotland Institute event at the Royal Society of Edinburgh on 4 September. So what does Scotland need to do? “Above all, it is to rediscover that expeditionary spirit that has led Scots to the Asian region for centuries,” believes Peter Wilson.

In Japan’s case, Henry Dyer, William Kinnimond Burton and Thomas Blake Glover were Scots who helped lay the foundations of modern Japan. Dyer was known as the “father of Japanese engineers” and was principal of the Imperial College of Engineering in Tokyo from 1873 to 1883. Burton introduced modern sanitation to the country. Glover developed Japan’s first coal mine, steam railway and the brewery which became Kirin.

Glover was also a founder of the shipbuilding company that became Mitsubishi, whose Livingston investment marks 20 years at work in Scotland and is another chapter in the history of engineering partnerships between Scots and Japanese – upon which future generations can build as both countries tackle the fundamental, diverse challenges that will define the century.

Earlier this year, it emerged that a painted scroll found at the back of a safe in Edinburgh Central Library was the work of celebrated 18th century master Furuyama Moromasa. We at ASI are delighted that Dr Rosina Buckland, senior curator at the National Museums of Scotland, will discuss the scroll at an ASI cultural event in November.

A rare and precious artefact depicting scenes from ancient Tokyo, the scroll’s rediscovery seems fitting at a time when the world is looking at Japan afresh, wondering whether or not “Abenomics” – the policies advocated by Shinzo Abe, current prime minister of Japan – can lead to sustained recovery.

• James Tulloch, former resident of Tokyo, is director of communications at the Asia Scotland Institute www.asiascotlandinstitute.com

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