Monday, February 04, 2013

Nuclear waste & the Japanese economic miracle

Early in January, Hiroko Tabuchi had an interesting piece in the New York Times on Japan's clean up of the mess left from the Fukushima nuclear crisis. I would have missed it had not the Australian Financial Review not reprinted the story today. I can't give you the link to the AFR story, it's behind the pay wall, but I found the original piece.

The thing that most interested me in the story was the apparent failure of the Japanese Government to either access new technology or to use spend on the disaster to encourage the development of that technology. After all, while we all hope that there will never be another nuclear accident, the reality is that there will be. For that reason, there are certain economic advantages in developing and testing the new, even if it only forms part of the overall effort.

This got me thinking. Do you remember the Japanese Miracle?  Probably only those born in the 1960s or earlier would do so. If you were born in in, say, 1970, you would only have been twenty one when the miracle finally collapsed. In essence, the Japanese economy, official structures and firms were seen as having some special interconnected features that guaranteed made Japan the economic and management model for the world. In Australia, this view of Japan reached a kind of apotheosis in the ill-fated Multifunction Polis concept.

There were special features in the Japanese management style that I have written about before, including the then Japanese approach to project management. In Japan, great effort was devoted to conceiving and defining the project, where the Australian approach was let's do and then fix. Outside engineering areas where the subject imposed it's own discipline, Australians spent an awful lot of time trying to fix.

What people forget is that great success is often time, culture and happenstance specific. The generalised universal models drawn from events often ignore this. Economics, public policy and management are all prone to this. However, all this raised an interesting question in my mind. What happened in Japan?

I could answer this question in many ways, but in the end I think it comes back to a form of ennui, a sort of listlessness, of boredom. Success came to be taken for granted. The once vibrant became routine, boring, done almost by rote. The political and economic imbalances that had always existed in the Japanese system became more important. Flexibility declined, the system became rigid.

Is this story relevant to Australia? I would argue so. Indeed, I have argued so with respect to both management and public policy. People talk of vision. I have done so too.

But the great economic, management and policy successes did not generally start with a vision. They tend to start with current issues, with ideas, with the desire to do new things, to test the bounds. The Japanese Miracle did not start with a vision of a miracle. It started in the rubble at the end of a World War with a beaten people with strong self-discipline and a powerful culture who wanted and needed to do new things. This combined with the right economic circumstances and an official system strongly focused on supporting commercial success.

I think that there are lessons here for us.                    


Anonymous said...

Hi Jim

Interesting stuff - about the innovations which might have formed part of the cleanup, I mean. Wonder if the same comment could be applied to our recent bushfire and flood experiences?

Haven't clicked on your links yet, but I seem to remember the multifunction polis as associated with South Australia - and, 'closer to my heart' the introduction of "just in time" manufacturing and delivery as being a Japanese concept?

Perhaps wrong, but it sticks in the mind as horrendous for a mfg client of my accounting firm which worked under that regime supplying radiator hoses to our once-proud car industry.

The JIT bit worked sort of ok; but wasn't matched by jit payment unfortunately...


Jim Belshaw said...

Yes, the MFP was in SA. The JIT one is interesting. The risks are more obvious now than when it was first introduced in Japan. One problem from my perspective is that it moved from a cooperative arrangement with shred benefits to one focused on squeezing costs regardless.