Thoughts from Japan

Management Insights

Fresh back from Tokyo and the six-monthly Orion International Advisers Conference, I was reflecting on the experience and some of the perspectives presented by the visiting speakers on Japan. In particular, in the context of an upcoming election here, are there initiatives the UK could adopt from other countries to help drive improvements here? Are there things to consider to help our politicians and businesses convert opportunities and avoid pitfalls?

Japan’s economy, having outpaced competitors since the 1960s, has seen pretty anaemic GDP growth since 1990. Inflation has hovered around zero for 30 years and, with the exception of the peak and recovery linked to the financial crash in 2008 and Covid, GDP growth has hovered between 3% and negative 1.3%.

But for all this, what has been the impact on quality of life for the average Japanese? There is a lot to like – very clean streets (there are no public bins – everyone takes their rubbish home), exceptionally low crime rate, cheap sociable restaurants, largely healthier than western equivalents, which probably contributes to the high life expectancy of over 85 years (compared to 81 in the UK and 79 for the US) and finally excellent and reasonably priced public transport.

With a focus on sustainability, I thought I’d draw some comparison with the UK on travel options and the impact on net zero objectives.

Public transport, in terms of environmental impact has to be prioritised better. What is needed to encourage usage of trains over the primary alternatives of car or plane is ease of use, a function of reliability, frequency, speed, network and cost.

In Japan, bullet trains travel at a maximum operating speed of 200mph (albeit test speeds have even achieved 275mph for conventional/375mph for maglev). This compares to the proposed maximum on HS2 (as and when built) is 225mph, so in the same range, depending of course on the amount of time spent at the maximum.

However, the Manchester spur of HS2 has been cancelled and I wouldn’t want to place bets on the remaining HS2 achieving average delays of under one minute year after year, nor our rail network operators managing to send 16 trains an hour with 3 minute minimums between trains, so the network can truly interconnect. Cost-wise Japanese trains seem reasonable, even if you are booking on the day, last minute – so users view it as default transport option. It is this linked up approach that is needed to encourage people away from car use and hence reduce pollution and congestion.

Public transport in my view isn’t perfect in Tokyo – for some reason, three different companies run the Tokyo underground lines for example and some tickets you can buy by credit card whilst for others you can only pay cash. However overall it is convenient, frequent and interlinked.

With an eye on energy sources,  one could criticise the fact it is mostly still fossil fuel based. Renewables account for c.22%, with around 10% coming from solar, 7% hydro and perhaps most notably a measly 0.25% from geothermal, compared to 26% in similarly endowed geothermal powerhouse, Iceland (where the remaining 74% is hydropower).

Perhaps we in the UK can think bigger picture and find a better way to link up the undoubted expertise in related areas to make things a little less parochial and a little more integrated to everyone’s benefit, both now and in terms of long term Net Zero targeting?

By Richard Hall on 24/05/2024