Vogel Discusses Japan's Success

Japan has sustained its astounding level of economic success largely because Japanese businesses are better than their Americans counterparts at automating their factories, serving their customers, and conducting product research, Professor of Sociology Ezra Vogel told an audience of 50 last night.

But even though Japan dominates the international market, rival countries do not yet fully accept Japan as a legitimate player, due to its generally impenetrable domestic market, the chairman of the East Asian Studies Commitee said at a talk sponsored by the Japanese Cultural Society.

Vogel, whose address was the first in a series of lectures, spoke on the reasons for Japan's past economic success, the nation's prospects for the future, and the causes of Japanese dominance of American business.

Japan's past economic success stems, in large part, from its business philosophy, Vogel said. While American companies tend to react drastically to economic crises, Japanese businesses are more likely to "tighten their belts and ride out" economic problems, he explained.

He added that the ultimate aim of American business is to make money for the shareholders, while Japanese businessmen focus on the well-being of their employees instead.

Japan's current dominance of the international market is primarily due to the high level of automation in its manufacturing facilities, Vogel said.

He attributed this technological lead to the number of electrical engineers that enter the manufacturing industry--almost three times the number per capita in the U.S.--and the Japanese policy of constantly redesigning preexisting plants.

The superiority of the service industry in Japan--especially the financial institutions--also accounts for their preeminence on the international scene, said Vogel. "The three top banks in the world are Japanese, and Japanese banks last year loaned more money than the banks of any other country," he added.

The emphasis on research and development of new and better products is another reason for Japanese industrial dominance, Vogel said. Japan's research is moving in "a very strong direction," Vogel said, and this explains the consistently high quality of Japanese products.

But despite these advantages, said Vogel, Japanese business is still not completely accepted in the international market.

Many foreign companies--especially American ones--resent the presence of the Japanese because of the closed nature of the Japanese domestic market. While the Japanese have no tariffs or formal trade barriers, their market is "unusually difficult to enter," Vogel said.

But Vogel said he expected Japanese business to continue to progress, although perhaps not at the same "phenomenal rate" that has marked their past economic development.