Re-building Trust in Japan UK Business After Brexit

for June, 2016

Re-building Trust in Japan UK Business After Brexit

Posted on 28 June 2016 in Cultural Awareness, News -
Japan UK

Cultural Differences

Disliking change more than most, the Japanese are reeling from a decision making process that differs culturally from their own. Characteristics of the British summed up by Der Spiegel as an “inner independence in addition to myriad anti-authoritarian defiant tendencies” stand in sharp contrast to the Japanese preference for hierarchy, conformism and putting your individual needs behind that of the group/company. Decision making in Japan is purposely consensual to get buy in from everyone so that unpredictable decisions are almost never made.

The traditional paternalistic role of a company In Japan where loyalty and trust work both ways (full time workers can rely on the company to look after them and the company can, to a certain extent, be allowed to tell them what to do) will explain why those Japanese companies who have invested heavily in areas such as the NE and who openly expressed their preference to stay in the EU, were hit hard by the high percentage of Brexit voters in these areas.

We now risk being seen as untrustworthy-not a good thing since trust is one of the basic cornerstones of doing business with Japan.

Building a Culture of Trust

However, the future of Japan UK business can be bright if we can re-build trust and mutual understanding. There is a very positive attitude towards doing business with Japan in the UK. I have been working with Tokio Marine HCC, who have been outstanding in their positive attitude towards working with the Japanese and building up this culture of trust. Many of the larger Japanese investors initially chose the UK because of access to the single European market (no-one knows if that will survive) but also because of many shared values and careful relationship building. Some of these companies have formed large Japanese communities in the UK creating a culture of trust through investment in training, local employment, educational and cultural links.

Business Opportunities

The vote for Brexit may have been a vote for many things but it should never become a vote against UK Japan business.

Although Brexit may have been a harsh lesson for the Japanese in the uncertainties of globalisation and shake their trust in the British market, I can’t see all their companies immediately jumping ship (their customary risk-averse nature may well prevent this especially when the future of the EU is so uncertain) nor them stopping doing business with British companies. Although it can take many years of relationship building to create successful business with Japan, long-termism is its reward. The CEO of Hitachi declared at Hitachi Rail’s opening ceremony in Newton Aycliffe that they were there to stay. Although Japan has been criticised for protecting less than lucrative (zombie) companies within their long-term networks, this non western business mentality may well be something we are thankful for in the short-term until that trust can be re-built and the future is more certain.

Japan is a long term investor in and trade partner with the UK and should remain one of our key business partners given their current globalisation imperative and a need for us to trade with other countries outside of the EU. The BoJ has been asked to free up cash for their companies in the UK-let’s hope our government can reciprocate by negotiating beneficial trade agreements and financial incentives.The vote for Brexit may have been a vote for many things but it should never become a vote against UK Japan business.

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Elected to Japan Society of the UK Board of Trustees

Posted on 28 June 2016 in News, Uncategorized -
The Japan Society Logo

I am proud to have been asked to serve as a Trustee on the Board of the Japan Society in the UK-the leading independent body in the UK dedicated to the enhancement of the British-Japanese relationship- to represent my activities within Japan UK business and also as Chair of JETAA UK. I am also honoured to have been elected at such an important time for raising understanding and trust between our two countries post Brexit. Never has it been more important for us to re-build the trust and make this relationship between our 2 countries stronger.

I was also pleased to have been involved  in gathering stories for the chapter on the JET Programme for the recently published book “Britain and Japan-Biographical Portraits” compiled and edited by Hugh Cortazzi and I attended the launch of this book after the AGM.

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Brexit-Japanese Reactions

Posted on 24 June 2016 in Market Insight, News -

I was asked by the LA Times to comment on the impact of Brexit on medium-term and long-term trade between the UK and Japan. The UK has benefited from massive investment by Japanese companies bringing their European HQ here and there have been unprecedented levels of M&A activities from Japan in recent years, specifically to gain more global market share. Not all of this market share has been tied to the EU but every single Japanese company I speak to quotes the significance of the UK’s membership of the EU as their decision to invest here.  Although it is far too early to predict anything at a very uncertain time, I could tell the Times that from working with and talking to the Japanese business community in the UK at various levels, they were extremely worried about a Brexit and how it would affect their access to European Markets as well as knowing there would be uncertainty on an unprecedented scale following it.

Given the Japanese aversion to change and unpredictability, the Brexit has caused shockwaves amongst the Japanese business and diplomatic community in the UK. It also caused the Nikkei to plunge to the lowest level in 5 years, shares in Japanese companies in the UK dropped and the Yen surged prompting the Japanese Finance Minister to issue a statement that they would intervene where necessary to off-set the affects of this on their currency and Japanese exports.

There is also the issue of the Japan EU Trade Partnership that is currently being negotiated. It is too early to say whether this will continue and whether it will bring more advantages for European companies wanting to trade with Japan. However, British investment in Japan could  stay strong if we can negotiate a separate deal with Japan. We are mostly dealing with the unknowns at the moment- a situation that risk-averse Japan is very nervous about.

On a positive note, there are elements of the Japanese way of doing business that make me feel confident that we will continue to enjoy positive trade with Japan. Most Japanese businesses have long-termism at their core and recent inward investment from companies such as Hitachi Rail in the UK have built upon long-term relationships and were made with the intention of being here for the long run come what may. This will hopefully be the key to what will happen with most Japanese companies in the UK-long-termism along with a propensity to caution and dislike of change will hopefully mean they won’t jump ship straight away and may stick around long enough to support us keeping the UK economy strong and competitive.



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Discussing Gender Roles Japan vs Sweden at Stockholm University’s International Teaching Week

Posted on 3 June 2016 in News -
Stockholm Networking Picture

I was delighted to have chosen to take part in Stockholm University’s First International Teaching Week, where I had many opportunities to really understand the culture of Stockholm Business School through meeting with various academics, attending seminars and debates and delivering my own lecture on the gender roles in Japan versus Sweden and whether ‘womenomics’ can close the gender gap given these ingrained roles.

We visited the Swedish Institute for an insight into how the Swedish government works to promote Sweden as a study destination internationally and attended the Annual Spring lecture at SBS to learn more about the transparency guarantee in Swedish development aid from Assistant Professor Pontus Hedlin and former Minister of Development Assistance Gunilla Carlsson.

We were shown amazing hospitality by our hosts with a wonderful boat tour of Stockholm and opportunities to join in with the amazing afternoon coffee and cakes tradition called Fika.

Stockholm by the river

I really came away with a desire to promote Stockholm as a place of study and hopefully to do more work. I made many contacts in my area of research and am in touch with the students I met there, who are all researching some really Japan related subjects. I hope to go back very soon!

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