WASHINGTON/TOKYO (Reuters) - In the 1980s when Sony and Toshiba were setting the agenda in the global TV and memory chip markets Japan was bristling with confidence as a hub of technological innovation.
Three decades later, with Japan’s electronics industry in decline, Prime Minister Shinzo Abe is heading to Silicon Valley - the first sitting Japanese leader to do so - in the hopes of rekindling that innovative spark.
Facebook Inc founder Mark Zuckerberg and Yahoo Inc cofounder Jerry Yang are among those Abe is scheduled to meet during a swing through the West Coast that follows a summit with President Barack Obama earlier this week.
“Japan will change. Let’s create a country where innovation is constantly happening, giving birth to new industries to lead the world,” Abe told a business lobby of IT-related companies this month, according to Japanese media.
“When I visit Silicon Valley I want to think about how we can take Silicon Valley’s ways and make them work in Japan.”
Critics dismiss such talk as wishful thinking. Japan’s once-dominant technology companies have long fallen behind the likes of Samsung Electronics of South Korea and Apple Inc.
Sony Corp, which invented the Walkman portable audio player, is struggling to come up with hit products. Sharp Corp, a pioneer in the flat-screen TV market, is seeking its second big bailout in three years.
Japanese venture capital investments came to $1.2 billion last year, according to the Tokyo-based Venture Enterprise Center, a small fraction of the $48 billion spent by venture capitalists in the United States, a separate survey based on Thomson Reuters data shows.
Much of Japan’s innovation is happening within the confines of large companies that tend to be plodding and risk-averse.
But Abe’s supporters are optimistic the visit will have an impact simply by way of the message it sends.
Abe has already stoked risk-taking by investors with massive monetary easing and government stimulus, the first two “arrows” of his “Abenomics” strategy, which helped to push Japanese share prices to 15-year highs. Promoting entrepreneurship is one target of the third arrow meant to unlock growth through structural reforms.
William Saito, an adviser to Abe’s government who is accompanying the prime minister on his trip to the United States, said Abe has become more concerned about sparking innovation at home.
“I have seen an evolution in his thinking,” Saito said. “We just didn’t keep up with global standards. Something is not clicking.”
Abe’s schedule includes chances to rub elbows with Oracle Chief Executive Larry Ellison, Microsoft Chairman John Thompson and Tesla Motors CEO Elon Musk, among others. He will also meet California Governor Jerry Brown, where he will talk up Japan’s high-speed train technology, eyeing a possible project in the state. Brown has made building an 800-mile high-speed rail system in the state a priority.
Nicholas Benes, who chairs a committee at the American Chamber of Commerce in Japan that proposes growth strategies to the government, said Abe could be doing more to promote new businesses.
Benes said that could include making it easier to hire and fire workers - a reform of Japan’s rigid labor market that Abe has so far failed to tackle.
Even so, Benes believes Abe’s trip to Silicon Valley could go far in promoting risk-taking in Japan, where most university graduates covet a stable job with a big company and only a small number think about starting their own business.
“The most important thing is to simply change the social perception of entrepreneurship from being something where the dropouts have to go, to something that you might want to do fresh out of Todai,” he said, referring to the prestigious Tokyo University by its Japanese name.
Additional reporting by Tim Kelly, Teppei Kasai and Katsuro Kitamatsu in Tokyo; Editing by David Storey, Leslie Adler and Edmund Klamann