Womenomics and Culture Change in Japan

JULIA TAYLOR KENNEDY: You're listening to Impact from the Carnegie Council.

Each episode, we explore a topic in global business ethics. This time, it's culture change in Japan. I'm Julia Taylor Kennedy.

In our last episode, we talked about the impact that corporations can have on cultural norms when it comes to fair wages, work conditions, even gender rights. We explored how a corporate policy could affect how employees behave on and off the job.

Well, today, we're going to look at one society that's trying to accomplish a cultural shift in a much more purposeful way. And to tell the story with me, I'm bringing along a colleague here at Carnegie Council.

Can you say your name and title please?

DEVIN STEWART: I'm Devin Stewart, senior fellow at Carnegie Council.

JULIA TAYLOR KENNEDY: Devin recently published a piece in Foreign Affairs about "womenomics." It's a new push to include more women in the Japanese economy. Devin's been studying Japan and philosophy for many years. And in a way, this push toward gender equality in the Japanese workplace comes from a place of desperation.

DEVIN STEWART: In Japan, there's been about two decades of stagnation.

JULIA TAYLOR KENNEDY: What kind of stagnation are we talking about?

DEVIN STEWART: Well, there's been moderate economic growth, but I would call it societal stagnation.

JULIA TAYLOR KENNEDY: And how can Japan reverse this trend?

DEVIN STEWART: When you are confronting a shrinking, aging population you have three options, basically. Either get your women to work, increase the birth rate, or let in a massive amount of immigration.

JULIA TAYLOR KENNEDY: Before we get into more detail on womenomics, I want to rewind a little bit because for people who haven't lived through it—I remember in the 1980s, Japan was it. The way we talk about China today is the way we were talking about Japan then. The way we talked about China five years ago is the way we were talking about Japan then. There was an enormous, almost existential, fear in the United States of Japan's rise, right?

DEVIN STEWART: Absolutely. And I would say, to some degree, the rise of Japan is even more intense, in some ways, for an American perspective or even from an international perspective, because Japan, unlike China, I believe actually contributed more to the ideas that are in currency today.

As you know, Japan invented things like the VCR and the Walkman and if you look at popular culture around the world, you have things like Godzilla, Ultraman, and Hello Kitty, for example. Hello Kitty is a cultural powerhouse.

JULIA TAYLOR KENNEDY: Here in New York you have huge boutiques floor-to-ceiling with Hello Kitty.

DEVIN STEWART: Exactly. There's an expression among some Japan-watchers that if you went on a street of New York and you asked a random person to name 10 things that are Asian, a majority—probably five or six of those things—would be Japanese things. Our popular notion of what Asia is really comes from a very strong Japanese cultural influence.

JULIA TAYLOR KENNEDY: But the Japanese economy has, overall, stagnated, so does that produce a kind of cultural anxiety?

DEVIN STEWART: Anxiety is throughout Japanese society; its own looking at itself and saying we have a shrinking population, an aging population. And now, the largest group of households are occupied by singles. They call them "family refugees." It now comprises the largest section of all the groups of different types of households.

JULIA TAYLOR KENNEDY: So there's this demographic shift as people grow older and have fewer kids. And at the same time, there's an economic shift, right, as rival markets in China and South Korea threaten Japan?

DEVIN STEWART: There's this sense that Japan's own identity as this strong consumer electronics producer, inventor, and innovator—that identity is deteriorating from rivals nearby.

JULIA TAYLOR KENNEDY: What makes you think that this slow population decline and this economic stagnation won't just continue?

DEVIN STEWART: Maybe it's kind of a Buddhist thinking or a philosophical thinking that the only thing that we can count on is that things change. Almost a truism that I learned in studying philosophy is that change is inevitable. Change is constant. Even if you left things as they were in the natural world, nature and life takes over and it will force change. To think that the past 20 years of Japan was a stagnant time, a time of ostensible stasis—to think that that is the whole story or that lasts forever is completely ridiculous.

JULIA TAYLOR KENNEDY: So you went to Japan looking for signs of change?

DEVIN STEWART: For years people have been looking for change in Japan. I wanted to be an investigator. I wanted to go in there with a metaphorical magnifying glass and see—look, the premise was all societies must change. I wanted to go find where that change is happening.

JULIA TAYLOR KENNEDY: Devin picked a good time to look. Just a few months before his trip, Japanese Prime Minister Shinzo Abe gave a speech to the United Nations about his own idea to quickly close the demographic gap in the Japanese labor market.

DEVIN STEWART: By 2020, which is when the Tokyo Summer Olympics will take place, he wants to have 30 percent of leaders in all organizations in the country be female.

JULIA TAYLOR KENNEDY: What is it now?

DEVIN STEWART: It's bad now.

JULIA TAYLOR KENNEDY: According to the Grant Thorton International Business Report, women currently occupy just 9 percent of senior management positions in Japan, coming in last of the 45 countries studied. That's compared to 22 percent in the United States, which is also in the bottom half globally. Russia tops the list—there, women occupy 43 percent of senior management positions.

I've known you for years. One of the first things you told me when I met you is that you're a feminist. So I'm curious why you particularly were interested in following up on this push to look to women as a potential labor source and hope to restore Japan's economic growth.

DEVIN STEWART: It's very simple. If you're not using half of your population, you're not meeting your potential for labor participation, for ideas, for innovation, for consumption, for participation in all levels of the economy. It really takes a change in mentality. That's the first step. What Abe's administration is focusing on right now is changing the mentality of first, men, and, second, women in the workforce. The way that Abe has been able to do this, to my surprise, is that his speeches and rhetoric have actually made a difference in the national conversation in Japan.

KEN SHIBUSAWA: Ken Shibusawa, Commons Asset Management chairman.

JULIA TAYLOR KENNEDY: Ken Shibusawa is one of the dozens of Japanese up-and-comers who Devin interviewed on his research trip.

KEN SHIBUSAWA: We feel our mission is to raise awareness about increasing diversity, including women.

JULIA TAYLOR KENNEDY: Shibusawa's company specializes in alternative, long-term investment strategies.

KEN SHIBUSAWA: Our client base tends to be, as I said, people in common households, but our sweet spot is people in their 30s and 40s, actually. Our investors tend to be very intelligent and they're very curious about things. They want to participate to make a better society, a better world.

JULIA TAYLOR KENNEDY: Shibusawa holds regular events that connect the corporations that his company is investing in with the investors themselves. Recently, he's used those events to spotlight how the companies are working to empower and promote women.

KEN SHIBUSAWA: I think the companies, in a sense, when they make these presentations to such an audience they get good feedback back and forth. So that encourages them.

JULIA TAYLOR KENNEDY: In fact, these clients in their 30s and 40s are likely to be the next generation of corporate leaders. Shibusawa thinks their outlook is very different from the outlook of the boomer generation.

KEN SHIBUSAWA: What's going to happen, around 2020, is we're going to start to see a generational shift.

JULIA TAYLOR KENNEDY: The older generation is going to start to retire.

KEN SHIBUSAWA: And people who are in their 40s are going to start to come up in more senior managerial positions within society.

JULIA TAYLOR KENNEDY: And Shibusawa says this new generation will bring new attitudes toward women.

KEN SHIBUSAWA: They're used to having female colleagues, or having female bosses. The older generations aren't used to that.

LIN KOBAYASHI: My name is Lin Kobayashi. I am the co-founder and chairperson of the board for the International School of Asia, Karuizawa.

JULIA TAYLOR KENNEDY: Lin Kobayashi has a really full plate. She is one of the few female bosses in Japan. She's also one of the World Economic Forum's Young Global Leaders. She sits on a national cabinet working committee to discuss supporting women in the workplace. And she's the mother of two.

Kobayashi discovered she was pregnant with her now-four-year-old son when she was just gathering the resources to open her school.

LIN KOBAYASHI: People said I was crazy when I got pregnant. I remember the day after I delivered I was already on my computer writing emails in the hospital.

JULIA TAYLOR KENNEDY: Two weeks later, she was on a business trip. Luckily, her husband was between jobs at the time and could stay home to care for their newborn son. More recently, after having her daughter, Kobayashi was able to take more time off. But she still brought her baby girl to a cabinet committee meeting.

LIN KOBAYASHI: All of these important people are saying, "She's definitely the youngest attendant in the cabinet office meetings."

JULIA TAYLOR KENNEDY: Kobayashi runs her school with work/life balance as a major priority for employees. She allows them to work from home, and sets limits on the number of hours that she herself works, setting an example for others.

LIN KOBAYASHI: What makes it a little hard for women in Japan to work or continue their careers is that when they give birth to children, that's when things start changing. Then, you have to go to the daycare center to pick up your kids at 5:00 p.m., 6:00 p.m.

JULIA TAYLOR KENNEDY: When your kids fall sick, you have to be home, too.

LIN KOBAYASHI: That is very hard to handle in a traditional Japanese corporation setting. You are expected to be there all the time because of our Japanese corporate culture, but I think that's slowly changing.

JULIA TAYLOR KENNEDY: In fact, Kobayashi is quite optimistic about things improving really quickly for women in the workplace.

LIN KOBAYASHI: Even before this womenomics policy, there was a significant change in societal acceptance for women working and trying to balance their family life.

JULIA TAYLOR KENNEDY: Her committee is also working to develop the support systems women would need to be able to work. As the government gets up to speed on providing more daycare centers and standardizing maternity leave, some Japanese corporations are already experimenting with more female-friendly policies.

LIN KOBAYASHI: Companies like Seino Transportation or Maruei, the department store company, they're very large, established companies. Also Sumitomo Life, the life insurance company, they have been encouraging their female workers to take maternity leaves and also making it easier for them to come back after they take a leave.

JULIA TAYLOR KENNEDY: But there is some pushback. As we've seen in the United States, affirmative action can be a bitter pill to swallow.

LIN KOBAYASHI: Some of the executives are arguing, which I believe is very valid, that if you set a quantitative goal you might end up placing people who are not as qualified just to be able to reach that goal. Even then they know that unless we have good role models within a corporation, we can't really encourage young women who are qualified and talented to aim to go to the top of the ladder.

MALLI GERO: My name is Malli Gero, and I am co-founder and executive director of 2020 Women On Boards.

JULIA TAYLOR KENNEDY: Gero heads an organization that's pushing to get 20 percent of U.S. corporate boards to include female directors. She gave me a vocabulary lesson in how to talk about numerical targets for women in the workplace.

MALLI GERO: We're not great advocates of quotas.

JULIA TAYLOR KENNEDY: A quota is a legal requirement. Some nations set quotas on the number of female representatives in government. With that quota, a government would be breaking a law and could be punished if they didn't have a certain number of women on their board or in senior management.

MALLI GERO: We're very interested in "comply and explain" initiatives, like in England and, I think, Australia.

JULIA TAYLOR KENNEDY: Comply and explain initiatives don't have a fine or other penalty when companies miss their targets for female leadership. But they do set an expectation for having, let's say, 20 percent of their top leaders be women.

MALLI GERO: And then if you don't make the target, you have to say why.

JULIA TAYLOR KENNEDY: Publicly.

MALLI GERO: It's not a law, but you have to be transparent about it, and these transparency initiatives are, we think, a really important strategy and something that we're looking at very closely.

JULIA TAYLOR KENNEDY: So, while there's no legal penalty to comply and explain, there is that expectation that companies will suffer a reputational risk for failing to promote women to senior positions. Now, the Japanese target seems to be looser. So far, Abe hasn't proposed a formal comply and explain element to his target in Japan.

MALLI GERO: The fact that it's a target—it's not a mandate—we'll see how they're going to get there. Whether they reach 30 percent by 2020, I can't say. But the fact that they put a stake in the ground and that they are serious about reaching this goal is a very good sign.

JULIA TAYLOR KENNEDY: So far, all we've heard is optimism and excitement about this possibility in Japan. Maybe the country won't jump from 9 percent female senior business leaders to 30 percent in six years. But still there's a lot of hope for progress.

Let's step back for a second and do a gut check. Is this change really possible for a whole country that values having women home with their kids, as primary caretakers; for a country that isn't accustomed to putting women in positions of authority at work?

What gives Devin hope is a potent mix of three things. First, the inevitability of change that he mentioned earlier: that all things must change, even stagnancy. Second, fresh blood like Lin Kobayashi and Ken Shibusawa.

DEVIN STEWART: You might call them Japan's Generation X. They are a new generation of more global-minded people. They're more supportive of things like divorce, gay marriage, studying abroad. They're just coming into power right now, and that's the key.

JULIA TAYLOR KENNEDY: But is the inevitability of change over time and new blood enough? I asked Malli Gero about the U.S. experience.

MALLI GERO: When we first began to look at this, many of us said, "Well this is just a generational thing. When the old-school directors retire and the new, younger directors take their seats, things will change. Men will change. CEOs, when they retire, they will understand the value that women bring."

And guess what? It didn't happen. These younger CEOs were still advancing more men to these positions of leadership than women.

JULIA TAYLOR KENNEDY: So, at least in North America, time and fresh blood aren't enough.

But Japan has something the United States hasn't had in the same way, and that's the third element that gives Devin hope: it's consistent tone from the top. After his big UN speech, Prime Minister Shinzo Abe has continued speaking out about womenomics and regularly talks about it in major media outlets in Japan.

DEVIN STEWART: Thanks to Abe's speeches about the importance of women in the economy, people now feel some kind of cover or space or prerogative to spark a conversation in professional settings about having more opportunities for women, having more training opportunities.

JULIA TAYLOR KENNEDY: Maybe the best source of hope is a fourth one: it's the fact that Japan has done this before. After the oil price shocks in the 1970's, which wreaked economic havoc in so many markets, Japan got its act together.

DEVIN STEWART: The government used a lot of public relations and encouragement and sort of asking for corporate cooperation and cooperation from people to, for example, buy energy-efficient appliances; for companies to seek to outdo one another in terms of energy-efficient appliances and also usage.

JULIA TAYLOR KENNEDY: Basic things like not leaving the air conditioning on all day or just freely wasting energy.

DEVIN STEWART: Jimmy Carter tried to do the same thing in the United States and it failed miserably.

JULIA TAYLOR KENNEDY: But several years ago, Japan was called one of the most energy-efficient economies among rich countries.

DEVIN STEWART: A lot of that had to do with instilling a sense that this is something we should do. They went out to do it without necessarily having to be clobbered over the head by the government by too much regulation and so forth. There was some regulation, but there was also incentives and there was a lot of talking about it.

JULIA TAYLOR KENNEDY: What's interesting about this is it sounds really like a top-down government push to change Japanese cultural attitudes toward energy efficiency. So how do you see that playing out now with women in business? Which is driving? Is it this cohort driving the government? Is it the government driving the cohort?

DEVIN STEWART: I don't know. That's a big question and maybe only some omniscient creature could answer that question. I don't know what the prime mover was. I don't know what started this whole thing. Maybe it was just—everyone just figured out this is what we should do, and it became obvious over time, like some kind of sudden emergence of a new consensus, which does happen.

Whatever it is, the people, and I would say the grassroots people—a lot of them are elite. Nevertheless, they're not in politics. That's the point, and they have the capacity to change society from the ground up. Those people are now in sync with the government, and I'm seeing the potential for the people to help the government and the government to help the people.

JULIA TAYLOR KENNEDY: So the next six years will be a very interesting case study for culture change in Japan. Are all the pieces in place? Lin Kobayashi thinks so.

LIN KOBAYASHI: Unlike before when women in the workforce was talked in a context of human rights or women's rights, now the discussion is very rational. There's an incentive for corporations to have more women in the workplace because our population is shrinking so we have no choice but to mobilize the people who have not worked in the past.

JULIA TAYLOR KENNEDY: Thanks for listening to Impact from the Carnegie Council, and a special thanks to our production team Mel Sebastiani, Terence Hurley, Deborah Carroll, and Amber Kiwan. I'm Julia Taylor Kennedy. You can find out more about this podcast at carnegiecouncil.org.