Vol13-1-e47

2/24

2AIST TODAY 2013-1President’s Message Thoughts for the New Year 2013IntroductionI welcomed the arrival of the New Year with a further strengthened determination to promote open innovation befitting Japan through cooperation with corporations, universities, national agencies, and local governments, so as to revive the once thriving society and economy of Japan.Over the past several years, the voices of people in various fields have frequently been heard pointing out the decline in the competitiveness of Japanese companies, especially those in the manufacturing industry that have been the backbone of Japan’s development, and recently these voices seem to have grown much louder in light of the performance of electronics companies last fiscal year and their forecasts for this fiscal year. Many have concluded that the overall problem lies in the companies’ business strategies. However, it should be seen more as a result of the failure of the business model emphasizing mass production of individual single products that has been pursued by Japanese corporations faced with the very severe business environment of a strong yen, high corporate taxes, and the delayed signing of economic partnership agreements (EPAs) in this digital age. A new competitive model must be developed. Moreover, the open innovation efforts at AIST must also be promoted based on these notions.Prescription for revitalizing JapanI personally cannot readily agree with the view that says the competitiveness of Japanese industry as a whole has declined. When examined in a clear light, the automobile industry has overcome the damage caused by the earthquake as well as the severe flooding in Thailand and is beginning to move forward on the path to recovery. Other Japanese industries including chemicals, steel, machine tools, and heavy electrical machinery can also be said to be performing comparatively better than the rest of the world despite the impact of the global economic slowdown arising from the financial instability in Europe. I believe that the fundamental strength of Japanese industry is still alive and well. The capacity of corporations to cope with the strong yen has incomparably improved compared with nearly a decade ago when I was the CEO of a corporation. Hence, if, for example, the strong yen were to weaken to the level at the time of 100 yen to the U.S. dollar, corporate profits including those of the suffering electronics companies would be greatly improved. Nevertheless, I have to admit that this is merely a dreamlike hypothesis when the very difficult financial situations of some EU countries are taken into consideration.Setting this aside, a major correction of the strong yen does not, in any event, seem likely in the near future. We must build a strategy for preserving the fundamental strength of Japanese industry assuming that the current difficult business environment will continue for the time being. I would like to express several opinions here on what I believe to be highly important points regarding this situation, including some that I have already repeatedly expressed on previous occasions.First, we should not forget the importance of strengthening parent laboratories and parent factories in Japan. According to recent reports in the newspapers and other media, an increasing number of companies in various industrial fields are establishing production centers overseas and in more than a few cases, the total overseas production volume is exceeding the volume of production in Japan. This trend is expected to continue into the future and the establishment of overseas R&D centers will also become more common among large corporations. However, the current situation is all the more reason for promoting the further development of major domestic centers. Generally speaking, this is because for Japanese companies, intellectual property (IP) in its widest sense, which includes practical business know-how born in Japan, can become the very foundation that supports the growth and development of their overseas centers. Strategies to preserve and reinforce this flow of IP are crucial for securing sustainable competitiveness. For this purpose, it is vital that each company make more efforts to strengthen its domestic centers and for Japan as a whole to provide the environment to support these efforts.The preservation and strengthening of small- and medium-sized companies’ innovative power is also highly important. AIST is

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