The Win-win-win Globalization and Japanese Companies
1. Introduction
The last decades of the 20th century witnessed the wide spread of market capitalism around the world. This was possible by the leaps in technology and trade, the dismantling of Berlin Wall, and the failure of socialism. Global capitalism has been marked by the rise of transnational corporations (TNCs) and the development of global financial markets. It has contributed to the new boom economy in the US and many parts of the world, creating millions of jobs and lifting millions of people from poverty. It has brought about cornucopia of affordable commodities for consumers in developed countries and the spread of technology and capital to many parts of the world. At the dawn of 21st century, global capitalism is taking into a new form; financial globalization. The flow of funds across nations has reached the highest historical level. International capital mobility is one of the key trends that have reshaped the global economy. East Asia, for instance, is progressing in its industrialization and financial integration with the experience of 1997 crisis. Middle Eastern countries have begun to fear about its running out of oil and gas and, therefore, put more oil money into investment and development to shift from oil-dependent economy. Meanwhile, oil money which used to flow into western countries is now making its way to Asia after the September 11 attack and US aggressive policies on petroleum dollars since then. The universe of TNCs consists of roughly 70,000 firms, with more than 690,000 subsidiaries and millions of suppliers2. With such an intense competitive environment and with the surge in capital flows including oil money, how should Japanese companies compete and thrive? This essay intends to discuss on how Japanese companies should deal with the recent trends of international capital flows and seize new opportunities to remain pioneers in the harsh wind of globalization. I argue that synergy between Japan’s technology and human resources with the rise of financial globalization is a critical factor for its success in the next stage. Three things need to accompany the synergy. First, Japan needs to leverage the international capital flows including oil money. The acquisition of capital will help Japan secure an advantageous position. Second, Japanese companies should remain to be “leading geese” by constantly strengthening their competitiveness and capability of leverage in technology, finance, and human resources. Third, by being “leading geese”, Japanese companies can reinforce their brand image and create more demand for their products