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Japan’s decline linked to loss of creative spirit

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    William Saito, a son of Japa­nese immigrants to the United States, believes Japan has lost its entrepreneurial spirit. Saito runs InTecur, a consultancy, identifies upcoming innovators, teaches at several universities and sits on government panels.

TOKYO » Worn out and resigned to its dwindling status, Japan is said to be quietly shuffling off the world stage. But don’t tell that to Kenji Hase­gawa, who is ready to conquer the global auto market with his nifty innovation, a bolt that doesn’t need a nut. Or Chi­aki Haya­shi, who makes millions teaching big-name companies to be creative again.

As different as they seem — Hase­gawa runs auto parts supplier Lock’n Bolt Corp., and Haya­shi is a rare woman to help found a Tokyo startup — both highlight the potential of innovation and entrepreneurship in a nation that is often typecast as facing an unrelenting decline.

Of the decline, there is plenty of evidence.

Long in the doldrums after its 1980s bubble economy burst, Japan has been eclipsed by China as the world’s second-biggest economy. Many of its consumer technology companies have been overtaken by South Korean competitors and are racking up huge losses. The number of young Japa­nese choosing to study abroad has dropped. While Facebook lured hundreds of millions of members worldwide, management at Japa­nese social network Mixi never looked to grow overseas.

The naysayers claim Japan is stagnating, only looking inward and squandering advantages such as its well-educated workforce, low crime rate and rich history of technological prowess. But even while acknowledging big challenges that include its swollen national debt and rapidly graying population, Japan’s boosters say it can still rekindle the sparks of ingenuity that in the past delivered network-connecting mobile phones years before the arrival of smartphones, and made instant noodles part of the global diet for the last four decades.

First, though, Japan must recognize that what ails it is at least partly in the mind.

"In order to have innovation, you must accept a certain amount of failure. To the Japa­nese, this has become taboo," said William Saito, a prolific technology inventor who now runs a company that identifies up-and-coming innovators and tries to match them with investors.

Saito says conformist Japan frowns upon failures and doesn’t allow for second chances. Worse, Japan appears to be wallowing, when what it needs is action, Saito and others say. Even the rising yen, long cited as the death knell for an exporting economy such as Japan, should be reframed as an advantage, delivering bigger buying power for Japa­nese companies abroad.

For some, Japan’s revival can come from reinventing what it has long known best — manufacturing, but with innovative ideas.

As tiny as a nutless bolt is, it has the potential to make Hase­gawa, the supplier, rich. Much of machinery, including cars, ships and factory equipment, uses bolts — untold numbers of them. So a bolt that doesn’t require a nut is a big timesaver.

A nutless bolt, based on the idea of a smaller bolt within a bolt, a patented secret, is also significantly lighter than a regular bolt, delivering savings in fuel, materials and other perks like better mileage in a car.

Hasegawa is talking with a long list of interested companies, including Pana­sonic Corp. and Toyota Motor Corp. He is looking into production outside Japan, perhaps Vietnam, he said.

Hasegawa says the key to Japan’s revival lies in breakthroughs such as his that developed because of a legacy in "mono­zu­kuri," which translates as "making things" but is more akin to craftsmanship.

Hayashi’s young business, Loftwork Inc., earned $11 million in annual sales taking a different but equally Japa­nese route as Hase­gawa’s.

She offers a service that stems from her diagnosis of the sickness at major companies — the loss of the innovative spirit. She hopes to start a kernel of creativity going at companies that "starts small but snowballs."

Top Japanese companies have a load of talented, hardworking people, but they have become so obsessed with rigidity like quality control in mass production that their thinking has grown static, and they can’t figure out where to start or how to change, she said.

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