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Waseda Frontline Research Vol. 3, Part 3 – Japan will use its diverse relationships to rise again
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Waseda Frontline Research Vol. 3, Part 3 – Japan will use its diverse relationships to rise again

Thu, Nov 19, 2015
Waseda Frontline Research Vol. 3, Part 3 – Japan will use its diverse relationships to rise again
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International economy and economic development researcher
Professor Yasuyuki Todo
Faculty of Political Science and Economics

How economics and economists can contribute to society

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Although many companies are thriving globally, some are not despite their potential. Professor Todo discusses his personal studies and the roles of companies and politics in Japanese economics as well as what economics and economists can do to contribute to society.

Rise of garyu companies in Japan

If I were to describe the ideal society and economy identified in experimental studies, it is “one with diverse relationships.” A region or organization with strong relationships with outsiders enables individuals, companies, and countries to achieve innovation and grow. Having strong ties both within a region or organization and with outsiders enables individuals, companies, and countries to be more innovative and achieve growth. In Japan, however, excessive ties within a region or organization are preventing the formation of ties with outsiders, causing prolonged economic stagnation. Globalization allows companies to innovate by allowing them to absorb knowledge from overseas. However, in Japan, many non-globalized companies remain domestic despite their potential.

I call these companies “garyu companies.” Garyu (literally means “crouching dragon”) is a term from the Chinese historical text The Records of the Three Kingdoms (Sanguozhi), referring to Zhuge Liang before he served Liu Bei. Therefore, it refers to people who have not fully demonstrated their potential despite having exceptional skills.

If many of Japan’s garyu companies “get up,” globalization will lead to a positive cycle that will undoubtedly increase Japan’s international competitiveness, providing an impetus for Japan to achieve economic greatness. I have long advocated for measures to globalize these garyu companies by quantitatively demonstrating their existence using corporate data. In recent years, the Abe administration has actively advocated measures to support the globalization of small and medium-sized enterprises (SMEs) in its Japan Revitalization Strategy (the so-called “growth strategy”). I have high expectations for this initiative. 

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Analysis based on “Questionnaire Survey on Internationalization and Corporate Activities” by the Small and Medium Enterprise Agency (conducted in December 2009; 3,513 SMEs in the manufacturing/non-manufacturing industry) (Source: Yasuyuki Todo) *Left side is organized by number of companies

Another important measure necessary for globalization is Economic Partnership Agreements (EPA) such as the Trans-Pacific Partnership (TPP). The true benefit of EPAs is not increased trade but increased ties with outsiders that promotes technological and other types of innovation.

Therefore, TPP has far greater benefits than usually assumed. I have long emphasized this point in newspaper articles and on my website, and I am grateful to see the conclusion of TPP negotiations.

Building ties with outsiders is also important for Japan to revitalize its local economies. For example, facilitating “I-turns” (moving from urban areas to rural towns) and “U-turns” (moving from rural towns to urban areas and back again) or attracting foreign companies and ventures to bring new ideas to regions will no doubt contribute to regional revitalization. I visit various regions to observe the conditions of local companies. When I give lectures at committees and industry associations of local municipalities, I often speak about regional revitalization.

In search of economics that contributes to society

Until seven or eight years ago, I thought a researcher’s job was to publish English language articles in international academic journals. However, I have become increasingly aware that the findings of academic research have not fully reached the general public or policy specialists. Therefore, I have become aware of the need to carefully disseminate research findings to the general public.

Considering the 20-plus years of economic stagnation in Japan, the Great East Japan earthquake in 2011 made me keenly aware that as an economist, I must contribute to the recovery of quake-stricken areas and the revitalization of Japan.

That is why I have been striving to disseminate political recommendations derived from my personal research to the public through books such as The Latent Potential of the Japanese Economy (Nihon Keizai no Sokojikara), newspaper articles, websites, committees and lectures.

Nevertheless, the quality of my academic research and social contributions are insufficient. When I transferred to Waseda University last year, I was able to develop relationships with researchers in various fields and participate in joint research projects with young and talented researchers. I am determined to make greater contributions to society by leveraging these ties with outsiders and strong ties within the organization.

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Corporate training to promote export in Vietnam (Source: Yasuyuki Todo)

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International workshop in South Korea (Source: Yasuyuki Todo)

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Meeting with Burkina Faso government officials (From left: Author; University of Tokyo Professor Yasuyuki Sawada; Waseda University Professor Haruko Noguchi)
(Source: Yasuyuki Todo)

Proceed without hesitation and you will succeed 

I encourage students to participate in international exchange and create a diverse network of relationships. However, what I want to convey most is what Antonio Inoki said in his retiring ceremony: “Proceed without hesitation and you will succeed.”

When I was a graduate student, I would spend most of my days doing calculations at my desk or computer. There was a time when I wondered if what I was doing would really be of use in the future. However, Inoki’s words kept me going and I was able to complete my PhD. I believe I have become a person that can contribute to society through my research, albeit in a small way. I want to tell all students who are unsure of their career goals to not hesitate and pursue their goals.

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Part 1
Part 2

Profile

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1991: B. A., Asian Studies, University of Tokyo
1994: Graduated from Institute of Developing Economies Advanced School
1995: M.A., Food Research Institute, Stanford University
2000: Ph.D., Economics, Stanford University
2000: Assistant Professor, Department of Economics, Southern Illinois University
2001: Lecturer, Faculty of Economics, Tokyo Metropolitan University
2002: Assistant Professor, Faculty of Economics, Tokyo Metropolitan University
2005: Assistant Professor, School of International Politics, Economics and Business, Aoyama Gakuin University
2007: Associate Professor, Graduate School of Frontier Sciences, University of Tokyo
2010: Professor, Graduate School of Frontier Sciences, University of Tokyo
2012: Department Head, Graduate School of Frontier Sciences, University of Tokyo
2014-present: Professor, Graduate School of Economics, Faculty of Political Science and Economics, Waseda University
Currently serving as Faculty Fellow at the Research Institute of Economy, Trade and Industry, Visiting Fellow at the JICA Research Institute, member of the Governing Council of the Japan External Trade Organization, member of the Performance Evaluation Committee of The Overseas Human Resources and Industry Development Association, and member of the Trade Committee of the Industrial Structure Council at the Ministry of Economy, Trade and Industry.
Personal website http://www.f.waseda.jp/yastodo/index.html

Research

・Todo, Yasuyuki, Kentaro Nakajima, and Petr Matous, “How Do Supply Chain Networks Affect the Resilience of Firms to Natural Disasters? Evidence from the Great East Japan Earthquake,” Journal of Regional Science, 55(2), 209-229, 2015. DOI: 10.1111/jors.12119

http://www.cirje.e.u-tokyo.ac.jp/research/workshops/emf/paper2013/emf0527.pdf

http://onlinelibrary.wiley.com/doi/10.1111/jors.12119/full

・Todo, Yasuyuki and Hitoshi Sato, “Effects of Presidents’ Characteristics on Internationalization of Small and Medium Firms in Japan,” the Journal of Japanese and International Economices, 34, pp. 236-255, 2014.

http://www.sciencedirect.com/science/article/pii/S0889158314000483

・Matous, Petr, Yasuyuki Todo, Tatsuya Ishikawa, “Emergence of Multiplex Mobile Phone Communication Networks across Rural Areas: An Ethiopian Experiment,” Network Science, 2(2), 162-188, 2014.

http://dx.doi.org/10.1017/nws.2014.12

・Takahashi, Ryo and Yasuyuki Todo, “The Impact of a Shade Coffee Certification Program on Forest Conservation: A Case Study from a Wild Coffee Forest in Ethiopia,” Journal of Environmental Management, 130(30), 48-54, 2013.

http://jica-ri.jica.go.jp/ja/publication/workingpaper/impact_of_a_shade_coffee_certification_program_on_forest_conservation_a_case_study_from_a_wild_coffe.html

http://www.sciencedirect.com/science/article/pii/S0301479713005483

・Todo, Yasuyuki, “Impacts of Aid-Funded Technical Assistance Programs: Firm-Level Evidence from the Indonesian Foundry Industry,” World Development, 39(3), pp. 351-362, 2011.

http://econpapers.repec.org/paper/etidpaper/08024.htm

http://www.sciencedirect.com/science/article/pii/S0305750X10001415

・Todo, Yasuyuki and Satoshi Shimizutani, “Overseas R&D Activities and Home Productivity Growth: Evidence from Japanese Firm-Level Data,” Journal of Industrial Economics, 56(4), pp. 752-777, 2008.

http://www.rieti.go.jp/jp/publications/dp/07e008.pdf

http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6451.2008.00363.x/full

・Todo, Yasuyuki and Koji Miyamoto, “Knowledge Spillovers from Multinational Enterprises and the Role of R&D Activities: Evidence from Indonesia,” Economic Development and Cultural Change, 55(1), pp. 173-200, 2006.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=668508

http://www.jstor.org/stable/10.1086/505729

Writings

・開発経済学入門,新世社,2015

・日本経済の底力-臥龍が目覚めるとき-,中央公論新社,2011.

・途上国化する日本,日本経済新聞出版社,2010.

・技術伝播と経済成長-グローバル化時代の途上国経済分析-, 勁草書房, 2008.

 Articles

“Economic Networks for More Innovative and Resilient Economies,” June 26, 2015, Vox.

“From Collusion to Competition? Japanese Business Groups in the 21st Century,” June 16, 2015, Vox.

“For Coin and Country: Easing Japan-China Tensions through Social, Economic, and Political Equilibrium,” the Georgetown Journal of International Affairs, December 12, 2014.

「サプライチェーンを通じた知識伝播-遠くのつながりと強いつながりの効果-」,経済産業研究所ウェブサイト,2015. 

「TPPの成長効果推計」,経済産業研究所ウェブサイト,2013.

「TPP参加の意義 国際化、生産性向上の鍵に」,日本経済新聞「経済教室」,2011.

「復興を超えた新たな高度成長へ」,経済産業研究所ウェブサイト,2011.

「日本経済体質強化の方向 今こそ『内需より輸出』で」,日本経済新聞「経済教室」,2009.

「経済・政治ネットワークと企業の開放度-インドネシアの事例-」,経済産業研究所ウェブサイト,2015,

「アジアと中所得の罠-排他性が成長・革新阻む-」,日本経済新聞「経済教室」, 2014.


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