Speech to the Japan British Society – 25/11/2015
Your Imperial Highness, Excellencies, distinguished guests, ladies and gentlemen and friends – many, I see, dating back to the mists of time, the bubble era, the pre-bubble era, the pre-pre-bubble era – it is an honour to address you this evening.
In our own way all of us here are contributing to Japan-UK relations through our personal and professional lives. These days I am fortunate in being able to divide my time between the UK and Japan, so I get to see both countries up close and also from a distance, which gives some useful perspective.
Happily I was able to arrange my schedule so that I was in the UK for the recent Rugby World Cup. It was an amazing occasion. In Britain we know how to put on a good show. As for the on-the-field performance, that was another matter entirely. Here I should point out that I am in fact Welsh and my team did fulfill its primary goal, which is to beat the English.
GORAMAROO!
Having said that, we failed to beat any of the big southern hemisphere teams, as did Ireland, France and Scotland, despite a brave effort, and of course England, who were knocked out in the blink of an eye. Altogether it was rather a sorry performance by the countries of the northern hemisphere. Except for one northern hemisphere team, which redeemed us all by taking a big southern hemisphere scalp in spectacular style. That was of course Japan, which scored a historical victory against the behemoths of South Africa.
It was interesting to see that the dream teams chosen by various pundits in The Guardian (which is an excellent newspaper – for sport, that is!) contained no Englishmen, no French, no Irish, one Scotsman, but two Welshman and two Japanese, the captain Michael Leach and Ayumu Goromaru. It was also fun to hear the TV pundits, especially our Welsh pundits, completely mangling the man’s name – Ahyomie Goramaroo!
When I’m in the UK I’m based in Oxford and I notice that Japan is increasingly present there. Not in a headline-catching, major-event way, but as the result of natural cultural osmosis. I’d like to give you three examples of what I mean.
First is the building of an anagama kiln in the Wytham Woods, which are owned by the university. Anagama is a technology which appeared in Japan over a thousand years ago. It is a single-chambered wood-fired kiln in which temperatures rise to over 1300 degrees C and two weeks of continuous firing are required to get the job done.
Anagama kilns are associated with the Bizen style of pottery, which is famed for its unglazed, stark and elemental creations. There really is nothing like it anywhere else. A Bizen master, the living national treasure Jun Isezaki, came over to Oxford to supervise the first firing, which took place earlier this year. Now potters from the local area and further afield can come and use this ancient Japanese technology to create their own works in contemporary Britain.
My second example is not so venerable and relates not to the high arts, but the culture of ordinary people. Fortuitously a new Japanese restaurant has opened a few hundred yards from where I live. We’re not talking here about sushi or kaiseki ryori, but curried cutlet, specifically tonkatsu karei and chicken katsu karei. Now they won’t be winning any stars from Michelin, but the food is filling and tasty and the place is always packed.
The first mention of curry in Japan was in the writings of the great Yukichi Fukuzawa, who we see every day staring out at us from 10,000 yen notes. That was on the eve of the Meiji Restoration and it seems that Indian cooks on board Royal Navy ships were the means of cultural transmission. But it was the Japanese Army that first served up curry rice – or rice curry, as they called it, already a rivalry with the Navy apparent there – at a training school in Hokkaido.
That was in 1873 and four years later the restaurant and confectioner Fugetsudo, which was founded in 1750, was making it available to the general public. Soon Japanese restaurants developed their own version of curry, which is quite different from the original.
ARE YOU SEXY, ARE YOU VIP?
So this interesting and nutritious Anglo-Japanese cultural interchange has quite a bit of history behind it too. But the next example I have is bang up-to-date. Right in the heart of Oxford is a brand new club that describes itself as “a unique playground for Oxford’s elite.” It’s not a gentleman’s club, though it does have a dress code. According to the website, no hoodies or sportswear are allowed.
You see, this is the kind of club where clubbers go clubbing. But the key point is this. The name of the club is Roppongi. Yes, that’s right. In the heart of the City of Dreaming Spires, we have our own version of Tokyo’s most famous pleasure zone. Tiny compared to the real thing, but I understand that the kind of entertainment on offer is much the same.
Furthermore the establishment is faithful to its Japanese roots. Amongst the cocktails on offer are such concoctions as Electric Kabuki, Black Samurai and something called Yakuzu Dream. Yes, that is ya-ku-zu with two “u”s.
Let me give you an idea of the ingredients that go into producing a drink called Roppongi Nights. It contains sake, green apple liqueur, vanilla, vanilla syrup and guava juice. Sounds delicious! Anyone who is curious about the taste should go downstairs to the Old Imperial Bar with its Frank Lloyd Wright decor and ask the barman to mix you one and then enjoy a real street-level Anglo-Japanese experience.
Needless to say, UK-Japan relations have changed a lot since the 1980s, when a surge of Japanese inward investment dominated the headlines. Back then the yen was up, the pound was down and the British economy was struggling back onto its feet after decades of poor performance, then de-industrialization and structural change. From the point of view of Japanese manufacturers, there was an abundance of cheap, skilled labour, especially in the industrial heartlands of Tyneside, South Wales and the Midlands.
That is a bygone era. Today the yen is down, the pound is up, the UK labour market is tight and after the opening of Eastern Europe much cheaper labour is available elsewhere in Europe. Today Japanese FDI into the UK is mainly in the service sector via M&A deals, rather than Japanese manufacturers building factories. In recent years we have seen Japanese companies buy into the UK advertising, insurance and media industries, the most notable example being the Nikkei’s bold acquisition of the Financial Times.
Managing these businesses, which are largely talent businesses, is much more difficult than managing a factory. Managing investment bankers has been likened to trying to herd cats. The only thing more difficult is trying to manage journalists, which is like getting the cats to dance in a chorus line. In any case, managing service industries requires a degree of human involvement and intimacy which is totally different from supervising production lines.
THE HIKIKOMORI LEAVES HIS BEDROOM
The Nikkei-FT deal is particularly symbolic because it shows a new Japan emerging, one that is willing to take calculated risks and project itself on the world stage. Ten years ago few would have believed that possible. Back then Japan seemed to be disengaging from the world and withdrawing into itself, a bit like a giant hikikomori, a shut-in. Now at last the hikikomori has emerged from its bedroom and is starting to make its presence felt. This year outward M&A is running at the highest levels since the bursting of the bubble.
British and Japanese people have quite a lot in common, one in particular being our love of grumbling and moaning. In Britain we enjoy complaining about the weather, the trains and the government. You will never hear anyone say “What a beautiful weather we’re having recently! The rail service is getting better and better and our prime minister is doing an excellent job.” In Japan the grumbling tends to be about your immediate boss and the state of the economy.
In reality both countries are doing well, given the “new normal” state of the world economy. Specifically the employment ratio – which means the percentage of the working age population actually working – is at a 40 year high in the UK and also in Japan, leaving out the very peak of the bubble economy in 1989 to 1991. In these two countries at least there are signs that the labour market is shifting from being a buyer’s market, which it has been for several decades, to a seller’s market.
If people are working they feel more secure and society is more stable. The social mood improves – though, of course, grumbling is a national pastime and will never cease. In Japan this year there have been two interesting youth phenomena. The so-called SEALDs, the student activists who were demonstrating outside the Diet every Friday night, and the party-party characters going crazy celebrating Halloween in Shibuya, Roppongi and other areas. I see these as two sides of the same coin, which is a more outward-going and confident social mood.
Not long ago the way older Japanese people thought of young people was captured by words like freeta (drifters from one part-time job to another), hikikomori (shut-ins) and soshoku-kei (herbivores). In other words apathetic and listless. Now the old people get to complain about the mess the youngsters left in Shibuya after partying on the streets all night long or the pretentiousness of the radical students with their Spanish revolutionary slogans.
Likewise, you can see evidence of the dark clouds lifting in the suicide rate which is down 30% from the highs reached twelve years ago, unwinding nearly all of that very disturbing increase we saw in the late 1990s.
Finally I would like to say a few words about UK-Japan relations, which are very important to both countries and need to be nurtured, developed and publicized more widely.
We hear a lot about China these days, too much in fact. Britain exports more to Belgium than it does to China and it is not at all clear that some of the deals that are being negotiated at government level will benefit the UK in the way that Japanese investment has. We have 140,000 British people working for Japanese companies, which is an order of magnitude greater than the number working for Chinese companies. One town in the North East that hosts a Japanese factory now produces more automobiles than the whole of Italy. The Japanese contribution to the British economy has been enormously positive.
Of course I’m looking forward to the next Rugby World Cup, to be held here in 2019, when I’ll be supporting two teams, Wales and Japan. It would be amazing if they were to meet – well, I won’t say in the final or semi-final because we need to be realistic – perhaps in the quarter final. That would present a huge dilemma, but a very enjoyable one.