The Conference on Global Problem
was held on 1993 with Associate Professor Seiichiro Yonekura of
the Institute of Business Research, Hitotsubashi University as the
This series of
conferences is for the younger generation in the Ministry of International
Trade and Industry and business circles, and each conference offers
a lecture given by a specialist followed by free discussion.
Here is an outline of the lecture.
The Intellectual Infrastructure of Japan in
the Global Environment
Institute of Business Research
I specialize in
business history. While thinking about what it means for a country
to become rich and for industry to develop steadily, I ran into
a question, and it is that question I shall speak about.
To give a familiar
example, there are two kinds of buildings in Hitotsubashi University.
Originally this university was in Hitotsubashi, Kanda, in the center
of Tokyo, but it was destroyed in the Great Kanto Earthquake of
1923, and was then moved to the present site in Kunitachi, 30km
west of central Tokyo in 1927.
is a city with wonderful city planning, but in those days it was
still an undeveloped area. We have to admit that the choice of the
location had a great insight at that time. The campas now has two
kinds of buildings, by which I mean those built between 1927 and
1930, and those built after the war.
Typical of the
former is the Kanematsu Auditorium, which was built with 500,000
yen contributed by Kanematsu Trading Ltd. Using the current deflator
this sum is equivalent to 10 billion yen. If the interior of those
buildings is renovated, it is entirely adequate for use in the 21st
On the other hand,
typical of the latter is the International Exchange Hall built last
year. The expense of building was only 450,000 yen per tsubo (3.3
square meters), while the cost of an ordinary residential building
was 600,000 yen per tsubo. It is simply a square building, neither
artistic nor attractive; in fact, to put it bluntly, it is a cheap
In 1929 (when
the auditorium was built), Japan's GDP per capita was $1,162 (by
the 1980 deflator), which was the lowest among the sixteen OECD
countries. The standard was about equal to that of the Philippines,
which was $1,091.
What I am trying
to emphasize is that Japan strategically invested in higher education
when the country was very poor. Yet last year when Japan had become
numerically richest in its entire history, its investment in education
was only a cheap building of 450,000 yen per tsubo.
The problem is
thus whether Japan has any strategy or long-term plan for education.
Rosenberg of Stanford University has written a book entitled "How
the West Grew Rich." He points out the importance of compulsory
education as well as the separation of politics and economy and
freedom from religion.
Though the education
it offered was not compulsory, Terakoya, a private elementary school
of the Edo period (1603-1867), had a very high percentage of attendance.
Because of this Terakoya system, it is said that the introduction
of the compulsory education system was easier after the Meiji Restoration
(1868). But even in Meiji Japan, however, there was not a little
opposition to the compulsory sending of children, who were important
in the work force, to school. Overcoming this opposition, Japan
did make education mandatory about 30 years after the Meiji Restoration.
(Student attendance was 28.1% in 1873, 81.5% in 1900, and 98.1%
According to calculations
made by Professor Ryoshin Minami (Hitotsubashi University), the
percentage of those registered in school to the population was,
in 1870, 3.9% in Japan, 17.4% in America, and 5.5% in England. But
in 1940 it was 21.1% in Japan, 23.4% in America, and 13.6% in England.
What does this
mean after all?.
It means that
most of the ability to compete is the result of a one hundred year
long investment in human resources.
England is stagnant
in many aspects today. Some say this is because of failure like
that of entrepreneurs and others claim it is due to the country's
cultural climate. But a new fact has also attracted attention: that
is, since education, particularly practical business education tends
to be neglected, the percentage of those registered in school to
the population is only 13% to 15%.
As for higher
business education in Japan, Tokyo High School of Commerce became
the College of Commerce (the present Hitotsubashi University) in
1923 and the total number of graduates up to that time was about
5,400. Hundreds of these were employed by Mitsui, Mitsubishi, and
other big business enterprises. It was unusual even in America for
more than one hundred college graduates to be employed by a single
About the same
time College of Commerce founded in Birmingham, England, was consistently
below its student capacity and the total number of graduates, under
the same conditions as its Japanese counterpart, was just 150.
As is often pointed
out, cumulative numbers like these indicate effectiveness.
In the 1950s Japan's
GNP was 16% of America's and 30% of the average of OECD countries.
GDP per capita was about the same as that of Brazil and Mexico.
A period of about fifty years is required for the cumulative number
to reflect a real ability to compete.
graduates in Japan are actually engaged in management, accounting,
and judicial affairs, and engineers are directly involved in production.
These circumstances also are seen as having steadily strengthened
Japan's ability to compete.
Process and product
innovations were also important in building up Japan's competitiveness.
Process innovation refers to lowering the cost of what already exists
and product innovation to creating a product with a new concept.
It is now clear
that what is really important for an ability to compete is process
As you know, the
commodities in which Japan has a competitive advantage are those
whose concepts were developed in America or other countries. Let
me repeat that process innovation, excellent compulsory education,
higher education, and the unity of higher education and production
are responsible for Japan's predominance in competition.
Now, compare the
present situation of Japan's investment in education with those
of other countries.
First, the percentage
the government spends on higher education to the GNP is 0.27% in
America, 0.1% in England, and in Japan and France only 0.06%.
Next, the percentage
of government research and development expenses to the GNP is 0.15%
in America, 0.1% in England, Germany and Norway, and 0.05% in Japan,
France and Italy.
Further, the percentage
of ordinary government aid to institutions of higher education to
the GNP is 0.75% in America, 0.97% in England, and 1.03% in Germany,
while in Japan it is 0.36%; that of government aid to research is
0.149% in America, 0.067% in England, 0.048% in Germany, and 0.013%
Japan now has
a population of 130 million and the average wage is the highest
in the world. When I think about a grand strategy for the nation
one hundred or two hundred years in the future, I believe the most
important thing for the country's survival is intensive investment
in the basic research and product innovation, though, of course,
I am not ignoring production itself.
With an American
scholarship, I have studied in the United States. Whenever I had
discussions with other scholarship holders from Europe, Iran, or
China, though we sometimes criticized America, we were all deeply
grateful to that country. Anticipating that the age of China would
come in time. Now American universities have granted scholarships
to many Chinese.
leads to the creation of bonds among people as well as making an
investment in peace.
For these reasons,
I propose a strategy of intensive investment in highly specialized
graduate education. Just as Japan adopted a priority production
system and invested heavily in four strategic industries after the
war, so it should now invest heavily in higher education. Here,
of course, "strategy" means not perverted equality, but
investment based on performance and results.
My second proposal
is that a new type of graduate school be set up. Students should
be from a variety of segments of society and should include those
from university, working members of society, and those from abroad.
For example, individuals
who have actually worked with a company for three or four years
have learned something that cannot be acquired through an academic
education. Some aged thirty years or over may want to go back to
university and study. Both can play roles in broadening university
four years at a local university with outstanding aspects of its
own, then work for two or three years, and after that go on to graduate
school. From the viewpoint of a company, it is desirable to entrust
judicial affairs to one who is qualified as a lawyer or has a Master's
degree in law. By the method I have proposed it is possible to create
a university education which has its own characteristics. If the
ultimate goal is a graduate education, ranking of universities based
on deviation value will no longer be applicable.
universities the ranking may change simply by the replacement of
the dean. In short, I believe that by shifting the greater part
of the emphasis from undergraduate to graduate education, the intellectual
infrastructure of Japan will be greatly changed.
Finally, I would
like to speak about something in connection with PKOs. The Peace
Corps begun by J. F. Kennedy was a wonderful idea, and it is an
excellent model for Japan to use to spread its pacifism all over
either in local disputes or in racial problems, cooperation in matters
of economy, education and technology will greatly contribute to
the peace and stability of the world.
strengthening of graduate education I have mentioned, and as an
example of one special feature of undergraduate education, I would
like to propose that it be the duty of sophomores or juniors and
professors of national universities to participate in the Japan
Overseas Cooperation Volunteers, or to work with an international
organization for at least one or two years. This educational contribution
to the world will gain a global respect and reputation for Japan.
We have to show that we are more than economic animals.