Japan CEOs Learn `Globish' to Expand Overseas as Economy Stalls

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Photographer: Tomohiro Ohsumi/Bloomberg

Shinichiro Yamada, a salesman at Monex Group, left, takes an English lesson at the company's headquarters in Tokyo. Yamada is one of those learning globish, even though he only deals with Japanese clients. “I’m poor in English, but I can speak,” Yamada, 28, said in English at one of Monex’s parties last month.

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Photographer: Tomohiro Ohsumi/Bloomberg

Shinichiro Yamada, a salesman at Monex Group, left, takes an English lesson at the company's headquarters in Tokyo. Yamada is one of those learning globish, even though he only deals with Japanese clients. “I’m poor in English, but I can speak,” Yamada, 28, said in English at one of Monex’s parties last month. Close

Shinichiro Yamada, a salesman at Monex Group, left, takes an English lesson at the company's headquarters in Tokyo.... Read More

Photographer:Robert Gilhooly/Bloomberg

Monex Group Inc. Chief Executive Officer Oki Matsumoto holds regular parties at the Tokyo-based company where employees must speak globish, or global English, a language for non-native speakers using basic grammar and a vocabulary of 1,500 words. Close

Monex Group Inc. Chief Executive Officer Oki Matsumoto holds regular parties at the Tokyo-based company where... Read More

Photographer: Tomohiro Ohsumi/Bloomberg

Asahi Breweries Ltd. President Naoki Izumiya forced all executives to take the Test of English for International Communication, or TOEIC, a standardized business English test, in April. Close

Asahi Breweries Ltd. President Naoki Izumiya forced all executives to take the Test of English for International... Read More

Photographer: Charles Pertwee/Bloomberg

Rakuten Inc. Chief Executive Officer Hiroshi Mikitani is pushing for the use of English in internal documents and meetings. Close

Rakuten Inc. Chief Executive Officer Hiroshi Mikitani is pushing for the use of English in internal documents and meetings.

Oki Matsumoto, chief executive officer of online trader Monex Group Inc. and a former Goldman Sachs Group Inc. partner, has a solution to Japan’s stagnant domestic economy: Learn “globish.”

Matsumoto holds regular parties at the Tokyo-based company where employees must speak globish, or global English, a language for non-native speakers using basic grammar and a vocabulary of 1,500 words. Fast Retailing Co., Asia’s biggest clothing chain, and Internet shopping mall Rakuten Inc. are also promoting English to help employees communicate with international partners and expand overseas.

“My English is totally globish,” Matsumoto wrote on his weblog on July 1. “I don’t feel any inconvenience in speaking with various people from around the world, even if my pronunciation has a Japanese accent.”

As the population shrinks and a stronger yen swells companies’ buying power for overseas acquisitions, the need for better international communication is growing in Japan. Japan’s economy slowed to an annualized 0.4 percent in the second quarter, from 4.4 percent in the previous three months, allowing it to be overtaken by China as the world’s second biggest.

“Emphasizing English is definitely the right direction to go, as the domestic economy has peaked,” said Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. “Companies need more sophisticated English speakers for their globalization, which is crucial to spur profits.”

Local Rules

Asahi Breweries Ltd., Japan’s second-largest beermaker, is sending 10 employees to overseas subsidiaries for a year to learn local languages, culture and business rules, President Naoki Izumiya said on Aug. 26. He forced all executives to take the Test of English for International Communication, or TOEIC, a standardized business English test, in April.

“I want the company to be internationalized because we can’t remain ‘Tokyo’s Asahi’ forever,” Izumiya said.

Globish was started in 1995 by French native Jean-Paul Nerriere, a retired marketing executive of International Business Machines Corp., according to its website. The first book on the language was published in 2004.

Shinichiro Yamada, a salesman at Monex Group, which is buying Boom Securities (H.K.) Ltd., is one of those learning globish, even though he only deals with Japanese clients.

“I’m poor in English, but I can speak,” Yamada, 28, said in English at one of Monex’s parties last month. “My English skill is rising.” Yamada said he needs English to get market information and understand products from the U.S. and the U.K.

English Menu

At Rakuten, Chief Executive Officer Hiroshi Mikitani, a Harvard Business School graduate, is pushing for the use of English in internal documents and meetings. He spoke English at a press conference for mostly Japanese reporters on Aug. 5 when the company announced its first-quarter earnings and the company displays English menus at staff cafeterias.

The company plans to raise the overseas proportion of transactions to 70 percent, as it extends services to 27 countries from six. Rakuten doesn’t say how much sales it gets from abroad as the amount is less than the 10 percent threshold required by government disclosure rules.

The rush into English has raised concerns with some executives in Japan.

‘Ridiculous’

At Honda Motor Co., which sold 82 percent of its vehicles in overseas markets in 2009, Chief Executive Takanobu Ito said the enforced use of English at Japanese offices was “ridiculous.” He said companies should use English only when appropriate, not in meetings attended only by Japanese people.

Nidec Corp., the world’s biggest maker of disk-drive motors, is being more ambitious. Managers will need one foreign language from 2015 and department heads will need two from 2020, according to the company.

“Chinese will be important,” said spokesman Norio Tamura. “We plan to increase the number of production sites there fivefold.”

Japanese companies may benefit from the yen’s surge to a 15-year high, bolstering their buying power, according to a Goldman Sachs Group Inc. report on Aug. 28. The yen has gained 11.5 percent against the dollar this year, the most among major currencies.

Companies should consolidate in industries where there is excessive competition, and be more aggressive in making acquisitions in Asia, where the long-term growth potential is high, said Kathy Matsui, chief strategist for Goldman in Tokyo.

Enrolment Spikes

Fast Retailing, operator of the Uniqlo clothing chain, plans to spend as much as 400 billion yen ($4.8 billion) on overseas expansions, according to Chief Executive Tadashi Yanai. Yanai has told his employees to study English for two hours every day for a year and offers a program to acquire English skills. Fast Retailing is also working on a global system to produce 1,000 internationally competent managers every year.

English conversation schools in Japan are recording spikes in enrolments. The number of new corporate clients jumped 50 percent in the three months through June 30 from a year earlier, said Jun Nakagawa, a spokesman at Berlitz Japan Inc., the language school unit of Benesse Holdings Inc.

“We gained from the recent push for English,” said Nakagawa. Interest in Chinese has also increased, overtaking French in terms of numbers of students to second place, he said.

Employees who are fluent in English will be essential for overseas expansion plans, said Naomi Fink, a strategist at Bank of Tokyo-Mitsubishi UFJ Ltd.

“There’s more emphasis put on English and English as a communication language for business in Asia as a whole,” said Fink. It’s needed “to communicate with the maximum amount of potential clients or potential business partners,” she said.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net.

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