Japanese businesses need different managers who are more willing to take risks as the country emerges from 15 years of deflation that hampered innovation, according to Takeshi Niinami, chairman of Lawson Inc.
“Most CEOs were promoted because they are really good at cost-cutting, not doing business, something new,” Niinami said today at a Japan Society conference in New York. “Those people can’t manage in this kind of situation where you can find more business opportunities.”
Niinami, 55, an economic adviser to Japanese Prime Minister Shinzo Abe, is on the Industrial Competitiveness Council of Japan and a member of the Tax Commission of the Government. He was previously the chief executive of Lawson, Japan’s second-biggest convenience store chain, and was named president of Suntory Holdings Ltd. this year.
After 18 months in office, Abe has fired two of what he calls the three arrows of Abenomics -- fiscal stimulus and unprecedented monetary easing -- in a bid to banish deflation from the world’s third-largest economy.
Prices excluding perishables, the Bank of Japan’s key inflation gauge, rose 3.4 percent in May from a year earlier, the fastest gain in 32 years. The stimulus helped trigger an 18 percent slide in the yen against the dollar last year and boosted share prices. The currency has strengthened about 3.8 percent in 2014 and the Topix index of stocks has dropped.
The plan’s third arrow includes structural reforms, such as opening markets to competition and increasing female participation in the workforce, as well as starting to rework corporate taxes.
Some big companies don’t pay as much tax as they should because of loopholes that were established in 1960s and 1970s to encourage exports, Niinami said.
“Those loopholes should be filled if we want to reduce” the corporate tax rate, he said. “We are well behind global equal footing.”
To contact the reporter on this story: John Detrixhe in New York at email@example.com