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Japan Must Let Zombie Companies Die

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Re: Japan Must Let Zombie Companies Die

#61

Post by lmm »

tempestn wrote: post #54
patio11 wrote: post #19

Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…

Could this situation create an opportunity for North American VCs to fund Japanese startups? Obviously it would be a lot more logistically difficult than working domestically, and would presumably carry a number of new risks, but if it's really that bad, presumably you could give significantly more lucrative opportunities as well. (And I assume for the startup, the details of getting a bank account and such would be…

Maybe. But you'd be funding people to live in the most expensive country in the world and where there's hardly any startup infrastructure. Even if you have funding, can you rent an office? Can you furnish it without paying for 100 people's worth of office furnishing? If there's a hardware element, are there businesses that will produce a prototype quickly? Can you recruit people? What are you going to do about series B/C/D, fly back to the US for a few months each time? Not to mention that the most driven entrepreneurs will be willing to move.

Re: Japan Must Let Zombie Companies Die

#62

Post by crdoconnor »

orangecat wrote: post #13
lkrubner wrote: post #10

The above article is best understood as a political piece, rather than a business story. Every single sentence in this article can be picked apart, but doing a line-by-line critique would miss the larger problems with the article. The author assumes that more productivity is always good, even though Japan has been suffering a lack of economic demand for most of the last 26 years. Big gains in productivity would only…

If the goal of Japanese policy makers is to boost demand, and that does seem like a wise goal, then keeping 50,000 workers employed at Sharp seems like a smart bet, compared to keeping 100 people employed at some nimble, fast-moving startup. If you want to make sure people have money so that demand is increased then just give them money, don't keep useless jobs around. the USA was able to sell its stake in GM at a pr…

>If you want to make sure people have money so that demand is increased then just give them money

In Japan they'd mostly just put it in a savings account or use it to pay down debts which wouldn't contribute much to demand.

Re: Japan Must Let Zombie Companies Die

#63

Post by rodgerd »

tempestn wrote: post #54
patio11 wrote: post #19

Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…

Could this situation create an opportunity for North American VCs to fund Japanese startups? Obviously it would be a lot more logistically difficult than working domestically, and would presumably carry a number of new risks, but if it's really that bad, presumably you could give significantly more lucrative opportunities as well. (And I assume for the startup, the details of getting a bank account and such would be…

> Could this situation create an opportunity for North American VCs to fund Japanese startups?

North American VCs don't even want to fund startups in the "wrong" part of the United States and at least one thinks CEOs can't have "foreign-accented English". What on earth about that suggests they'd leap into the Japanese market?

Re: Japan Must Let Zombie Companies Die

#64

Post by crdoconnor »

lkrubner wrote: post #10

The above article is best understood as a political piece, rather than a business story. Every single sentence in this article can be picked apart, but doing a line-by-line critique would miss the larger problems with the article. The author assumes that more productivity is always good, even though Japan has been suffering a lack of economic demand for most of the last 26 years. Big gains in productivity would only…

>>"If Japan’s bailouts remind you of the U.S.'s rescue of its auto companies, you’re not alone. There is a strong argument that the auto bailouts only delayed the day when General Motors and Chrysler lose out to nimbler competitors like Tesla Motors." > >Right, but the USA bailout of the auto companies seems to have been a good bet.

There's also the fact that Toyota was initially perpetually bailed out by the Japanese and had their exports subsidized by suppressing the value of their currency. The Asian tigers and their auto companies didn't just appear out of nowhere.

In a way, the auto bailouts can be seen as just levelling the playing field somewhat.

Free market religion never did build a wealthy industrial economy. Judicious application of subsidies did though.

Re: Japan Must Let Zombie Companies Die

#65

Post by pixelcort »

lmm wrote: post #61
tempestn wrote: post #54

Earlier quoted context omitted.

Could this situation create an opportunity for North American VCs to fund Japanese startups? Obviously it would be a lot more logistically difficult than working domestically, and would presumably carry a number of new risks, but if it's really that bad, presumably you could give significantly more lucrative opportunities as well. (And I assume for the startup, the details of getting a bank account and such would be…

Maybe. But you'd be funding people to live in the most expensive country in the world and where there's hardly any startup infrastructure. Even if you have funding, can you rent an office? Can you furnish it without paying for 100 people's worth of office furnishing? If there's a hardware element, are there businesses that will produce a prototype quickly? Can you recruit people? What are you going to do about series…

True, but look at the exchange rate: $1 is now ¥118, so if you can overcome those obstacles, you can stretch the value of that money a bit extra.

Re: Japan Must Let Zombie Companies Die

#66

Post by kagamine »

captaindiego wrote: post #41
arohner wrote: post #26

Earlier quoted context omitted.

Why is a business checking account so difficult? Seems like "I have $1000 (or 10k) to place in my shiny new account" would be enough to mollify them?

Even getting a basic credit card in Japan as a foreigner can be a real pain. If you work for a big company and can get some oomph behind your application you're fine. But if you're a foreign student you're probably going to have trouble.

From numerous YT videos of well-established foreigners in Japan I understand that just moving house and being accepted for a rental contract is very difficult. Often foreigners are asked to pay higher deposits even though their income is from Japan and have lived there for years, and have rented without problem elsewhere.

Example: https://www.youtube.com/watch?v=odahzHioQQ4

Re: Japan Must Let Zombie Companies Die

#67

Post by crdoconnor »

simonh wrote: post #56
lkrubner wrote: post #10

The above article is best understood as a political piece, rather than a business story. Every single sentence in this article can be picked apart, but doing a line-by-line critique would miss the larger problems with the article. The author assumes that more productivity is always good, even though Japan has been suffering a lack of economic demand for most of the last 26 years. Big gains in productivity would only…

>...then keeping 50,000 workers employed at Sharp seems like a smart bet, compared to keeping 100 people employed at some nimble, fast-moving startup. Where does the money to subsidize those jobs come from? Are you seriously suggesting that sucking subsidy money out of the productive economy to pay for those jobs is not depressing demand? All our economies could do with some of this magic money, it sounds like it wou…

>Are you seriously suggesting that sucking subsidy money out of the productive economy to pay for those jobs is not depressing demand?

Which part of giving people money do you think would reduce their tendency to spend it?

Re: Japan Must Let Zombie Companies Die

#68

Post by crdoconnor »

jzelinskie wrote: post #5

>you decide to leave your job and start a business with your college buddies I know the point they were trying to make in the article, but the primary reason this doesn't happen in Japan is the cultural fear of failure rather than the system being broken. Once you're in, the nanny corporation will take care of you for the rest of your life. Once those corporations are in, the government will take care of them for the…

>I know the point they were trying to make in the article, but the primary reason this doesn't happen in Japan is the cultural fear of failure rather than the system being broken. Once you're in, the nanny corporation will take care of you for the rest of your life.

The Japanese job for life is pretty much gone now:

http://www.businessweek.com/managing/content/sep2009/ca20090...

Re: Japan Must Let Zombie Companies Die

#69

Post by sageikosa »

jljljl wrote: post #33
duncan_bayne wrote: post #17

Earlier quoted context omitted.

I think the author was criticising malinvestment, rather than arguing for higher productivity. https://en.wikipedia.org/wiki/Malinvestment According to the Austrian school, market interventions like those in Japan are bad _regardless_ of the effect on productivity, because they represent malinvestment.

How exactly do you judge a malinvestment if you don't measure its effects?

You measure the market demand for investment capital. If there is none, but there is sufficient liquidity elsewhere, then smart money is avoiding that enterprise as a profit making venture.

Re: Japan Must Let Zombie Companies Die

#70

Post by mattlutze »

ihsw wrote: post #15
tmlee wrote: post #7

Earlier quoted context omitted.

The corporations can't take care of their employees forever, so does the government can't take care of the corporations forever.. Wouldn't they not want this to hit a dead end?

The rationale is that the more successful divisions of corporations support the existence of less successful divisions, and more successful corporations support the existence of less successful corporations. This is socialism -- social ownership of risk. The rising tide lifts us all. There are fewer winners and fewer losers, and it's only sustainable when everybody buys into it and nobody gets greedy or envious. Such…

> Conversely, this is the reason for Europe's clinging to socialism for the better part of the last century (homogeneous society)

Europe is a continent with 50ish countries and dozens of widely spoken languages. It is in no way a homogeneous landmass.

> a melting pot of sorts

Which it has been since folks started invading, warring and immigrating across the continent thousands of years ago.

> maintaining a Euro-centric identity will be far more difficult as many scramble to align themselves with a nation-centric identity.

There hasn't been a dominant Euro-centric identity across Europe, however. Current trends in politics favoring the messages from conservative (or very conservative) parties is interesting news for the pundits to discuss. Different countries in Europe have been quite conservative and quite liberal over the last century, but they all are nations first (as is evidenced by how difficult it can be to effect change through the European Council/Parliament.

> A strong EU that leans to the right is inevitable

Unfortunately I'm not sure this can be concluded from the preceding arguments.

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