December 24, 1989

THE BIGGEST favor Japan ever did for the United States was send bootlegged copies of its book, “The Japan That Can Say No” across the Pacific. Copies are zinging all over the country, and a long-needed and heated discussion has commenced in the electronics industry.

Subtitled “The New U.S.-Japan Relations Card,” the book was co-authored by Akio Morita, the chairman of Sony Corp., and Shintaro Ishihara, a raging nationalist and member of Japan’s cabinet.

Written in Japanese, the text was supposedly not meant to be translated into English or distributed in America, but I don’t believe it for a minute. Despite the diplomatic cordiality between the United States and Japan at the moment, it’s clear by reading the book that our blatant anti-Japanese sentiment has stepped hard on Japan’s national tail. A Japanese book “illegally” translated into English is the perfect way for Japan to growl and bark at us without breaking a cultural tradition of avoiding confrontation.

Most of the electronics executives I’ve talked to, however, don’t seem to consider this. They immediately begin railing about the most sensational of the book’s ideas — specifically, that U.S. actions against Japan are motivated by racism, and Ishihara’s statement that Japan should consider playing its “card” of the world’s reliance on its chip technology and threaten to sell chips to the Soviet Union instead of us.

I guess some people prefer to focus on these kinds of provocative issues, which allow them to point a finger at Japan’s motives, rather than examine their own shortcomings. Don’t misunderstand: Japan dumped chips and killed off the dying U.S. memory chip industry. Japanese electronics firms have done other creepy things too, and they should be punished for them. But just like the racism charge, it’s often a matter of the pot calling the kettle black.
Long accustomed to free access to any global market, U.S. companies have done the same, and worse — dumping like crazy, engaging in hit-and-run speculation, etc. But many U.S. companies got angry when their attempt to do business-as-usual in Japan was foiled.

“You don’t just wake up one day and the next week you’re (in Japan),” says David G. Norman, manager of business development for Businessland in San Jose. Norman’s been working for a year on opening a Businessland subsidiary in Japan, and expects to announce the new firm’s corporate structure and the name of its Japanese partner next month. “Testing the market is not OK. They don’t like speculators. If you’re not serious, don’t try.”

Then there’s the continuing faulty perception that the Japanese are only good at copying or adapting, not at creative work. Morita tells a great story about how a U.S. firm gave up trying to sell transistor radios (using then-new Bell Labs technology). Sony stepped in with the “one radio, one person” marketing concept and began selling all over the world.

We call them copycats rather than give them credit for A) creating a market where we thought none existed, and B) creating the manufacturing processes to make electronic products affordable. How many non-Japanese stereo components do you own today? How about your VCR? TV? Car? Kitchen appliances? Power tools? How much more creative do you want ‘em to get?

Another huge problem faced by U.S. firms playing catch-up with Japan is that for too many years, the structure of our economy has been based on no commitment and the promise of fast, outlandish profit. “What I want is all the power and none of the responsibility,” says humorist Ashleigh Brilliant, and that sentiment about sums up most present U.S. investment strategies.

Rep. Tom Campbell, R-Sunnyvale, who represents Silicon Valley in Washington, D.C., is trying to break us of our short-term perspective. He’s devised a plan to support the growth of U.S. industry — tax breaks for start-up investments and research and development, no tax incentives for leveraged buyouts which encourage company debt and more tax incentives for firms that loan employees to teach at schools.

More controversial are his proposed changes to antitrust laws, which would encourage more consortia such as U.S. Memories and Sematech to band together to grab larger chunks of global market share.

All these moves, flawed or not, are heartening because they deal with reality, not the fantasy of the Bad Japanese. Products stamped “Made in U.S.A.” are no longer automatically the best, and xenophobia won’t change that. Though it’s likely to mean less profit for a while, business and industry need to set aside patriotic posturing, get into the trenches and start making the painful, necessary changes that will revive our economy, our spirits and our faith in free enterprise.

Next week: Worker rights and a “U.S. That Can Say Yes.”