Tim Craig on the billion-dollar Cool Japan strategy

Can you tell us about your career in Japan, and what brought you there? 

I kind of washed up on Japan’s shores in 1970 looking for adventure. From then until now I’ve been back and forth a lot – living in Japan, back in the States, Canada for 16 years. But basically my heart has always been in Japan.

I really became a fan of Japanese pop culture particularly when my kids were young and we were living in Kyoto. So I was watching Japanese music shows with them, and they were reading manga and watching anime.

Then for many years I was teaching English at Panasonic. That’s when I became interested in business, which led me to getting an MBA and a PhD in international business and strategic management. I ended up teaching in the business school in the University of Victoria in Canada.  At that time I had half-employment at the Asian research centre there, and they wanted me to put on a conference every year, so I did one on Japanese pop culture  in 1997.

It was the first international conference on Japanese pop culture ever. The internet had just been developed enough that you could reach out to people, so it was a big deal. People from all over the world participated, including the pioneer manga scholar Fred Schodt and famous manga artist Monkey Punch. That led to a book I published called Japan Pop: Inside the World of Japanese Popular Culture.

Until I retired a couple of years ago, I was teaching at the Business School of Doshisha University in Kyoto, and started a new specialization area called Culture and Creativity. We were trying to target students who had become interested in Japanese pop culture but were also interested in a business career.

I was teaching a course called The Business Side of Japanese Pop Culture. There was no teaching material for that, so I started making my own using the case study method. Most of the material in my book Cool Japan – Case Studies from Japan’s Cultural and Creative Industries started as cases I was writing up about different genres of Japanese pop culture – looking at what they are in general, but also the business side of it.

How have Japan’s creative industries changed over the last decades? 

Japan has always been a pretty insulated market because of the language barrier. Anime and video games are the areas that they’ve really overcome the language barrier and have become quite big internationally. Other aspects such as pop music, TV drama, they are also reaching out a bit and have some international fans – but not as big.

On the pop culture side, there’s been a slow move towards being more international, with a lot more non-Japanese people living and working here even though Japan is fairly closed in terms of immigration. Are you familiar with the idol group AKB48? They have sister groups in Indonesia and Shanghai.

Wait. The band has franchises?

Yeah, that’s right.

In Japan the population is shrinking. They have like the lowest birth rate in the world. So the economy is shrinking, and a lot of businesses are screwed if they continue to rely only on the domestic market. How do we export or take advantage of overseas market opportunities?

One example of that is the AKB48 idol group.

They started franchises. The first one was Indonesia but now they’ve got them in many other Asian countries. That’s not technically an export – they set up a group over there and sing in Chinese or Indonesian. So what things do you keep the same? What things do you have to adjust? It’s really interesting stuff.

But that’s a general trend. A lot of Japanese industries, cultural industries, which rely on a domestic market that’s shrinking are forced to look overseas. And that leads to all sorts of challenges and opportunities.

What about traditional cultural industries in Japan? 

They have the same issue because of the shrinking population, but also because of shrinking popularity. Young Japanese people are not that interested in drinking sake. That’s something old men do. Young people don’t watch sumo anymore. So they are also reaching out or depending more on foreigners.

They have been very successful at increasing tourism to Japan. But there are other ways to basically make more money from the overseas market.

Is there a fear of watering down or changing these traditional industries?

I’d say that fear is more pronounced among foreign fans of Japanese pop culture! They’re more anal; the Japanese are very flexible. This country really respects and keeps alive tradition, but it’s very open to new stuff including changing tradition.

What is the ‘Cool Japan’ strategy and where does it come from?

Actually, the first chapter of the book is about that.

Japan’s traditionally strong industries – like automobiles and electronics – are not doing as well as they once did. The country has been in recession or near-recession since the economic bubble of the late ’80s, early ’90s.

So the country and government is looking for ways to boost the economy.  And Japanese culture – both pop and traditional – is extremely popular overseas. But Japanese creators have not made as much money from international markets as creators in other countries such as Korea or the USA. And these people don’t know about international business. They’re just creators!

In 2011 the prime minister started the Cool Japan initiative. One of its aims is to give creators assistance, and create infrastructure or systems to allow the good ones to make more money or be more successful in overseas markets. It’s intended for businesses that are in cultural industries: food chains and restaurants, makers, anime studios, publishers.

There’s a Cool Japan fund where companies can apply for grants. It’s something like a billion dollars. The last time I updated that chapter of the book, there were something like 20 projects that had been approved and were receiving funding.

Another parallel aim of the initiative is soft power that creates more fans of Japan around the world. But the main thing is economic.

There’s a back-and-forth between Korea and Japan when it comes to government intervention in the creative industries.

In the late 1990s, Korea was recovering from an economic crisis and, obviously looking at Japan’s success, launched a large fund to drive export in their own cultural industries. Now it looks like the Cool Japan strategy is following Korea’s policies. 

To what extent is Korea considered a rival or a threat to Japan’s creative industries? 

I don’t think anybody sees it as a threat. At least I’ve never heard of that or thought of it in that way.

Everybody is trying to get a piece of the world market, but if anything there are synergies. If people like K-Pop in the States, they may think J-Pop is cool too. Korean pop stars appear on Japanese TV a lot, and many Japanese women love Korean TV dramas.

It’s wonderful. The relationship between those two countries was awful, because of their history, and it’s really through pop culture that the two countries have become more friendly. Not necessarily at the government level, but among ordinary people. Japanese cultural items were banned in Korea for a long time, but then it started seeping it as an underground movement.

Now Japanese music and manga are common in Korea – and that wasn’t the case until the ’90s or so.

What does the future hold for the Cool Japan strategy? Is it working?

Japan will continue to turn out good stuff as a cultural powerhouse.

The broad picture is the domestic market is shrinking, which is a worry. So there’s a question: can you take advantage of overseas markets? The trend would be for more international involvement.

As far as the Cool Japan initiative and its economic goals, it’s partly government money, but also private money. So the question is whether it earns the returns on that investment which were expected. And it’s still a bit early to tell, because most of the projects and companies started with that funding have only been in existence for five or six years at the most – and a lot of them just one or two years.

I personally think the reasons and logic for it are sound. There was a report naming a few of the companies which haven’t been doing well, so that’s controversial. Is this a good use of taxpayer money?

You could argue that Japan’s cultural products have become popular without any help from the government at all. It’s been the efforts of individual, private creators and the intrinsic value of the products that has done that. So some people say it’s a waste of taxpayer money.

But that’s a long-running debate around what’s called industrial policy.

Could it be cancelled?

I think it’s going to continue.

A lot of those projects aim to have spillover effects, so it’s pretty hard to measure. And Japan has been pouring money into all kinds of projects as a way to stimulate the economy – there have certainly been worse investments!


Tim Craig holds a Ph.D. in International Business and Business Strategy, and bachelor’s and master’s degrees in Biology, English, East Asian Studies, and International Management. He has 20 years’ teaching and research experience in top business schools in Canada and Japan, and an extensive publication record, including three books and numerous articles in academic and popular outlets. He speaks and reads Japanese fluently.

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