Japanese seek to improve quality of life: The head of Sony has sparked off a furious debate by urging a change of economic philosophy. Terry McCarthy reports

IN A country where stability has been the bedrock of economic success, there is a growing clamour for change in the way people lead their lives. An opinion poll published last week in Asahi Shimbun, one of Japan's leading national dailies, proved the point. No fewer than 87 per cent of respondents said the way of life in Japan should be changed.

There is a growing feeling across the country that the post- war sacrifices endured by the Japanese labour force to construct a world-beating economy have gone far enough. Everyone from the lowliest factory worker to cabinet ministers proclaims that now is the time to concentrate on improving the quality of life.

An integral part of this new thinking is the mounting criticism from abroad of Japanese as one- dimensional 'economic animals' - a term younger Japanese in particular use disparagingly about themselves. On top of this are the lessons of Japanese who travel overseas and see their American and European counterparts enjoying a higher standard of living - even though GNP per capita is higher in Japan than in the US and most European countries.

The big unanswered question, however, is how this change towards a higher quality way of life is to be achieved, and who is to put this change into motion? Despite the government's repeated aim to convert Japan into a 'life-style superpower', few Japanese citizens have any faith in their politicians' ability to change anything. This year's Sagawa Kyubin affair involving gangsters and illegal pay- offs has only deepened the public's scepticism of politically- motivated reform.

But outside the world of politics the same debate has been carried on in a more genuine, and potentially more far-reaching, way in the ranks of the country's top corporate executives, particularly in the electronics and car industries - the very men who created Japan's economic miracle in the first place. If change were to come, many Japanese felt it would come from the heads of industry, who are not bound to the myriad special interest groups to which politicians are beholden.

However, as the debate has progressed the reformers are finding it very hard to win over their conservative colleagues.

It started off at the beginning of 1992 with an article written by Akio Morita, the chairman of Sony, in Bungei Shunju, an influential monthly magazine. Mr Morita wrote the article after a long trip through Europe and the US, during which he said he was shocked at the level of hostility he found to Japan's perceived economic warfare against its Western competitors.

If Japan was to avoid becoming an international pariah, he argued, it would have to carry out a wholesale reformation of its economic management policies. Workers should receive higher wages, their working hours should be reduced, corporations should pay higher dividends, more attention should be paid to preserving the environment, and the underlying philosophy of relentlessly pursuing market share should be scrapped in favour of a Western- style profit motive.

Coming from the head of one of Japan's best-known companies, Mr Morita's article attracted a lot of attention - and criticism. One of his strongest opponents, Tsuneo Iida, an economics professor, accused Mr Morita of joining the Japan-bashers overseas and creating a new group of 'self- bashers' within Japan. Mr Iida said there was no reason for Japan to take Western economies as role models, since they were decadent and their key industries in decline. Instead, Japan should push home its advantage in manufacturing excellence, 'to redefine what consumers need to own if they are to consider themselves affluent'.

A more moderate tone emanated from the Keidanren, Japan's Federation of Economic Organisations, the equivalent of the CBI. The new keyword was to be kyosei, literally 'living together' - a tentative philosophy of international co-operation that would promote mutual reliance and goodwill between Japan and its corporations with the rest of the world. Many members of the Keidanren share Mr Morita's apprehension at Japan's bad image overseas, and shudder at the possibility of a fully fledged trade war breaking out in the world.

But having coined the term kyosei, there is still considerable debate over what it might imply in practice. While Mr Morita and his supporters argue that it implies a less cut-throat approach to world trade, others have used it to describe an elusive 'harmonisation' of Japan's economic system with that of other countries.

Leading the 'harmonisation' advocates is Shoichiro Toyoda, chairman of Toyota and a vice- chairman of the Keidanren. Speaking at a Keidanren seminar on kyosei last year, Mr Toyoda said that while Japan should 'modify any of our practices that are exclusionary . . . we also need to encourage people overseas to consider adopting elements of Japanese practices that are good and useful'. So far so good.

But then Mr Toyoda went on to define the term in question. 'The kyosei we seek is predicated on placing the interests of customers above all other considerations', - including, presumably, workers' welfare, profit margins and dividend payments, environmental concerns and all the other issues Mr Morita addressed in his original article.

It is instructive that the chairman of Toyota should express such views. Toyota is coming under increasing fire even from its domestic competitors in Japan's car industry for continuing to pursue market share, even in a time of economic slowdown. Relying on its substantial cash reserves, Toyota has refused to lengthen product cycles, on the argument that new products best serve the interests of consumers. In fact, its less well-off competitors in Japan claim, Toyota is simply out to increase further its market share from its current high level of 40 per cent.

The argument continues to swing back and forth. Many executives concede that some aspects of Japanese management need to change, but fear that Mr Morita's proposals were too radical. One virtue of the Japanese system that many are loath to discard is the importance given to long-term planning and a strategic view of a given industry, the absence of which is regarded as one of the key weaknesses in the US short- term results-oriented management system.

But looking back over the year, Mr Morita is satisfied. 'I knew that what I proposed in that article couldn't be done overnight,' he told a Japanese newspaper last month.

'But I believe I accomplished what I intended because it sparked broad debate. Never before had economic scholars cited a single article by one corporate man as material in their arguments.'

(Photograph omitted)