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Keidanren Kaikan, the head office of the Japan Business Federation, in Chiyoda, Tokyo, Japan.
BUSINESS

Keidanren drives corporate Japan's global agenda

Japan’s leading corporate lobby, Keidanren, is advocating for fair and open trade globally, with a renewed emphasis on relations with the U.S. and the use of technology for the good of all

Since its foundation in 1946, Keidanren, the Japan Business Federation, has been the nation’s most powerful corporate voice, so much so that its head is commonly called the prime minister of business. And with a change of leadership last May, the influential federation is moving forward with a fresh perspective.  

Hiroaki Nakanishi, its new executive chairman, breaks the tradition of Keidanren leaders coming from the manufacturing and automotive industries. From the world of high technology, he is the former CEO and current chair and executive officer of Hitachi, the Japanese multinational electronics and engineering conglomerate, which he successfully turned around in the wake of the 2008 financial crisis from significant losses to profitability. Now Keidanren, with Nakanishi at the helm, is focusing on leading the digital transformation of the Japanese society and advocating for an effective global system so the world can positively transform through revolutionary technology.

Keidanren was founded 71 years ago in the spirit of creating a well-considered and powerful collective voice for Japan’s business community. “We must all work together as one for Japan to catch up with the world,” said the federation’s first chairman, Ishikawa Ichiro. Today, that philosophy of unity remains, and Keidanren advocates on behalf of around 1,300 companies and 109 industrial associations, a marked difference from the American approach in which individual industry bodies have more influence.   

Throughout its history, the organization has been pivotal in Japan’s economic prowess and status as a global role model for how to best do business and industry. The federation has worked for the liberalization of trade, the promotion of private sector diplomacy, and the establishment of stable industrial relations, advising the Japanese government on national regulatory and economic reform, as well as liaising with international leaders to form mutually beneficial relationships and deeper economic integration.

Keidanren has long worked abroad, but as the economy gets more integrated through globalization, so too does the need to influence the international community. A strong advocate of liberal trade and global economic development, in recent years it has advised policymakers, businesses and the public on the 2008 financial crisis, Brexit, the Trans-Pacific Partnership, the Japan-EU EPA and the recent wave of U.S. tariffs.

Keidanren has been a strong global voice on the 2008 financial crisis, Brexit, the Trans-Pacific Partnership, the Japan-EU EPA and the recent wave of U.S. tariffs

“For Japan, with its rapidly aging society and declining birth rate, promoting globalization and incorporating the vigor of overseas markets constitute indispensable factors to realize sustainable economic growth,” Keidanren USA said in a statement.

Due to domestic and international developments, plus Japan’s desire to further strengthen ties in America, Keidanren’s presence in the U.S. has been intensified in recent years. In 2015, Keidanren reopened their U.S. liaison entity, Keidanren USA, and began to organize an annual high-level business mission to the country. According to the organization, its core mission in the U.S. is to facilitate more engagement by the Japanese business sector with the U.S. policymaking community and to promote the very real contributions being made by Japanese companies to the U.S. economy, starting with hundreds of billions of dollars in foreign direct investment and the creation of almost 1.3 million jobs across the country through trade.

As a reaction to U.S. President Donald Trump’s protectionist inclinations, the federation is also shifting its approach to U.S. lobbying. While it continues to take part in federal conversations, including recently submitting comments to the U.S. Department of Commerce related to automobile tariffs, it is taking a new focus on communication with policymakers at state and local levels.

Japanese business in the U.S.

SOURCE: Keidanren, 2017

$421 billion

Japan FDI to the US (stock)

856,100

Americans directly employed by Japanese companies

$100 billion+

U.S. exports to Japan

And unlike so many lobbies, the Japan business federation’s goals go beyond corporate profits. All members of the federation have to sign onto a charter of corporate behavior, which includes pledges to adhere to principals related to fair business practices, respect for human rights and engagement with environmental issues.

“Keidanren has always advocated that, to build an affluent and vibrant society led by the private sector under a fair and free market economy, corporations must behave with a strong sense of ethical values and responsibility, and gain trust and rapport from the public…. regardless of its location,” reads the charter, which was also updated last year to include a commitment to using technology for the betterment of society.

“To build an affluent and vibrant society led by the private sector under a fair and free market economy, corporations must behave with a strong sense of ethical values and responsibility”

With its principals in mind, Keidanren has also partnered with the American Chamber of Commerce in Japan (ACCJ) to suggest the direction that both Japanese and American companies should take in terms of the digital economy, advocating for the responsible use of data, the establishment of a more secure cyberspace, and the construction and harmonization of global data systems through U.S.-Japan leadership.

“We recommend that Japan and the U.S. make the implementation of digital economy policy a focus of national strategy. The private sector should create services that raise people’s quality of life and actively manage its businesses to achieve digital transformation, while building consumer trust. It should be ready and available to be an active partner in policymaking, and in the establishment of best practices as the digital economy rolls out,” the Keidanren-ACCJ working group said in a 2018 statement.  

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