Change in Japan The cycle of resistance to change in Japan. Joi Ito is developing a Blueprint for Japan 2020:
I have already shared this thought with Joi -- the need for Japan to embrace failure. In a talk by MIT's Lester Thurow he pointed out Japan's institutionalized culture does not allow for failure:
- A strong cultural emphasis placed on success without toleration for failure
- Backward bankruptcy laws. Even if someone goes bankrupt they are still expected to pay their debts. Allows creditors to pursue debts for two generations.
Japan's aversion to failure is in stark contrast to the Silicon Valley, where lore used to have it that we reward failure. Allowing failure enables a culture of risk taking. Risk taking spawns innovation, which creates products that command premium pricing. When a credit market does not allow default, it negatively impacts market prices. This is perhaps a major factor in Japan's deflationary trap.
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