"Viewing Galapagos positively reveals Japan's future" Mr. Seinosuke Kawaguchi

Mr. Morinosuke Kawaguchi, President of Morinosuke Inc., develops a unique methodology that systematizes technology, innovation, and subculture. His distinctive approach to Japanese manufacturing is now attracting significant attention. Mr. Taro Minami of DENTSU SOKEN INC. Japan Studies Group spoke with him.

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Seeing Japan's Future by Embracing Galapagos in a Positive Light

The more the world homogenizes through globalization, the more Japan can shine

Minami: Mr. Kawaguchi, you advocate that Japan should leverage its cultural essence in manufacturing and business strategy. Could you share how you arrived at this conviction?

Kawaguchi: I started as an engineer at an electronics manufacturer. Witnessing how poor management decisions often disrupted engineers' careers sparked my interest in MOT (Management of Technology). Later, I spent 13 years at a strategy consulting firm strong in MOT, but I began to feel limitations in pursuing "how to make" through operational excellence. I always concluded that "what to make" is more important. This requires no systematized methods or formulas; instead, it demands an anthropological sensitivity—an understanding of people and culture. As my interest in thinking at a more meta level grew, two major themes emerged within me: the relationship between artifacts and humans, and the relationship between Japanese values and global values. The term "Galapagos" is symbolic here. Despite excelling in science and technology, Japanese people somehow tend to belittle themselves. I found this odd and compiled my observations into books like 'Manufacturing in a Country of Otaku and Girls' and 'The World's Acclaim for "Made in Japan"'.

Minami: So you're suggesting we should view Galapagos not as a problem, but as an opportunity?

Kawaguchi: Galapagos is so fundamental to Japan that if you took it away, nothing would remain. Right now, no country—including emerging nations—can become the next Galapagos after Japan. Globalization has increased mobility and shortened product lifecycles, meaning countries don't have time to cultivate a middle class or build industrial clusters before being overtaken by the next nation. But Japan has already achieved this, placing it in a privileged position as the last advanced nation. Japan was a latecomer among modern nations, yet it became a country capable of producing everything domestically. Furthermore, establishing an entire education system in its own language is significant. The more English-based culture and values homogenize the world, the more Japan will stand out in relative terms.

Leveraging the Japanese character leads to sustainable strengths

Minami: How do you perceive Japan's uniqueness and characteristics?

Kawaguchi: One aspect is survival itself—making continuity an end in itself. In Western societies focused on winning, companies pursue expansion through M&A. In Japan, the priority is simply to keep going, however modestly. It's said that over 40% of companies with histories exceeding 200 years are in Japan. When continuing becomes the goal, it naturally leads to high-mix, low-volume production. Pricing at the very edge of profitability, based on the idea of "just making enough to get by," creates a barrier to entry. Even after foreign companies withdraw from the market, Japanese companies tend to maintain these low prices that allow them to survive. Areas where Japan holds significant global market share often involve high-mix, low-volume production, such as in capital goods. Another characteristic is the relentless pursuit of ingenuity. Japanese people have a fear of doing nothing, which goes beyond the concept of "diligence." For example, a chocolate confection born in the UK remained limited to just a few varieties locally for decades. Yet when it came to Japan, it quickly branched out into hundreds of varieties. Ironically, it's now exported back to the UK and even becomes a souvenir when visiting Britain.

Minami: In which specific fields does this Japanese temperament prove particularly advantageous?

Kawaguchi: Japanese traits shine brightest in non-verbal domains. Take products: engineers create something thinking, "This opening mechanism feels just right," and buyers instinctively agree. Understanding happens through the product itself, without language. That's why Japan has always excelled in manufacturing. The same principle applies to culture—manga, anime, and more. Because we held firm against becoming an English textbook, we preserved our originality. The flip side is that we find it difficult to break into the English-standard world. This is a matter of having to choose one path or the other. Since the entire world is steeped in English standards, shouldn't Japan be allowed to pursue its own unique path?

The "openness" that Japan finds challenging could become a major opportunity

Minami: Given the trend toward open systems, can Japanese companies sustain their tendencies toward high-mix low-volume production and low profitability?

Kawaguchi: Japan's culture, honed in a closed environment, has an aversion to open structures. However, the countries known for their Galapagos-like isolation stand to benefit most from the spread of production technologies capable of handling small-batch, high-variety production—symbolized by 3D printers—and the rise of an era where ownership of production technology is less crucial, symbolized by membership-based workshops like "TechShop." This is a matter of production technology sophistication. While mass production of a few varieties remains advantageous, as the gap narrows, small-batch, high-variety production actually yields higher profit margins. Furthermore, when production means are opened up, the sensibilities and ingenuity of the makers become crucial. Sensibility is honed over long periods in a rich social environment; it cannot be cultivated overnight. Compared to operational excellence, it is a far more difficult area to catch up in. Japan may be poor at paradigm shifts, but it excels at digging deep within given constraints. Worrying about being a Galapagos is itself a luxury; striving desperately to become an ordinary country is unwise. First, we must correctly recognize what we have built and know ourselves.