Pandemics, crises and Japan
On February 14 this year, Japan saw its first local infection from the CoVid-19 virus. It has only been a bit over six weeks, but already seems like a world away. Every country has had its own way of facing the reality of this pandemic. This has been a sudden refresher of high school algebra: the expansion on an epidemic follows the exponential function, while our brains are more geared to understanding linear increases or decreases. It has also been a refresher in the economic theory of the “tragedy of the commons” where what is best for an individual (get on with your life normally) is not aligned with the common good (prevent transmission).
In this kind of situation, strong government leadership is essential for individuals and businesses to know where they stand and take proper measures. But we are not seeing much leadership or clarity in the world in general and Japan is not an exception.
It helps to remember previous crises. The 1973 oil shock, the 1995 Great Hanshin earthquake, the 2011 Fukushima crisis all followed a pattern of bad initial responses. Eventually things worked out through great sacrifice. Muddling through crises seems to be the norm in Japan, in sharp contrast with the image of a highly organized system and society.
As of today, companies are still navigating conflicting announcements and messages from local and national government leaders. It is difficult and stressful, but it helps to remember some basic ideas: take measures to protect the health of employees, partners and customers. Take measures to ensure there is enough cash to survive the worst of the crisis. Then, start thinking about the post-crisis world, which may bring a sharp recession in many industries. Companies will need to keep a sharp focus on the basics, fresh thinking, flexibility and anticipation.
At the Spanish Chamber of Commerce in Japan, we want to engage all our members to help each other think through and make good decisions through the crisis. We will be posting ideas and thoughts over the next few days. We look forward to your comments. Thank you for reading!
President, Spanish Chamber of Commerce in Japan