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The Three Most Powerful Industrial Organizations in Japan

Businessmen and businesswomen in Japan

Japan has three private powerhouses that organize the country’s various industries and different sized companies. All three help develop and push policies aimed at achieving the best possible evolution of Japan’s business climate. Keidanren is considered the most conservative and quite similar to The Confederation of European Business, or as we usually say: “BusinessEurope”. Japan Chamber of Commerce is a network of comprehensive local economic organizations, organizing some 1.25 million members businesses nationwide, embracing companies in every size, from sole proprietors to large companies. Japan Association of Corporate Executives organizes around 1400 top-level executives from Japan’s 1000 largest and most influential industrial companies. They work with issues related to the development of Japan in many aspects from social to reform and economy in both a domestic and global context.

Keidanren – Japan Business Federation

Its original name translates to Japan Federation of Economic Organizations and was established just after WW2 with the aim of recovery for the Japanese economy. In 2002 it merged with Nikkeiren (Japan’s Federation of Employers’ Association), keeping the name Keidanren. For most of the post-war period, Keidanren has been the voice of Japan’s largest industrial companies. Noteworthy is the fact that they always supported the government’s efforts to raise Japan’s consumption tax to 10%. It has even called for the consumption tax to be raised higher, namely to 15%.

Keidanren organizes over 1400 member companies, some 100 nationwide industrial associations and 47 Regional economic organizations. Their own organization comprises a large number of committees, devoted to all different industrial sectors as well as special projects, including COVID-19.

The aim of Keidanren’s work is to achieve sustainable development of the Japanese economy in order to improve the quality of life for all of the Japanese people. The work they carry out is prepared in committees and then communicated to regulatory bodies, government and the various ministries.

An example of Keidanren’s communication:

Subcommittee on Digital Economy

Japan has proposed Society 5.0 as its concept for the future society, with the aim of realizing economic growth and solving social problems by making full use of digital technology and data. The government and the private sector are working together toward this goal.

To realize Society 5.0, it is essential to formulate consistent rules backed by a global consensus that facilitate the secure use of data across national borders. Therefore, all countries must pay attention to ensuring a balance between the consumers’ values, protection of privacy, and public interest while deepening international cooperation in order to build international systems and mechanisms for the free flow and utilization of data across national boundaries.

From this standpoint, we would like to give the following comments on “A European strategy for data” released by the European Commission on February 19, 2020:

(Read the full communication here!)

This was COMMUNICATED by keidanren On May 30, 2020.

Keidanren’s mission

The mission of Keidanren is to work for accelerating the growth of Japan’s and the world’s economy. Their means are through strengthening corporations and to transform the Japanese economy into one that is sustainable and driven by the private sector.

Keidanren has always been very clear that they work with always achieving consensus among their own. However, one recent decision resulted in something very unusual. Their work to influence the government in one area was not smooth. Keidanren’s official policy view was to restart Japan’s nuclear reactors as soon as possible after the Fukushima disaster. This led to an astonishing rift in Keidanren’s fabric. Rakuten’s president, Hiroshi Mikitani, left the federation over this issue. Masayoshi Son of SoftBank Group publicly objected to the organization’s focus on restarting the nuclear plants but remains a member.

Japan Chamber of Commerce, JCCI

This organization has an immense amount of tradition and history under its belt. The first Chamber of Commerce and Industry was established in Tokyo in 1878. Chambers later sprung up in other cities. In 1892, 15 chambers gathered together and formed a federation that found its current form as the Japan Chamber of Commerce and Industry (JCCI) in 1922. Today, there are 515 Chambers of Commerce spread out through Japan’s cities.  They form a large-scale nationwide network that boasts 1.25 million organized members. Chambers in Japan are designated as corporations with special status and operate under a special government law called the Chambers of Commerce and Industry Act. The Japanese Chambers all have the following characteristics apart from being public, non-profit, and non-political:

  • Regional, one chamber per city.
  • Large and small companies of every industry are welcome as members.
  • International in their organization and outlook.

Understandably, the JCCI is a strong voice for a huge part of Japan’s Industries. As they also organize SME’s, they also communicate the future of Japan’s new companies. They are an opinion leader in mainly economic circles. JCCI give voice to the local chambers by representing them to the government and other relevant bodies. There’s strong work performed in helping with the implementation. JCCI also plays an important role in the dissemination of information concerning government policies and programs, and the promotion of various nationwide projects.

JCCI Formulating Policy Proposals for the Japan of Tomorrow

Arguably, their most important function is to help solve the problems facing regional communities. This is achieved by speaking on behalf of the local economies and societies. JCCI is harnessing the immense power of the private sector in order to actively recommend and lobby for needed new or updated policies, and by working toward their implementation.

JCCI’s toolbox includes surveys and studies from the medium-to-long-range perspective. The key issues they work with are economic measures, small business policies, the tax system, finance, economic regulations, the global environment and reforms. Education, labour issues, international relations, and the Constitution are other important areas of focus.

Japan Association of Corporate Executives

The Japan Association of Corporate Executives is a private, nonprofit, nonpartisan organization of professional association of independent leading executives. It was founded in 1948 and engages in advocacy on public policy issues related to the development of the Japanese economy in both a domestic and global context.

The work in the organization is based on each member shedding her/his corporate identity and instead participates as an individual. Unconstrained by the interest of any specific company or industry members are completely free to express privately held opinions and ideas. This feature distinguishes them clearly from the other two organizations.

Their approximately 1,400 members are all top senior executives from almost 1000 of Japan’s most influential corporations. Membership is by invitation only. All members share the idea that corporate managers should be key players in formulating solutions of a broad range of political, economic, and social issues.

They conduct in-depth policy studies and organize seminars on a variety of important issues that relate to the development of the Japanese economy. The association engages with political parties, government officials, ministries, labour organizations and other of society’s stakeholders.

Japan Association of Corporate Executives promotes a progressive, innovative and market-based approach for Japan’s future best well-being. This is in stark contrast to the position of the other two main corporate business associations: Keidanren and the Japan Chamber of Commerce and Industry. However, it’s useful to keep in mind that this is “progressive” from a deeply traditional Japanese perspective. This progressive organization only extended membership to female executives as late as in 1986. As always, better late than never.

A key concept that they are advocating is the notion that corporate social responsibility is an integral part of responsible business activities, not simply a legal compliance issue or limited to discrete charitable giving.