Understanding the factors behind Tsunamiof change.
Gerry Gannon
Naoto Iwasaki

1．The gate of social change
In the spring of 2019, with the abdication of Emperor Akihito, Japantransitioned from the Heisei era to the Reiwa era. The Reiwa era began with theanticipation of a new dawn and was quickly embraced as a “new” era with theupcoming “Olympic year” of 2021. Unfortunately, this new era coincided with theadvent of the new Corona virus, commonly referred to as Covid19 which spread
rapidly around the world and forced many countries to “lock down”, restructuring
travel and as a consequence most major economies slipped into recession. Thus,
the optimism with which the Reiwa era began, was soon replaced by the realities
of Covid19 with the WHO (World Health Organization) declaring a “global pandemic
of infectious diseases” on March the 11th 2021.
Through the winter of 2020/2021 economies and societies around the world
went further into “lock down” mode and even with the advent of vaccines, newvariants such as Delta and Lambda are threatening to thwart any chance of respite
and recovery (both for people and economies).
The situation which at one time seemed resolved with the incredibly swift
production of targeted vaccines, at one stage threatened to even derail the Tokyo
Olympics in 2021 with a majority of the Japanese public coming out against the─ 75 ─

成城・経済研究第 234 号（2021 年 12 月）

Olympics being held in Tokyo, necessitating extreme measures being put in place
both for athletes and their coaches at the Olympic village. The Olympics finallywent ahead, but for the first time in its history the Olympics was conducted withempty stadiums, devoid of all but a few spectators, made up of competing athletes,
their trainers and coaches with a lucky few Olympic village workers. Humanity’slife transitioned in this “new normal (new daily life)” of masks, social distancing,working from home, no social contacts (not even family), “contact tracing” andmandatory quarantines becoming standard practice. In addition to the toll on healthcare systems around the world, the level of deaths from Covid19 grew
exponentially. Even world leaders were not immune to this onslaught with theleaders of Brazil (Jair Bolsonaro), the USA (Donald Trump), France (EmmanuelMacron) and the UK (Boris Johnson) succumbing to the scourge of Covid19.

Just as Japan experienced a “new daily life” when it moved from the Showaera, which had enjoyed increased economic growth, to the Heisei era,characterized by a major economic downturn. So, Japan also experienced just as a
dramatic change from the Heisei era to the Reiwa era. Indeed, the Reiwa era
heralded in an unprecedented new reality and not just for Japan, these changes
were global bringing changes in corporate behavior with extensive working from
home, changed social structure and social distancing, changes to the politicalsystem and most of all to the global economies and the every-day lives ofhumanity, 8 billion people’s lives changing immediately and dramatically.
Arguably Covid19 has had moderate to significant impact on every human on theplanet, in one way or another. Whilst many in Japan considered that the Heisei era
with its long-term 30 recession years to be the benchmark of disruption, Covid-19
brought an even swifter and more fundamental disruption, both to the global
economy and in every field of human endeavor, even extending to social
distancing in the classroom for schoolchildren. And the change is not yet over, we─ 76 ─

Understanding the factors behind Tsunami of change.

are not yet able to assess what will be the long-term impact of this Covid19 era
indeed, we cannot even assess and are confused as to just where we are in the
pandemic. One hopes as Churchill eloquently put it, that we are at the end of the
beginning, or maybe not? “This is not the end. It is not even the beginning of theend. But it is perhaps, the end of the beginning” (Winston Churchill quote, November
1942, London, Houses of Parliament). Many consider that the impact of Covid19 will

not just affect today but its impact will affect people and the global economy for
years to come. Indeed, it has been suggested that we are at a fulcrum point in
human development.
One of the factors that is adding energy to this Covid19 induced earthquake is
the “Progress of Globalization” and “Evolution of ICT and Networks” which havesynchronized to create a huge energy for change leading to diastrophism. The
progress towards globalization, which entered its mature phase as the Cold War
between East and West concluded. Since then, ideological-based conflicts havebecome less and less of a global issue, although the new rise of China may
reengage a new era of conflict between the West v particularly, interesting given
the previous animosity which had previously existed between Russia and China,
this now being replaced with Entente Cordial. During this era, whole new
businesses and business models have emerged as a direct consequence of thetransformation enabled by the internet with new emerging disruptive businesses,
and technologies. Moreover, this new era has been characterized by new global
alliances and tensions 1) UAE, Morocco, Sudan, Bahrain and Israel, 2) Russia,
Venezuela and Iran, 3) Belarus and Russia v the EU, 4) the distancing of Turkey
from the EU and 5) tensions within the EU itself, Brexit and the political landscapein Hungary and 6) China v Japan and Taiwan. When the emergence of China ascompetitive superpower to the USA is considered in this context, this ushers in adifferent world landscape than had gone before.

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成城・経済研究第 234 号（2021 年 12 月）

Another factor that caused significant change is the “evolution of informationand communication technology (ICT) and networks”, which began in earnest in the
1990s. In 1990, the commercial service of the internet was facilitated in the USA
by the dissipation of ARPA net1). Three years later, in 1993, the commercial use of
the Internet was permitted, and the connection between personal computer
networks and the internet began2). In the aftermath of the great Hanshin-Awaji
earthquake in 1995, the added value that the internet brought in times of crisis wasrecognized and the number of users increased rapidly in Japan as a result. From1995 onwards the year referred to as the “Internet first year”, the user baseincreased year on year, and the penetration rate in Japan exceeded 50% in shortorder. The uptake and increased provision of services and applications accelerated
the penetration of the internet and Japan rapidly advanced to the next internet
stage, the emergence of the so called “net society” with the appearance of thesmartphone and iPhone which was introduced by Apple Co. in 2007.
The transformative events as a result of the Covid19 pandemic continues toshape global events and as yet there is no end to this earthquake of change in sight.
Now into the pandemics second year, effective vaccines for the pandemic are still
being studied3). And there is no sign that the infectious spread has ended or isdiminishing, with new variants emerging swiftly and the number of infected
persons topping the 100 million marks with a death toll of 2 million in early 2021,
and the number of victims increasing every day.
Although the responses and measures taken by national governments vary, few
1)
2)
3)

It is a computer network which became the prototype of the Internet introduced by
the Department of Defense’s Office of High Research Programs.
The former Ministry of Posts and Telecommunications was the competent authority
at that time.
On November 9, 2020, Pfizer’s vaccine was reported to be completed. And the
Vaccine was supplied in May. However, the vaccine is a preventive drug to the last,
not a therapeutic agent.

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Understanding the factors behind Tsunami of change.

countries or regions have returned to the so-called “before corona” state4). It is alsoquestioned by many whether in fact it will be possible to return to a pre Covid19
lifestyle at all, in the near or medium future. In Japan, both the media andgovernment are not optimistic. On a quarterly basis from April to June in 2020, a
significant boost to the economy was introduced to restore the economic situation
because of the 30% decrease in GDP5), but this “booster shot” proved to be
unsuccessful. On the other hand, words such as “after Corona” “with Corona” and“new normal” permeate social media, print media and news channels with manyassessing that there is now a different base to start from as “life starts different
from before”. This is not just in Japan; this is a global phenomenon, and so it
seems the “new normal” has arrived.
The threat of natural disasters and pandemics on a global scale and theevolution of ICT and networks, seems to have been a catalyst in accelerating andenabling changes in social structure. We are at the beginning of exponential socialchange in 2020 and are entering an unprecedented era of exponential social change
as we move through 2021.
Thus, the dawn of the Reiwa era in Japan can be summarized by theconvergence of three factors with behavioral changes, innovations and reforms ofJapanese companies as keywords: “progress of globalization”, “evolution of ICT
and networks” and the “threat of natural disasters and pandemics”.
4)

5)

In developed countries and regions, New Zealand and Taiwan, etc. havecomparatively suppressed the number of infected persons. In addition, in the island
nations of the South Pacific, the number of infected people. There is a country called
0, but it is economically exhausted because it is locked down, and it is not without the
influence of the pandemic. It has expanded again in January in China, which was said
that the number of infected persons has decreased at one time.
The direct relation with the economic activity plan said campaign is not clear.
However, though there is no concrete material which denies it, it seems that it isdingy that it should stop and think intuitively once. And, it was stopped on December
15. And, on January 7, the government issued a regional state of emergency.

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成城・経済研究第 234 号（2021 年 12 月）

2．Progress of globalization
One of the factors that is likely to lead to further exponential social change is
the “progress of globalization,” and the new relationships energy and opportunities
that it creates. The first phase of “progress of globalization” is the “age ofinternationalization”, which began in the mid-1970s in Japan.
(1) The age of internationalization
After the first oil shock in 1973 (referred to as the Yom Kippur War), large
Japanese companies adopted a strategy that expanded their businessinternationally, establishing offshore ventures in the USA and Europe. This helped
fuel the world economy through the 1980s and enter a period of rapid growth forthese Japanese innovators. Indeed, 10 Japanese companies occupied more thanhalf of the companies at the top of the semiconductor manufacturer’s rankings, andJapanese manufacturers collectively achieved in excess of 50% market share of the
USA automobile market, overtaking the domestic US car makers’ collective
market share for the first time. Even in the computer industry (which was a state-ofFigure 1“World Ranking of Semiconductor Business

1985

2019

1

NEC

JAPAN

1

Intel

USA

2

HitachiJAPAN

2

SUMSON

KOREA

3Toshiba

JAPAN

3

TSMC

TAIWAN

4

Motorola

USA

4

SK Hynix

KOREA

5

TI

USA

5

MicronUSA

6

Philips

HOLLAND

6

Broadcom

USA

7

FujitsuJAPAN

7

Qualcomm

USA

8Panasonic

JAPAN

8

NvidiaUSA

9

Mitsubishi

JAPAN

9

TI

USA

10

Intel

USA

10

HiSillicon

CHINA

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Understanding the factors behind Tsunami of change.
the-art technology industry at the time), Japanese companies were building competitive

advantages in terms of hardware technology and quality.
As many Japanese companies took advantage of higher postwar economic
growth, Japanese management symbolized by the three mutually supportive
people focused strategies “life-time employment”, “seniority system” and “incompany labor unions”, was studied by a number of leading non-Japanese worldclass companies. As a result, many economists, business scholars and business
commentators analyzed Japanese management and developed theories as to thepotential superiority of Japanese management practices throughout the 1980s, as it
was thought that within these Japanese leadership qualities lay a secret tosuccess6).
Indeed, in the field of home appliances and automobiles, the “made in Japan”
label became actively sought after by consumers in the global marketplace. At thattime, most of the production bases of Japanese manufacturers were in Japan, andsince only a few companies had integrated production plants overseas, theproducts were genuinely made in Japan7). It was not until the Plaza Agreement inNovember 1986 that Japanese manufacturers began to fully work on establishingof overseas production facilities. The exchange rate which had been 1 USD = 235
yen appreciated rapidly (For Japanese exporters to the USA) to an unsustainable rate
for exports to 1 USD = 150 yen within a 12-month period. This resulted in the
USA falling into a chronic trade deficit as a result of the appreciation of the yen
and the comparative weaknesses of the US dollar tendency8). Thus, many Japanese
6)
7)
8)

The following researches are typical. Thomas J. Peters & Robert H. Waterman, “Insearch of Excellence”, 1982, Hammar Michel & Champy James, “Reengineering
Corporation”, 1993, Hamel Gery & Praharad C. K., “Meeting for the Future”, 1995.
Therefore, there was also a Japan bashing.
On September 23, 1986, the dollar-yen rate fell by about 20 yen from 235 yen per
dollar for 24 hours a day alone. After one year, the value of the dollar almost halved,
and it came to trade in the 150 yen range.

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成城・経済研究
Figure 2

第 234 号（2021 年 12 月）

Process of exchange rate (1972-1990)

YEN
350

300

250

200

150

100

50

0
1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

Source: Bank of Japan (Tokyo Market U.S. Dollar and Yen Spot as of 5:00 p.m./ Average monthly)companies which had not advanced an overseas manufacturing strategy wereforced to do so and had to rapidly relocate production bases and R&D bases
overseas.
(2) The dawn of globalization
As a result of the surge in Japan’s postwar economy, many in Japan expectedthat the 21st century would herald Japan’s emergence and continued growth toultimately achieve world economic superpower status as a result of significant
economic growth through rapidly expanding domestic and global demand.
However, the bursting of what has been called “the bubble economy” in the early
1990s, dashed that dream and it failed to materialize. The confidence which had
characterized Japanese businesses in the early 1990s was lost, and the superiorityof Japanese companies in the world market was significantly damaged. Europe and─ 82 ─

Understanding the factors behind Tsunami of change.

USA which had been economically challenged by the strength of Japan were for atime on their back foot, but they soon regained their strength both politically andeconomically. From the 1990s to the early 2000s, Europe strengthened its powerand grew to form the world’s second largest market by realizing EU inauguration,monetary union, etc., even after experiencing various challenges conflicts such as
integrating former Eastern European societies.
Whilst in the Asian region, ASEAN countries such as Thailand and Malaysia,
and NIES (Newly Industrializing Economies) countries such as Korea, Taiwan, Hong
Kong, and Singapore, which are known as the “Four Small Dragons of Asia9)”
achieved rapid economic growth and demonstrated their increased power as“middle-advanced countries” helping drive the global economy. This advancement
was however temporarily derailed by the Asian financial crisis which began in
Thailand in 1997. Part of the cause which led to this financial crisis was also therapidly expanding borderless economy. As a result of worldwide credit relaxation,
speculative funds could be swiftly moved on a global scale, and this led to asignificant rise in transnational speculation, which national host governments wereunable to control.
At the same time, the emergence of the BRICs countries such as Brazil (with apopulation in excess of 200 million); Russia (with a population in excess of 125 million),

India (with a population in excess of 1.2 billion) and China (with a population of 1.4
billion) emerged to have a very significant active presence in the global economy

with huge home markets and an abundance of home resources (people and materials)
on which to draw. Since 2000, trilateralism which has been centered in thedeveloped countries in Japan, USA and Europe, has waned and a multi-centeredglobal economic structure (MCGE) emerged in which the center of the economy is

9)

It is an abbreviation of New Giving Economists.

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成城・経済研究第 234 号（2021 年 12 月）

scattered on a global scale.
China which had emerged as one of the cores of MCGE and has been referred
to as “the factory for the world” since the latter half of 1990s has continued higheconomic growth exceeding 10% per year. When China gained access to the WTO
in 2001, it began to play a key role as the driving force of the world economy.
China’s place in the global economy was cemented by events such as Beijing
Olympics in 2008 and Shanghai World Exposition in 2010. This was in contrast to
the severe economic shock experienced by many Western countries during theLehman shock of 2008 and the subsequent massive recession which occurred.
From 2010 onwards, China under Xi Jinping’s administration, reinforced its
economic power by adding significant political strength by developing hand inhand with developing countries pioneering an alternative political growth model
via the so called “Belt and Road” initiative.
Meanwhile India which has been steadily advancing toward “ICT large
country” has managed to secure its place as the world’s fourth largest economy
after USA, China and Japan in terms of purchasing power parity. Moreover, thisemergence of India as an economic power is likely to continue for some time as
India has a higher proportion of its population under 25 as compared to developed
countries (characterized by rapidly declining birthrates and aging populations),
particularly when compared to China, its regional political and economic
competitor which had developed a one-child policy to restrict its burgeoning
population. Indeed, the economic growth of Indian market is expected to increasesignificantly in the coming decades as a result of the potential for vigorous
consumption and innovation leading to real opportunities for expanding trade anddirect investment. This does however need to be balanced with the widely
recognized challenges which exist in India, the large number of people living
under the poverty line, underdeveloped infrastructure (particularly so in rural areas),─ 84 ─

Understanding the factors behind Tsunami of change.

underdeveloped labor laws, and to add further health care and environmental
issues.
(3) Deepening globalization
The advanced economies that had been driving the global economy had been
derailed by the debt crisis and the failure of Lehman Brothers Co., Ltd. whichcaused the subprime loan problem in the middle of 2007. Whilst in addition, theJapanese people and economy suffered greatly from the Great East Japan
Earthquake (2011) and the resultant Fukushima nuclear power plant disaster. At
this time when Japan led the world in birthrate decline and increasingly aging
population, China’s GDP overtook Japan’s although with a population tenfold
higher. Today, this gap in GDP has more than doubled.
Moreover, Japan’s per capita income ranking has also declined significantly. In
1989 Japan’s boasted the world’s second largest GDP and the third largest GDP
per capita. Japan fell from Asia’s number one position in 2000 and has since
become lower than the average of the entire OECD. Stock prices which had been
improving to reach 20,000 yen until just before the Lehman shock plummeted to 7,
000 yen in one fail swoop, and most companies were forced to downgrade theirbusiness performance. The economic situation since 2012 has gradually returnedto that of a recovery, and today the stock price has risen to over 25,000 yen.
However, economic disparities in Japan are widening and the ratio of poor
children is worryingly on the increase10). Meanwhile in Europe the Greek financial
crisis exposed how fragile the EU-wide system was, and this situation was fully
exposed by the World Economic Review which announced that in 2011 the10)

In November 2020, 25,000 yen was recorded in the first section market of the Tokyo
Stock Exchange for the first time after the bursting of the bubble economy. As of theend of January 2021, it has exceeded 27,000 yen.

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成城・経済研究第 234 号（2021 年 12 月）

Eurozone grew by only 0.2%.
Thus, western advanced countries, which had led the world economy for such along time, found their position had significantly deteriorated in just 10 short years
into the new millennium. On the other hand, countries that had been referred to as“developing countries”, developed and have realized their economic growthpotential and have correspondingly been able to raise their voice on theinternational stage. For example, in discussions such as the Free Trade Agreement(FTA) and the Economic Partnership Agreement (EPA), emerging Asian countries

such as ASEAN countries and Korea, as well as countries in the southernhemisphere such as Chile, Brazil, Australia and South Africa, are playing an
increasingly significant and important role. In this sense, as the globalization of theeconomic society progressed, the leadership of the western advanced nations was
being challenged by the newly emerging economies and thus the balance of
Figure 3

Global Economic Growth Ratebillion yen%

600,000

6

500,000

4

400,000

2

300,0000

200,000-2

100,000

-4

-6

0
2005

2006

2007

2008

2009

2010

2011

2012

Source: World Economic Outlook Database, October 2020

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Understanding the factors behind Tsunami of change.

economic and world power is beginning to shift.
(4) Globalization in transition
2016 marked a year of transition, prior to 2016, the USA led the world as a
vocal advocate of globalization. This changed significantly with the election of
President Trump. Previously the world with America at the helm of this drive had
been pursing free trade and globalization. President Trump abruptly changed thiswith the introduction of strict immigration restrictions and protectionist economic
policies. President Trump, set out a policy based on “America first” and in addition
to protectionist policies, President Trump deliberately chose to move away from a
global leadership role to a more introverted internal perspective in order to achieve
MAGA (“make America great again”). This strategy was pursued with such singleminded focus that it even succeeded in driving a wedge between the USA and its
European allies. President Trump stirring great acrimony and conflict with its
European partners and the NATO alliance, much to the delight of Russia andChina. This withdrawal from the world stage (though short lived as President Trump
was replaced in 2021 by President Biden) represented a great opportunity for China toreplace America on the world stage and even once defeated until January 20, 2021,
Trump resisted until the very end11).
Another transitional factor concern is the events in Europe. As a result of the socalled UK Brexit, led by Prime Minister Boris Johnson, the UK pushed for andsucceeded in exiting Europe. Europe, which was one of the first regions to fully torealize the free movement of “people, things and money”, has seen some resistancestarting to build against globalization. The natural flow of European integration
11)

As of December 20, 2020, Mr. Trump has yet to declare his presidential bid a defeat.
Trump’s last gasp. It exposed that U. S. democracy is not mature at all. An
unbelievable incident has occurred the day before the resignation.

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成城・経済研究第 234 号（2021 年 12 月）

has been halted quite abruptly in many European nations. For the first time theissue of tariffs in a European context has been raised, particularly with the now
Brexited UK, this threat of tariffs with the UK represents a big risk factor forforeign companies with production bases in the UK. In addition, UK companies
that have overseas production facilities are also concerned and are swiftly
reassessing their supply chains. Indeed, this has contributed to Honda’s decision toexit the UK after 35 years as a manufacturing base.
Whilst globally we can consider these factors be a realignment of a number ofkey strategic relationships, particularly significant is the cooperation between
Russia and China which, together with its dramatic economic rise has helped
propel the emergence of China as a true global competitor (both politically andeconomically) to the USA.

These recent events add uncertainty to the previous tide of globalization.
Moreover, it is certain that these events have brought about a greater “division”
between a number of countries, some of which are ongoing (e.g., the position of Eirein Europe and Northern Ireland within the UK) and the international community and arelikely to have a considerable impact on the future “progress of globalization”.
In that sense, it can be said that the positive march towards the “progress ofglobalization” is likely, at the very least to pause or possibly force a great change
in the global economy.

3．The evolutionof ICT and networks
An additional factor that has caused the social structural change in the world
over the past 30 years, is the “evolution of information and communication
technology (ICT) and networks”, that is to say, the progress of ICT, various
equipment and information infrastructure that has become more sophisticated, andthe emerging significance of AI（Artificial Intelligence）to multiple fields of─ 88 ─

Understanding the factors behind Tsunami of change.

human endeavor.
(1) IT evolution and the collapse of the net bubble
Since the mid-1980s, digitalization has progressed rapidly, and processing
capacity has increased exponentially by the high integration of semiconductors andthe increased processing speeds of CPUs. The foundation of the information age
was integrated into the industrial base during the 1990s. At that time, the buzzword“SIS (Strategic Information System)” rose to prominence. Against this backgroundthe three major management resources “people, things, and cash” were added to by
a fourth resource, so it became “people, things, cash, and information”.
Also in the early 1990s, significant price reductions for personal computers(PC) occurred, the likes of Dell Computers, which developed a new business modelof the direct sales system, resulted in PCs becoming commodities. In parallel with
this, the price of all information-related equipment continued to decline at anannual rate of about 30-40% in inverse proportion to its performance as result ofwhat has been called “Moore’s law”, thus the so called “cheap revolution12)”.
The cheap revolution coincided with the development and exploitation of theinternet, which started in the USA. In Japan this internet revolution commenced inin 1995 with the release of Windows 95. It’s market penetration was phenomenal
and it achieved a 300% market penetration very swiftly. At the same time as thedevelopmentof

high-performance

low

price

PCs,

the

communication

infrastructure such as ISDN and optical cables improved significantly in Japan as aresult of the application of a national policy, resulting to an internet penetration
rate by of 70%13).
12)
13)

Umeda has given “Internet”, “Cheap Revolution”, and “Open Source” as “threemajor trends for the next 10 years”. Mochio Umeda, “Web Evolution: Real Change
Will Begin”, 2006, Chikuma Shobo.
The Ministry of internal affairs and communications, 2017 version of the White─ 89 ─

成城・経済研究第 234 号（2021 年 12 月）

Thus, there was a rush into this market space in the early days of the internet totake advantage of the opportunities with a wide variety of company startups(mainly in the US and markets when internet take up was high). The number of entrants

rose from a trickle to a boom by the late 1990s and it became a separate investment
section in its own right, some companies effectively laying “golden eggs” forinvestors. These companies were very attractive to investors as they had highgrowth profiles with apparent almost unlimited potential (if successful). However,
not all startups laid golden eggs and in 2000, many companies went bust as a result
the IT bubble bursting, and the global economy entered into a recession, this stageof the internet has been referred to as the “Collapse of the Net Bubble”.
Fortunately, a number of key players survived and prospered, and these enterprises
represented the founding four of major internet players and this elite groups
became known as “GAFA14)”.
In contrast in Japan where the influence of the IT bubble collapse was not assignificant, the penetration rate of the mobile phone (feature phone) exceeded that of
the US and reached 90%, thus becoming a substantial market. It was the mobile
phone revolution which led the way in Japan for the internet and it became know inJapan as the “Galapagos phenomenon”, (a very unique phenomena evidenced only inJapan). Information and communications platforms were rapidly developed by

NTT Docomo in 1999 and “i Mode” particularly gained popularity with its highdegree of usability and thus was adopted swiftly be the young early adopters andquickly established itself as a daily necessity. In Japan, the new IT
communications medium was developing separately through land-based Internet
and mobile phones communications. In this regard, it can be said that the internet

14)

Paper on Information and Communications, The Spread of the Internet soumu.go.jp
It is an abbreviation mainly said in our country and Europe. Microsoft co. is added tothese 4 companies, and it is sometimes called “GAFAM”.

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Understanding the factors behind Tsunami of change.

society in Japan has evolved somewhat differently to other global markets, where
Internet and communication devices have co-evolved like PDA（Personal Digital
Assistant）15).
(2) Evolving Internet Society“GAFA” which weathered the storm and in fact grew stronger from thecollapse of the IT bubble (reducing potential competition) became the key players in
the new internet revolution. “GAFA” comprises the four key internet era
companies, Google started as an information search service company, Apple is thelong-established IT company founded in the mid-1970s (but was able to leverage theinternet revolution to its advantage), Facebook started SNS as its own business andAmazon started as an online bookstore. All of these key players have huge market
capitalization and were real winners from benefited from the internet startup
period. Their ability to leverage their entrepreneurial drive with savvy delivery ofvalue to the customer led to their significant growth. These companies have inmany instances been able to add to their initial core businesses that they initiallydeveloped, but their core technology is ICT. They were able to develop theircustomer value propositions models to create huge profits and secure growth,
while expanding their business domains by making full use of M&A. Today, thetotal market capitalization of these companies is approximately 560 trillion yen,
comparable to the to the 5th largest economy in the world, the UK.16)
The business model called “platform business17)” has now become a huge

15)
16)
17)

PDA is a portable information terminal, and it is a small equipment for carrying andhandling information such as schedule, to-do, address book, memo, etc. In somecases, it was equipped with a communication function.
See Nikkei Inc. for more information on the May 9, 2020 morning edition.
A platform company is a company with a business model that facilitates the exchangeof value between multiple user groups, consumers, and producers.be.

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Figure 4

第 234 号（2021 年 12 月）
Performance of GAFA

$ billion
300,000

250,000

200,000

150,000

100,000

50,000

0

2015

2016
google2017
amazonfacebook

2018
apple

2019

microsoft

Made from Annual Reports of these Companies

market centering on GAFA, and the speed of the revolution and the evolution of
the internet society is likely to accelerate this trend further, particularly with theadvent of higher global internet penetration and the advent of AI.
Apple, a long-established IT company, launched the iPhone, a smartphone in
the US market in 2007. The appearance of the smartphone (SUMAHO called inJapan) embodies the so-called “ubiquitous computing” by integrating the functionsof two information devices18), the mobile phone and PC. Apple has created a newmarket by frequently remodeling hardware annually and continuously updating
and improving its operating software, the version of iOS, which is a dedicated OS,
while at the same time providing new applications (apps) that run exclusively on
apple only.
The iPhone, which became an unprecedented hit worldwide in 2008, brought
18)

The meaning of ubiquitous means “it is everywhere”, and the function of thecomputer is called “ubiquitous computing”.

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Understanding the factors behind Tsunami of change.

with it a significant increase in Apple’s fortunes and additionally provided realvalue added to consumers. The iPhone spawned a large number of apps andopportunities for many other IT companies who developed products and apps forthe iPhone platform. This despite the requirement by Apple that suppliers abide bystrict contracts tying them to Apple, thus extending Apple’s power over the newinternet economy. These suppliers are bound by and have to follow the de facto
standards of Apple Inc.
The success of Apple with its iPhone led Google, the top company of in theinformation search engine field, to deliver its own answer the apple iPhone in2007, with “Android”, an open-source smartphone OS and in 2008 the first
Android smartphone equipped was released19). Whilst Google has had muchsuccess with Android as the market for Android phones developed with US
companies, Google has lost market share, primarily to companies that commenced
as subcontractors to Google. Companies such as Xiao Mi Technology Co. and
Huawei Co. from China, Samson Co. and LG Co. from Korea, and Sony Co. fromJapan. This market has now developed into two powerful rival duopolies todaywith the “iOS vs Android” battle.
Smartphones spread very rapidly becoming indispensable communication
tools due to high customer perceived need and developing very usable customer
interfaces with very high levels of convenience. In addition to the access to
information, such as weather forecasts, share prices, travel issues etc. the world
market between B2C, B2B and C2C, and the relationship between producers and19)

On 5th November, 2007, the standards organization “Open Handset Alliance” (OpenHandset Alliance, OHA) established Android, which is a platform for mobile phone
software, mainly by Google, Qualcomm, and T-Mobile International, a German
telecommunications carrier, announced. It is an open source software provided toeveryone for free, and it is distributed based on ApacheLicense 2.0 for the purpose of
making it easier for third-party vendors to customize independently. From October
2008, we will respondSmartphoneAre sold in large numbers.

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consumers, experienced exponential growth adding to the value and desirability
for consumers. The subsequent SNS revolution facilitated and enabled real change
in the depth and breadth of social communication and interactions among people.
The communication revolution has in fact succeeded by breaking down and adding
value to the time and spatial constraints that have restricted our daily life and social
activities.
Friedman T. L. coined the phrase “the platform of the flat world”, and thechanges it caused are as follows20). Platforms in the flat world were born by up
spreading the development of personal computers, optical fibers, workflow andsoftware. No one predicted such a convergence. One day, people all over the world
suddenly realized that they had great power to globalize as individuals. We have to
be more aware of the competition of individuals from all over the world than ever
Figure 5

Global market share of Smartphone (2019)2020(Jan. to Oct)

Android
71.67

iOS
27.70

other
0.63

2019

Android
72.43

iOS
25.85

other
1.71

2018

Android
72.27

iOS
24.04

other
3.70

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Made from Data of these Companies

20)

However, when ‘Flat world’ was published, the smartphone had not been launchedyet. The point here shows the early stage of the net society.

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Understanding the factors behind Tsunami of change.

before, and instead of competing, the opportunities to cooperate have increased
dramatically21).
Devices like smartphones have changed the market structure and indeed
created new markets by creating and enabling the provision of completely newservices. It is also clear that this trend is likely to continue for some time to come.
For example, new apps with widely differing monetization strategies have evolved
all vying to attract and keep as many users as long as possible. Some service
providers have been able to develop completely new models to engage withcustomers by collecting and analyzing the information such as big data, without
conflicting with personal information protection, as many people owned
smartphones and came to access the internet. In addition, the evolution of
information infrastructure is changing the way we interact in cities by introducing
the smart city concept, changing the delivery times via new logistics channels suchas delivery by drone and SCM. Even to the extent of changing the market forcapital via the introduction of electronic money and changing the labor market byopportunities presented by the gig economy22) and remote office working.
If any enterprise is unable to adapt to such innovations and trends it will notlast long in the marketplace, such is the competition that another provider will be
there to provide an appropriate added value service almost immediately. There is adanger both for individuals and companies if they do not keep up to date of beingcaught out, adding less value than their competitors, in which case theirmarketability will suffer very swiftly with serious consequences. This raises theissue of the challenge, both companies and individuals of not falling behind,because once individuals or corporations slip behind, they may not be able to catch
21)
22)

See Friedman T “The World Is Flat: A Brief History of the Twenty-first Century
Further Updated and Expanded Edition”, Farrar Straus and Giroux, 2005
The gig economy is an ecosystem that undertakes one-time work through theInternet. For example, Uber Co. in the U.S.A. is mentioned.

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up and may be unemployable in an individual’s case or lose market share or gobankrupt in a company’s case.
(3) Advent of exponential change
The evolution of ICT has now made AI as a reality. AI with automatic learning
ability can automatically improve recognition and judgment ability. It becomes
possible to dramatically improve the ability in the field that hitherto the computer
was weakest, such as pattern recognition. And the machine learning techniques
referred to as “deep learning” can be used for automatic learning. However, withthe evolution and popularization of IT devices, big data usage becomes readily
available, so the ability and effectiveness of AI has been greatly enhanced23). Thisis because machines do not have the power to make analogies from experience likehumans and other animals, so it is necessary to learn the diversity of objects to beaddressed from massive of data to recognize and build patterns that appear24).
In March

2016, “Alpha Go” which is Go software, became widely known for

its victory over Lee Sedol from Korea, who was the world champion of Go. Alpha
Go defeated the champion, who is quoted as saying, “I want to show that AI has
not reached the point where it beat humans25). ” On the other hand, AI is also
stepping into the world of art such as music and fine art, which have been thoughtthat the power of computers would be unable to reach. In short, we are in achanging era, creativity has until now been the sole preserve of humans, this is
however no longer the case, and we are on the cusp of a revolution in AI such that23)

Yukio Noguchi, “To the future of “pre-industrial”―A major change in businessmodel begins”, nhk publishing new book (Kindle position No.1597-1605), see NHK
publishing Kindle edition.
24) House and people, “Revitalization and Human Resource Development × in the Eraof Data in Shin Nihon AI (News Picks Publishing)”, (Kindle Position No. 380-382)，
Newspix Co., Ltd., See the Kindle version for more information.
25) See position No. 248 of kindle in the above book.

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Understanding the factors behind Tsunami of change.

computers and AI intelligence will enable computers to create for the first timewith unfathomable and unimaginable repercussions.
Ray Kuzweil who is an inventor and a futurologist said, “The rate of change inhuman-invented technology is accelerating, and its power is expanding at an
exponential rate. If you do not closely monitor the trajectory of change, you will
have completely undreamt-of results26).” With this warning the advent of“singularity (technical singularity)” in 2040 is predicted. Indeed, there remains
questions as to whether the capabilities of machines will out performance humans
and perhaps science fiction predictions that machines will control humans will
become a reality. This does however have to be balanced by some who suggest
these thoughts are alarmist and researchers have expressed doubt as to whether
singularity will be achievable27).
However, we are confident that the great energy created by “the evolution of
ICT and networks” has the potential to change our society exponentially, as with“progress of globalization”.

4．Threat of natural disasters and pandemics
It is clear that the “progress of globalization” and the “evolution of ICT andnetworks” has advanced and evolved faster than any other time in history. On
balance, commentators, practitioners and academics would consider that thisprogress was generally positive.
In addition, these two factors described above “the threat of natural disasters
and pandemics” are an additional factor which has created significant energy for26) See “Singularity Is Near”, NHK Publishing, 2016.
27) The technology pointed out by Carl Weitz includes things other than machines. Carl
Weitz gives “G.N.R” as a revolution that affects the evolution of humanity anddramatically changes our lives. “G” is a genetics revolution, “N” is a nanorevolution, and “R” is a robotics revolution.

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成城・経済研究第 234 号（2021 年 12 月）

corporate, social and economic change. Because by their very nature, natural
disasters occur without warning and because it is difficult or impossible toanticipate them, it is in the “luck of the draw” or random events which dictate howmuch and which group of individuals or societies are affected by such disasters. In
particular, natural disasters such as those caused by global warming clearly relate
to environmental issues such as “sustainability”, which has come to the fore in
geo-environmental conversations in recent years. The energy created by the threatof pandemics is an added factor which has the power to change societies on a
global scale and needs to be considered.
(1) Threat of natural disasters
By way of example, when recalling the events of 11th March 2011, the Great
East Japan Earthquake that occurred 10 years ago, about 20,000 people, young andold fell victim to the catastrophe and the huge 40.1-meter tsunami and its
aftermath. Despite a massive search, rescue and recovery mission, to this day there
many people still missing whose remains have not been recovered. Moreover, thedamage of the great earthquake which was centered just offshore of Tohoku region
was not just limited to this region. The damage was far more widespread, thetsunami caused damage to a vast swath of Japan from the southern coast of
Hokkaido, through the Tohoku region to Kanto. In addition to the tsunami, there
was the earthquake and various infrastructure failures which brought their own
consequences, including the destruction of a number of dams in the affected areas.
Not to mention the damage to infrastructure across the region and the disruption tosociety and businesses. Unfortunately, the Fukushima Daiichi nuclear power plant
located on the Eastern Pacific Ocean was destroyed by the tsunami and a core
meltdown occurred, necessitating the long-term evacuation of the surrounding
areas, representing an additional disaster event in combination with the earthquake─ 98 ─

Understanding the factors behind Tsunami of change.

and tsunami itself, these evacuations representing the destruction of local
communities.
As a result of this terrible earthquake, Japan’s energy policy, which until thattime had relied on nuclear power plants for much of its electricity (partially on
environmental grounds, re the reduced carbon dioxide emissions achieved with nuclear
energy generation) came under immense pressure to change direction. As a direct

result of this tragedy, the nuclear power plants scattered throughout Japan wereforced to shut down almost immediately28). Until this earthquake and subsequenttsunami, Japan had not been able to break away from its dependence on nuclear
power plants, even with the global trend of switching to renewable energy
generation to options such as wind and solar power. As a direct result of thedamage to the Fukushima reactor, the power situation deteriorated rapidly because
Japan, through public opinion, was pressured to change its direction away from
nuclear power generation almost at once. One of the immediate consequences of
the taking “off-line” of the Fukushima plant was large scale power outages in theeast Japan region. Many people who recalled the bitter experience of the first oilshock in 1973, likened the Fukushima experience to the first oil shock experience.
Many Japanese have now come to recognize that this significant earthquake, (anunprecedented magnitude 9.0 on the Richter scale, making it the largest earthquake inmodern history) marked a turning point which, even 10 years later, many people arestill suffering from its aftermath.
These natural threats to society are not limited to earthquakes. Even after theearthquake, Japan and the rest of the world has experienced natural disasters
causing significant loss of life and resulting huge economic losses. No matter how
28)

Afterwards, there is a nuclear power plant which was admitted to restart partly
because of the change of the nuclear power plant policy. According to the Nuclear
Propulsion Committee, nine nuclear power plants have been restarted as ofNovember 2020.

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good governments’ disaster planning scenarios are, it is almost impossible to avoid
the threat of natural disasters or anticipate them fully. As has been pointed out,
earthquakes and typhoons cannot be avoided, but sometimes the failure to respondeffectively to these tragic events turns a nature caused event into a man-madedisaster, compounding the natural disaster by making a bad situation worse.
(2) Threat of pandemic
Another factor that mankind understands all too well now, one which cannot
be avoided by humanity and which can cause dramatic change, is that of apandemic. The historian Yuval Noah Harari29) points out that “For man, thesecond enemy following famine is the plague and infectious diseases30)”, revealing
the fear of infectious diseases that have greatly changed history. Until now many
Japanese and advanced western nations who, on the whole, live a most protectedhygienic life and rush for medical attention at the slightest hint of any health issue,
have considered themselves immune to such problems, for what people thought
was a bygone age. Indeed, humanities very success, since the last great Spanish flu
epidemic of 1918 may have led us to become complacent and believe that
pandemics were from stories of the Middle Ages and subjects of fiction or
movies31). Even the recent impact of Ebola was, because of our success incontrolling successive outbreaks, considered a distant threat. However, early in the
new year of 2020, mankind received a rude awakening about the power a simple
virus has to change our lives immediately and radically. The global experience

29)
30)
31)

The Complete History of Sapiens andHomo DeusAn Israeli historian who has
authored bestsellers such as
Yuval Noah Harari, “HOMODEUS: A Brief History of Tomorrow”, Yuval NoahHarari, 2015.
In 2009, “Infected Islands” was screened by Toho Co., Ltd. Produced by the
Infectious Islands Policy Committee.

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Understanding the factors behind Tsunami of change.

from Covid19 indicates that it is a lesson which will not be forgotten soon. The
impact that one cruise ship can have on entering Yokohama port surprised many
people32) . Even then, given this first-hand experience at Yokohama, it was not
until the middle of February of the same year that Japan responded in earnest to
this infectious disease.
As with many advanced countries, in Japan, until now, infectious diseases havenot featured very highly on people’s consciousness. In fact, various infectious
agents do challenge humanity every decade or so. If one looks at humanities
experience in the first two decades of the 21st century, we have had SARS (severe
respiratory syndrome) in 2002-03, bird flu in 2005, hog flu in 2009-10, and Ebola

hemorrhagic fever in 2014-15. In addition, as is the case with the annual influenza
virus, many lives are lost in the winter from influenza, whilst more than 30 million
lives were lost worldwide in the AIDS virus that occurred in the early 1980s33),
and 1 million infected people die every year even today34). However, in manycases, Japanese people have had a heightened awareness of infectious diseases
only for a short period of time either by popping Tamiflu or getting flu shots.
For the Japanese who did not have infectious diseases high on their risk
assessments to their stable ordered society, 2020 was a year when the potential ofsuch a threat became all too apparent. The only weapon at our disposal as32) “Corona VIrus Desease 2019”.
33) According to an announcement by the Ministry of Health, Labour and Welfare, there
were 3,325 deaths of influenza in Japan in 2018.
34) UNAIDS, ｢DADABOOK」, 2017, http://www.unaids.org/sites/default/files/media_
asset/20170720_Data_book_2017_en.pdf
UNAIDS, ｢Core epidemiology slides, June 2017｣, http://www.unaids.org/sites/defa
ult/files/media_asset/UNAIDS_2017_core-epidemiology-slides_en.pdf
UNAIDS, ｢Fact sheet - Latest statistics on the status of the AIDS epidemic.」,
http://www.unaids.org/sites/default/files/media_asset/UNAIDS_FactSheet_en.pdf
UNAIDS, ｢Global AIDS Update 2016」, http://www.unaids.org/sites/default/files/
mediaasset/global-AIDS-update-2016_en.pdf
UNAIDS AIDS Info (viewed October 2017), http://aidsinfo.unaids.org/

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experienced in the beginning of the outbreak at Wuhan City in China, was to go
into dramatic immediate lockdown. In spite of lockdowns, the virus spread
globally very swiftly, within a month. In response to the events in Wuhan City, theJapanese government decided on January 28 to make this new type of pneumonia adesignated infectious disease. However, many Japanese did not realize the threat
this new infectious agent represented. Many universities in Japan conductedentrance examinations as normal, without any special measures, and initially there
was no problem with inbound tourism and no great change to everyday lives,
which aided its rapid spread throughout society.
However, things began to change in mid-February when the 3,500 passengersof the cruise ship Diamond Princess, which entered Yokohama port on February
4th, disembarked the ship. The shortage of masks and disinfectant alcohol became
apparent, and some large companies began to take measures against infectious
diseases such as closures, time difference commuting and teleworking. Little bylittle the general public in Japan began to feel a sense of crisis35). At the end of
February, the Japanese government recognizing the implications of the emerging
pandemic moved swiftly, and on February 27, 2020, the Government of Japan
requested that elementary, junior high and high schools nationwide should beclosed with immediate effect36).
Furthermore, on 10th, March the Cabinet approved a draft amendment to theSpecial Measures Law, which is the basis for declaring a state of emergency. The
next day, Mr. Tedros, Director of WHO recognized that Covid19 had reached35)
36)

Masks are the subject of bomb-buying by Chinese tourists.
The national school was closed at the request of the government, but later there was a
discussion on whether this measure was correct because the rate of serious disease in
the case of children and young people was remarkably low. However, it was pointed
out that the university becomes a cluster of the infection spread from the behavior
style of the student, and the class was basically carried out by the remote method inmany universities in the fiscal year 2020. Seijo University is no exception.

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Understanding the factors behind Tsunami of change.

pandemic status, and called on governments to further strengthen measures, andthus the whole world was caught in the midst of Covid19 turmoil37). Subsequently,
lockdowns were carried out one after another in European countries, and the IOC(International Olympic Committee) decided to postpone the 2020 Tokyo Olympic andParalympic Games. On 7th, April a state of emergency was declared in Japan, andthe new dormant life commenced on a nationwide scale.
Many companies’ performance deteriorated rapidly because many economic
activities were halted by pandemic countermeasures taken by countries around theworld38). Restaurants, bars business, tourism businesses, hotels, aviation
businesses and people to people businesses suffered particularly. Subsidies andsupport funds by national and local governments abounded but were unable tocompensate for all that was lost and many hitherto thriving businesses collapsed.
The longer the situation went on, the more severe the situation became,particularly as there was no end in sight, it was something which was difficult, if
not impossible, to plan for. Some companies had to change their business models
entirely, if they had not, the survival of the company could not be protected.
However, after the state of emergency was lifted, society regained its calmness
little by little, and although it was a little less than before the pandemic, the numberof customers increased and there was, for a time at least, when pre-pandemic daily
life returned. Partly because of this, GDP in Japan fell to 30% as compared to it’sannual high and rose 18% annually in the July-September quarter. Even though it
was temporarily revived, there is no guarantee that any company can survive thecoming “new normal” era without transforming. However, at the same time, thenumber of infected persons had increased greatly in Europe and the USA, and
37) See Nikkei Shimbun, 12th, March 2020.
38) According to the Nikkei Shimbun, 1st, August 2020, one in three major companies in
the world was in the red.

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成城・経済研究第 234 号（2021 年 12 月）

there were many countries that had started lockdown again. Japan was no
exception, though lockdown could not be introduced effectively due to statutory
reasons. It was not a recovery based on adapting to new daily life but was acontingent recovery attempting as people learnt to deal with the new restrictions todaily life.
On the other hand, it was also true that a few companies were able to pivot andtake advantage of the “new normal”, improve their business performance andincrease their market capitalization in the wake of the pandemic. Under normal
circumstances any business model conversion is very risky and takes time,
particularly in periods of uncertainty and given the unclear future, it was very
difficult to complete business model transformations in such a short time period.
For many companies it was more realistic to operate the current business modelthrough other methods and channels. In other words, the business model in manycases had to maintained as it was. For example, many of the major manufacturers
in Japan chose the introduction of remote work, without the need for attendance onsite. Many educational institutions such as universities, were able to convert to an
online educational model, avoiding face-to-face classes. It seemed that the only
way to prevent the spread of infectious diseases was to minimize movement, towear a face mask when venturing out, and avoid “close contact”. Thus, there wasno choice but to change to telecommuting, telework, remote lectures, etc. In suchan environment, it was natural that enterprises which were able to develop
business by having a suitable business model such as home delivery industry of
food39) and remote conference systems related enterprises40) became winning
39)
40)

Delivery companies specializing in food and beverage such as Uber Eats and
Demaekan are doing well, and workers working in these companies (independent
self-employed workers) are called “gig workers.”
The stock price of ZOOM Co., which is listed on nasdaq was only 74.5USD one year
ago (2019/11/29). However, it became 509.25USD at the end of November, 2020.

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Understanding the factors behind Tsunami of change.

combinations, some were able to increase their performance significantly.
Natural disasters and pandemics cannot be predicted therefore, we can only
learn lessons from them for the future. But in the moment, we have to take thenecessary actions as we navigate the disaster. Hindsight is perfect vison, but in the
midst of a pandemic, particularly one which is changing rapidly, how to make the“right” decisions? You can’t do a thing you don’t have (e.g. vaccines), and you can’t
do what you can’t do (see what is coming next?). As a result, the only option is toreact and learn for the next pandemic when it comes.
In this way, as well as the “progress of globalization” and the “evolution of
information and communication technology and networks”, so the “threat ofnatural disasters and pandemics” may create large social change and have thecapacity to cause exponential social change. But our success in the last area is notnecessarily assured, thus the importance to learn from our mistakes for the future.

5．Creating business through changes in management
In this paper, we have overviewed three factors creating energy for change inour society, i.e., “progress of globalization”, “evolution of ICT and networks” andthe “threat of natural disaster and pandemics”, which we have experienced in fact
and/or witnessed for about 65 years through the Showa era, Heisei era, and Reiwa
era since second world war. These are the main factors that change the businessenvironment of companies who ultimately aim to survive and prosper41).
Moreover, these factors are also important factors to consider when examining
future change. Of course, there may be other factors that cannot be aggregated into
them, and new factors may emerge which will also lead to significant changes in
the future.

41)

This hypothesis is based on biological analogy.

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成城・経済研究第 234 号（2021 年 12 月）

However, if we limit our discussion to the business environment surrounding
corporations in recent years, it can be said that these three factors individually andparticularly collectively have had a massive influence on change. As additional
factors emerge in the business environment that cause change, in conjunction withthese three change factors, it is clear that the business environment and the social
environment will become even more complex, and risk and uncertainty will rise.
As a result, it would be wise for companies to consider the impact on themselvesof existing and future challenges as undoubtedly more complex social change arelikely to increase. Given such a scenario, companies should ponder their ability toreact and adapt to such changes as without doing so they will become reactive,
rather than proactive to changes, both seen and unseen.
For example, if we progress from a single-center national society such as the“Pan-Americana” era to an era of globalization with a multi-centered internationalsociety (MCGE), it is assumed that hegemonic nations will no longer exist and apolitically and economically flat world will emerge42). On the other hand, when
ICT and networks evolve, a new industrial society with completely different
industrial structures should therefore arrive. For example, social structuretransformed as the first industrial revolution fundamentally changed the industrial
structure of the 18th century. It is not difficult to imagine that the Fourth Industrial
Revolution will also bring about major structural changes. Society may need tochange fundamentally the way it works. In anticipation of this new future theJapanese government legislated “Work Style Reform” initiative in 2018. It mightwell be that as a result of future “natural disasters and pandemic threats”, the newnormal is telecommuting, remote office, and extended “workcation” which ismade up from work and vacation.
42)

The process could go through a five-pole process between Japan, the United States,
Europe, China, and Russia.

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Understanding the factors behind Tsunami of change.

Given the wide potential of influences on future change (known and unknown) it
would be unwise to predict the future with any certainty. However, if we consider
the three change factors already discussed, it may be possible to predict a few key
ares of concern accurately. It seems a convincing argument that there was afundamental reason that Japanese companies and the Japanese economy could notrecover from the Heisei Recession from 1991 to 2011. Everything introduced tobring change during this time were in fact stopgap measures43). However, whensomething changed, it could not be considered that one part was “relevant” andsometimes something “not related” would change. There were root causes thatwere not identified at the time, due to a number of factors and this created a very
unpredictable situation which was difficult to adjust in real time, particularly given
the significant negative impact being experienced at that time.
Undoubtedly “progress of globalization” and “progress of ICT and network”
have made a substantial contribution to people’s daily lives and their ability topivot and adapt to change. “natural disasters and pandemic threats” have added tothese two drivers of changed so there is now a triple convergence of change which
may well take global societies in unforeseen directions.
When such events are viewed from a corporate human perspective, only one
certain thing can be said. That is that opportunities are generally created forcompanies, societies and individuals, when the social structure changes. For
example, companies and entrepreneurs should consider what kind of businessmodel could be constructed and introduced in response to changes in the businessenvironment. In other words, when a company responds to social changes, the firstthing to work on is what kind of business model should they develop, what should
43)

Self-deprecatingly,after all, many of the ideas presented by business scholars may beclose to this. There is a case where a manager became a management scholar, but amanagement scholar have never seen a successful case in the business.

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成城・経済研究第 234 号（2021 年 12 月）

they keep from their current model and what should they divest of in the way they
do things. What kind of products and services should they develop in the market,
and importantly, how should these products and services be delivered, which will
indicate the pivot each company will need to achieve in order to deliver on thisnew consumer opportunity? However, in pandemics, there is not much time topivot and readjust a large company’s business model, and it is not possible toinnovate and identify (whilst in the middle or substantial change) which area of thebusiness model should be tackled first in the business. Then, redesigning
management models becomes urgent but without clarity as to how to adjust
becomes an act of desperation. In other words, in the new normal, the redesign ofthe corporate model (overall structure of the enterprise) is realized by innovating themanagement model without going through the process of changing the businessmodel. Needless to say, it is fundamental that the business model and management
model are matched, but clarity of how to innovate the management model andevolve the new business models and by what kind of mechanism is undoubtedly amajor future problem44). The question arises what benefits does the new normal
give us. Then, we need to address what kind of business model is required todeliver this and consequently what kind of management and governance model are
required in order to deliver it efficiently and effectively at minimal risk to theshareholders and other stakeholders. So, what corporate model should companies
adopt? At the present time, the answer is unknown. However, in periods ofexponential social change, it may not be easy for both companies and individuals
to survive. On the other hand, there are many opportunities, and why is it sodifficult to pivot to these new opportunities, those who can prosper and succeed, as
the famed and feared British special forces SAS motto suggests “Who dares wins”.

44)

See Naoto Iwasaki, “Redesign of Corporate Design”, Hakuto Shobo, 2012.

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Understanding the factors behind Tsunami of change.
【Main References】
Kazuto Ataka, “Shin Nihon”, News Picks Publishing, Kindle Edition, 2019
Bay Current Consulting Co., “Digital Transformation in 3 Steps”, Nikkei BP, 2017Friedman Thomas, “The World Is Flat”, Farrar Straus and Giroux, 2005
Hamel Gery & Praharad C.K., “Competing for the Future”, 1995
Hammar Michel & Champy James, “Reengineering Corporation”, HVR publishing, 1993
Naoto Iwasaki, “Redesigning Corporate Design”, Hakuto Shobo, 2012
Shingo Konomoto et.al, “Digital Capitalism”, Toyo Keizai Shinposha, 2018
Ray Kurtzweil, “The Singularity is near”, Loretta Barrette Books, 2005
Tsuyoshi Natsuno, “iPhone vs. Android”, Ascii Newbook, 2011
Kazuhiro Ohara, “Principles of IT Business”, NHK Publishing, 2014
Ken Sakamura, “What is ubiquitous?”, Iwanami Shoten, 2007
Kazuki Saito, “Singularity Business”, Gentosha Shinsho, 2017
Mochio Umeda, “Web Evolution - Real Change Will Begin”, Chikuma Shobo, 2006
Thomas J. Peters & Robert H. Waterman, “In search of Excellence”, 1982
Yuval Noah Harari, “HOMODEUS: A Brief History of Tomorrow”, RAMDOMHOUSE,
2015
Yuval Noah Harari, “21 Lessons for the 21st Century”, RANDOMHOUSE, 2018
This article is considerably rewritten “The sun also rise?” in Seijo Economics No.231,
Jan., 2021 by Prof. Naoto Iwasaki and add new information and new ideas with Dr. Gerry
Gannon and Prof. Naoto Iwasaki.

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