Kishida`s New Capitalism Might Fly - But Only If ...

The big vision of Japan’s Prime Minister Fumio Kishida is to revive the Japanese economy through a “#NewFormofCapitalism”. In short: no chance without the right messaging.

There is indeed a global paradigm shift away from past neoliberalism and shareholder capitalism with a China-type of state capitalism not being a real alternative for Western cultures. A more long-term stakeholder-oriented capitalism is indeed en vogue and probably also needed.

But Kishida`s new capitalism concept starts with a major communication problem, which might derail his otherwise applaudable initiative for Japan.

A comparison with “#Abenomics”, the famous and powerful theme of Abe’s second reign from 2012-2020, illustrates these challenges.

First, the theme “#NewCapitalism” is not only vague by nature and name. It is also unspecific to Japan – very different from Abenomics, which was explicitly about Japan, and even carried the name of its creator.

Kishida needs a qualitative description of what exactly it is that defines his capitalism, be it "ethical", "community" or "sustainable" capitalism 

Second, Abenomics clearly and very consistently spoke of three pillars, the famous three arrows of (1) monetary easing, (2) fiscal expansion, and (3) growth strategies, an area where Kishida is - yet - vague.

The third and probably most concerning point comes with the term “distribution,” to which Kishida refers prominently by explicitly calling for a “virtuous cycle of growth and distribution” – a strong albeit also dangerous soundbite. But such prominent reference to distribution spooks the business community and reminds observers of welfare capitalism and of policies promoted by individuals such as Bernie Sanders.

More important and powerful would be to shift the perception away from an abstract, state-steered distribution of wealth.  Focus should be placed on the actors that contribute to the generation of growth. Investment in human capital, i.e. in people is and should be the key.

These people to focus on include women, younger people, foreigners, founders of start-ups (and probably even shareholder activists). In Japan, all of them have traditionally been either ignored or even disadvantaged.

And here might also lie a clue to solving the messaging problem. Just think of the term “#PeopleCapitalism”. It is not difficult to imagine how such a framing could be easily filled with hard core economic arguments on the importance of human capital as well as emotionally proof points that could equally shape a future debate – in Japan as well as globally.

See my longer article in Asia Times on this topic and check out whether there might be a PR cure for making Kishida`s idea at least fly out of the starting blocks and not stumble already on the first meters.