Focus: Gross National Cool

JETRO, 1221 Avenue of the Americas, NYC, NY 10020February 14, 2004

Japan Regains its Position as a Global Cultural and Trend Leader

As the Japanese economy achieved critical scale several decades ago, Japanese firms moved to expand their international presence. Foreign businesses struggled to adjust to this competition and consumers around the world quickly embraced the value represented within the color televisions, cameras, VCRs, fuel-efficient vehicles and other innovative products offered by Japanese manufacturers. Visitors to Japan could sense energy and dynamism coursing through the streets and over time began to look upon Japan as a global trend leader. Foreign executives scrutinized Japanese management and production techniques and students began to study the Japanese language and other aspects of its society. Japanese themes began to emerge in U.S. and other popular cultures, helping to spread Japanese art, food and ideas around the world.

Following the collapse of Japan’s bubble economy in the early 1990s, however, the admiration and ultimately concern that many foreign business and industry executives had expressed over Japan’s economic progress began to dissipate. Cultural interest and awareness about Japan began to wane as well. Students turned their attention to other regions of the world and study groups from nations seeking to learn the secret of Japan’s success were replaced by Japanese firms, think tanks and other observers who began traveling to the U.S. and other markets to research the best way to deal with the nations problems.

Recently, however, we have begun to see a renewed interest in Japanese culture around the world. Over the past few years the concept of Japan’s “Gross National Cool” has appeared in numerous publications, highlighting the countries newfound competitiveness in music, video games, anime, art, films and fashion. In the U.S. for example, this is reflected in the many Japanese athletes who are now playing on professional sports teams, as well as a heightened interest in Japanese cuisine and numerous films dealing with Japan – several of which have been nominated for Oscars at the Academy Awards competition later this month.

The Japan External Trade Organization (JETRO) provides the following information, which examines this trend, as well as specific opportunities and developments that may be of interest to international business executives and investors.

Economic Adjustment Accentuates Cultural and Artistic Innovation in Japan

Periods of economic adjustment such as the one Japan experienced over the past decade are generally accompanied by increased attention to cultural and artistic expression. Analysts tend to attribute this correlation to the fact that diminished opportunities provide fewer jobs, makes entrepreneurship more risky and lowers the satisfaction of those already employed. As a result, the opportunity cost of choosing an artistic career is lowered. Cultural expression also provides an outlet to express dissatisfaction and anxiety – particularly among young people who must beat the brunt of this adjustment in the form of higher unemployment and social dislocation. Equally important, it can constitute a form of “escapism” allowing individuals to forget at least temporarily about their problems. This is particularly true in developed, mature economies, where there is a relatively high standard of living and even when economic conditions are suboptimal, most of the population does not have to worry about their basic survival needs.

Just as one might view the period of strong cultural expression in the U.S. during the late 1960s and 1970s – when the United States was undergoing its own period of economic and social adjustment -- as a time when the youth of America channeled their attention into new forms of art, fashion, music and cultural lifestyles -- the same might be said of Japan today.

While circumstances in Japan are indeed different from those in the U.S. at that time, there are several forces at work that are leading Japanese youth away from the fixed – one company from start to finish --- career track followed by their parents and others throughout most of Japan’s postwar history. Most importantly, economic adjustment has led to higher unemployment. Even though the situation is improving by many measures, the unemployment rate as of July 2003 for workers aged 15-19 was about 10.2%. Among those aged 20-24, it was about 9.2% and from 25-29 about 7%. This compares to an overall rate of about 5.3%.

One outgrowth of the difficulty of finding full-time jobs has been the rise of "Freeters", a Japanese word combining the English word free and the German word Arbeiter (laborer). Typically, freeters are young people who do not have permanent jobs, but have one or more part-time Japan’s Ministry of Health, Labour and Welfare jobs or move from one job to another. estimates that more than 2 million youths -- or about 3 percent of the nation's workforce -- were freeters in fiscal 2002. The existence of freeters is a real policy challenge for Japan’s government, which is dedicating itself to setting up job placement offices for jobless youths and to help subsidize companies that employ these underutilized workers. However according to a survey undertaken by the Japan Information Network, many freeters say they have chosen this lifestyle because they wish to pursue their dreams. Others maintain they feel more comfortable living this way and prefer having more time for themselves.

Another result of uncertain economic times has been a greater reluctance by Japanese youth to set up independent households and to start families. This too has negative long-term consequences, yet over the short term it is resulting in additional disposable income, particularly among young women. Driving higher consumption within this key deomographic, it is helping to support the emergence of new fashion and style trends and other leisure-oriented activities. For example, the purchasing behavior of young Japanese women – is considered so important to marketing executives, firms such as BoomPlanning have developed successful business models helping others to monitor their purchasing and consumption habits. Marketers who have been able to reach this audience have enjoyed great success. One success story includes the case of Atlus Co., Ltd., which generated approximately $850 million in sales within two years, though the launch a line of photo sticker machines, that caught the imagination of young women across Japan.

Changes in Japanese lifestyles and the attitudes of young people are reflected in a recent survey by the Hakuhodo Institute of Life and Living which conducts a comprehensive survey of attitudes toward life in Japan every two years. The New York Times recently reported on the findings, which “show that people are focusing on enjoying life and are happy despite the long (economic slump)”. According to Executive Director Hidehiko Sekizawa “People want to return to an era where life was perceived to be more enjoyable”

Cultural Exports Constitute an Emerging Growth Sector in Japan

As business executives, investors as well as journalists and the general public begin to show a greater interest as to what is going on within Japan we have begun to see a renewed interest in, and popularity of, Japanese culture around the world. Two years ago, Douglas McGray authored an article in Foreign Policy Magazine highlighting this trend celebrating Japan’s “Gross National Cool” and the countries newfound competitiveness in music, video games, anime, art, films and fashion.

The growing appeal of Japanese cultural exports has since been covered in many other prominent publications. This includes Time Magazine, in a cover story last year entitled “What’s Right with Japan” ,
Bloomberg in a story named “Exporting pop culture” and the Washington Post on “Japan’s Empire of Cool” Similar stories have also appeared in an Australian newspaper named The Age, entitled “It may be off the boil, but suddenly Japan is the coolest of the cool” , LeMonde in France named "Cool Japan": le Japon superpuissance de la pop , the New York Times Magazine in Pokémon Hegemon and many other publications.

Some analysts estimate the entertainment industry in Japan is worth up to about 10% of the nation’s GNP. Additionally, according to the Marubeni Research Institute, Japanese cultural exports – in the form of sales and royalties from music, video games, anime, art, films and fashion – have increased 300% since 1992 to $12.5 billion, while exports as a whole increased only 20%. While these results are still small in comparison with Japan’s total economy they are by no means insignificant.

Additionally, a record number of students are now studying the Japanese language. According to the Japan Foundation and the Marubeni Research Institute, three million foreigners are now studying Japanese compared to only 127,000 in 1997. The Washington Post, reporting on this finding quoted David Janes, a program officer with the U.S.-Japan Foundation who attributes this rise to Japanese popular culture. He recounted a trip to an Iowa high school where 80 students are studying Japanese and noted “what really amazed me is when asked why they were studying the language, the majority did not hesitate. They said manga and anime.”

The result of this renewed popularity is that Japanese themes are now emerging with more prominence outside of Japan. For the first time since the 1980s, attention is again being focused on Japan in many movies. several of these films are currently up for nomination at the upcoming Academy Award celebration later this month. The Last Samurai, nominated in three categories, opened in 536 screens in the U.S., earning $8.36 during its first weekend. This placed it within the top ten foreign film openings in 2003. Lost in Translation, nominated for four categories and Kill Bill are two other major Hollywood productions released over the past year and Japanese Story, is an independent Australian film that also proved very popular and won many awards.

Japanese films are also beginning to gain worldwide recognition. Hayao Miyazaki’s Spirited Away won the Golden Bear at last year’s Berlin Film Festival -- a first for animated films. Twilight Samurai was also recognized at the Berlin Festival and won an award at the Hawaii International Film Festival. It was screened at the Chicago Film Festival and nominated as a finalist in the best foreign film category at the upcoming Academy Awards – the first time a Japanese film has been nominated since 1981.

In fact, from February 25 to March 3, four Japanese movie production companies -- Eleven Arts, Inc. Gainax Network Systems, Micott and Basara Inc. and Touhokushinsha Film Corporation -- will be exhibiting at the American Film Market in Santa Monica, CA. This is the first time there will be a Japan Booth there. Last year this working festival attracted 296 companies from 29 countries and 6827 people attended.

Japanese players have also become more involved in North American sports and in fact the New York Yankees will play their opening game against the Tampa Bay Devil Rays in the Tokyo Dome next month. New York has two popular baseball players Hideki Matsui of the Yankees and Kazuo Matsui of the Mets. Additionally, Shingo Takatsu signed on last month as the newest member of the Chicago White Sox. In other sports such as golf, Japanese athletes including Shigeki Maruyama and Hidemichi Tanaka have also begun to gain recognition and establish a U.S. and international fan base.

Commercially, Japanese culture is gaining further traction within the U.S. Japan’s most visible pop icon Sanrio’s Hello Kitty, presently generates worldwide sales estimated to be almost $1 billion and has up to 15,000 product licenses. More recent successes include the introduction last year of Shonen Jump, a leading Japanese comic book, which has already achieved a monthly U.S. circulation exceeding 500,000. Japan-oriented video games, such as Tenchu and The Way of the Samurai are also worldwide best sellers.

Other aspects of Japanese contemporary culture are proving popular through events such as the 2001 “Buzz Club” exhibition, which was held at the P.S.1 Gallery in Long Island City in coordination with the Museum of Modern Art. More than 100 Japanese works were featured and over 100,000 visitors attended. This exhibition was followed by another at the same gallery entitled: First Steps: Emerging Artists from Japan from February to June of last year.

Popular Japanese Designer Takashi Murakami, whose works on canvas have been sold in New York auction houses for prices exceeding $500,000, also had a public art exhibition, which Metropolis Magazine described as “ruling Rockefeller Center last summer”.

Japan Exerts More Influence in International Art, Entertainment and Style

A byproduct of a more globally-oriented and interconnected world economy is a greater propensity for cultural trends and characteristics to travel more quickly. Once popular, they are adapted, integrated and enjoyed by other people around the world. Examples of areas where Japanese cultural trends have proved especially popular in overseas markets include:

Animation/Video Games: Japanese “anime” (Japanese for animation) or “manga” (illustrated book of drawings that tell stories) are quickly gaining in popularity around the world. One analyst Ichiya Nakamura, a visiting scholar at the Stanford Japan Center and M.I.T. Media Lab was recently quoted in Time Magazine stating “Japan has changed from being a manufacturing and industrial society to a pop-culture society. Time notes that “Pokémon has supplanted Astroboy in the hearts of schoolkids in more than 65 countries. Sixty percent of the world’s animated-cartoon series are made in Japan and companies such as Production I.G. have evolved into global animation leaders. Since it was founded in 1987, Production I.G. has created 13 feature films, 25 direct-to-video films, 19 television series, 13 video games, and other features, including a highly acclaimed 20 minute sequence within Quentin Tarantino’s Kill Bill movie released last year. It is now developing a television feature, which will be scripted in Japanese and then directly translated and broadcast in English to U.S. audiences.

Japan also exhibits a strong competitiveness in video games. Sony’s Play Station and Nintendo’s Game Cube still dominate the video game industry despite efforts by Microsoft Corporation to compete in this sector. Additionally, while Sega stopped making home game consoles due to severe competition from these three competitors, it still retains a strong position in arcade equipment – this month reporting that April-December 2003 profits doubled over the previous year.

Japanese Animation on the WWW

Anime Web Network

Anime International Co., Inc.

Desktop Anime

Anime and Manga Glossary


Industrial, Product and Interior Design and Architecture: Even before Sony launched its ground-breaking Walkman in 1979, Japanese firms were seen as innovators in product design. Their ability to introduce well-crafted color televisions, cameras, and later on VCRs and other forms of consumer electronics as well as high-quality, fuel-efficient vehicles introduced quickly attracted attention and were positively received by consumers around the world. The clean, minimalist look of Japanese style as well as many futuristic elements have also been incorporated into many office and home interiors and a recent building boom in Tokyo has offered international design firms and architects an opportunity to design some of the most exciting and innovative commercial real estate projects currently under development in the world today.

Japan Good Design Award Library

Japan Design Foundation

Roppongi Hills

Mori Arts Center

Fashion, Music, Technology and Consumer Trends: Japanese designers such as Rei Kawakubom, Issey Miyake have been well known for many years to lovers of fashion. Additionally, the streets of Harajuku and Shibuya have long been recognized as mandatory stops one must visit not only to view emerging fashion trends but to experience what one analyst terms the ability to “Recognize The Future When It Lands On You”.

Other designers now gaining recognition include Junya Watanabe and Jun Takahashi, who several leading fashion editors believe is the hottest fashion designer to emerge in years. Five other Japanese designers will be exhibiting from February 29-March 2 at the upcoming Fashion Coterie Show, which is the main fashion trade show held in New York after the Bryant Park runway events.
Musical stars such as Ayumi Hamasaki, who has sold more music than any other act in Japan – the world’s largest music market outside the U.S. – for the past two years and is also proving very popular in other Asian markets. Furthermore, Japan leads the U.S. and many other markets in many emerging consumer trends, for example the application of new mobile technologies to retailing and lifestyle choices. NTT/DoCoMo’s i-mode [] products are leading the early adaption of “texting” and other innovations in the wireless area. Japan is also in the forefront of other social developments and aspects of consumer behavior and Japanese firms are leading in many areas of digital convergence.

Japan: Evolving Fashion Trends

PC World: Tokyo Edge Column New York Stuyvesant 2004 test results,colid,29,00.asp

J@pan Inc.: Convergence Emergence

Japan: Evolving Consumer Trends

Food and Cuisine: Many Americans experienced their first taste of Japanese food at restaurants such as Benihana, which opened in the U.S. on East 56th Street in New York City in 1964, where one still exists today. Since this time Japanese cuisine has become extremely popular and one can now find sushi and other Japanese foods in supermarkets, restaurants, convenience stores and other locations around the world. The Iron Chef television show now brings Japanese cooking directly into the homes of Americans every week. Brazil’s Veja Magazine reported that there are now more sushi than Brazilian barbeque restaurants in Sao Paulo, the largest city in South America, and residents consumer 278 sushi rolls per minute. Articles have also appeared noting the popularity of sushi in Moscow and the Washington Post quoted Patrice Jorland, the cultural attaché at the French Embassy in Tokyo as noting “in Paris, on the Rue de la Gaite, the entire street has filled up with sushi restaurants over the past two years.

Additionally, in New York, Los Angeles and other major U.S. urban centers, there are many Japanese-style convenience stores opening that provide a full range of Japanese products. In addition, in cities such as New York, the upsurge in Japanese-related restaurants is remarkable. In the new Time Warner Center there is a new sushi restaurant and bar, which will be run by Masa Takayama, a chef who has achieved success in LA. It will feature tasting menus for $350. On the 35th floor there is Asiate run by a chef called Nori Sugie. This restaurant fuses Japanese cuisine with French. There is also Riingo, opened by the chef Marcus Samulsson, who owns Aquavit, Geisha, by Eric Ripert of Le Bernadin fame and Sumile. All of these restaurants have opened in the last two months.

Tokyo Food Page

Japanese Food Page

Japanese Cuisine & Recipe Page

Japanese Cookbook for Kids

Japanese Cuisine, Restaurant & Nightlife Guide

Japanese Cooking: Basic Techniques



Data, statistics and the reference materials presented within this newsletter have been compiled by JETRO from publicly-released media and research accounts. Although these statements are believed to be reliable, JETRO does not guarantee their accuracy, and any such information should be checked independently by the reader before they are used to make any business or investment decision.

For additional information, please contact Satoshi Miyamoto, Executive Director of JETRO NY at Tel: 212-997-0416, Fax: 212-997-0464, E-mail:

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