Questioning the reality of Fukushima, Part 3:
“Daddy’s Not Home” Opens Floodgates for Financial Damage Caused by Harmful Rumors, Misinformation
Interview with Technology and Industry Consultant, Morinosuke Kawaguchi
Interviewer/author: Aiko Hayashi

The original Japanese article was published on the Eco Japan website on 2011.10.19th, titled
Link: http://eco.nikkeibp.co.jp/article/report/20111017/108820/?P=2
Translation: Jenny Silver

The Fukushima Project is a third-party investigation of the accident at Fukushima Daiichi Nuclear Reactor Plant. We’ve asked several experts for their explanations; Part I was an interview with FP Chairman, Eiichi Yamaguchi (Doshisha University ITEC Deputy), and Part II was an interview with FP Committee Member, Associate ProfessorShunji Iio Ph.D. (Tokyo Institute of Technology; Nuclear Reactor Engineering Research Institute).

This time, we sat down with Morinosuke Kawaguchi, who is working as a technology and industry consultant at Arthur D. Little, about the financial losses that were caused by the nuclear accident. The Japanese industry suffered not only physical damage, along with radiation and insufficient power, but there are also invisible factors that continue to damage Japan’sreputation. Kawaguchi points out that taking a firm position in desperate times without a “fatherly role” led to increased damage.

Ayako Hayashi: After the nuclear accident, many countries decided to ban imports of Japanese agricultural produce, and there were even incidents of refusing Japanese industrial products. Even now, seven months after the accident, regulations focused on food products continue, with many countries having set fixed regulations for the 47 prefectures. From a Japanese standpoint, could it be that this is an overreaction?

Morinosuke Kawaguchi
Associate Director at Arthur D. Little (Japan) Inc.

Morinosuke Kawaguchi: More than the Japanese have considered, the financial damage caused by rumors and misunderstandings isexpanding. In Interbrand’s quantitative study pertaining to “The power of Japanese brands internationally against the effects of the earthquake and nuclear accident” (announced May 5th, 2011), the question, “Are you skeptical of Japanese products, even ifthey’re produced outside of Japan?” elicited a response of “skeptical” in 21% of the U.S. respondents, 15% in the U.K., and 46% in China. In other words, I think it’s only these people who say “I’m afraid of radiation, so I don’t want to buy their products.” It may be an irrational feeling, but it is a harmful misunderstanding. How many Japanese understand this reality and how bad this crisis is?

I can’t help thinking that Japanese are underestimating the damage from harmful misunderstandings. Evaluationscirculate around the world very quickly. There is a saying that “gossip is short-lived,” but the truth fades even sooner. Using the data from Google as validation, if you look at the number of hits from searching the keyword “Fukushima,” the results werehalved just two weeks after the accident, and now, after six months, have been reduced to about 3%. Since this trend was the same for “Lehman” (Lehman Shock), public interest is the same.

Search results according to "Google Trends" (Provided by Morinosuke Kawaguchi)

Hayashi: People in the world are no longer actively following information about Fukushima.

Kawaguchi: “On the contrary, information that may be uncertain is transmitted in a sensationalist way. "The whole nation of Japan is comparable to Chernobyl's radioactive contamination" and "uninhabitable for hundreds of years" appeared in an outrageous article. This information originated from foreign mass media outlets, not from personal blogs on the Internet. Even if there's a retraction now, there is no escape from the impression cast from this article. This far-away, foreign country now has an established bad reputation. Okinawan crops have nothing to do with a motorcycle manufacturing plant in Vietnam. Japan is only thought of as unsafe, and people do not want to buy its products.

Another fear I have is not just that products won't be sold directly, but also that there can be an extensive, long-term, negative effect due to a sharp decline in human interaction. There has been a noticeable decrease of tourists and exchange-students since the earthquake. Recently, the number of visitors from pro-Japan countries like Taiwan and the United States have seen signs of recovery, but there is still the situation where tourism from Europe and China has decreased by 40% compared to the same time last year (June). The number of tourists has
been decreasing so rapidly that the tourism industry is in dire straits, but that's not all, the future of the Japanese economy as a whole is losing value more and more every day. It is very difficult to visualize or calculate the loss from something intangible, but I think it will be important to talk about it soon.

Since March, tourists visiting Japan as well as business trips have decreased. As a whole, there has been base recovery, but the responses from Europe and China have been sluggish.
(Provided by Morinosuke Kawaguchi)

Japanese do not have the techniques to convey the merits of their country

Hayashi: In termsof the "value of the future", what does that mean?

Kawaguchi: Japan is the type of country that you come to love especially after you've really experienced it. It has a lot of good content, but due to language and mentality, they lack the power of expression to convey its charm. In short, the PR is sub-par.

An easily understood example is the breakthrough for washlets at the 1998 Nagano Olympics. People from all over the world gathered at the Olympics. At this venue, they experienced the washlets for the first time in their lives, and were impressed by how great they were. Some people bought them and took them home as a souvenir.They would let their friends and relatives try them out. This became the starting point for the washlets to have a big breakthrough in the global marketplace, in the 26th year since its release.

The experience was enough for them to take the washlets back home; there had been no persuading PR. For Japan, that can't fully convey its products through language, this is very important. Because Japan is a popular destination for tourists and students, stimulated word-of-mouth can become viral communication from positive sources. If they hadn't come to Japan, they wouldn't have had the experiences to take home, and thus would not have transmitted Japan's appeal to their home countries. A market has to extend to these people as a starting point, or they will be lost forever.

Hayashi: With already seven months having passed since the nuclear accident, in terms of Japan's future value, are there many losses?

Kawaguchi: Even though I want people to have the experience (of Japan), we have completely lost our “safety card” due to the nuclear accident. The depth of the wound that Japanese brands have suffered is immeasurable. What we shoulddo now is verify the processes that led us here, and while reflecting, move on to the next generation.

This verification has two aspects. The first one is before the accident. For why the nuclear accident happened, we have to look at the technical verification and the social background at the same time. The other aspect is after the accident. Because we could have been able to minimize the reputational damage, it is necessary to think about how it came to this.

Consider the latter first.
As mentioned in the beginning, Japanese are vulnerable to reputational damage. Perhaps since there is no interest, it is unknown how Japan is perceived from overseas. There is interesting data to support this.
There is a correlation between the GDP per capita being an indicator of affluence, and TOEFL scores being an indicator of English proficiency. Even in Korea and India, the correlation between affluence and proficiency in English is proportional. However in Japan, the level of English is extremely weak compared to the GDP. In terms of language level, it is equivalent to a developing country in Africa. In other words, even though Japanese are among the particularly affluent in the world, they're not really learning English. We have behaved as if wealth sprung from the ground like people from lucky oil producing countries. The reason for language barriers is lack of knowledge about other countries. We don't even know what's being said. So, I think we are indifferent to things like the thoughtlessness in reputational damage.

The correlation between GDP per capita and TOEFL scores. Japan is basically equivalent to oil producing countries, like Kuwait, UAE, and Qatar.
(Provided by Morinosuke Kawaguchi)

Where is the father figure that is supposed to protect Japan?

Hayashi: Could the Japanese have minimized reputational damage with their poor language abilities?

Kawaguchi: When something bad came out, it should have been smoothed out very quickly.
News were consumed unreflected, which suits the Japanese mentality, an in this critical situation no one wanted to argue.Even if things had been covered up, there still would have been a desperate attempt to minimize the reputational damage.

So then, whose role is it to cover things up? That would be “Daddy.” Rising up to protect the family in a time of need, he says what he has to say, and does what he has to do. This is nothing else than fatherhood. However this time, I don't think one singleprime minister assuming the fatherhood role would have been at a level where he could have fixed everything. I think that all adults had a responsibility, including myself, and that there were some things that needed to be protected.

Hayashi: I think that everyone started thinking about what they should do about the earthquake and the nuclear accident. But has the situation become so big that individuals don't know what they can or should do?

Kawaguchi: A Canadian man living in Japan by the name of Andrew Woolnerset up a website called “The Journalism Wall of Shame.” The site is a wide collection of outrageous articles from overseas about the Tohoku Earthquake, published together with posters' evaluations. While reviewing the information gathered on the site, the levels ranged from non-malicious misinformation to the worst natured level, “Satan,” which had no fewer than 70 articles. I think that visualizing information through websites like these, the reputational damage can be somewhat reduced.

If you start thinking about the completeness of the website and language problems, you might think it's not useful, but of course it has been brushed up with the launch of the β version. You don't have to hunt through the maze of outrageous articles from before. In a time of crisis, this site can turn serious and defend against the attacks, but at a peaceful time, this site works well operating as PR sending the merits of Japan overseas in a leisurely way. There are many people from abroad who have a high interest in Japan's subculture, so I want the number of sympathizers for Japanese brands to increase rapidly. If that happens, when something happens, when it comes to being able to exhibit fatherhood, we are well-positioned so that we should be able to beat down a ridiculous article from spreading during its early stages.

Companies and Neighborhood Associations: “Disease is Everywhere.”

Hayashi: With ridiculous articles in circulation having increased reputational damage, Japan now has an absentee father, or in other words, has father gone missing?

Kawaguchi: That's what I think. In my 2007 publication, “Neon Genesis of GeekyÄi0-Äi0Girly Japanese Äi0Engineering,” Äi0I wrote about trying to sell the concept of motherhood and childishness and if this were to become the case, of course there is a true feeling of disapproval of the country's eliminated fatherhood. Motherhood is about protecting and cherishing so that (the children) are not exposed to the rough realities of the world. From the viewpoint of maximizing the value of the resources at hand, motherhood is important, but in situations of minimizing the damage, it is necessary that the father be sent out.

Most of the problem now is mostly due to motherhood winning over fatherhood. That symbol is the industrial protection policy. Using the differences inobtained by subtracting the value of imports from exports and looking at the portfolio of global competitiveness figures, industries that earn foreign currency such as electro-mechanical equipment and transportation vehicles have been a small fraction. The Japanese treasury situation in a nutshell is that automotive companies earn money to buy fuel and industrial materials. Then the export of electronics, machinery, and plastic materials fulfills the portions related to food and clothing, as well as everyday goods. If Japanese cars lose out in the overseas market to Korea's Sonata Äi0(Hyundai's latest sedan model) then our affluence could break away easily.

Unfortunately, industries like agriculture and pharmaceuticals are becoming targets of protectionist policies, and are not contributing to the Japanese economy. The competitive edge is weak because of this protection. A prime example is how the nuclear industry was guarded over and over again.

The plot of the trade differences and international competitive power figures reveals the actual status of industries like transportation equipment that earn foreign currency, while food and pharmaceutical industries are dependent on imports.
(Courtesy of Morinosuke Kawaguchi)

Hayashi: Everyday people began to look at the composition ofthe nuclear industry, but ironically, this is simply because of the occurrence of the nuclear accident.

Kawaguchi: With the nuclear administration and the nuclear industry, I think it's a very important point that the power industry analyze the background leading up to the accident.

After the war, because Japan was a defeated nation that had just begun to study nuclear power, there was a possibility that the industry of protectionism in itself had collapsed. Considering the historical background of the time, protectionist policies were a given, for that reason we are very appreciative of the efforts of our predecessors. However, the goal imperceptibly became the protection of the protecting organization, not the industries. Under the pretext of organizations supporting the nuclear power industry such as protection, training, and supervision, it was nothing more than furthering themselves.

However, please consider this. Is this just the problem of Kasumigaseki?

Companies also have cases of making their goals the protection of organizations. Even though clearly a cost center, the decision to withdraw an organization that continues to drag along can't be made. Dysfunctional organizations with lingering conflicts among factions are neglected, and an unfinished organization can't be dismantled because it has yet to be successful. Have you looked at these organizations up close? We Japanese are now being called into question for our organizational mentality. Scooping at the roots of the nuclear accident is not something special, even for companies, even for neighborhood associations, it's because “disease is everywhere”, it affects us all.

“Knowing Destiny” Thoughts of a50 years-old

Hayashi: The roots of the nuclear accident and the roots facing the organizational issues of Japanese society are quite similar. Is the FUKUSHIMA PROJECT developing a more in-depth organizational theory?

Kawaguchi: Yes. But also we consider the nuclear accident with an objective analysis, government and administration as principalelements in organizational theory, and we include ourselves.

I'm turning fifty. This is no longer the age to complain about society, it's the age where we assume responsibility. I should not have to shift the responsibility to someone.Since this same disease is spreading all over Japan, we have to consider this a personal problem, and if it's not solved from a familiar place, the world won't change. I think rather than a theory, this is a matter that must be understood by each and every everyone.

Hayashi: As far as concrete actions that we can do ourselves, you have talked about this website solution before, but is there anything else we can do?

Kawaguchi: You can use Geiger counters to your advantage more as a means against reputational damage control.You can upload measurements from a special devicefor your iPhone that can serve as a Geiger counter, and there are people who are making a hazard map using this information. As with the previous website mentioned, being able to visualize information willlead to a reduction of damage from inaccurate information. In addition, the Geiger counter, “Air Counter,” by S.T. is being sold for ¥9,800. It has no communication functions, but its affordable low cost has appeal. Of course, it's very effective for making hazard maps.

To take the idea one step further, Geiger counters could be distributed to tour conductors from overseas at Haneda Airport, free of charge and at the government's expense. I think the S.T. version of the device uses a semiconductor, so thecost could be reduced if it were mass-produced and become fairly inexpensive.

Tour guides get a Geiger counter while visiting the touristic attractions of Japan which have to be measured constantly. Once the data is uploaded and posted to blogs, it is a visualization of valid information. In addition, even if you return to your country, if there were a measuring device at hand, you would probably want to use it at home or at the office. Comparing Japan's level with those figures, people might post “There's not much of a difference, is there?” This could be an opportunity for Japan to regain its lost brand image of “safety.”

Hayashi: The credibility of public data and information has been greatly shaken, but it's a very interesting idea that tour guides from overseas would measure for us.

Kawaguchi: I think there's a different degree of trust between doing it yourself and data measured using the same Geiger counter. The tour guides and the people who read those blogs and their many peers who speak of safety will increase the sense of security. Because of this, the country would certainly receive a boost. The IT network has been on a personal level leading to today's information infrastructure environment, where the key has become bottom-up lobbying as starting point for increasing sympathizers.

In former times in Japan, problems getting energy and resources were underlying causes as the Pacific War began, but the insensitivity to information warfare became deadly and we will not forget the experience of defeat. Japan's fatal delay in “decryption technology” and “visualization by radar technology” is equivalent to the Geiger counters mentioned here and the functionality of the outrageous collection of articles. I think these can also be regarded as part of some kind of information warfare.

The most important things are the challenge of rubble removal and reconstruction plans that are right in front of us. On top of this, there are things that are difficult for the eye to see; for instance, even now the problem of ongoing loss of intangible “soft” assets, or about the damage of the Japanese brand. We need to raise awareness more, and I want to encourage you to contribute to it.

About Morinosuke Kawaguchi (1961);
Principal, Associate Director at Arthur D. Little (Japan) Inc.

Morinosuke Kawaguchi graduated from Keio University's Faculty of Engineering with a Bachelor’s Degree in Applied Chemistry and holds a Master of Science from the University of Illinois.

Before joining Arthur D. Little, he worked at the Kansai Research Institute, a technology consulting firm focusing on evaluating the marketability of each type of manufacturing technology, building technology strategy, setting IP strategy. Prior to becoming a consultant, he worked as an engineer at Hitachi Co. Ltd. for 15 years, where he gained experience in product development, as well as materials and production technology R&D for their OA equipment, household appliances, and heavy industry equipment businesses. Kawaguchi is Principal, Associate Directorfor Arthur D. Little (Japan) Inc., the global strategy consulting firm. His main areas of expertise include an array of strategic issues focusing on the electronics, precision instruments, machine and chemical manufacturing industries. He is an expert in Management of Technology (MOT), Intellectual Property Management (IPM), and Technology and Innovation Management (TIM) in various industries such as telecommunications, electronics and the car industry.

His first business book “Otaku de onnanoko na kuni no monozukuri” received the Nikkei BP BizTech Book Award in 2008. This book has been translated into Korean, Chinese, Thai and English. His second book “Sekai ga zessan suru -Made by Japan" was published in 2010.

He is one of the authors of the Fukushima project, Japan’s first crowd-funded book investigating and analyzing the accident which occurred in the Fukushima Daiichi Nuclear Power Station in 2011.