- [Peter] Japan. A country often seen as
a land of innovation. From bullet trains. To pioneering robotics. - I will now register
the guest's information. Please press the button to begin. - [Peter] It's little wonder
the country is seen by many as being at the frontiers
of modern technology. - Your check-in is now completed. - But underneath the surface lies a Japan that is also
fiercely traditional. And, in some, places that's
holding back the economy. Here's why Japan is falling behind. Japan used to be the third
largest economy in the world, but last year it lost
that title to Germany. For decades, the country has grappled with slow economic
growth and productivity. Part of that reason is their
dependence on older technology. Hideki Arami started
working for his father at this hanko, or stamp shop in 1992 and took over the business 14 years later. This is a hanko. And it's often used in Japan in place of a signature, for example, on contracts or invoices or other official documents. For centuries, the
stamps have been required to prove one's identity. Even today, they're often
used in everyday situations like receiving a parcel
or opening a bank account. (Hideki speaks Japanese) (Hideki speaks Japanese) - However, these types of practices can make businesses less productive. Japan's productivity is
only about two thirds of the U.S. level, about three quarters of
the level in Germany. So it's quite low, and has stayed that way for many years. There's always a difficulty
striking that balance between the most efficient, the most productive way of doing things, and the traditional and widely
loved way of doing things. The result? A country rich in culture
but resistant to change. - There's this old joke. How do you know that somebody is working for a Japanese company? Well, when you look at the name card, it still has the fax number. - Jesper Koll, an economist who has lived a Japan since 1986, says it's more than just the technology that's weighing Japan down. - The Japanese have become so pedantic, have become such sticklers for precision, that if the hanko, if the seal touches
the line where it's on, then it's invalid, and you have to redo the
entire form all over again. And that's ultimately what's so beautiful and so infuriating about
the way Japan works. Because it is so process-oriented. - In the years since the pandemic, the government has made
it easier, in some cases, to go without hanko, perhaps a written signature
or no signature at all. But still unofficial
documents that we sign, for example, here at
The Wall Street Journal, Dow Jones Japan's office, we still use hanko quite frequently. And hanko is not the only old technology still used in Japan. In some offices, people
still use the fax machine, instead of emails, to send important documents. - Japan was very, very good at being an early adopter. Because if you look at the 1970s, if you look at the early 1980s, obviously, you came up with the Walkman, which completely revolutionized the way mankind experiences music. But sort of from the
analog to the digital, that transition never really happened. - [Peter] In some ways, Japan has not changed
much since the 1990s. Many employees still work for one company for most of their careers. Wages across Japan have stayed more or less
the same for 30 years, although they are beginning
to rise this year. Many Japanese work long hours, especially in certain workplaces such as elite government ministries. Yet productivity is low. - Japan is incredibly labor-intensive. Do yourself a favor and go
into a Japanese Starbucks. And where in the United
States there is two people taking the order and doing the cafe latte with the extra shot, here in Japan, there's
at least five people. This is one of the simplest
concepts in the world. Because you just take output divided by the number of input. And so, obviously, fewer people is better. - [Peter] Japan's rigid work culture still often prioritizes
conformity over efficiency. But that may be about to change, spearheaded by Japan's Digital Minister. He wants the country to move
on from obsolete technologies. - For some government procedures today, you're still required
to submit application in floppy disk. Floppy disk, yeah. So I had to declare war
on floppy disk in Japan. - [Peter] Younger
Japanese are more willing to rewrite the rules, work reasonable hours, and take risks. They're also more willing
to adopt new technologies. - So there is a big generational element, but even with the digital alternatives, it's the pedantism of
the form over content. That's why Japan has great difficulty in being an early adopter or in adopting modern technology, digital technology in
a fast and speedy way. - [Peter] Japan has always marched to the beat of its own drum, embracing modern technology but retaining its own culture and charms. But for Japan to lift its economy, it may need to chisel away
some parts of its history to keep growing in the future. (soft electronic music)
