Rethinking Japan's Future

Ahead of International Women’s Day this month, the pioneer of “womenomics” reflects on Japan’s efforts to forge a brighter, more inclusive future.

From Japan’s vantage point, it’s almost impossible to see Italy. Not peering from atop Mount Fuji, but from its place far down the World Economic Forum’s 2022 report on the global gender gap.

Among the G-7 nations, five rank between 10th and 27th while Italy places 63rd. Japan is far back at 116th, just 30 spots off the foot of the table.

But it’s not for a lack of trying.

Kathy Matsui, the former vice chair of Goldman Sachs Japan who was credited with coining the term “womenomics,” says it’s important to acknowledge Japan’s overall progress in gender parity.

“There’s no denying we need more women in the Diet, more women managers, more women on boards, more women founders, but I don’t think that alone should negate the positive things,” the Club Member says. “We need to acknowledge the progress. The biggest progress is in the mind. This is now an economic imperative, as opposed to a nice-to-have issue.”

In some respects, Japan has pulled ahead of its peers. In 2015, the Japanese government passed a female employment promotion act that requires companies to disclose gender statistics and formulate plans to address gender gaps. They must also establish and reveal targets, such as the percentage of female managers they aim have to have in place by 2030.

“We don’t even have this rule in the US,” Matsui notes.

She and her colleagues at the American investment giant argued in their 1999 research that part of the solution to ending Japan’s decades-long economic stagnation lay in boosting female participation in the workforce.

The term womenomics later became equated with gender equality in Japan and was adopted as a key pillar of Prime Minister Shinzo Abe’s economic and social reform plan.

A 2019 follow-up report by Matsui and her team cited Organization for Economic Cooperation and Development (OECD) data showing Japan’s female labor rate at a record-high 71 percent, greater than that of the United States and the European Union.

While the figure marked a major increase from 53 percent in 1986, the percentage of women registered as part-time or “nonregular” grew from 32 percent in 1986 to around 56 percent in 2020, according to a government survey.

Matsui, who now runs a venture capital fund she co-founded in 2021, published a book in Japanese in 2020 with a title that translates as How to Nurture Female Employees. It contains useful tips for firms and corporate leaders on how to establish gender policies and the importance of asking women twice if they are willing to accept a promotion.

“There are differences in the genders,” Matsui says. “For instance, how women feel about promotion and performance reviews and work-life balance. Those are real. I think the onus of improving female representation in leadership falls on the organizations more than the government. Yes, you can have quotas, but the government can only do so much and can’t intervene in how a private-sector organization recruits, retains or promotes women. It ultimately falls on the responsibility of the leadership of an organization. And that’s why I wrote the book.”

Matsui spends much of her time in California (where she was born and grew up) but returned to Tokyo last month to take part in City-Tech Tokyo, a conference on sustainability, open innovation and startups. She says she’s optimistic about the future of women in Japan because the country has no choice but to change its approach if it wants to return to a sustainable growth path.

That growth, she points out, will come from labor, capital or improved productivity. But with the country rapidly aging (over 65s now account for nearly 30 percent of the population) and births at an all-time low, the challenges continue to pile up, with no clear solutions in sight.

According to Matsui, if people feel optimistic about their country’s future, the birthrate will automatically follow. But first, she says, the conditions for that confidence have to be created through more job opportunities, greater worker mobility and the embracing of people with unconventional skills. Diversity, she stresses, is the key.

“A lot of growth for many economies around the world is sourced from innovation. So where’s that innovation going to come from? In many cases, it tends to come from different perspectives, from different types of backgrounds,” she says. “But diversity is not limited to women. It’s non-Japanese people, it’s LGBTQ individuals, it’s different ethnicities and different socioeconomic and religious backgrounds. Think how much more vibrant innovation and creativity could be with diversity. The future could look very different.”