The Economist – Shinichiro Yano

The Economist 3/30

I like reading the Economist. Thanks to this journal, I can know about what is going on the world. I will write what I am interested in from this week’s the Economist.

India Economy : Nobody doubts that China has joined the ranks of the great powers. But, nevertheless its huge potential, India does not show their strength so much. In my opinion, as far as soft power is concerned, India is one of powerful countries. While China is aging rapidly and worker’s population will decrease, India has relatively young and also growing. However, they have also several problem, such as the right of women, unstable periphery. I would like to know more about this country which can become a great power undoubtedly.

Global Warming : Some Recent several terrible natural disasters may remind us Global warming may be one of reason. But some scientists are arguing that man-made climate change is not quite so bad a threat as it appeared to be a few years ago. It is difficult to judge whether this is true or not. However, we have already started several projects and we could not go back to. The world still needs to deal with it.

Heathrow Airport : Last year, when Britain’s government was being lobbied to revive controversial plan to expand Heathrow airport. For me, surprisingly, having predicted just before the financial crisis that 495m passengers a year would want to use Britain’s airports by 2030, it now puts the potential damand by then just 320m. More than 100m would pass through British airport, however, we can tell how hard the financial crisis damage of this area. Among the developed countries, the number of passengers is expanding. I actually don’t understand the relation between the number of passengers and economic development. Why the number of passengers keep growing? Especially like in Britain, Japan, there seems to be few chance to grow.

The Economist give me the idea what I would like to know next. These topics are interesting. I will survey further.

Adult adoption in Japan.

This is from the Economict article : Keeping it in the family.

http://www.economist.com/news/asia/21567419-family-firms-adopt-unusual-approach-remain-competitive-keeping-it-family

I didn’t know this fact. That’s why I believe that reading the Economist is important for me. I thought the adoption in Japan is rare. But this article says the adoption is common in Japan. Why? The family firms adopt to remain company. But is adoption good for running companies?

ANDREW CARNEGIE, a 19th-century tycoon, famously said that inherited wealth “deadens talents and energies”—

For me, this is understandable, usually family control company is not good.As the proverb in Japan says, 1st generation owner establish the company, works hard to stabilize the company. When 2nd generation owner inherit the company, he works well because he knows the hardship 1st genaration owner goes through. But 3rd generation owner doesn’t know their hardship and tends to bring his an idealized theory into the company, and crushes the company.

But, only Japanese seems to be opposite to ANDREW CARNEGIE believed.

A forthcoming paper* in the Journal of Financial Economics finds not only that inherited family control is still common in Japanese business, but that family firms are “puzzlingly competitive”, outperforming otherwise similar professionally managed companies.

So. inherited family control is common in Japan.
And puzzlingly competitive.

Japan boasts some of the world’s oldest family-run businesses, and many family firms—Suzuki, Matsui Securities, Suntory—break the rule of steady dynastic decline. So how do Japanese firms do it? The answer, says the paper, is adoption.

Running the company, they use the adoption.

Last year more than 81,000 people were adopted in Japan, one of the highest rates in the world. But, amazingly, over 90% of those adopted were adults. The practice of adopting men in their 20s and 30s is used to rescue biologically ill-fated families and ensure a business heir, says Vikas Mehrotra, of the University of Alberta.

This number is totally new to me, is much bigger than I expected.

Frustratingly, the paper’s research stops in 2000. Mariko Fujiwara, a sociologist, says more Japanese parents are now willing to accept the end of the family line. But she adds that Japanese marriages will always have cultural and legal implications because the future of so many businesses depends on who takes them over.

Now I know a lot of companies are looking for their successor. They are relatively small, and now have a difficulty to find their successor. These company usually has high technology in certain sectors. But the problems are decreasing workers population, in the number of children, job mismatching with young people. We Japanese are going to loose diversity. We need to study and help important companies.

The impact of China’s one-child policy.

This is from the Ecomonist article : Peak toil.

http://www.economist.com/news/china/21570750-first-two-articles-about-impact-chinas-one-child-policy-we-look-shrinking

Now, Japanese economy is suffering from the number of working-age population. That will happen in Korean and in the other Asian countries. But, because of its largeness, the problem of China is on different level. What will happen to China’s economy and World economy in the interim?

ON JANUARY 18th the National Bureau of Statistics (NBS) announced that the number of working-age Chinese shrank last year by a total of 3.45m. In the slow-moving world of demography, that is a big turning point.

One may see the power of economy based on GDP. The shrinking of the working-age population will put downward pressure on GDP directly. Japanese is suffering from decreasing the number of working-age population, even though the growth rate of GDP per person has been the best in developed countries for recent 10 years. To keep the growth rate of GDP, the working-age population needs to work harder.

Once all its exceptions are taken into account, it permits about 1.47 children per woman. If the policy were relaxed dramatically, would China’s population explode again?

Many Chinese women would not have a second child even if they were allowed to.

Once decreasing the population has started, it is difficult to come back. It is because that the population of women decrease and the more developed economy prevents the family from having 2nd child. Even the one-child policy in China would release, 2nd child costs too much for the middle-class family.

The shrinking of the working-age population will put downward pressure on the saving rate and upward pressure on wages, as coastal factories have already found. According to Mr Laurent, the number of 15- to 24-year-olds will shrink particularly quickly, dropping by 38m, or 21%, over the next ten years.

No country has never experienced this rapid shrinking of working-age population, which will put downward pressure on GDP in Chin directly. So China need to focus on GDP per person. As the Proverb goes “quality over quantity”.

As they age, migrants may no longer be suitable for factory jobs that require dextrous fingers, or for some construction work, which requires a strong back. But as Yao Yang of Peking University points out, these older workers could take over service jobs in supermarkets and health spas or as security guards which are now done by youngsters. That would free young people to man China’s assembly lines.

The secret of China’s success lies not in the workers it adds, but in what new capital, technology and know-how adds to its workers.

The memory and sleep.

This is from Economist article : Memory, Remenber, remenber.

http://www.economist.com/news/science-and-technology/21571121-new-understanding-emerging-memory-and-forgetfulness-remember-remember

The recent development of study of brain is fascinating. This article is about new understanding of memory and forgetfulness.

The memory is an evolved structure with a job to do. The job is to preserve its owner and help him or her reproduce. Perfection is not required, only adequacy.

Selective forgetting of useless and selective remembering of useful, both are important. Much of this selecting takes place during sleep, there are two paper in ‘Nature Neuroscience’.

1. Robert Stickgold of Harvard University and Matthew Walker of University of California, Berkeley.

They proposed that the process of sleep acts as a form of triage, first choosing what to retain, and then selecting how it will be retained. And they founded sleep does help people discard information they have been told to forget. The more frequently someone experiences waves of brain activity known as sleep spindles, the more his brain scraps items that it is supposed to.Rather than forget passively, then, the brain seems to shed memories actively!! Sleep also helps guide memories intended to be retained down particular paths, which means remember as the patterns not the facts.

2. Bryce Mander and Matthew Walker of University of California, Berkeley.

They compared the process in the young and the old, further into the matter of forgetting.18 people in their teens and 20s, and 15 in their 60s and 70s, were taught nonsensical word pairs, tested on immediately, and then tested again after a night’s sleep. The oldsters scored worse than the youngsters in the immediate test, which is not surprise. What was notable was that, after the sleep, oldster’s brains seems to retain even less material than youngsters’. And those who retained the least had slept less deeply.

Points.

1. Our brain selects what information do we need, and then discard the rest during sleep.

2. Sleep helps us remember as the patterns, as oppose to the facts.

3. The older are worse at immediate memory test, in addition to this, the older are worse after night sleep.

4. Bad sleep helps poor memory.

It may be that the inability to form new memories is not a bug, but a feature. However I would say.

Live the present, study today, tomorrow is too late!!