Japan may be rigid but it is not inefficient

David Pilling – The Financial Times

Copyright The Financial Times
April 24 2008
It is the men with red-glowing Darth Vader nightsticks who provoke particular scorn. These are the people, employed by Japanese construction companies, who stand by roadworks or building sites, waving pedestrians and traffic out of harm’s way. So vital is their function that sometimes they are replaced by plastic cut-outs.
Then there are the elevator ladies, with their doll-like mannerisms, who press the lift buttons, the shop assistants who work in pairs, and the hotel attendants with so much time on their hands they physically walk guests to the lavatory or cigar bar.
These are the examples regularly invoked to illustrate Japan’s supposed service-sector failings. While Japanese manufacturing is held up as world class, its service sector, which accounts for 70 per cent of output, is regularly lampooned as being years behind the efficiencies achieved in the US and even sleepy Europe.
The latest Organisation for Economic Co-operation and Development report on Japan, released this month, treads familiar ground. It states that “boosting productivity in the service sector is a key priority for promoting long-term growth” as the workforce ages and shrinks. While manufacturing labour productivity per hour increased from 1999 to 2004 by 4 per cent annually, keeping pace with the US, it notes, service-sector productivity lagged behind badly, rising just 0.9 per cent.
There is a problem with such analysis. You need only to read, in a previous finding, that Japan’s transport system is 30 per cent less efficient than that of the US to smell a rat. Common sense tells you that passenger transport is vastly superior in Japan, where tens of millions of people are moved daily at reasonable cost. The Shinkansen bullet train, for example, with 300 daily services between Tokyo and Osaka, makes the 552km journey in 2¬Ω hours with an average delay measured in seconds.
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