LastUpDate: December 19, 2018

【Keynote Speech 2】
Global Talent Now from the View of Companies

Chairman, Chuo Electric Works Ltd./ Osaka
Hatano Yoshio

1. Introduction

    Thank you for the introduction. My name is Yoshio Hatano. I’m from Chuo Electric Works Ltd. Today, I will talk about my experience. Although there are many participants from large companies, I believe that small and medium-sized enterprises (SMEs) are propping up Japanese business and the economy. Currently, SMEs are also undergoing globalization and recruiting many global talents. I would like to share my experience as one of these examples.

2. Situation of Japanese Companies

    About 99.7 percent of Japanese companies are SMEs. Moreover, about 76 percent of Japanese workers work for SMEs. The fact that there are so many SMEs reflects that the key to the economic recovery is the reinvigoration of SMEs.
    SMEs are also expanding their business overseas. Our company currently has an office in Thailand and previously had an office in Shanghai in China. Now, not only large companies but also many SMEs are looking for global talents.
    Large companies are responsible for 50 percent of Japan’s gross domestic product (GDP). To put it the other way around, SMEs are responsible for the remaining 50 percent. In other words, Japanese manufacturing requires SMEs’ talents. Furthermore, while it is said that the average rate of return for large companies is about 4 percent, there are many SMEs with profit margins of 10 percent.
    There are many SMEs that have their own unique products or technology. They, of course, have their global presence and expand their operations to international markets.

3. World Situation

    In 2003, developed countries accounted for about 80 percent of the world’s GDP and developing countries accounted for about 20 percent. However, according to the outlook for 2015, the ratio for developing countries will be 38.8 percent and they’ve come to account for about 40 percent of the world’s GDP. Due to ASEAN’s economic liberalization, if 600 million people move freely within the area in the future, the economic tide will drastically change. Asia, including India and China, is a large market with a population of 3 billion. About half of the world’s markets are located in Asia. In Indochina, there are the East-West Corridor and the Kunming-Bangkok Expressway, and railway construction will begin, so logistics activities will drastically change. The roads and railway traversing the area will reduce the travel time of two weeks to three days in the near future.
    The average age of citizens of most member countries of ASEAN is in the twenties. These countries are undergoing rapid economic development and will continue to spur their development in the future. Meanwhile, in Japan, the average age of citizens is 46 years old, and one third of citizens are aged 65 or older. The population of 18-year-olds in Japan is rapidly declining and fell to 1.18 million in 2014, almost half of its peak. It is expected to continue to decline further in the future.

4. Association of SMEs

    Currently, I serve as an adviser to the Osaka Doyu-Kai (Association of SMEs). In the past, I was the representative director of the association for eight years. Osaka Doyu-Kai sets three goals: “To create a good company,” “To be a good manager,” and “To improve the management environment surrounding SMEs.”
    The National Conference of the Association of Small Business Entrepreneurs organizes prefectural associations of SMEs, and consists of 44,000 member companies. I serve as a representative of the liaison council for business collaboration promotion of the National Conference of the Association of Small Business Entrepreneurs. Currently, I am working on collaboration mainly with SMEs in Thailand together with Japanese companies going to Thailand and its neighboring countries.
    I give lectures at various universities and am always asked by students: “What makes a good company?” The minimum requirement for a good company is to always turn a profit. A capital adequacy ratio of 25% or more would be one of the conditions for a good company. The higher the capital adequacy ratio is, the better the company would be. “Pay as you go” management would also be one of the conditions for a good company. Even if the company has debts, if it has more amount of cash and deposits than that of debts, that would be all right.
    Having more than 10 valued clients would be another of the conditions for a good company. Our company has more than 10 clients. Now is the time when large companies go bankrupt, so from the perspective of diversification of risk, it is recommended to have more than 10 valued clients. A company to which finance institutions positively lend money at low interest would be a good company.
    Business managers need to be trusted by everyone, including valued clients and suppliers, but above all, it is very important for them to be trusted and respected by their employees. Whether they run things their way or otherwise, human factors make up a significant proportion.
    It is also important to be involved with local contribution activities and education of young people.

5. Chuo Electric Works Ltd.

    Our company was established in 1930 with a capital of 10 million yen. The company has 52 employees. Of them, 42 were university graduates and 6 were graduate school graduates. We take part in exhibitions overseas and have many visitors from abroad. About 20 or more MBA students and a professor from DePaul University in Chicago visit our company every year.
    Our company is developing various systems. In the field of aircraft, we have developed test systems for Honda’s business jets, Boeing 787 and MRJ (Mitsubishi Regional Jet). Furthermore, we have been involved with system development in other various fields, such as automobiles, electric power, railways, Shinkansen, and semiconductors.
    We have been involved with an increasing number of system developments in the field of medical equipment. We have developed an MRI control system. Almost 100 percent of large hospitals in the world use the MRI control system developed by our company. The name of the medical equipment company is used for the system and our company’s name does not appear. However, in reality, we have been creating the important parts of this medical equipment for more than 20 years.
    We have more than 10 main client companies. All of them are listed on the first section of the Tokyo Stock Exchange. Except for one company, we are doing business with them by opening a bank account directly.
    We are in collaboration with the University of Tokyo, Osaka University, Kobe University, and other universities. We regularly give a lecture on a yearly basis at Osaka City University, Kwansei Gakuin University, Osaka Sangyo University, Kinki University and Hannan University.

6. Recruiting human resources every year

    I would like to tell you, especially those from companies, that even SMEs should recruit human resources every year. Regular recruitment is absolutely important. If you become busy and if you are not employing people, you can’t do the job. If you get a big job, but if you decline it because of labor shortage, then your company won’t grow any more. Training personnel requires five years. However, if you are at least hiring new employees, even though their training requires five years, staff levels increase and they will eventually be capable of doing the job. Moreover, regular recruitment will serve as a liaison with universities.

7. Action and humanity

    You don’t need to be concerned about difference in ability. Life is not determined by your ability. It is determined by your energy and power of action. The more you move, the more you get to know people, and the more opportunity you can have for networking. The network you build with your actions will open a completely different, new vista of your future.
    “Humanity” is also important. Being honest and humble will make you grow personally. And do not stop trying. Ordinary people usually try to make an effort twice, or three times at most, and give up effort. I’m one of them, but people called “hard workers” will never give up. They will try five times, six times, or even 10 times. People called “geniuses” will continue to try until they succeed. The Japanese Nobel laureate in physics said “I got this award because I kept trying.”

8. Frendship will lead to future

    It is also important to make more and more friends in your school days. I know there are many people who get nervous in public, who hesitate to talk to people and who hate socializing and have only a few friends. But think again. That won’t do. To deepen your experience of your life, I always tell students to make 100 friends in their school days. To make 100 friends, you need to actively speak to someone and try to build a network. If you can build a network, this will help you wherever you go in the future. Your friendship will lead to your future. If you speak to your classmates, as a business person in interest, after graduation, they might make a shrewd guess as to why you speak to them now or what the catch is, because you didn’t speak to them at school. I communicate with people around the world by hugging. Human relationships come from your own actions. The more friends you have, the more information you can receive. This may make you realize your secret talents that you haven’t noticed yet.


    Our company is a small company, but many talented people wish to join us every year from good universities, including Osaka University, Kobe University, Hiroshima University, Okayama University of Science, Kansai University, Kwansei Gakuin University, Doshisha University and Ritsumeikan Universeity.
    Graduates of the Graduate Schools of Osaka University and Kobe University were international students from China. We’ve been accepting interns for 15 years, and recently, international students from Laos and Saudi Arabia joined our internship program.
    One of the most unique examples is a career bureaucrat of the Ministry of Economy, Trade and Industry who passed the Type I national civil service examination and is in the second year of his career. He came to the internship to be kaban-mochi (a Man Friday). He carried my bag with my PC and followed me around everywhere I went. When I sometimes joined a study session held by Osaka Doyu-Kai in the evening, he followed me there and waited until it finished. He followed me on my business trips within the country.

10.Hiring International Students

    The first non-Japanese employee our company hired was an American, but the company was very reluctant to hire non-Japanese. At that time, we hadn’t launched overseas operations, and we were unsure what we can do with them and what positive effects we could expect from hiring non-Japanese employees. However, once we worked with him, we understood well that there is no difference between Japanese and non-Japanese. After all, we are all human beings.
    The second time was when we hired three Chinese students eight years ago. Our company changed from that point. At that time, we were marketing to China. Since the company hired the Chinese students, we go to China on business almost every month.
    Currently, we have five non-Japanese staff members, including Chinese. Since we have visitors from various countries, global employees are very supportive for us.   

11.Positive International Students

    International students are very positive. Many of them are active because they wish to succeed in Japan or start a business in their home country to become a bridge between Japan and their home country, so they do surprisingly well on an aptitude test. In terms of the grades on the aptitude test, all Japanese students joining us are behind.
    At one point, we were hiring only international students. At that time, I was the president of the company, and was told by our senior staff “President, if you continue to hire non-Japanese employees, our company will be taken over by them. Please consider hiring Japanese people.” Left with no choice, I was forced to give Japanese students some advantages, and then we were finally able to hire Japanese students. That is how many high-level international students there are.
    International students are trying to get used to Japanese society. They are trying to learn Japanese. Even if they studied Japanese at a language school, they can’t understand subtle nuances in Japanese. My wife is the chief of general affairs of our company, and she plays the role of their mother in Japan to teach them Japanese strictly. Thanks to this, Chinese employees now speak beautiful Japanese that’s as good as, or even better than, our Japanese employees’.

12.What Is Important Is Human Relations

    I tell international students who joined our company, “I am your father in Japan and the chief of general affairs is your mother in Japan. You can talk to us about anything as if we were real family.” We hold a wine party at home several times a year. We invite our young employees and ask international students to join the party. While we are continuing to do this, they give us a small present on Mother’s Day and Father’s Day. Even if we forget, they give me a present as a group. I really appreciate it.
    I listen to all of their problems, from love to marriage. I believe this is why they can make their marriages work. Moreover, if their parents come to Japan, I always try to go out for dinner with them. If I visit their home town on business, I always try to see their parents to talk to them as much as possible. I believe that human relations are really important.   

13.Anxiety about Being a Working Adult

    International students feel anxiety about being a working adult. However, it’s nothing to worry about. All Japanese and non-Japanese students feel anxious about being a business person. That’s that.
    If you are concerned about whether things work out with a Japanese company, you can come as an intern to see for yourself what a Japanese company is like. This is very important. 

14.What Is Important Is to Act

    Two weeks ago, I went to Las Vegas. When I tried to go to the airport from the hotel in Las Vegas, I saw there was a long line waiting at the taxi stand. Taxis didn’t arrive and I thought it might take more than an hour to get a taxi. I felt it was no use waiting for one any further. So I asked a doorman of the hotel whether the limousine parked in front of the hotel could drive me to the airport. Unexpectedly, it was available. I suggested to a nearby American to share the limousine with everyone. In the end, we shared the limousine with eight people and split the bill. I spoke to another American who sat next to me in the limousine. He asked me if I was Japanese and I answered yes. Then he spoke to me in Japanese. He told me that he had been in Japan 10 days before for his daughter’s wedding and his wife taught English at Panasonic so she spoke Japanese better than he. I told him that I know Mr. Masayuki Matsushita, Vice Chairman of Panasonic Corporation, quite well. He said “Wow” and we exchanged business cards. When we parted, he said “Come to see me.”
    I also become friendly with people sitting next to me on an airplane. This is a picture of the executive director of Sojitz Corporation. We still stay in touch with each other.
    This way, if you want to make friends, you can make friends anywhere. What is important is to be always “acting.” 


    As implied by the word “ichigoichie” (treasure every encounter, for it will never recur), I always hug people I encounter anywhere.

 (pointing at a power point slide on the screen)

    This is a Russian person, the first foreign person I hugged, more than 10 years ago.
    This is a president of a Japanese company in Poland and staff members there. Look at their smiles after hugging. Their smiles are wonderful.
    This is a souvenir shop I stopped by when I visited Poland. Their smiles are wonderful. At first, they stared at me quizzically, but after I hugged them, five women there smiled and approached me asking “Who is this present for?”
    This is a photograph taken at a hotel where I stayed when I visited Vienna. I hugged a person over the counter. It was two-night stay, but whenever I passed in front of the counter, she was there and asked me “Where are you going? Is there anything I can do to help?” So I asked her how to get to a restaurant. She drew a map by hand and wrote down the best dish at the restaurant. This is “collaboration.”
    JICA’s trainees visit our company once a year. Previously, when the trainees visited our company, the actress Norika Fujiwara came to cover this and I was interviewed by her. Of course, I hugged her.
    This is a photograph I took when I was invited to Nanjing by the Nanjing government. When I went to a restaurant in Nanjing, people at the next table were very excited and enjoying themselves. I spoke to them to see what kind of people they are. I found that they happened to be Chinese students who had been studying at Kyoto University. I instantly became friendly with them. After dinner, when I suggested to my Japanese companions that we go Dutch, I was told by a staff member of the restaurant that the people at the next table paid for us. Nanjing people who we had met for the first time on that day bought us dinner. I thought how wonderful “collaboration” is. You can collaborate with anybody, anywhere. It is important to “act” positively.


    In any and all circumstances, the most important things are “humanity” and “action.” The situation is the same with companies. As the saying goes, “Inu mo arukeba bo ni ataru,” literally translated as “the dog that walks around will find a stick,” meaning, “you will have unexpected good fortune when you take action.” Likewise, the president who walks around will find a job. Unless for some extraordinary reason, a president who just sits within the company is not a good president. Only after he/she moves around, he/she can receive information and explore every avenue.
    I often go to parties. If you go to a party, you can find three groups: a group of people who are having lively conversations with merry voices; a group of people who are eating by themselves; and a group of people who are telling gloomy stories in a negative tone. Which group do you join? Are you eating by yourself? That won’t do. If you join the group of people who are having lively conversations with merry voices, you can find many tips and clues for business, life and humanity. “Laugh and be fat.” If you bring any tips and clues home with you, then your life will change drastically.
    I joined our company to succeed my father when it was a small company with five employees. Although it was nothing special at that time, I hoped to create something that would be the best in the world. Now, we have several things that we think are the best in the world. “Your dream can come true if you believe in your dream.” Our company has grown to become that kind of company. Currently, our job application-to-opening ratio is about 30 every year. So many people want to join the company.
    I would like to end my presentation today by saying that I hope you have your own big dream and act to make it come true. Thank you for your attention.

【Comment】 (Coordinator: Ota Hiroshi)

    In terms of economic activity, from the perspective of human resource production, Asia is now the center of this era. More than half of the world’s international students are from Asia. While Japan is in a geographically favorable location, it is not taking advantage of this when it comes to recruiting talented people (international students) from overseas, and is facing the challenge of how to best handle them.
    In Mr. Hatano’s presentation, he introduced us to some examples of how to effectively recruit international students. However, unfortunately, there are few cases of small- and medium-sized enterprises in Japan hiring international students. There are various ways of hiring and making good use of international students, depending on the country they are from. In some cases, students may like the Japanese way of socializing without separating private and public matters. In other cases, it may be important for them to find what they can contribute to the company they work for. It could be said that divergent ways of thinking and awareness of the job hunting situation of international students in Japan may not be understood well.
    Moreover, there are not enough successful international students to serve as role models. To facilitate the hiring of international students in the future, we first need to better understand their career paths, including cases where they eventually leave their employer, or leave their employer and return to their home country, but continue to work in a Japan-related position.