APO Top Management Forum: Management Innovation for Productivity Improvement in the Service Sector
2–3 March 2009, Kyoto, Japan
Opening Statement
by Mr. Shigeo Takenaka
APO Secretary-General
Ladies and gentlemen:
On behalf of the Asian Productivity Organization (APO), I would like to welcome all of you to the Top Management Forum 2009 in this beautiful, historic city of Kyoto. This forum is one of the longest-running APO project series. It was first held in 1985, and therefore has continued for more than 20 years. During that 24-year history, the forum has invited the top managers of business corporations from APO member countries to gain practical insights from Japanese best practices in a variety of pertinent areas.
This year’s Top Management Forum will examine “Management Innovation for Productivity Improvement in the Service Sector.” As you know, the Japanese manufacturing sector has been very competitive in the international market, but performance in the service sector has not been as impressive. In the manufacturing sector, Japan has many strong industries. The automobile industry boasts of Toyota, which attained the number one position in terms of the volume of production worldwide last year. The Japanese market share in the camera industry was close to 50% in 2007, while the Japanese share in video cameras exceeded 90%. There are many other similar cases in manufacturing.
However, Japanese standing among its competitors in the service sector is much less impressive. Taking the tourist industry as an example, Japan ranked only 30th in 2006 in terms of attracting foreign visitors. Even among APO member countries, Japan achieved only the number four ranking, attracting about 8 million overseas visitors. Malaysia, Thailand, and Singapore all surpassed the Japanese performance in tourism. In fact, the Malaysian figure was 2.5 times higher than that of Japan. In the same year, Bangkok’s Don Muang airport handled more passengers than Narita Airport, with 43 million passengers compared with 35 million for Narita.
In the field of higher education, Japan attracted roughly 100,000 foreign college and postgraduate students in 2008, mostly from Asian countries. In the same year, the USA attracted roughly 600,000 students from abroad, earning over $15 billion through their expenditures on tuition and living expenses. Sixty percent of the overseas students in the USA were from the Asian region.
Although Japan prides itself on its culinary tradition, it has not been successful in transplanting Japan-based restaurant chains to Asia and the rest of the world. All of the famous chains we have in Asia, including Japan, are McDonalds, Kentucky Fried Chicken, Starbucks, or other American brands. The Japanese have a lot of catching up to do in developing successful business models in the food industry in particular and in the service sector in general.
To promote the competitiveness of the service sector, in 2007 the Japanese Productivity Center for Socio-Economic Development (JPC-SED) took an initiative to spur the growth of service industries and set up an organization called Service Productivity and Innovation for Growth, referred to as SPRING. It also took into account the fact that the share of the service sector in the Japanese GDP had reached nearly 70% in the previous year. SPRING’s activities have included conducting research, holding symposia, and making policy proposals. I am sure that in the course of this forum a more detailed explanation will be provided by other speakers.
One of the activities that SPRING has emphasized is the establishment of the “300 High-Service Award” program starting from 2007. The idea is to give recognition to service companies that have successfully introduced innovations in their business. SPRING’s target is to confer the awards on as many as 300 companies but so far only 108 have been selected. However, those 108 companies were all very creative in developing original ways to improve their productivity. When I read the SPRING reports on their selection, I wished that the entire contents could be translated and distributed to the Top Management Forum participants for their perusal. Most of the companies listed are also SMEs, which makes the report even more relevant to APO participants. I am happy to report that the JPC-SED chose four of those 108 award winners and their representatives will be here to present their experiences to you. I am sure that you will learn a lot from their achievements.
As many of you know, in the last few years, the APO has been trying to devote more resources to the development of the service sector. In 2008 alone, we conducted two research projects and three study meetings on the service sector. We also organized two service sector-related study missions to the USA. In a departure from the past, we started selecting service-related enterprises for demonstration projects. The Mongolian telecom company project is one example, and the Thai project on healthcare is another. In addition, the APO organized two projects on customer relations management. I hope very much that you will be able to learn as much from this forum as from the APO projects I mentioned. Let us persist in endeavors to build up the service sector in the Asia-Pacific so that one day the APO region will not only be called the manufacturing center of the world but also the center of service excellence.
In closing, I would like to thank the Government of Japan, JPC-SED, and Kansai Productivity Center for their support in hosting the 25th Top Management Forum on this timely topic in Kyoto. My gratitude particularly goes to Mr. Junichi Ozawa of the Ministry of Economy, Trade and Industry, President Tsuneaki Taniguchi of the JPC-SED, and Mr. Kiyoshi Otsubo of the Kansai Productivity Center for their presence at this opening session.
Thank you.
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