Venture capitalist, attorney and educator Michael Korver opened SPRIE's spring seminar series on new post-bubble patterns of entrepreneurship in Japan. Korver, a managing partner in Japan's Global Venture Capital, spoke on how he has seen venture capital evolve there in light of his own firm's experiences.

Korver argued that despite a number of problems surrounding the venture capital situation in Japan--a surplus of capital overwhelmingly from large entities in the financial services sector, low perceptions of entrepreneurial activity, and a lack of "high growth expectation" entrepreneurial activity--Tokyo offers a number of advantages to entrepreneurs, perhaps the most significant being Japan's early-adopter, high-consumption domestic market.

"Tokyo is... the perfect incubator for new businesses, ...but the Japanese leaders do not understand that the future of Japan... is absolutely dependent on creating entrepreneurial innovation."
-Michael Korver

He conceded that things have gotten worse since 2006: the backlash from the Livedoor/Takafumi Horie scandal and the resulting drop in the stock market, a 20% withholding tax on investment in Japan from foreign sources and the Ministry of Finance's regulation of industries that use limited partnerships like the venture capital industry have all added up to a drying-up of VC investments and a drop in IPOs in Japan.

Nonetheless, Korver will continue to have Tokyo as his base of operations. "Tokyo is... the perfect incubator for new businesses, ...but the Japanese leaders do not understand that the future of Japan... is absolutely dependent on creating entrepreneurial innovation."

In recent years, Japan’s traditional employment structure has begun to shift. Historically in Japan, employees expected to work for the same organization throughout their professional lives, gaining experience and garnering respect as they grew in seniority. Known as “lifetime employment,” this occupational approach typified the Japanese professional experience. Today, though lifetime employment still persists in many companies in Japan, more and more workers, many of them recent graduates, are changing jobs in search of better prospects. The companies that hire this new breed of employee are looking for recruits who have the requisite experience, but lack the expectation of respect and promotion simply by virtue of their years of service. In the Tokyo metropolitan area in particular, a number of companies have embraced this short-term employment system.

What are the differences between Japanese who change jobs and those who work in the same place all their lives? In 2005, the Social Stratification and Mobility Study (SSM Study) provided new perspective on the changing face of Japanese job mobility. A large-scale survey, social survey professionals have conducted the SSM Study every ten years since 1955. This article is based on the fourth release data (November 2007 version), which was prepared by the 2005 Social Stratification and Mobility Study Group.

Several patterns emerge in the SSM Study data. First, much depends on when an employee first began working. Those (male) workers who started their first job after 1950—especially during Japan’s post–World War II rebuilding phase or the economic bubble of the early 1990s—are much more likely to change jobs than those who started their first job before that year. In particular, those employed during the rebuilding era have tended to change jobs multiple times.

Second, Japanese employees behave differently depending on the size of the enterprise at which they work. At governmental organizations or large enterprises with more than one thousand employees, for example, workers who started their first job there tend to stay there. As the organizations diminish in size, this tendency likewise decreases. At mid- or small-size organizations with fewer than three hundred employees, workers who started their first job there tend to change their job earlier than their counterparts at bigger employers.

Third, with respect to job type, white collar professionals tend to keep their first job, whereas blue collar workers change job more often. More specifically, there is little job movement, for example, among those employed in educational or research services. However, in mining, transportation, manufacturing, sales or wholesale businesses, legal and accounting services, communications, and advertising, workers regularly change job due to long hours coupled with low income.

Fourth, in terms of educational background, workers who have attended college, university, or graduate school often stick with their first job. Workers with high school or junior high school levels of educations are more likely to move on from their first job within first few years.

Why do Japanese workers change jobs? The SSM Study indicates that, among those moving from their first to their second job, 33 percent did so for a “better” position. Ten percent made the switch because they were dissatisfied and wanted a change, or because they were either laid off or the company went bankrupt. The Study also shows that the 33 percent who sought better work also tended, in making such a change, to increase both their income and job prestige, and to affiliate with larger organizations. Many workers who secured better jobs were more educated; the 10 percent who cited job dissatisfaction as the reason for their move tended to be less so. More detailed analysis of the SSM Study reveals that more than 50 percent of those who moved on to a second, better job not only felt that they were better off, but also that they actually joined a smaller organization. This data point shows that a “better” job in Japan does not always mean working for a big, famous company.

The SSM Study considered other important elements of the job-changing experience, including the patterns of change as they relate to job prestige and autonomy. People who moved from large companies tended to be forced into smaller companies, whereas workers from mid- or small-size companies (fewer than three hundred employees) often remain in that size bracket. Most workers experience increased job prestige when they change jobs; this is especially true of educated workers who change job after building up ten or more years of experience at their first job. The exception to this pattern is white collar employees, whose prestige is high from the very first job they take and therefore less likely to rise significantly higher.

The SSM Study showed that white collar workers—and, interestingly, particularly those working in sales—enjoy enhanced autonomy after their job change. Generally, job changes result in “better,” more autonomous employment and higher prestige, if at a smaller organization. People who change their job, therefore, tend to be more motivated by job prestige and increased professional autonomy than by the size of the employer, or even the income level.

Job mobility in Japan is still in an early phase. In the country’s large companies, educated white collar workers—those who theoretically possess the greatest potential for upward job mobility—still tend to stay with the same organization for most of their professional lives. Those relative few who do move report increased satisfaction with their autonomy and/or their job prestige, even in cases where they join a smaller company or take a pay cut. In an effort to move beyond traditional lifetime employment, the Japanese government now encourages the job mobility, but workers have yet to embrace the system on a large scale.

Nuclear weapons today present tremendous dangers, but also an historic opportunity. U.S. leadership will be required to take the world to the next stage -- to a solid consensus for reversing reliance on nuclear weapons globally as a vital contribution to preventing their proliferation into potentially dangerous hands, and ultimately ending them as a threat to the world.

Nuclear weapons were essential to maintaining international security during the Cold War because they were a means of deterrence. The end of the Cold War made the doctrine of mutual Soviet-American deterrence obsolete. Deterrence continues to be a relevant consideration for many states with regard to threats from other states. But reliance on nuclear weapons for this purpose is becoming increasingly hazardous and decreasingly effective.

North Korea's recent nuclear test and Iran's refusal to stop its program to enrich uranium -- potentially to weapons grade -- highlight the fact that the world is now on the precipice of a new and dangerous nuclear era. Most alarmingly, the likelihood that non-state terrorists will get their hands on nuclear weaponry is increasing. In today's war waged on world order by terrorists, nuclear weapons are the ultimate means of mass devastation. And non-state terrorist groups with nuclear weapons are conceptually outside the bounds of a deterrent strategy and present difficult new security challenges.

Apart from the terrorist threat, unless urgent new actions are taken, the U.S. soon will be compelled to enter a new nuclear era that will be more precarious, psychologically disorienting, and economically even more costly than was Cold War deterrence. It is far from certain that we can successfully replicate the old Soviet-American "mutually assured destruction" with an increasing number of potential nuclear enemies world-wide without dramatically increasing the risk that nuclear weapons will be used. New nuclear states do not have the benefit of years of step-by-step safeguards put in effect during the Cold War to prevent nuclear accidents, misjudgments or unauthorized launches. The United States and the Soviet Union learned from mistakes that were less than fatal. Both countries were diligent to ensure that no nuclear weapon was used during the Cold War by design or by accident. Will new nuclear nations and the world be as fortunate in the next 50 years as we were during the Cold War?

Leaders addressed this issue in earlier times. In his "Atoms for Peace" address to the United Nations in 1953, Dwight D. Eisenhower pledged America's "determination to help solve the fearful atomic dilemma -- to devote its entire heart and mind to find the way by which the miraculous inventiveness of man shall not be dedicated to his death, but consecrated to his life." John F. Kennedy, seeking to break the logjam on nuclear disarmament, said, "The world was not meant to be a prison in which man awaits his execution."

Rajiv Gandhi, addressing the U.N. General Assembly on June 9, 1988, appealed, "Nuclear war will not mean the death of a hundred million people. Or even a thousand million. It will mean the extinction of four thousand million: the end of life as we know it on our planet earth. We come to the United Nations to seek your support. We seek your support to put a stop to this madness."

Ronald Reagan called for the abolishment of "all nuclear weapons," which he considered to be "totally irrational, totally inhumane, good for nothing but killing, possibly destructive of life on earth and civilization." Mikhail Gorbachev shared this vision, which had also been expressed by previous American presidents.

Although Reagan and Mr. Gorbachev failed at Reykjavik to achieve the goal of an agreement to get rid of all nuclear weapons, they did succeed in turning the arms race on its head. They initiated steps leading to significant reductions in deployed long- and intermediate-range nuclear forces, including the elimination of an entire class of threatening missiles.

What will it take to rekindle the vision shared by Reagan and Mr. Gorbachev? Can a world-wide consensus be forged that defines a series of practical steps leading to major reductions in the nuclear danger? There is an urgent need to address the challenge posed by these two questions.

The Non-Proliferation Treaty (NPT) envisioned the end of all nuclear weapons. It provides (a) that states that did not possess nuclear weapons as of 1967 agree not to obtain them, and (b) that states that do possess them agree to divest themselves of these weapons over time. Every president of both parties since Richard Nixon has reaffirmed these treaty obligations, but non-nuclear weapon states have grown increasingly skeptical of the sincerity of the nuclear powers.

Strong non-proliferation efforts are under way. The Cooperative Threat Reduction program, the Global Threat Reduction Initiative, the Proliferation Security Initiative and the Additional Protocols are innovative approaches that provide powerful new tools for detecting activities that violate the NPT and endanger world security. They deserve full implementation. The negotiations on proliferation of nuclear weapons by North Korea and Iran, involving all the permanent members of the Security Council plus Germany and Japan, are crucially important. They must be energetically pursued.

But by themselves, none of these steps are adequate to the danger. Reagan and General Secretary Gorbachev aspired to accomplish more at their meeting in Reykjavik 20 years ago -- the elimination of nuclear weapons altogether. Their vision shocked experts in the doctrine of nuclear deterrence, but galvanized the hopes of people around the world. The leaders of the two countries with the largest arsenals of nuclear weapons discussed the abolition of their most powerful weapons.

* * *

What should be done? Can the promise of the NPT and the possibilities envisioned at Reykjavik be brought to fruition? We believe that a major effort should be launched by the United States to produce a positive answer through concrete stages.

First and foremost is intensive work with leaders of the countries in possession of nuclear weapons to turn the goal of a world without nuclear weapons into a joint enterprise. Such a joint enterprise, by involving changes in the disposition of the states possessing nuclear weapons, would lend additional weight to efforts already under way to avoid the emergence of a nuclear-armed North Korea and Iran.

The program on which agreements should be sought would constitute a series of agreed and urgent steps that would lay the groundwork for a world free of the nuclear threat. Steps would include:

• Changing the Cold War posture of deployed nuclear weapons to increase warning time and thereby reduce the danger of an accidental or unauthorized use of a nuclear weapon.

• Continuing to reduce substantially the size of nuclear forces in all states that possess them.

• Eliminating short-range nuclear weapons designed to be forward-deployed.

• Initiating a bipartisan process with the Senate, including understandings to increase confidence and provide for periodic review, to achieve ratification of the Comprehensive Test Ban Treaty, taking advantage of recent technical advances, and working to secure ratification by other key states.

• Getting control of the uranium enrichment process, combined with the guarantee that uranium for nuclear power reactors could be obtained at a reasonable price, first from the Nuclear Suppliers Group and then from the International Atomic Energy Agency (IAEA) or other controlled international reserves. It will also be necessary to deal with proliferation issues presented by spent fuel from reactors producing electricity.

• Halting the production of fissile material for weapons globally; phasing out the use of highly enriched uranium in civil commerce and removing weapons-usable uranium from research facilities around the world and rendering the materials safe.

• Redoubling our efforts to resolve regional confrontations and conflicts that give rise to new nuclear powers.

 
Achieving the goal of a world free of nuclear weapons will also require effective measures to impede or counter any nuclear-related conduct that is potentially threatening to the security of any state or peoples.

Reassertion of the vision of a world free of nuclear weapons and practical measures toward achieving that goal would be, and would be perceived as, a bold initiative consistent with America's moral heritage. The effort could have a profoundly positive impact on the security of future generations. Without the bold vision, the actions will not be perceived as fair or urgent. Without the actions, the vision will not be perceived as realistic or possible.

We endorse setting the goal of a world free of nuclear weapons and working energetically on the actions required to achieve that goal, beginning with the measures outlined above.

Mr. Shultz, a distinguished fellow at the Hoover Institution at Stanford, was secretary of state from 1982 to 1989. Mr. Perry was secretary of defense from 1994 to 1997. Mr. Kissinger, chairman of Kissinger Associates, was secretary of state from 1973 to 1977. Mr. Nunn is former chairman of the Senate Armed Services Committee.

A conference organized by Mr. Shultz and Sidney D. Drell was held at Hoover to reconsider the vision that Reagan and Mr. Gorbachev brought to Reykjavik. In addition to Messrs. Shultz and Drell, the following participants also endorse the view in this statement: Martin Anderson, Steve Andreasen, Michael Armacost, William Crowe, James Goodby, Thomas Graham Jr., Thomas Henriksen, David Holloway, Max Kampelman, Jack Matlock, John McLaughlin, Don Oberdorfer, Rozanne Ridgway, Henry Rowen, Roald Sagdeev and Abraham Sofaer.

David Straub, currently a Pantech Fellow at Shorenstein APARC, has been appointed associate director of the Korea Program. He will take up his position on 1 July 2008 and will aid in the overall design, planning, development and management of the Korean Studies Program research programs and events.
"David has been a tremendous asset to us with his expertise and experiences on US-ROK relations. As he takes on his new role with us, he will provide important leadership to the Korean Studies Program that has been expanding fast." says director of the center, Gi-Wook Shin
Straub is a former senior foreign service officer whose 30-year career with the U.S. Department of State focused on Northeast Asian affairs including over 12 years on Korean affairs. He served in Seoul as head of the political section at the US embassy from 1999 to 2002 during popular protests against the US, and played a key working-level role in the Six-Party Talks on North Korea's nuclear program as the State Department's Korea country desk director from 2002 to 2004. Straub also served eight years at the US embassy in Japan. His final assignment was as State Department Japan country desk director from 2004 to 2006, when he was co-leader of the U.S. delegation to talks with Japan on the realignment of the U.S.-Japan alliance and of US military bases in Japan. Straub is currently writing a book on US-ROK relations based on his experiences as a foreign service officer.

After leaving the Department of State, Straub taught U.S.-Korean relations at The Johns Hopkins University's School of Advanced International Studies and later at the Graduate School of International Studies of Seoul National University. He speaks German, Korean, and Japanese.

Stanford, Calif. - The visit this week of South Korea's new president, Lee Myung Bak, offers a rare opportunity to put the American-Korean relationship back on a more solid footing. President Lee, who won a decisive victory in last December's election, has expressed views on the security alliance, a bilateral free trade agreement, and policy toward North Korea that are thoroughly compatible with US interests. And Mr. Lee's authority was bolstered by his party's substantial victory in legislative elections April 9.

The question is whether Washington is poised to take advantage of this convergence of views.

For the past eight years, a major perception gap between Seoul and Washington has been painfully evident. Our governments often worked at cross-purposes in the six-party talks to denuclearize North Korea. Progressive governments in South Korea encouraged peaceful coexistence with the North through a pattern of unreciprocated engagement. For much of that time, the Bush administration sought to isolate and pressure Pyongyang into relinquishing its nuclear ambitions, and it made little effort to conceal its hopes for a regime change in Pyongyang.

When Washington decided to move its military headquarters out of Seoul in 2003, many Korean officials suspected that the Americans were just eager to get troops out of North Korean artillery range. President Roh Moo Hyun at times seemed interested in carving out a role as a balance wheel between the major powers in Northeast Asia. Meanwhile, the US was preoccupied by problems in the Middle East, and some American officials wondered if the US-Republic of Korea (ROK) alliance could long survive when one party dismissed the North Korean threat while the other viewed it as increasingly menacing.

Now comes Lee, a former mayor of Seoul and Hyundai construction executive with a reputation for tough-minded, pragmatic conservatism, eager to correct what he described as the misguided priorities of past ROK administrations. In a recent meeting with New Beginnings, a group of American policy experts on Korea, Lee appeared determined to accord priority to the alliance with the United States, exact a measure of reciprocity from the North, forestall major economic concessions to the North until it abandons its nuclear activities, and design a more ambitious global role for his country.

Surely Washington welcomes Lee's priorities. The tougher question is whether it can work effectively with him to translate shared aims into concrete results. This will pose three particular challenges.

First, on the nuclear issue, undeniably, bilateral talks with Pyongyang can facilitate diplomatic progress. There are dangers as well. Disconnects with the Japanese have deepened, and their officials occasionally complain about American "betrayals" in the discussions with Pyongyang. The North has consistently sought to use the negotiations to split the US and its allies. Success in the talks requires coordinated diplomacy between the US and the North's neighbors – especially with South Korea. In the past it often appeared that South Korean presidents worried less about Pyongyang's nuclear activities than Washington's possible reactions to them.

Today, there is the danger that South Korean conservatives may fear that Washington will ultimately acquiesce in North Korea's nascent nuclear status. No attempt to contain, let alone eliminate, the North Korean nuclear program can succeed unless the US and ROK governments work closely together. This will require a higher standard of candor and mutual trust in bilateral consultations than has been typical in recent years.

Second, the ratification of the Korea-US free-trade agreement (FTA) is a vital piece of unfinished business. Lee appears prepared to resume imports of US beef (halted due to mad cow disease concerns), essential to moving the FTA forward in Congress. Unfortunately, the Democratic presidential contenders are pandering to special interests on trade issues in a way they will probably later regret. Both sides have strategic and commercial interests at stake. The US stands to gain much more in increased exports from the FTA, while the Koreans hope that liberalizing foreign access to their economy will make them more competitive. So there is much to gain by nailing down this deal. A failure to complete it would be a significant strategic setback for our partnership.

Third, there is the question as to whether our political cycles will again diverge. For the past eight years, the US has been led by one of its most conservative administrations, while South Korea was headed by its most liberal president. Missteps were, perhaps, inevitable. And they have persisted, even though some effective work was done behind the scenes to forge cooperative arrangements on trade and force-deployment issues.

Lee's election signifies a conservative swing in South Korea's politics, while polls suggest the US may be moving in the opposite direction. Thus, a felicitous convergence of US and ROK official perspectives could prove fleeting. Yet the interests we share in expanded commerce, in modernizing our alliance, and in approaching the North with a joint strategy for "denuclearization" are compelling. They transcend partisan politics. They serve our respective national interests. The time to capitalize on them is now.

New Beginnings: Post-Election Prospects for U.S.-ROK Relations, a non-partisan study group of distinguished former American senior officials and experts formed by the Walter H. Shorenstein Asia-Pacific Research Center and the New York-based Korea Society, will release their report on how to revitalize the U.S.-Republic of Korea alliance on Monday, April 14, in Washington, DC., followed by a presentation in New York on April 15.

The report is being issued on the eve of the arrival in the United States of newly elected and inaugurated President of the Republic of Korea Lee Myung-bak. The report provides an analysis of the significance of the change in administration in South Korea and recommendations to American policymakers on steps to improve the partnership between the two countries. It reflects what the group learned during extensive meetings in Korea in early February, including discussions with then President-elect Lee and his senior advisors, as well as leading businessmen, security officials and experts, journalists, the leadership of the then ruling party, as well as senior American diplomats and military officials.

The full text of the report is available below. Press coverage of this project and the report can also be found in the links below.

New Beginnings was formed in anticipation of both the change in power in Korea and the upcoming U.S. national elections. The group plans to brief the presidential campaigns of all the major candidates on its recommendations, as well as key congressional leaders and senior administration officials.

Panel discussions by members of New Beginnings, looking ahead to President Lee’s visit to New York and Washington, will take place on:

Monday, April 14th, from 3:00-5:00 PM at the John Hopkins University School of Advanced International Studies (Rome Building, Room Auditorium, 1619 Massachusetts Avenue, NW, Washington, DC) hosted by Don Oberdorfer, Chairman of the U.S.-Korea Institute at John Hopkins University.

Tuesday, April 15th, from 10:00-11:30 AM at Korea Society: New Beginnings: Post-Election Prospects for U.S.-ROK Relations (950 Third Ave, 8th Fl, New York, NY 10022) hosted by Evans Revere, president of The Korea Society.

Study group members are:

Michael H. Armacost, former U.S. Ambassador to Japan and former Under Secretary of State for Political Affairs; currently the Shorenstein Distinguished Fellow at Stanford University

Stephen W. Bosworth, dean of the Fletcher School of Law and Diplomacy of Tufts University, and a former U.S. ambassador to South Korea

Robert Carlin, a visiting scholar at Stanford's Center for International Security and Cooperation, and a former State Department Northeast Asia intelligence chief

Victor Cha, director of Asian Studies and D.S. Song Professor at Georgetown University, and former director for Asian affairs at the National Security Council and U.S. deputy head of delegation for the Six Party Talks in the George W. Bush administration

Thomas C. Hubbard, McLarty Associates; former U.S. ambassador to South Korea

Don Oberdorfer, chairman of the U.S.-Korea Institute of the Johns Hopkins University School of Advanced International Studies, and former longtime Washington Post foreign correspondent

Charles L. Pritchard, president of the Korea Economic Institute in Washington, D.C., and former U.S. ambassador and special envoy for negotiations with North Korea

Evans J.R. Revere, president of the Korea Society and former principal deputy assistant secretary of state for East Asian and Pacific Affairs

Gi-Wook Shin, director of Shorenstein APARC; the Tong Yang, Korea Foundation, and Korea Stanford Alumni Chair of Korean Studies; and professor of sociology at Stanford University

Daniel C. Sneider, associate director for research at Shorenstein APARC, Stanford University, and formerly a foreign affairs correspondent and columnist

David Straub, Pantech Research Fellow at Stanford's Shorenstein APARC, and a former State Department Korean affairs director