The anniversary of the Fukushima tsunami and nuclear disaster is just the latest unpleasant news from Japan. There's also the recent failure of a huge electronics company, Japan's widening trade deficit and ongoing political paralysis.
Since I spent my 20s living and working in Japan, people often ask me whether the country can rebound amid news like this.
That premise is wrong. There's plenty of positive change in Japan and reasons to expect better ahead. In many cases we would be lucky to follow their lead.
Most media accounts talk about Japan's decline since the famous stock-and-property market bubbles in 1990. The New York Times sets the tone by implying in most news articles that it's been a constant slump. In fact there's been an average of 1 percent annual growth.
Economic data is suspect because statistics measure output and prices for a basket of goods, even if they're not the best indicators. It's hard to say whether Japan's rising unemployment and the struggles of older companies weren't inevitable given globalization and demographic trends.
Really there was no "lost decade" for most of Japan, according to a fantastic essay by Eamonn Fingleton, a longtime Japan resident and analyst. He points to new building, longer life expectancy and more consumption. Paul Krugman noted that Japan's decline is often overstated.
Instead, the last 20 years have brought a higher standard of living for many. When I first lived in Japan, airfares were sky-high, there were only a handful of ATMs in each major city (and most were closed except in the middle of the day) and phone calls were prohibitively expensive. Now Japan arguably leads the world on ease of travel, e-commerce/retail convenience and telecom. They also show how to do urbanism on a grand scale.
Maybe it comes down to whether you like the place or not. Japan has a very high barrier to entry that turns off many visitors: I've know plenty of good journalists in Asia who never liked Japan because they couldn't figure it out. But if you speak and read the language it's a rewarding place. The emphasis on group over individual makes life easy, yet it's a free society. It's safe. Everything works.
Of course there are huge challenges. Too many regulations hinder innovation and there's plenty of nepotism and corruption (see Olympus).
The thing is, Japanese also know the solutions. The obstacle is simply political — and there's no reason that can't change. The Fukushima disaster is yielding political change nationally as people stop letting government off the hook. Voters in Osaka have upended the order there by picking a governor opposed by the political parties.
Meanwhile don't fall for the headlines. Japan has huge opportunity to profit from innovation in health care, environmental restoration and clean energy, among other fields.
Conventional wisdom says Japan fails if it doesn't see rapid overall growth (by the way, comparisons with China, which is 10x bigger, are crazy). Not true. It's a dynamic place that we ignore at our own expense.