RIETI Special Seminar

U.S.-Japan Relations, Japanese-Americans, and Silicon Valley: A personal perspective (Summary)

Information

• Time and Date: 14:00-15:30, Friday, April 3, 2015
• Venue: 1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo, RIETI's seminar room #1121 (METI Annex 11th floor)

Summary

Witness to history: Evolution of U.S.-Japan relations

This is not a scholarly lecture, rather it is a personal perspective and an individual's life story about U.S.-Japan relations, Japanese-Americans, and Silicon Valley.

Over the course of my life, I have witnessed the worst and best of times in terms of U.S.-Japan relations. I was born in the midst of the most destructive war in history—World War II. In that period, from 1941 to 1945, the United States and Japan were locked into total war as the bitterest of enemies—Pearl Harbor marked the start of the United States' involvement in the war, and the bombing of Hiroshima and Nagasaki marked its end. During this time, racist propaganda filled the media air in both countries. In the United States, the Japanese were called "Japs." The racism of the American propaganda can be seen in cartoons which were published during this time. The Japanese were portrayed as the incarnation of evil—treacherous, barbaric, and cruel. At the height of the war, a public opinion survey was conducted, and 13% of the Americans surveyed wanted to see all Japanese people exterminated. This shows the extent of the racial hatred that was generated against the Japanese.

Today, however, the two countries have become the closest of allies. The U.S.-Japan alliance is the most constructive alliance in the history of the Asia-Pacific region. It has lasted more than a half-century giving rise to unprecedented peace and prosperity in the region. All nation-states in Asia have benefitted enormously, including China. Japan was the first Asian country to industrialize in the postwar period. The wave of growth then moved to Taiwan and South Korea, Southeast Asia, and eventually to China and India. In this process, more than one billion world citizens have been lifted out of lives of poverty, which also means that there are one billion new consumers in the world economy.

The U.S-Japan economic relationship is vast, deep, and strong. Two-way merchandise trade between the United States and Japan amounts to about $290 billion, and two-way foreign direct investment (FDI) is$442 billion. U.S. portfolio investment in Japan is $175 billion. Japan holds over$1 trillion in U.S. government instruments. Japan's net external assets are $3.2 trillion—the largest in the world, much of which is in U.S. Treasuries and other U.S. assets. Both Japan and the United States are open economies, governed by the rule of law and committed to free trade. Along with Europe, they have formed the foundation of the postwar economic system. In short, the U.S.-Japan relationship is absolutely essential to the stability and growth of the world economy. In my lifetime, Japan and the United States have gone from arch-enemies, bent on destruction of one another, to very close, mutually dependent allies. In recent U.S. public opinion polls, 80% of Americans have favorable feelings towards Japan and the Japanese people. The prevailing image of the Japanese people in the United States now is that they are trustworthy, reliable—strong allies and trusted friends. In one generation's time, the relationship has turned completely around. Make no mistake: the transformation of Japanese and U.S. relations is one of the most amazing chapters in postwar history. My life experiences as a Japanese-American I was born in 1942, shortly after the attack on Pearl Harbor. My parents immigrated to the United States as Christian missionaries in 1937, landing in San Diego. The only reason that they were allowed to enter the United States was because of their status as Christian missionaries. Starting in 1924, Japanese immigrants were not permitted to settle in the United States under the Immigration Act. I was born at the Santa Anita Racetrack in Southern California, one of many relocation facilities where Japanese-Americans were rounded up and placed in transit to internment camps scattered throughout the country. 120,000 Japanese-Americans were incarcerated in wartime internment camps; two-thirds of them were U.S. citizens, like myself. This was an egregious violation of our human rights. There was never an instance of subversion or betrayal, or a lack of loyalty to the United States, but there was paranoia among U.S. authorities that we might be loyal to the enemy, Japan. Imagine coming home from school, as my older brothers and sister did, and finding soldiers waiting outside our home, carrying rifles. We were given time to put some clothes in a suitcase and get into a truck—which took us to the Santa Anita Racetrack. Japanese-Americans lost everything: their land, homes, cars, furniture, work tools, savings, and assets. When I was two weeks old, they put my family and me onto a one-way train to no-one-knew-where. After a long, hot day of train travel, we ended up in Poston, Arizona. Because the train windows were boarded up, the train became swelteringly hot—well over 120 degrees Fahrenheit. As a two-week old infant, I nearly died due to heat prostration. My mother had to beg the soldiers to let us have some fresh air, and that is what saved my life. What I remember about Poston, Arizona is that it was an isolated, desolate desert. It was prone to sudden, blinding dust storms. In the winter, it was freezing cold; in the summer, swelteringly hot. I remember hearing coyotes howling plaintively in the distance. The howls captured how some of us felt trapped inside the barbed wire fences. Scorpions, centipedes, and rattlesnakes were our neighbors. Adversity like this either can bring out a sense of victimization and self-pity, or a powerful sense of resolve to overcome whatever obstacles we would face. Since 1942, the lives of Japanese-Americans have been a series of challenges. We have become used to dealing with racism and injustice, such as internment. The grave injustice of internment led to an official apology from the U.S. government in 1988. Japanese-American legislators led a campaign to get the Civil Liberties Act of 1988 passed in the Senate and in Congress, whereby the U.S. government officially recognized the injustice of the internment of Japanese-Americans and apologized. The U.S. government provided monetary compensation to everyone who was interned, which is an almost unique episode in American and indeed world history. I do not know of a single government in the world that would recognize a grave injustice that it had committed and to apologize and compensate those to whom it had happened. The Civil Liberties Act of 1988 has restored my faith in the founding principles of American democracy. The U.S. government has righted a disgraceful wrong. Indebtedness to the previous generation I feel an enormous debt of gratitude to my parents who immigrated to the United States and built a new life for their children. I cannot imagine what life would have been like if they had stayed in Japan and we had grown up there. Both of my parents passed away relatively early in my life. They did not leave me any inheritance because their salaries were low, but at the same time, neither did they leave me any debt that had to be repaid. I was very grateful for that as it was an opportunity to start my adult life with a clean slate. We were all expected to make our own way on the basis of what we could accomplish as individual Americans. My parents taught us the value of non-material achievement and altruism. I was never able to thank my parents adequately for all that they did for me, so when I visit their graves in Los Angeles now, I always give thanks and vow to them to dedicate my energies to strengthen relations between the United States and Japan. For me, the ultimate fulfillment in life has been to be able to raise my own family with loyalty to the United States and a sense of ancestral attachment to Japan. My daughter is a high school teacher who teaches classes on the Japanese economy, and my son has started his own financial services company with a few Japanese clients. The impact of prominent Japanese-Americans There are 1.3 million Japanese-Americans now, which is a small but important fraction of the U.S. population. The Japanese-American community is one of the most successful in the United States, and they have played a historic role in the U.S.-Japan relationship, which most people do not realize. For the 70 years since the end of the war, they have interacted with, studied at school with, played with, and work with millions of fellow Americans. Other Americans see us as Japanese. Their view of Japan and the Japanese people has been strongly shaped by their daily interactions with Japanese-Americans. The respect that Japanese-Americans have gained has helped enormously in achieving a favorable view of Japan and the Japanese people among Americans. This is one reason why 80% of Americans today hold positive attitudes toward Japan and the Japanese. Recall that during the Pacific War, 13% of Americans wanted to see every Japanese wiped off the face of the earth. Prominent Japanese-Americans include Ellison Onizuka, an astronaut; George Takei, the famous actor in the Star Trek series; Travis Ishikawa and Jeremy Guthrie, professional baseball players; Dean Cain, who played Superman on television; Ann Curry, one of the United States' leading television anchorwomen; and Michio Kaku, a physicist and scientific commentator on public television. In every walk of American life—politics, law, education, science, medicine, engineering, and entertainment—there are respected Japanese-American leaders. The role that Japanese-Americans have played has had a far-ranging, transformative impact on U.S.-Japan relations. 1.3 million Japanese-Americans have been, and are, de facto ambassadors of goodwill for the United States and Japan. The United States' educational system: Passport in a land of opportunity As the son of poor immigrant missionaries, I found that my pathway in life was to navigate through the education system in the United States. The U.S. education system provides an opportunity for immigrants and their second-generation children to advance in U.S. society because the educational system is open and meritocratic. I was fortunate enough to be accepted at Princeton University where I benefitted enormously from a challenging and rigorous undergraduate education. It reoriented my life and equipped me with the educational tools necessary to survive. My brother went to Dartmouth College and then to Harvard Medical School. My sister, who was expected by my parents to drop out of high school to support us boys through college, was determined to complete her education. She got married, had three children, and divorced young, but despite the challenges of being a single mother, she attended night school and received her B.A. degree in 10 years, eventually getting a master's degree (M.A.) and a doctorate (Ph.D.) while serving as a vice president at Wells Fargo Bank. She was relentlessly determined to earn her college and graduate degrees. At Princeton University, it was my extraordinary fortune to be taught by a number of inspiring professors, including Jun Eto, the Japanese literary critic, and George F. Kennan, father of the communist containment policy. At Harvard University, I studied under Edwin O. Reischauer, U.S. ambassador to Japan. My roommates at Princeton, too, were extraordinary: Bill Bradley, a Rhodes Scholar, professional basketball player, U.S. senator, and presidential candidate; and Jim Leach, a U.S. congressman for nearly 30 years. College was a remarkable chance to network with emerging young leaders, but because I was so nervous that I would flunk out, I spent most of my time studying. My roommates noticed that I would talk in my sleep, "Dad, mom, forgive me for failing you!" The competition was brutally intense. I was the prototypical "nerd." After graduating from Princeton, Harvard, and University of Michigan, I moved on to take a job as a young member of the faculty at Stanford University, where I have been ever since. Over the 40 years at Stanford, I have taught several thousand students including those who would go on to found major innovative companies in Silicon Valley. I also had opportunities to teach the children of Asian elites from Hong Kong, Singapore, South Korea, Taiwan, Thailand, Vietnam, and India. Stanford University is a mecca for Asian students and a cradle for entrepreneurship and innovation. It has given birth to 40,000 new, industry-defining companies since 1950, including Hewlett-Packard Company, Google Inc., Yahoo Inc., LinkedIn, Nike, Inc., Tesla Motors, Inc., Oracle Corporation, and Cisco Systems, Inc., which have created whole new segments of the global economy. Of these firms, 18,000 are based in California, employing three million workers, and generating$1.3 trillion in sales. To give a sense of scale, this is 8% of the U.S. gross domestic product (GDP) and 22% of Japan's GDP.

As the son of immigrants, I am exceedingly grateful that I was able to have access to this pathway of advancement through the open and excellent U.S. education system.

Immigration, diversity & dynamism: The United States' competitive advantage

The second pillar of U.S. pre-eminence is immigration, which is linked to education. The United States is a nation of immigrants, and today there are more than 40 million immigrants living in the United States. Yet despite the almost staggering number, the United States has been stable and dynamic over the years.

In 1964, U.S. President Lyndon Johnson, as part of the "Great Society," passed the Immigration and Nationality Act. Through this Act, the quota system was lifted, and immigrants from Asia, Africa, and Latin America were able to enter the United States in massive waves. In 1970, 60% of the immigrants to the United States were from Europe; 30 years later, less than 15% hailed from Europe.

When I was growing up, the U.S. population was less than 200 million, but today it is 312 million. The population is growing by leaps and bounds; by 2050, it is projected to reach 438 million, with the white population constituting less than 50%, and the non-white population becoming the majority.

The impact of immigration on the U.S. economy has been, on balance, highly positive. A RAND Corporation study found that immigrants boost the U.S. economy by \$10 billion a year. In Silicon Valley, more than 50% of all start-ups were founded by immigrants or the children of immigrants. Silicon Valley has become the mecca for the best and brightest, streaming in from all over the world to be educated, find employment, and start their own companies. One-quarter of all scientists with doctoral degrees are immigrants.

Immigration is one of the United States' major competitive strengths. Without immigration, the dynamism of Silicon Valley would be nowhere near what it is today. The interplay between the United States' global dominance in higher education and the continual infusion of immigrant labor at opposite ends of the value-added spectrum—both low and high—is one of the central sources of ferment, creativity, and high productivity in the United States. Japan is at the opposite end of the spectrum. There are only two million foreign residents in Japan, which is less than 2% of the population. As a homogeneous society, many Japanese are worried about the impact of "outsiders" on societal cohesion and social stability. In the United States, however, immigrants, including illegal immigrants, are less likely to commit crimes than the native born population. Also, immigrants—even illegal immigrants—pay taxes.

Entering Silicon Valley

Today, Silicon Valley is transforming every sector of the world economy—computers, telecommunications, energy, transportation, healthcare, retail, financial services, and entertainment. Every area of life is being changed by technological progress largely emanating from Silicon Valley. Big data, cloud computing, stem cell research, biotechnology, the internet of things, mobile devices, e-commerce, smart homes, smart communities, and smart grids are transforming the entire landscape of the global economy. For Japan to remain competitive in areas where they have been strong, such as manufacturing and transportation, it will need to keep abreast of the rolling wave technological innovation. We are living in an era of "creative destruction."

Over the past 40 years, I have watched Japan's inability to connect with Silicon Valley with frustration and disappointment. Japan has been an actor in the domain of Silicon Valley competition, but it has been nearly invisible in the domain of collaboration and cooperation. I believe it is time for Japan to connect, in a far-reaching and systematic way, with Silicon Valley. One of the big problems for the Japanese to enter Silicon Valley is that the culture of large Japanese corporations clashes with that of small start-ups in Silicon Valley. Silicon Valley's culture is one of speed, adaptability, and a hearty appetite for risk-taking. On the other hand, Japanese corporations put a premium on risk-aversion, continuity, and stability. In general, they are slow to make decisions and clumsy at making flexible adaptations. This clash of cultures has made it difficult for Japan to enter Silicon Valley.

Silicon Valley is a network society. It is a closed society in many ways, like a college fraternity, or like the Bohemian Club in San Francisco. Japan has lacked access to this fraternity—this network of Silicon Valley elites. On their own, it is almost impossible for the Japanese—or any foreign nationality—to enter the inner sanctum of Silicon Valley.

I believe that Japanese-Americans can help Japanese corporations gain access to Silicon Valley networks because some key members of the network are Japanese-American. Koichi (Ko) Nishimura is one such figure. He began his career at IBM Corporation and then became CEO at Solectron Corporation, one of the key corporations in the history of Silicon Valley. Solectron became the semiconductor foundry for Silicon Valley and the world. Keith Yamashita, who was one of Steve Jobs' close colleagues at Apple, is the founder of the consulting firm SYPartners. Design "guru" John Maeda, who was identified by Forbes Magazine as one of the most influential and creative thinkers in the world, are two other prominent Japanese-Americans in Silicon Valley.

U.S.-Japan Council's Silicon Valley-Japan Platform

The U.S.-Japan Council, a group of Japanese-Americans of which I am a member, is dedicated to upgrading relations between the two countries and is willing to act as a bridge. We have established what is called the Silicon Valley-Japan Platform (SVJP) consisting of several strong pillars to deepen ties of interdependence between Silicon Valley and Japan. One is a group of senior advisors on the U.S. and Japanese side. We are also launching a series of incubators whereby we select exceptionally talented and promising small Japanese firms, bring them to Silicon Valley, and give them the best mentoring and training by Silicon Valley mentors, trainers, and investors. There will be incubators in design, transportation, robotics, healthcare, and retail. Over the next five years, we hope to bring 200 companies from the small and medium sector of Japan to the United States.

There will be research and development collaboration through Stanford University, especially the BioDesign Center and the Design School. Conferences, seminars and meetings, including high-level visits—starting during Golden Week in 2015, when Prime Minister Shinzo Abe will visit Silicon Valley. This will be the first visit by the Japanese head of state since 1989, more than a quarter-century ago.

Conclusion

Japanese-Americans have been affected profoundly by U.S.-Japan relations—adversely, during the Pacific War and its aftermath, and positively, today, in the postwar period. Many Japanese-Americans are committed to further strengthening U.S.-Japan relations, and one way we hope to achieve this is by helping to connect Silicon Valley with the needs of economic revitalization in Japan. Thank you very much.

Q&A

Q1. I wanted to ask about your suggestion for Japanese companies to connect to Silicon Valley through Japanese-Americans. Recently, my concern has been that Japan has not been good about connecting with Asian-Americans, especially those of Korean or Chinese origin. What are your suggestions about how Japanese should approach Asian-Americans as a whole?

Daniel I. OKIMOTO
Until recently, my impression was that Japan had almost no interest in connecting with Japanese-Americans. But the Abe administration appears to be interested now—they look at the 1.3 million Japanese-Americans as an asset of tremendous potential value. Owing to our history of wartime internment, Japanese-Americans are fiercely independent politically. We will never be a lobbyist group for Japan.

Q2. To follow up, do you think that the sentiment to not be involved will remain the case in the future, or do you think it will change?

Daniel I. OKIMOTO
Yes, but it depends on the individual. There are Japanese-Americans, such as U.S. Congressman Mike Honda who sympathize with the Koreans and Chinese on the issue of comfort women. However, he is an individual who does not speak for the Japanese-American community. The Japanese-Americans' experience of internment was searing, so we do not want to be political instruments for any government or political entity. However, we do want to strengthen U.S.-Japan relations in a fundamental and non-political way.

Q3. For a long period of time, I think the Japanese government and Japanese people have been struggling to establish connections in Silicon Valley. Many Japanese have visited Silicon Valley, but I have not seen any concrete results. What do you think is the most important thing to build an effective network with Silicon Valley?

Daniel I. OKIMOTO
The culture of large Japanese corporations—risk averse, conservative—and Silicon Valley startups—nimble, fast, constantly taking risks—are a study in contrasts. This clash of two cultures may be the biggest hurdle to overcome. Another problem is that, while many Japanese come to study engineering at Stanford University, not many remain in Silicon Valley. It is hard to enter the mainstream Silicon Valley network if one goes back home immediately after graduating.

Also, when Japanese have tried to set up venture capital funds, they would put a lot of money into their investments, but would put Japanese nationals in place as fund managers—often people with no entrepreneurial experience, no connection with the Silicon Valley network, and no access to deal flow. To avoid creating enclaves of Japanese, they should hire local entrepreneurs and local fund managers.

Q4. In your book, Between MITI and the Market , you mentioned policy networks such as trade associations and evaluative councils. You showed that such networks were very effective for industrial development. Do you think these networks still exist? Are they still effective or are they obsolete?

Daniel I. OKIMOTO
In my book, I described Japan as a network society which is difficult to enter—but Silicon Valley is even harder. It is like a fraternity. If one is not inside, one does not get the same information or opportunities as those who are inside. I think the network aspects of Japan, from the heavy manufacturing era, have diminished over time, but still have some lingering influence.

Q5. I understand that you are trained as a political scientist, but you are also very connected to Silicon Valley. How did you cultivate your literacy in this area?

Daniel I. OKIMOTO
My father encouraged me to be curious and to have a wide vista in looking at life. I looked at learning as a lifelong process. So, when I arrived in Silicon Valley, I thought that I had to learn about technology, which I did by reading anything I could, and also trying to learn firsthand from people I knew in the industry.

Q6. You said that you see difficulty occurring between Japan and the United States over the next 20 to 30 years. What did you have in mind? Also, what do you think the biggest challenge is currently between the United States and Japan?

Daniel I. OKIMOTO
I am basically optimistic about the relationship between the United States and Japan, but I think it is going to be more difficult and challenging than it has been up to this point. One of the reasons that the alliance between our two countries has been the longest and strongest in Asian history is because it has never been tested. As the points of tension between Japan and its neighbors multiply, the dangers of accidental war do as well. Even if there is no direct conflict, the rise of China as a great East Asian power changes the international system. Periods of change such as the current era are also periods of conflict. Will the United States be able to adapt? Will Japan? I hope so.

It will help if China becomes democratic, but I see it going through a difficult period of transition and slowing economic growth. The driver of economic growth is no longer capital investment but is consumer-led demand, and to adapt to that will require institutional changes at every level. China also has the problem of corruption, which comes into conflict with the growing desire for freedom of speech and expression as it democratizes. This is also an era of governance crisis.

Q7. I think many Japanese would not think about "identity." We take it for granted that we are Japanese, which is quite different from Japanese-Americans who have faced so many difficulties in the past. In Japan, we are facing many changes. How do you see changes going on in Japanese-American society?

Daniel I. OKIMOTO
I believe that the problems that Japan faces are all solvable—including demographic trends, changes in the labor market, the generational gap, and the long-time grip of deflation. Leadership is required to solve these problems, and I admire Prime Minister Abe for the leadership he has shown in addressing these problems so far.

Japanese-Americans face both an opportunity and a challenge. The opportunity is that there no longer are the barriers of discrimination. At the same time, however, there has been constant challenges and adversity. In my view, challenges are necessary for developing motivation and strength of character. The danger for the Japanese-American community is that it will become complacent. But in general, Japanese-Americans have been socially active in the United States, and the U.S.-Japan Council is a vehicle for them to contribute to U.S.-Japan relations. I'm exceedingly optimistic that Japanese-Americans will continue to play a pivotal role in strengthening U.S.-Japan relations.