Interview【JICA-RI Focus Vol.28】 Interview with Senior Research Fellow Go Shimada

Firstly, could you explain about the background, progress and outcome of the collaborative project between JICA-RI and IPD of Columbia University led by Nobel-Prize-winning economist, Professor Joseph Stiglitz?

Our research collaboration with IPD started as one of the side events at the Tokyo International Conference on African Development (TICAD IV) held in Yokohama in 2008. In this event, Professor Stiglitz, presidents and prime ministers from African countries including Tanzania, Ethiopia, and Mozambique, President of the African Development Bank and JICA discussed the roles of government in development. Since then, the Africa Task Force Meeting of IPD has been working on pressing development issues in Africa, such as economic growth and poverty eradication. The outcome of significant discussions on the adaptability of development experiences in Asia, the role of governments, international trade and governance was compiled as a book and published by Oxford University Press in 2012. These joint efforts led to the next research project “Structural transformation of the African economy”. The outcome of the study was presented as a report at both a symposium and a Task Force Meeting at the TICAD V held in 2013, in which Professor Stiglitz also participated. The book based on the report is to be published by Columbia University Press soon. Currently, an on-going research project with IPD focuses on broader industrial policies. We intend to analyze industrial policy from different perspectives, such as the financial one or even including those of physicists. As Solow claimed (1957), it has been widely believed that technological progress aggregates the production function in economics. This research project, however, will look at factors traditionally regarded as residuals, for instance, management and social capital. These factors are important for creating a “learning society” for filling the gap in knowledge for development. The findings of this research project are expected to be published as a book.

One of JICA’s strategies to support industrial policy in developing countries is the introduction of “KAIZEN.” You have been working on the project entitled “Impact evaluation of the scaling up of Small and Medium-sized Enterprises through training on managerial capital” that has started recently. Could you explain the background and purpose of this project?

When the IPD Task Force Meeting was held in Ethiopia in 2008, then Ethiopian Prime Minister Meles Zenawi expressed a strong interest in KAIZEN, and requested Japan’s assistance. Since then, JICA has been supporting Ethiopia in the introduction of the KAIZEN approach in the country. I was involved in this project as a director in the Industrial Development and Public Policy Department of JICA. JICA has the advantage of experience in hands-on capacity building on the ground, and one such example is KAIZEN. In order to prove the effectiveness of the approach of KAIZEN, however, more academic evidence needs to be accumulated. Thus, this research project was launched to scientifically analyze the Kaizen industrial policy and verify its efficacy.

The purpose of the project is to assess the impact of KAIZEN as a Japanese managerial strategy for small and medium-sized enterprises in developing countries. Could you elaborate more on the roles and impacts of KAIZEN on the management of small and medium-sized enterprises?

KAIZEN means “continuous improvement,” to improve the quality of goods and services in order to be more productive. Can you imagine how long it takes to identify all of 5 out of 100 random numbers? I believe it takes around 20 to 30 seconds. What happens if the numbers are in order? It takes a second. The same goes for office work. If it takes 30 seconds to find a file in disorganized office, the loss amounts to 5,000 minutes when 10,000 workers at large enterprise lose 30 seconds each day. Industries in the developing countries count on the production of basic industrial merchandise. So, efficiency in logistics is really important and it has a huge impact on productivity. Furthermore, KAIZEN not only promotes productivity but progresses labor relations. The introduction of KAIZEN in Japan since the 1950s has contributed to constructive labor relations. KAIZEN has contributed to fair profit distribution between employers and employees. As a consequence, the living standards of workers were improved in the process of reconstruction after the Second World War. These historical perspectives will also be considered in the research. This project, targeting companies in eight countries in Latin America, will conduct interviews with both managers and workers and conduct a quantitative analysis of the interview data.

Lastly, could you explain your project on the long-term analysis of the reconstruction process of the Hanshin-Awaji Earthquake with a focus on social capital as a part of the research project “Research outcomes related to the post-2015 (post-MDGs) development agenda?”

The Great Hanshin-Awaji Earthquake hit Kobe, my hometown, in 1995. I have had scruples about not having devoted myself to the reconstruction of the city, being away from the town. When the Great East Japan Earthquake and Tsunami hit on March 11, 2011, I started to think again about the Hanshin-Awaji Earthquake. “Kizuna (human bonding)” was a key word for reconstruction after the March 11. And I thought over Kizuna again, considered as a sort of social capital in economic terms. In economics, the factors of production are: labor, capital, land, and technological progress, whereas social capital is generally excluded. However, there is a great possibility that social capital such as “Kizuna” plays an important role. Therefore, I chose a research topic focusing on disaster reconstruction and social capital. Securing employment is essential in the medium- and long-term reconstruction process, because people have to resettle in other areas unless they can find a job. The result of the research shows that revitalizing small and medium-sized enterprises by re-building social capital is crucial to boosting employment. Another important concept in this research is “Resilience.” “Resilience” means the power to recover from disasters, or to go back to the origin, or reconstruction. “Resilience” has been discussed widely in international arenas including in relation to the post-2015 development agenda, as a number of natural disasters have struck the world. In the research, I also try to clarify the concept of resilience through the case study of the Hanshin-Awaji Earthquake. As I mentioned, the role of social capital cannot be overlooked as a factor in aggregate productivity in industrial policies. It is also important for securing employment, and to promoting “Resilience” in recovering from external forces such as natural disasters. In the course of my research, I will continue to focus on the role of social capital.