Japan Gears Up for the Green Revolution

The Japan External Trade Organization, this nation’s export trade promotion arm, typically loves to show off the latest in Japanese high-tech, high-value-added innovations. But the agency recently gave star treatment to the kind of product that would have been studiously ignored even a year ago: an adhesive tape that’s totally recyclable.

Where Japan’s Ministry of International Trade and Industry once preached the gospel of relentless industrial productivity, it now pledges to create a large-scale “eco factory” that stresses environmental harmony as much as production efficiency. The model plant would use high-speed robots to dismantle used cars, electrical products and other industrial waste into reusable steel, plastic and other raw materials. MITI’s ostensible goal is to encourage Japanese industry to strike a better balance between economic growth and ecological soundness.

“Japanese companies are now becoming much more environmentally aware and innovative with the environment in mind,” asserts Tomiaki Nagase, senior managing director at Kao Corp., Japan’s household products giant.

To be sure, Japanese companies are giving a lot of lip service to environmental concerns. The Keidanren, Japan’s Federation of Economic Organizations, last year adopted a global environment charter calling for its members to behave in ecologically desirable ways.

In reality, Japanese industry is about three years behind the United States and Europe in such areas as recycling, says Christopher W. Hirth, international coordinator for the Nippon Ecology Network, one of Japan’s oldest recycling operations. “Most companies think recycling is too costly, and they don’t want to take the risk,” he observes. “The government is just beginning to mandate recycling.”

Nevertheless, many Japanese companies sense that the green movement is not a fad and are now preparing to invest in “ecology” with much the same verve that they invested in “quality” more than 30 years ago.

Toray, Japan’s leading textile company, recently put a household water purifier on the market based on its proprietary synthetic fiber technology. Less than two years ago, Mitsubishi Petrochemical launched a plastics disposal initiative to develop clean-burning wrapping materials. Environmental innovation is gradually becoming linked to industrial competitiveness.

The biggest industrial stakes, of course, revolve around the “green automobile.” The 1998 California deadline requiring that at least 2% of a car maker’s fleet consist of “zero emission vehicles” has set off a frenzy of research and development in electric vehicles. Sanyo Electric just introduced a prototype of a hybrid solar car that blends surface-mounted solar cells, rechargeable batteries and a small fuel cell. Of course, Toyota, Nissan and the other major Japanese auto manufacturers are all pushing to meet the deadline. They can’t afford to lose their preeminent positions in America’s most lucrative car market.

But if Japanese companies do a better job of manufacturing and marketing green automobiles in the United States, what happens to that $30-billion annual trade deficit in autos and auto parts between America and Japan?

Indeed, if Japanese companies are as successful at creating green innovations and goods as they have been in so many other consumer and industrial markets, we face the real possibility that environmental competitiveness will ultimately exacerbate trade tension. American policy-makers would then be placed in the awkward political position of trying to discourage the domestic sale of environmentally sounder products even as they champion the virtues of clean air, clean water and reduced waste.

Of course, it’s not yet clear if green innovations will play a vital role in establishing competitiveness. What’s certain, however, is that if Japanese industry can do in ecological engineering what it’s done in quality engineering, then American industry is going to find itself in yet another bruising economic battle.