I delivered a speech in Chicago entitled "Ten Minutes vs. Ten Years." I stated that we Japanese plan and develop our business strategies ten years ahead. When I asked an American money trader, "how far ahead do you plan...one week?" The reply was "no, no...ten minutes." He was moving money through a computer, targeting the fate of that transaction ten minutes later. So, as I told the Americans, we are focusing on business ten years in advance, while you seem to be concerned only with profits ten minutes from now. At that rate, you may well never be able to compete with us.
A well-known economist, Peter Drucker, wrote recently: "Americans cannot live in a symbol economy where businessmen play only with numbers; Americans should come back to a real economy where money moves in accordance with real production acitivities."
Unfortunately, in America, stocks are owned and handled by institutional investors whose fund managers actually buy and sell stocks in huge numbers in an attempt to maximize profits in a given short period of time. At the slightest increase in stock prices, they sell, and when the profit margin of any company declines as a result of poor management, they sell before the company's stock prices begin to decline. For them, the name of the game of nothing but quick profits.
It is expected that the American service industry will flourish. This includes finance and financial services, where entrepreneurs and investors alike do not leave their money in long-term projects, such as the ten-year projects that have been implemented in Japan. The American economy is, then, an economy without substance. It must return to a real production economy.
In America, R&D is closely linked to the military budget. R&D in the private sector is heavily dependent on military expenditure. As a result, a corporation can engage in the development of a new fighter without worrying about profit or loss. On the other hand, budget constraints on NASA and the military agencies will directly reduce the volume of R&D.
A ten-minute profit cycle economy does not permit companies to invest in long term development. There are some exceptions, such as IBM, AT&T, DuPont, and some others. But they do not represent the mainstream of American business nowadays. Gradually but surely, American business is shifting toward a symbol economy. In addition, it seems fashionable to call the service industry the "futuristic third wave" and information and intelligence is the business of the future. But these produce nothing. Business, in my mind, is nothing but "value added;" we must add value and wisdom to things and this is what America seems to have forgotten. And this is the most deplorable aspect of America today.