1. Does the Financial Economy Support the Productive Economy? Kenji E. Kushida Shorenstein Asia-Pacific Research Center Stanford University 7/30/2015 0

2. - 1 - Syncretism: New, Traditional, and Hybrid Japan’s syncretic political economy: the coexistence of new, traditional, and hybrid areas. New = Startups, portion of finance that resembles Wall Street (investment banks, securities firms, some kinds of insurers), private equity, hedge funds, etc. Startup ecosystem: plenty of money, not enough Venture Capitalists capable of investing like Silicon Valley VCs. (their investments often look like loans, they are usually not previously entrepreneurs, limited interpersonal networks, etc.)

3. - 2 - Syncretism: New, Traditional, and Hybrid Traditional: local banks, local SMEs, etc. Historical patterns of political pork? Not a clear departure into financialized model, but mostly not a growth engine. Hybrid: large manufacturers, financial groups, and many medium-sized firms. Q= share buybacks?  some, but not like US Q= shares tied to executive compensation/bonuses?  levels far lower than US, still relatively little cross-firm executive hiring Q= declining R&D?  yes, but not decimated like US model Q= core competitive problems? Commoditization and lack of IT investment towards strategic, productivity-enhancing uses