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Friday, Feb. 8, 2002

Kansai forum hears calls for innovation


Staff Writer

OSAKA -- "No guts, no glory" was the rallying cry for nearly 400 Kansai area business and government leaders Thursday, the opening day of the 40th annual Kansai Economic Seminar.

The Kansai region is facing the nation's worst unemployment rate, which hit 6.5 percent in December. Its showcase Kansai International Airport is sinking financially, saddled with debts. And manufacturing and financial institutions are moving to Tokyo and overseas.

Against this backdrop, Yoshihisa Akiyama, chairman of the Kansai Economic Federation (Kankeiren) opened the two-day event, warning that 2002 is a pivotal year for the local economy and the key to recovery has more to do with "spirit."

"One of the keys to the recovery of the Kansai region is the willingness to take risks. No guts, no glory," Akiyama said at the seminar held at the Osaka International Convention Center.

Quoting Western economic thinkers from John Maynard Keynes to Peter Drucker, Akiyama said that unless Kansai firms broke out of their lethargic sense of helplessness and regained their sense of "animal spirit," recovery will be impossible.

One of the major concerns of the participants is China's recent entry into the World Trade Organization and its impact on Japanese firms.

Motoharu Iue, the head of Sanyo Electric Co., warned that in hard industries like audiovisual products and desktop PCs, Chinese firms will likely become more competitive in the years ahead as they continue to improve quality and produce more cheaply than Japanese manufacturers.

"Japanese firms must understand that they have to deregulate and carry through with cost-cutting reforms," Iue said.

While various seminars on Thursday dealt with central government-led schemes to revive the local economy, such as turning Kobe into a biotech center, foreign observers noted that the sinking -- physically and financially -- of Kansai International Airport, is not being publicly dealt with.

"Foreign investment schemes and revival of the local economy cannot proceed without first dealing with the high user fees and economic problems of Kansai International Airport," said one European observer, speaking anonymously. "But, like last year, nobody seems to want to deal with the real issue."

This year's seminar takes place against a backdrop of growing calls for reform of the Kansai business community, including the consolidation of local business organizations that are said to be needlessly competing with each other.

However, the Kansai Association of Corporate Executives, which sponsors the conference, decided not to include a separate panel discussion on the issue, saying the time is not right to discuss such a complex issue.

The seminar is taking place in Osaka for the first time in 33 years. Traditionally held at the Kyoto International Conference Hall, it was moved to Osaka to provide much-needed convention business to the Osaka Prefecture-run conference hall, which has been struggling to attract large-scale conventions since its completion in 2000.



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