24/Sep/2026 ― Introduction: A Comparative Analysis of Japan’s Lost Three Decades

Our pursuit of understanding how Japan’s bubble formed in the 1980s, how it collapsed in the 1990s, and why the so-called “Lost 30 Years” continued for so long has been one of the forces driving Hibiki Path Advisors SPC (“Hibiki” or “we”) toward engagement investment. Through our investment activities, we have wanted to contribute, in our own way, to Japan’s renewal — or put differently, to the revival of the vitality of Japanese companies.

We remain frustrated that the cross-shareholding structure inherited from the Showa era delayed the emergence of stronger governance awareness and the momentum for change, and that even today, questions of corporate growth and value are too often reduced to the superficial framing of “companies versus shareholders.”¹ At the same time, we also find hope in the current environment, where more and more corporate managers seem to be showing the so-called animal spirits to “catch up with, and eventually overtake,” Western companies after many years of lagging behind.

Today, we would like to introduce a series of articles by Mr. Koichi Iwamoto, Research Associate at the Research Institute of Economy, Trade and Industry (Please see the links below). This series gave us a great deal to think about, and we felt that it contains many hints — perhaps even answers — for the revival of Japanese companies.²

The series starts from a very simple question: why has productivity in Japan fallen to roughly half that of Germany? But it does not stop at economic data. Mr. Iwamoto goes much deeper, cutting sharply into the thinking behind corporate management in both countries, the stance of government administration, the mindset of employees, and even broader views on life and work. Many of his observations are uncomfortable to read, but precisely for that reason, they are worth taking seriously.

As an aside, Germany’s corporate governance structure is clearly divided between the management board, or Vorstand, and the supervisory board, or Aufsichtsrat, creating a strict hierarchical system. The supervisory board has the authority to approve important matters and appoint or dismiss members of the management board, and it carries strong supervisory responsibility as the highest-level decision-making body. In large companies with more than 2,000 employees, German law requires employee representatives to make up half of the supervisory board. This is an extremely rare and difficult governance structure that can only function when employees themselves have a deeply rooted awareness of improving corporate value over the medium to long term.

In that sense, this series is also worth reading as a way to understand the historical and cultural soil that allows such an institutional design to function in Germany. It is a wonderful analysis, made possible by Mr. Iwamoto’s experience and insight. We would strongly encourage not only investors and capital market participants, but also corporate managers and executives, to read it.

The key points from the first article are as follows. Underlining has been added by Hibiki.

Germans make honest and straightforward efforts to earn money, and think about how to make products that people want and sell them at high prices.

・Japanese people make efforts to produce good products and sell them cheaply. Put another way, this is a low-margin, high-volume model based on mass production and mass sales. Taken too far, it becomes a race to gain market share while ignoring profits.
・In Germany, there is a national consensus that manufacturing is the core industry supporting the country. As a result, the education system and human capital development are designed around manufacturing.
・Japanese people stationed in Germany often say that “Germans do not work.” Yet Japan, where people work late on weekdays and engage in economic activity to the fullest even on weekends, has fallen far behind Germany and earns only about half as much as Germans.
・Germany has strong small and medium-sized companies known as “hidden champions.” They produce domestically, export overseas, and bring added value back into the country.

¹ Please see our Reposting of Our “Capitalism Trilogy”
² Hibiki Path Advisors SPC has no relationship with the Research Institute of Economy, Trade and Industry or Mr. Koichi Iwamoto, and is not in a position to endorse or oppose their views.

The opinions, views, and analyses expressed in this report are solely those of the author in his personal capacity and do not represent the official views, policies, or investment decisions of any asset management company, investment fund, or other organization with which the author is affiliated or otherwise related.

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In case of any inconsistency between the English language version and the Japanese language version, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated.