"We think in the long-term, while you Americans only think about quarterly earnings." I was witness to these proud words spoken by a world-renowned Japanese CEO to a group of American visitors. The time was the 1980's.

Fast forward 30 years. The CEO has passed on to the next world, and Japan is feeling passed by the present world. The "economic animal" of the 1980's – the Japanese salaryman – has been replaced by the "herbivorous man." He can only see the grass at his footsteps to chew, and spends his days answering to the demands of transparency, traceability, compliance, and governance.

This is an obvious exaggeration of what is happening in present day Japan. Yet, most of the world sees Japan as a country that has lost is past luster with the economy, as measured by GDP growth, practically at a standstill for the past couple of decades.

However, let us take note that approximately 60% of GDP is household consumption. This means that Japanese individuals are spending approximately 300 trillion yen (US$3.2 trillion) annually. This amount is larger than the total GDP of France or the United Kingdom. Yes, BRIC's is growing quite rapidly, but other than China, their GDP is still lower than Japan's annual household spending. China is overtaking Japan as the second largest nation in terms of total GDP, yet their household spending as a percentage of GDP is said to be approximately 30%. Therefore, with population of 1/10 of China, the Japanese household in aggregate is still spending twice as much.

Bear in mind, this 300 trillion yen figure is annual "flow," and not "stock." If this much money is flowing through an economy every year, certainly there must be good business opportunities.

So why is then Japan the forgotten child of the 21st century? The answer is probably because the bulk of this "flow" from Japanese households is spent on "preservation", rather than on "growth".

About 10 years ago, a Chinese businessman asked me, "Shibusawa-san, do you know what is going on in China?” I confessed I did not know. He answered, "1.3 billion people go to sleep every night, believing that tomorrow will be better than today."

This was a wake-up call for me. 130 million people in Japan go to sleep every night, hoping that tomorrow will be the same as today. Yet, most believe it will get worse. I realized then that "scale" was not the problem for Japan in the increasingly competitive world. The "mindset" was the huge problem.

When World War II ended, the Japanese people knew that tomorrow was going to be better, because today had been so horrible. After the Meiji Restoration, the Japanese people knew that tomorrow had to be better than today, or the nation would be at risk of being swallowed up by the West.

Today in Japan, why have TV dramas based on the lives of historical heroes like Ryoma Sakamoto [Ryoma-Den] and Saneyuki Akiyama and Yoshifuru Akiyama [Saka-No-Ue-No-Kumo] become so popular? Why has a modern rewritten version of industrialist Eiichi Shibusawa's book on ethics and business [Rongo-to-Soroban] become a recent best seller?

I believe this is because there is a strong underlying feeling shared by many Japanese to yearn to revisit our foundations of transforming from a feudal state into a modern economy and society. Not necessarily to go back in time, but rather to stand at our foundations to gaze forward toward our future. The landscape probably looks different from what most of us are seeing from our everyday "reality."

Preservation means securing our future based on past success. Growth, on the other hand, is challenging an uncertain future. Therefore, the inclination by many Japanese people of clinging to our past success enjoyed by the last several generations, in the hope of securing our future, is quite understandable. Yet if we, the Japanese people of today, do not take on this challenge, then ours and our future generations' destiny will be for certain. And, it is not a pretty picture

Japan is facing many difficulties. But when good people are faced with difficulties, they change. If they change, then a new path will open up for a new destiny. These words were spoken by the 6th century BC Taoist philosopher, Laozi, and we can see that this is common sense, shared by all people of this world, past and present.

If we hope for a bright future 30 years from now, the most important day is certainly not 30 years from now. Rather, it is today. The welfare and security of our future generation in 30 years rests on how many Japanese people from Hokkaido and Okinawa can take that small step today. To change that mindset, to believe that tomorrow in fact can be much better than today.

The fate for Japan in the 21st century rests not on the government or corporations, but rather on the Japanese people. This is the wake-up call. Our hopes and aspirations are like dew falling away to the ground. If we can just catch and collect it, at some point it will start to trickle. Then, eventually it will start to flow like a mighty river, providing the precious source of energy for ourselves and future generations.

The writer is Chief Executive Officer, Shibusawa & Company, Inc.

May 7, 2010