East Needs West, and Vice Versa

Meetings & Conventions: East Needs West, and Vice Versa March 1998 Current Issue
March 1998 OBSERVATIONS:

East Needs West, and Vice Versa

BY DAVID GHITELMAN

Japan's economic crisis opens the door to U.S. meeting groups

In the early '80s, I edited a monthly newsletter for the Consulate General of Japan in New York City. My job was to promote goodwill through increased understanding of the economic powerhouse at the far side of the Pacific.

Heaven knows, at that time goodwill between our two nations was in short supply. This was the era when American autoworkers would buy a new Japanese car and attack it with sledgehammers to express their anger with Japan's trade policies. My bosses would watch the evening news and shudder.

Many Americans, in turn, were afraid of Japan's success. The American auto industry had long been the pride of the nation. All of a sudden, Detroit gas guzzlers began to look like dinosaurs with internal combustion engines. A similar fate appeared to await the U.S. consumer electronics business. It had become next to impossible to buy a television set that wasn't made in Japan.

And things would soon get worse. I remember a luncheon/product launch I attended shortly before leaving the consulate. I was still new to the world of corporate entertaining and was more dazzled by the setting -- Tavern on the Green, that New York City eatery so neatly tucked into the western flank of Central Park -- than the product being promoted. Also, I was skeptical about whether Americans would take to a device that would render their collections of vinyl records obsolete.

CD players were just the tip of the iceberg. There were also video cameras, video cassette recorders and video games. Then Japanese companies started to buy such prime packages of U.S. real estate as New York City's Rockefeller Center. Our leading purveyor of pop paranoia, Michael Crichton, wrote a novel, Rising Sun (subsequently made into a major motion picture), about a fiendish Japanese scheme to take over the world.

Fortunately, the Japanese turned out to pose no more real danger to us than the raptors from one of Crichton's other bestselling fantasies, Jurassic Park. In 1990, stock and real estate prices crashed in Japan. While many individual companies recovered, the overall economy has never quite regained its fierce, world-beating momentum.

Although I served loyally at the consulate for nearly three years, I was not privileged to travel to Japan until I joined M&C. In the spring of 1992, I visited six Japanese cities in eight days. Everywhere I was shown gleaming new convention centers and sparkling new hotels. The country, I was told, had learned from the example of places like Baltimore. Japan's megalopoli were going directly from being centers of manufacturing to a new role as post-industrial information society hubs without passing through the rust-belt stage that had devastated so many American cities.

The convention business was going to be a vital component of this promising future. Groups from around the world would come to these freshly minted meeting palaces. The word "internationalization" was on everyone's lips.

Those convention centers sure looked spiffy, but I couldn't figure out what nation those international groups were supposed to come from. Certainly, they wouldn't be coming in any large numbers from the United States. In the early '90s, the high price of the yen and the low cost of the dollar made travel there prohibitively expensive.

Then, last autumn, following the economic meltdown of Southeast Asia, and simultaneous with the collapse of the Korean economy, the Japanese financial system began going down the tubes. Just a decade ago, we were afraid that the Japanese were going to take us over. Now, our fear is that they are going to pull us down with them.

Should the Japanese economy fall into a serious recession (or worse), the U.S. economy could be badly wounded. Lower wages could give Japanese-made goods a significant price advantage, and it could once again become much cheaper to produce Toyotas in Nagoya than in Tennessee. Also, if Japanese consumers have less disposable income, they will buy fewer American things, from computer software to hotel stays in Hawaii.

The silver lining: A Japanese slowdown supplies U.S. meeting planners and their attendees an excellent opportunity to profit from the current crisis, use some of the finest meeting facilities in the world and, at the same time, help restore the Japanese economy.

It's no longer my job to foster goodwill between the Americans and the Japanese. But if it were, now would be a much easier time to make a convincing case for cooperation, respect and mutual support. Today, we can go to Japan and see for ourselves -- without breaking the bank -- that all that hostility was born of ignorance, and friendly competition is what can keep East and West in perfect balance. *