Lessons from Japan’s 1,000-year-old businesses

By Staff Writer
March 02, 2022
Japan’s longevity is already a renowned phenomenon as more than 80,000 of its citizens have reached age 100 or more – the highest ratio worldwide. And such longevity applies not only to its inhabitants, but to its businesses as well. Japan has the highest rate of centuries-old companies still active, some of which date back to nearly 1,500 years ago, surviving calamities and crises. How could these businesses last so long? In the era of start-ups mushrooming worldwide, their timeless secrets can help building sustainable businesses in the 21st century.

Creating bonds

Kongo-gumi, a construction company located in Osaka, is an extreme example. Since 578 AD, this contractor has built many important edifices, including the Shitenno-ji, a highly regarded temple in Osaka, created for a massive national project directed by Prince Shotoku himself.
Exterior of a large temple in Osaka
Shitenno-ji,a temple build in 593 AD.
Doubtlessly, the example of Kongo-gumi is outstanding, but there are another 33,000 entities operating since at least 100 years ago (Teikoku Data Bank, 2019). In contrast, the US, which ranks 2nd globally for age-old companies, has just 19,497. Such a long-standing entities are called in Japanese “Shinise,” literally meaning “old shops” and they are deeply respected due to their cultural heritage. Yoshinori Hara, dean and professor at Kyoto University’s Graduate School of Management says “Many of these long-standing companies are family owned, medium to small-sized. Usually they are Sake breweries, art-crafts workshops, manufacturers, construction, or food-related shops. Similarly, there is also a trend where companies involved with Japanese culture, history and life-customs can sustain their business longer.”
Exterior of a very old Japanese brewery
Sake breweries are an example of Shinise industry
Surprisingly, long-standing companies are not exclusively limited to small family-owned organizations. For example, Nintendo, globally acclaimed for creating Super Mario games and Switch, originated around 1889 in Kyoto as maker and seller of Hanafuda, a traditional card game. Although shinise are highly diverse in nature, they all share one aspect: as Hara states “many of these historical entities have created bonds among stakeholders such as local residents, family members and business partners.”

Hara continues, “there is a Japanese word “Mikata Yoshi,” which can be translated as “three-way satisfaction: seller, customers, and society. That philosophy is particularly rooted in these long-lasting Japanese companies. The fact that companies are sustainable and well-accepted by society is the reason we find shinise in Japan.” Additionally, he explains the country’s historical businesses tend to seek something more subtle: “These firms have prioritized to sustain their companies for the next generation rather than seeking immediate benefits.”

Purpose economy

However, continuing business in Japan for many generations is not easy at all, as the country has had many severe experiences in its 2000 years of history, including natural disasters like earthquakes, economic crises, and war. How can these companies counter these hazards? “Again, the potential reason is a strong synergy among stakeholders. For example, Rokkaku-do, a temple in Kyoto, faced many fires and burned down 18 times, but the locals have collaborated to rebuild the temple each time.
Aerial shot of a Japanese temple, showing tiled roofs and gardens
The Rokkaku-do Temple in Kyoto has burned down multiple times over its long history, but has been rebuilt each time thanks to support from the local community
Common philosophy (purpose economy or meaningful existence in society) and altruistic mindset are also important aspects.” Consequently, how can businesses be well-prepared to withstand the unprecedented crises in modern times? Hara replies “Companies can stand against crises with multi-stakeholder management. In addition to this, in the digital transformation era, Decentralized Autonomous Organization and networking among these communities will be an important aspect.”
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