At the World Economic Forum in Davos this January, Japanese Prime Minister Shinzo Abe delivered the keynote address kicking off the conference. He spoke about his hopes of counteracting the aging and shrinking of Japan’s population by tapping into the creativity and innovation of the country’s “most under-utilized resource.”

That under-utilized resource is women.

Citing encouraging remarks from high-powered female friends like Arianna Huffington and Hilary Clinton, Abe announced his intention of turning Japan into “a place where women shine.”

Japan certainly has plenty of ground to make up. In the WEF’s Global Gender Gap Report 2013, Japan ranked at No. 105 out of 136 countries, below Burkina Faso and Cambodia, and above Nigeria and Belize. This was one of the lowest levels for an OECD country, with only Korea (111) and Turkey (120) scoring worse.

Wanting to make a clean break from the bad old days, Abe proposed a clear target for his empowerment program: 30% of leading positions to be occupied by women by 2020.

To set an example, the prime minister has promoted women in government. There are two female ministers, Tomomi Inada and Masako Mori, in the cabinet. More strikingly, women hold two of the three most powerful positions in Abe’s Liberal Democratic party.

Abe is also putting women in top positions in the civil service. In November 2013, for example, he appointed Makiko Yamada, an assistant-vice minister of economy, trade, and industry, to be one of his three secretaries. Yamada is the first woman to serve in this influential post.

At a conference I organized in Fukuoka last February, I had the opportunity to see the government’s enthusiasm for female-empowerment close up. Deputy Prime Minster Taro Aso was one of our speakers—and the very first thing he asked me was whether I could recommend any able women to serve as government committee members.

The private sector is following the government’s lead. This April, Nomura Trust & Banking Co. appointed Chie Shimpo, a forty-eight-year-old woman, as its president. And in June, Keiko Tashiro will become a director of Daiwa Securities.

Japan already has plenty of inspirational women entrepreneurs, such as Tomoko Namba, founder of mobile game developer DeNA, and Sakie Akiyama, co-founder of Saki Corporation, a testing-equipment manufacturer.

High-speed Transformation

Generally, Japan is slow to initiate change, but once a consensus has been achieved, things can move surprisingly fast. Consensus is certainly in place on the female empowerment issue. Both government and the private sector are eager to promote women.

So what obstacles are still blocking the way?

I can point to two.

First off, the tax system actively favors single-income households over dual-income households. A husband qualifies for very generous tax breaks if his wife earns less than ¥1.03 million per year. Equally, when the wife earns under ¥1.3 million per year, she is not obliged to pay any state pension premiums, but is covered by her husband’s pension.

These arrangements clearly discourage women from working full-time after getting married.

The tax code should be changed.

The second problem is the issue of preparedness. Are women actually ready for the leadership positions Abe wants them to assume?

Not in all cases.

Recently, for example, when the Prime Minister’s office tried to appoint a woman judge to the Supreme Court, they encountered a problem. Since most female judges work in the family courts, none of them had the right background experience.

Equipping women for leadership positions involves admitting them to the proper track to secure the requisite experience and qualifications at the start of their careers. Since many organizations only opened up fully to women in the late 1990s or 2000s, it will take time to build up a critical mass of qualified women across all fields.

No Prejudice

Some foreign observers think of Japan as a society with a deep-seated prejudice against promoting women leaders. While I concede that some sectors (manufacturing) are more conservative than others (services), Japan overall is now very accepting of women in authority.

On top of that, the way people work has changed. With smartphone- and tablet-enabled mobile working, the old model of salarymen staying late in the office every day is simply out of date. Companies want people who work smart, not long. This is a structural shift that should favor women.

Take GLOBIS, the organization I head. We have already surpassed Abe’s 2020 target. More than 30% of our directors, managers, board members and executive committee members are female.

In addition, to do our part to build a more diverse workforce, we’re aiming to boost the proportion of women MBA students at GLOBIS University from the current 20% to 30% over the next few years, and to 40% by 2020.

In 2012, Japan’s Ministry of Economy, Trade and Industry teamed up with the Tokyo Stock Exchange to publish an annual list of Nadeshiko Brand companies. (Nadeshiko is a poetic Japanese word for “woman.” Japan’s national female soccer team is called “Nadeshiko Japan.”)

The Nadeshiko firms—which include global names like Nissan, Nikon, and Fast Retailing (of Uniqlo fame)—combine active support for career women with superior financial performance.

In other words, Japanese companies that empower women and embrace diversity generate better returns for shareholders.

The same thing applies to Japan as a whole.

Having more women in leadership positions across all sectors will supercharge Japan’s performance. I, for one, am looking forward to Japan becoming a place where women shine, and I’m doing my best to help make it happen.

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