Japan: Sweden 50 years ago

When I grew up, my father was a politician in the local governement. This meant a lot of backscratching - even though he never took to it, you could easily see how helping your neighbour could be a driver. I have seen this later, in other areas and industries, including the company I work: You look to, and look after, the people you know first. Simply put, the school tie and country club rules.
Why is this bad? It was not until the good ole boys stopped running the American south that it became an engine of growth (even though there still is poverty, it has grown more than Europe in the past 50 years). And the reason is that if you always stick with those and what you know, you will get stuck in groupthink - not finding new solutions. But it is worse: You will not drive the economic growth either, since you are only trying to grow the value within your existing network, not the value itself. In a free economy, the best bid wins, not the one offered by your mates. This may be disruptive but it means value creation. Old boys networks at best means value conservation, at worst value destruction as incompetence creates additional costs.
So when the old boys networks started to break up in Sweden, however traumatic it was, the growth in the economy took off. This was, incidentally, at the same time as women started moving out into the workplace in a big way. From an economic perspective, it is of course more cost-efficient to leave your kids in childcare than having your wife stay at home to take care of them. She will create more value for more people just by having a job, whatever it is - since she will meet more people. For the children, childcare can create value as well, by helping them be social. But on the other hand, having a mother to come home to when you are small is a value hard to measure economically.
Nevertheless, sometimes Japan feels like Sweden did when I was 10. I probably experience society from the same level as well, 40 years later. But the old boys club which has been such an enormous drag on Japan, by lending to companies already broke and creating huge building projects which were just pork for the voters (and jobs for the boys) is breaking up. If nothing else, it is dying off. It would just take a few thousand entrepreneurs who did things better to reshape society, and they are coming. If the Japanese governement just had the sense to make sure some of them were Chinese, then there would be no worries over Japans economy.
The traditional businesses will be losing customers on the margin, even if it is only us foreigners. And what is more, they will find it hard to change their business, since their traditional customers will not be happy about it; and if they do not change, the business will eventually go down as the customers die off.
There are a lot of Japanese business which will disappear in the next 20 years, as the old people die off. This does not mean that traditional Japan will disappear, it already has. But it means that new business which come up do not have to compete with the old businesses - their customers are dying anyway. The spa will replace the sento, not because it is better but because it can charge its customers more - and get more customers on the margin.
It will mean it becomes harder for families who rely on traditional businesses to make ends meet. This will force more women into the labour force. Some of them will turn out to be successful entrepreneurs. These entrepreneurs will bring more women into the labour force, if nothing else because women will tend to start businesses which cater to women (it is always easier to do what you know). Some of them, of course, will become building contractors and publishers and what not. The governement will have to adapt to this by making childcare easier and cheaper. It will solve the growth problem of Japan (just like it did Swedens) by increasing the labour force. And it will mean the trickle of foreigners which will come (if nothing else, because the Japanese women are so beautiful and wonderful wives) will become even more a business driver. Slowly, the old boys networks dying away will expose the value of Japan. The Asian tigers will have to hold on to their hats when that starts to happen.