Core Viewpoint - Japanese companies have undergone significant changes in their operational models over the past three decades, particularly shifting from equipment investment to increasing stock dividends, which raises concerns about their growth potential [3][5][6]. Group 1: Investment Trends - Since 2001, the ratio of equipment investment to stock dividends for large Japanese companies has drastically decreased from 6.58 to 0.95 by 2021, indicating that stock dividends have surpassed equipment investments for the first time since World War II [5][6]. - The total amount of stock dividends has increased approximately sixfold over the past 20 years, while equipment investment has remained relatively stagnant at around 20 trillion yen [5][6]. - In 2021, stock dividends reached 24.6 trillion yen, while equipment investment was only 22 trillion yen, further widening the gap [5][6]. Group 2: Corporate Governance and Management Style - The shift in Japanese corporate governance began in 2001, coinciding with reforms that encouraged a more shareholder-focused approach, often at the expense of employee investment and equipment spending [6][7]. - The focus on shareholder returns has led to a significant increase in profit margins, but this has primarily benefited shareholders rather than fostering sustainable growth [7][15]. - Japanese small and medium-sized enterprises (SMEs) have maintained a more balanced approach, with a ratio of equipment investment to stock dividends of 3.06 in 2021, indicating a more proactive investment attitude compared to large corporations [7][8]. Group 3: Macroeconomic Context - Major macroeconomic events, such as the bursting of the asset bubble in 1991, the 2008 financial crisis, and the COVID-19 pandemic, have significantly impacted the operational environment for Japanese companies [8][12][13]. - These events have led to a pattern of "going with the flow," where companies have reacted passively to external pressures rather than proactively adapting their strategies [8][15]. - Historical analysis suggests that Japan's economy has experienced significant changes approximately every 17 years, indicating a cyclical nature to these macroeconomic shifts [12][14]. Group 4: Strategic Errors - Japanese companies have made two fundamental errors: significantly increasing stock dividends while limiting investments, and failing to deeply consider their core operational principles [15][16]. - The shift towards prioritizing shareholder interests has resulted in reduced investment in employees and long-term growth strategies, which may not be sustainable [15][16]. - Companies need to correct these strategic errors and prepare for potential future macroeconomic changes, as the next significant event may occur around 2025 [16][17].