A K I O M O R I TA

26 january 1921 . 3 october 1999

PROCEEDINGS OF THE AMERICAN PHILOSOPHICAL SOCIETY

VOL. 145, NO. 2, JUNE 2001

akio morita
KIO MORITA was not only a unique citizen of Japan, but also a unique citizen of the world. Coming from a society that generally de-emphasizes the importance of individuals, he was a unique and distinctive individual. According to some opinion polls, his was the most recognizable Japanese face in the world. His name was generally better known in the West than that of any other Japanese citizen (including Japans prime ministers). Sony, the company that his creative and entrepreneurial energies made so uniquely successful, was among a handful of the best-known brand names in the world, and was probably the single best-known name at the conuence of quality and brand recognition in the minds of global consumers. Akios success in putting a human face on the austere faceless image of Japan, Inc., in the West (and of coming to personify the Japanese economic miracle in the process) is legend. His entrepreneurial origins would be recognizable to any American entrepreneurstarting a company with Maseru Ibuka in the basement of a war-devastated, bombed-out department storewith $500 in borrowed cashand hawking tape recorders from the back of a pickup truck to a generation of Japanese consumers who had no idea what they could possibly be used for. From there it was on to his seminal visit to Bell Labs in the early 1950s, when he looked at the best of American researchthe transistor (for which its American inventors saw only a small niche market in hearing aids). Following up on Ibukas vision, Akio had his Eureka! moment at Bell Labs, foreseeing the future of the transistor-based microelectronics that was, of course, at the heart of Sonys success in transistor radios, but is also the core technology of the entire computer and consumer electronics revolutions of our times. Having once been stung in Europe to learn that Westerners in the 1950s equated Made in Japan with toys and cheap, poor-quality items like the little umbrellas oated in cocktails, he would go on to oversee breakthrough developments in color television, camcorders, video recorders, and the Walkman, among thousands of other Sony products that helped redene Made in Japan as a phrase embodying leading-edge technology, quality, and high customer satisfaction. It would be hard to imagine any other Japanese embracing American culture in the high-prole (and totally natural) ways Akio did, whether appearing in the famed Do you know me? series of American Express commercials or embracing the pink-haired punk rock star Cyndi Lauper on the cover of the New York Times Magazine. But Akio was not just a unique Japanese. As I have said, he was also a unique citizen of the world. He not only understood the need to put a human face on Japanese business; he had tremendous insights
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that related to the global economy and to issues far beyond the parochial interests of Japan. He was a vigorous exponent of globalization and understood probably better than anyone that it was going to be a way of life. He also understood that there would be problems with globalization and challenges to this process. He envisioned putting in place a framework that could support globalization in the face of inevitable inequities, disparities, and the kind of criticism that we saw so recently after his death at the WTO talks in Seattle in 1999. Akio favored not just globalization in the abstract, but something he called global localization. Under his formulation of global localization, multinational companies should strive to manufacture and create jobs in local markets, transfer technology and skills, defend the environment, and otherwise contribute as good corporate citizens building up local and regional economies around the world. Sony, under his leadership and today, is an exemplar in these areas. Akio articulated a visionary proposal for global economic and business harmonization, which he discussed in a series of path-breaking articles for one of Japans leading intellectual publications. I encouraged him to share these views with the English-speaking world. He did this, and added even more to the argument in a major article for the Atlantic Monthly in June 1993. Almost alone among leading Japanese voices of that time, he recognized that Japan would have to give up a lot in terms of more open access to its markets, deregulation, and so forth, in order to be a credible participant in a genuinely harmonized new world economic order. Akio contributed to the development of the English language more than once, with product names such as the Walkman. Even the name of Sony was chosen so as not to sound Japanese. It drew from the Latin sonus and the English sound and the expression Sonny Boy, an English expression that was popular in Japan at that time to describe someone who had a young and pioneering spirit. But Akios Englishlanguage phrases designed to express political, economic, and social ideas have also become part of the global public domain. In addition to global localization, he spoke often of fate-sharing to express the mutual responsibilities of business, government, and labor on the one hand, or of the United States and Japan on the other. He spoke of cooperative competition between companies. His thinking on this subject helped lay the philosophical basis for many of todays partnerships between companies that are also competitors. He applied this theory to national economies as well, offering a rational view of how the United States and Japan could compete and cooperate economically to our mutual benet. He did not coin the term human capital,

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but he was an early adopter of it. He placed great value on selecting new recruits for Sony, based not on their university degrees but on what they could contribute. He was not the rst to speak of the marriage of hardware and software. But with Sonys bold acquisition of CBS Records and the admittedly sometimes troublesome acquisition of Columbia Pictures, he pushed Sony further than any company had gone at that time in trying to explore the possible synergies between hardware and software. Frankly speaking is a phrase many Japanese useand then go on to say something that isnt terribly frank. Akio tended to speak frankly most of the time, even when it rankled his American friends. The blunt lectures he gave to American business audiences in the 1980s (some would say too blunt for his own interests) on the erosion of quality in American manufacturing or on the problems caused by Americas xation on short-term nancial results actually contributed to stimulating some of the great changes in American competitiveness that have taken place in the last decade. Akio was an innovator in everything he did and everything he touched, from consumer electronics to the global economic agenda. But it was in his rst incarnationas the consummate innovator in consumer electronicsthat I rst met him. As a result of my work as president and CEO of Bell & Howell in the early 1960s, I had come to know one of Americas great innovators of the twentieth century, Dr. Edwin Land, founder of Polaroid. Dr. Land and I had many wonderful meetings and encounters. I freely confessed to him that I was a technical idiot. But I was passionate about innovation. He seemed to appreciate my thoughts on how consumers interacted with products, and on marketing, and sometimes inventing or at least dening a consumer need (but never a technical solution). He would frequently show me a new invention. I would look at it in awe, but then point out some problem for the average consumer in using it. He would then go back to his workshop, stay up all night, and proudly show me something the next day that solved my problem. During one of these encounters he told me that if I was so interested in innovation, I should make it my business to get over to Japan and see what Maseru Ibuka and Akio Morita, the cofounders of Sony, were doing there. I took Dr. Land up on his suggestion a few months later. From my Bell & Howell experience, I already knew that Japanese competitors were eating this countrys lunch in the still camera market, but I had not yet personally experienced what lay behind this trend. On that rst visit to Sony, Ibuka and Morita took me through their

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factories and their research labs. Just as Land had predicted, I was amazed by what I saw. Indeed, I felt I had seen the future. I had seen how innovations in product markets, technology, and manufacturing would come to revolutionize the consumer goods industry. Some years later, I had moved from the business world to the political world, and was working in Richard Nixons White House, rst as the presidents point man on international economic affairs and later as secretary of commerce. In these capacities, I saw Akio Morita several timesand in a new light. The U.S. trade decit with Japan had just begun to be statistically, and certainly politically, signicant. But even when it amounted to only a few billion dollars, I saw that it could become a major economic and political issue over time. As a result, I was deeply involved in trying to persuade Japanese ofcialdom to liberalize trade, open markets, and revalue the yen to a more credible level. Innumerable Japanese trade and political delegations came to see me in those days, trying to convince me that it was impossible for Japan to make these changes. From the head of Nippon Steel, which had emerged as one of the worlds largest steel companies, and from many other CEOs of what were by then world-class Japanese companies, I heard the ritualized incantation about how Japan was a humble island nation with no natural resources still suffering from the devastation of the war. This poor nation could not possibly make the changes Americans wanted, I was told over and over. Akio Morita participated in some of these delegations. He had a different perspective. He had done what was unthinkable for a Japanese executive at that time: he had moved with his wife Yoshiko and their children to New York in order to immerse himself in the American environment. He wanted to learn everything he could about American business, consumers, and culture. Today, Japanese executives sometimes do a tour of duty in the U.S., but too often live in their own walled-off environments, rarely getting to know Americans well and sometimes rarely even having to speak English. With Akio, it was just the opposite. He and Yoshiko plunged themselves into every aspect of American life from business to politics, media, the arts, and the education of their kids. This seminal experience made him a genuine expert on American life and was incredibly valuable to him throughout his career. I also served on the board of RCA. Akio spent many generous hours trying to educate me about videotape and video technologies that were then changing the paradigm of RCAs business. Akio told me he was contemplating a series of strategic steps for Sony that would take many of his ideas about globalization of the company to a new

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level. He asked me to be available to him as a senior advisor, someone he could count on to speak frankly as he expanded Sonys activities in the United States. In 1985, I founded The Blackstone Group, together with one of my old Lehman Brothers partners, Steve Schwarzman. Although the rm has gone in many other business directions since then, our rst area of interest was to take a step away from the world of greenmail and hostile takeovers then shaking Wall Street, and serve as traditional, trusted, senior advisors to heads of companies pursuing strictly friendly mergers and acquisitions. Very early in the life of The Blackstone Group, Akio Morita asked us to help Sony make its major acquisitions in the U.S., beginning with the highly successful CBS Records business. Akio took another unprecedentedly global-minded step. He asked me to serve on Sony Corporations board of directors as the rst ever foreign, outside director of a major Japanese corporation. Indeed, even today, foreign directors are extremely rare. Again, given my respect and gratitude, I could scarcely say no to Akio, even though it meant resigning from U.S. boards on which I had long served, such as 3M, to avoid competitive conicts. Many other common interests outside the business world brought us together over the years. I was the founding chairman of the Institute for International Economics (IIE) in Washington, D.C., an organization that I believe has emerged as the worlds leading think tank on cross-border economic issues. Early on, I asked Akio to serve on our board, which he gladly did. He hosted meetings in Japan for me and for the IIEs directors and scholars. He made introductions to all the right people at the top of Japanese society. Considering that the message of the IIEs research often focused on the need for internal economic reform in Japan, Akios role was truly a pioneering one. To honor his unique contributions to the Institute, he joined a very select group of Americansthe chairman of the Federal Reserve Board, Alan Greenspan, the former secretary of state, George Shultz, and Reginald Jones, former CEO of General Electricas an honorary director. The arts were also of great interest to Akio and Yoshiko Morita. Yoshiko and I serve together as trustees of the Museum of Modern Art (MoMA). I have been delighted to participate in an effort to establish an Akio Morita wing at the MoMA. Akio had an irrepressible energy. He moved quickly from one business and policy topic to another, and moved fast physically from situation to situation. His quick walking gait was a metaphor for his persona. He could go from talking about a big business problem to sports or opera with ease. He took up skiing at sixty and scuba diving

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at sixty-ve. He was an avid tennis player and enjoyed golf immensely. I recall taking him, Yoshiko, and their son to play at the Augusta National Golf Course. Even though I knew Akio well at this point, and knew a lot about his wide range of business and social contacts, it was impressive nonetheless to see that he knew virtually every American CEO in the club house that day. I dont mean he recognized them, I mean he knew them personally and by name, and went up to chat with them as if it were the most natural thing in the world to be running into them. At the time of Akios stroke in November 1993, I was engaged with him in two different and fascinating dialogues. One was a suggestion I had made to him to publish a new book to follow up on his excellent 1986 autobiography, Made in Japan. I had suggested he call this one Musings by Morita, and use it to expound his many interesting and thought-provoking opinions about a wide range of topics. I had in mind taking the pleasures of spending a lunch or a dinner conversation with him and serving them up to the thousands of readers who would otherwise not get the chance to sample his unique food for thought. I had interested my friend Jason Epstein at Random House (probably Americas greatest living editor) in the idea of publishing this book. Indeed, Random House won a hotly contested auction for the rights only a few weeks before Akios stroke. I think this book would have been a marvelous legacy. It is a shame it never came to fruition. (And what a shame it was that his stroke came only days before he was to have achieved a lifelong dream to take the helm of Japans most powerful business organization, the Keidanren.) I had also just begun a dialogue with Akio about the impact of the Internet and interactive media. He was fascinated with these phenomena and agreed with me that, as the center of action was in the United States, he should start spending a lot more time in America with the entrepreneurs and technologists who were creating these new breakthroughs and new businesses. I am sure he would have had a great amount to contribute to that dialogue as well. It goes without saying that the U.S.-Japan bilateral dialogue has been signicantly diminished by Akios absence during those last years when he was incapacitated. One hopes that more individuals will emerge, on both sides, who can truly understand the culture and perspective of others. It is particularly sad and ironic to have lost Akio just at the threshold of the new millennium. As one who loved innovation and the next new thingand who helped lay the foundation for all that is happening nowhe would have relished living through these extraordinary times. Surely, he would have had a unique perspective to enlighten us all.

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Akio Morita was a visionary in all things. He was an inventor of world-changing consumer products, of course, but he was also Japans greatest ambassador-at-large, and a thoughtful architect and dynamic builder of the new global economy. He could not only dream the big dreamshe could make them come true. The world of the twenty-rst century will miss him greatly, and so, certainly, will I.
Elected 1992

Peter G. Peterson
Chairman The Blackstone Group