4-1 The endangered public company

The rise and fall of a great invention, and why it matters

Why I picked up the article:

I thought the number of IPOs is decreasing only in Japan because of its economic situation. But as the article suggest, a flight from being public is a matter of the world. We have discussed similar topic of state capitalism in the former debate. This time I want to put the situation in order by discussion.


What are the merits and the demerits of being public?
Why Zack didn’t want Facebook to be public? And what about other “go private” companies?
Do you think the situation matter as the Economist suggest?


The public company was the invention of the mid 19th industrial age. It provides the giants (motors, railway, irons) with capital. In the 21st internet age, the picture changes. Zack resisted going public and wants Facebook in private for as long as he could. Why?

# of public companies/ 38% in America 48% in Britain (since1997)
# of IPOs in each year/ 165(in 1980-2000) 30(in 2001-2009) 135 annually

(1) The burden of law requirements/ quarterly reports/ 
(2) The flourish of alternative corporate forms/ “go private”/ SOEs/ family conglomerates
(3) Resources without being public/access to capital/ limited liability/ professional managers

The Economist suggestion
They worry about the decline of a public company for 3 reasons.

(1) Without IPO, entrepreneurs couldn’t make innovation or risky bets.
(2) Companies wouldn’t open their info and become dark.
(3) Ordinary people couldn’t get a chance to invest to future Google.

They think make something change, especially politicians need to easing regulation to make capitalism popular again. Or, the result is that ever more business is conducted in the dark, with rich insiders playing a more powerful role. 

Other discussion of this week:

[Special report] [International Banking]
Winners and losers World, here we come

1. Do you have bank accounts in international banks such as Citi bank? Why do you have?

2. Do you think Japanese banks should go abroad and do retail business?

[Business] [Commercial aircraft]
Duelling the duopolies

1. Do you think Japan can win the international competition and break the duopolies?

2. Do you think Japanese government should put importance on aircraft industry and support it?

[Graphic details] [Corruption and development]
Corrosive corruption

1. What criteria can describe a country "good"?

This week was the first time of season 4. We were 9 people and gathered at Saint-Marc Cafe in Kanda. One of them was a new comer who got to know our study group by her friend. 4 topics we discussed this week. "The endangered public company" from Leaders section describes the changing situation around public company. I was impressed at that kind of stream is world wide trend. This week The economist also published a special report related to international banking. It was  interesting because it  describes digitization of retail business in banking.  


ESG Prospectus

Season 4 will be launch from the next week

The Economist Study Group (ESG) is a group for young people who want to lead and make a positive impact on their field of the society. Our group is in progress, launched in April 2011 in Tokyo just after the devastating earthquake and tsunami hit the northeastern Japan.Our group aims to share insightful thoughts and ideas by discussing global issues based on articles of The Economist. The Economist is a international newspaper edited in the offices in the City of London, England. Its primary focus is world news, politics and business. Also it runs regular sections on science and technology as well as books and the arts. By discussing various topics in a group, we confront different values and beliefs of others, and find what ours are. This is hard to get opportunity for us who live in this front-running country.

We gather at a café on every Sunday morning. Detailed information is below:

Date & time: Every Sunday 10:00-12:00
Place: a Café in Kanda and others
People: mostly born in 80’s working in both public and private sectors. 
4-8 people coming to join as usual
Language: English
Style: Free talk / discussion / debate
Schedule: (1) Join (2) Read (3) Prepare (4) Discuss

(1)  Join
You can JOIN our discussion by checking a mark on a spreadsheet which members share on Google Docs. We can share date, time, place and members who can join in the spreadsheet.

(2) Read
You should READ all articles picked up by members who can join the discussion. You also pick up one article from a current newspaper.

(3) Prepare
Before discussion, you have to PREPAR your discussion paper on the article you picked up. It may consist of summary, discussion topics and a reason of choosing the article. Preparing A4 paper is enough for the discussion.

(4) Discuss
Based on your discussion paper, we DISCUSS each topic we pick up for the time. You can choose the style of the discussion from free talk / debate / presentation and so on. 


3-19 Chen, China and America

The Mormon way of business
The Mormons have produced a striking number of successful businesspeople

Mormons ( /ˈmɔrmənz/) are a religious and cultural group related to Mormonism, the principal branch of the Latter Day Saint movement, which began with the visions of Joseph Smith in upstate New York during the 1820s. After Smith's death in 1844 the Mormons followed Brigham Young to what would become the Utah Territory. Today a vast majority of Mormons are members of The Church of Jesus Christ of Latter-day Saints (LDS Church) while a minority are members of other churches. (Wikipedia)

Why I picked up:
I met two young Mormons in Inokashira park when I was a student. They are clean-cut and neatly dressed and friendly. At first I thought they are travelers or students but a friend told me they are Mormons and explain their missionary work. I am interested in their way of living at that time.

Do you have any experiences related to religion people such as Mormons?
I would like to discuss the relation between religion and business.

(1)Characteristics of Mormons
1. Don’t get drunk 2. Have large families 3. Stabele marriages 4. a three month supply of food 5. Clean-cut and neatly dressed 6.have passion for business(pro-business infrstracture ex Marriott School in Brigham young university )

(2)Successful business Mormons
1.Mitt Romney(Bain Capital/ Republican candidate) 2.Jon Huntsman senior(Huntsman Corporation) 3.David Neeleman(Jet Blue and Azul) 4.Ralph Atkins(Sky West) 5.Eric Varvel(Credit Suisse) 6.Harris Simons(Zions Bancorporation) 7.Allan O’Bryant(reinsuarance branch) 8.J.W.Marriott(Marriott hotel) 9.Clayton Christensen(Disruptive Innovation) 10.Stephen Covey (7 habits)

(3)What explain Mormons success?
1. Clean way of living 2.Business friendly faith 3. Well-organized churches 4.Missionary work of young Mormons


3-18 Rather dangerous Monsieur Hollande

New rivers of gold
Remittances from unlikely places are helping poor countries in downturn

Why I picked up:
I am interested in a Japanese entrepreneur, Tochisako Atsumasa who is the president of MFIC (Micro Finance International Corporation) and his business. He founded his company in US. His company provides financial services especially remittances for mainly migrant workers from South American countries.

  1. Compared to other inflows such as direct investment, development aid (ODA) and trades, what are the merits and demerits of remittances?
  2.  What kind of impact growing remittances have in the world economy?

1) The world’s most busiest remittance corridor
US => Mexico (=> Guatemala, Honduras) $22.2b

2) Remittances to poor countries are enormously valuable.
    Worth more than all overseas-development aid
Totaled $372b to poor countries in 2011

3) Remittances are not just big but growing  
    4 times bigger than 2000 despite economic crisis
 Reason for the boom: The data are better

4) Remittances come from wider countries than was previously thought
Originated in America 46% in 1970 => just 17% in 2010
 Saudi Arabia (the Gulf) posting $27b to South Asian and Africans
 Russia dispatching $19b mostly to Central Asia

5) Remittances are not immune to fluctuation though they are less volatile
 Cash flows to Mexico is 12% lower than their pre crash peak
 “The Arab spring”

6) Remittances are changed by currency fluctuation and immigrant policy
 Hit by weak dollars and euros, many migrants will react by spending longer or staying closer
 American stricter border controls keep migrants in as well as out