The Miracle: The Epic Story of Asia's Quest for Wealth

Read an Excerpt

The Miracle
The Epic Story of Asia's Quest for Wealth

Chapter One

The Radio That Changed the World

We should all join to try to make more Japans in other parts of the world. ...Akio Morita

Akio Morita was not amused. The Japanese businessman was in a restaurant in Dusseldorf in 1953 and ordered a dish of ice cream. Stuck into a scoop was a miniature decorative paper parasol. "This is from your country," the smiling waiter informed Morita. He probably intended to make Morita feel welcome in a foreign land, but instead he inadvertently bruised Morita's pride. "That was the extent of his knowledge of Japan and its capabilities, I thought, and maybe he was typical," Morita later wrote. "What a long way we had to go."

At that moment, Morita was not confident that Japan could get as far as it needed. More than eighty years earlier, Japan had determined to catch up with the West, yet despite all of its efforts, the Japanese were still far behind, especially in the realm Morita knew best...technology. The importance of technology was made devastatingly clear to him while he served as a naval officer during World War II. He was assigned to a team of researchers developing heat-seeking weaponry and night-vision gun sights. The Imperial military headquarters believed that breakthrough technologies would turn the tide of a war that was fast becoming a hopeless cause. At the time, Morita believed that the technology gap between Japan and the United States was not great.

That illusion, however, was shattered when America dropped atomic bombs on Japan. He heard about the first...Hiroshima...while eating lunchwith his colleagues on August 7, 1945, one day after the blast. The news report stated that "a new kind of weapon that flashed and shone" had been used by the Americans, but Morita, a highly trained physicist, knew exactly what it was. The news came as a revelation. "We might as well give up our research right now," a despondent Morita told his team at the lunch table. "If the Americans can build an atomic bomb, we must be too far behind in every field to catch up." His superior officer was furious with him for such defeatism, but Morita believed he was simply being realistic. "The news of Hiroshima was something truly incredible to me," he later recalled. "It struck me that American industrial might was greater than we realized, simply overwhelming." The bombs also convinced Morita that educated young Japanese like himself must persevere and lead Japan's postwar renewal. "It was brought home to me more than ever that Japan would need all the talent it could save for the future," Morita later wrote. "I don't mind saying that even then, as a young man, I felt that somehow I had a role to play in that future."

Morita pursued that role through a start-up venture he founded in 1946 with a partner, Masaru Ibuka. They called it the Tokyo Telecommunications Engineering Corporation. Their first headquarters was in the ruins of a Tokyo department store. Then they moved to a wooden shack on the outskirts of the capital. When it rained, the staff opened umbrellas over their desks to protect them from water leaking through the bomb-damaged roof. But like garage entrepreneurs anywhere, they had ambitions well beyond their meager resources. Amid the destruction of the war, they hoped their efforts could contribute to their nation's recovery. In a founding prospectus, Ibuka wrote that the company determined "to reconstruct Japan and to elevate the nation's culture through dynamic technological and manufacturing activities."

As Morita sat glumly with his ice cream in Dusseldorf seven years later, however, he was disheartened. Morita felt that Germany's rapid recovery from its own disastrous war effort "made Japan's postwar progress seem slow." His spirits were also dampened by a preceding trip through America. The size and scale of the United States made him doubt that his tiny firm could ever be successful in the American market. "I thought it would be impossible to sell our products here," Morita later wrote. "The place just overwhelmed me."

Yet just before his return to Tokyo, Morita's hopes lifted during a stop in Eindhoven in the Netherlands, then the home base of electronics giant Philips. He toured the factory...not as a VIP executive, but as an ordinary tourist...and was wowed by its technical prowess. Morita was impressed that the Netherlands, a small, agricultural nation much like Japan, had produced such a world-class technology firm. Encouraged, he wrote a letter to Ibuka. "If Philips can do it," he scribbled, "maybe we can too."

It was not such a far-fetched idea. The enterprise Morita and Ibuka formed would become the famous Sony Corporation, arguably Asia's best-known company. Sony came to symbolize the growing economic and technical power of Japan and Asia and the intensifying threat they posed to the Western-dominated economic order. Sony, in some ways, became the Miracle's brand name.

Likewise, the gregarious Akio Morita was probably the Miracle's single most famous personality. Morita became so well known in the United States that he was enlisted to pitch American Express cards in a commercial on American television. ("Do you know me?" Morita asks. "As chairman of Sony, I expect great reception.") Morita operated in the most elite circles of American society, fraternizing with the likes of the Rockefellers and calling Leonard Bernstein a good friend. When Sony wished to break into the China market, Henry Kissinger arranged a meeting for Morita with China's supreme leader. Morita, Kissinger once commented, was "a great patriot yet an individual who had learned that, in the current world, Japan had to excel by relating to other countries rather than by separating itself from them." Despite his respect for the United States, Morita was also one of Japan's stoutest defenders when trade disputes turned the relationship between the two countries confrontational in the 1970s and 1980s.

As a businessman, Morita displayed an innate talent for understanding consumer behavior and identifying future technological and social trends. Those talents helped place Sony at the forefront of the global electronics industry. His inspiration came from an almost childlike curiosity and enthusiasm. A lifetime lover of toys, he collected music boxes and player pianos, and never resisted a visit to New York City's famous toy store FAO Schwarz. The study at his home featured an antique American nickelodeon, complete with a stash of nickels to make it play.8 Morita started skiing at sixty, windsurfed at sixty-five, and learned to scuba dive at sixty-seven. "Idleness leads to sickness," he once said. An incessant tinkerer, Morita was always fascinated by the latest electronic gadgetry. Yotaro Kobayashi, a former chairman of Fuji Xerox and a close friend of Morita's, recalls contacting Morita in 1967 when his company had just released its first desktop copier in Japan. Morita wanted one immediately. The next day, Morita called Kobayashi and proclaimed: "We know everything about the Xerox machine." No sooner had the new product arrived at Morita's office than he and a team of engineers dismantled it to figure out how it worked. Perturbed, Kobayashi gently reminded Morita that he had rented, not purchased, the copier, so Morita had just destroyed Kobayashi's property. "I know that," Morita said. "It's back in complete shape and working."