Shinise

 

The Japanese take pride in ‘shinise’: businesses that have lasted for hundreds or even thousands of years. This points out an interesting alternative to the goal of profit maximization: maximizing the time of survival.

• Ben Dooley and Hisako Ueno, This Japanese shop is 1,020 years old. It knows a bit about surviving crises, New York Times, 2 December 2020.

Such enterprises may be less dynamic than those in other countries. But their resilience offers lessons for businesses in places like the United States, where the coronavirus has forced tens of thousands into bankruptcy.

“If you look at the economics textbooks, enterprises are supposed to be maximizing profits, scaling up their size, market share and growth rate. But these companies’ operating principles are completely different,” said Kenji Matsuoka, a professor emeritus of business at Ryukoku University in Kyoto.

“Their No. 1 priority is carrying on,” he added. “Each generation is like a runner in a relay race. What’s important is passing the baton.”

Japan is an old-business superpower. The country is home to more than 33,000 with at least 100 years of history — over 40 percent of the world’s total. Over 3,100 have been running for at least two centuries. Around 140 have existed for more than 500 years. And at least 19 claim to have been continuously operating since the first millennium.

(Some of the oldest companies, including Ichiwa, cannot definitively trace their history back to their founding, but their timelines are accepted by the government, scholars and — in Ichiwa’s case — the competing mochi shop across the street.)

The businesses, known as “shinise,” are a source of both pride and fascination. Regional governments promote their products. Business management books explain the secrets of their success. And entire travel guides are devoted to them.

Of course if some businesses try to maximize time of survival, they may be small compared to businesses that are mainly trying to become “big”—at least if size is not the best road to long-term survival, which apparently it’s not. So we’ll have short-lived dinosaurs tromping around, and, dodging their footsteps, long-lived mice.

The idea of different organisms pursuing different strategies is familiar in ecology, where people talk about r-selected and K-selected organisms. The former “emphasize high growth rates, typically exploit less-crowded ecological niches, and produce many offspring, each of which has a relatively low probability of surviving to adulthood.” The latter “display traits associated with living at densities close to carrying capacity and typically are strong competitors in such crowded niches, that invest more heavily in fewer offspring, each of which has a relatively high probability of surviving to adulthood.”

But the contrast between r-selection and K-selection seems different to me than the contrast between profit maximization and lifespan maximization. As far as I know, no organism except humans deliberately tries to maximize the lifetime of anything.

And amusingly, the theory of r-selection versus K-selection may also be nearing the end of its life:

When Stearns reviewed the status of the theory in 1992, he noted that from 1977 to 1982 there was an average of 42 references to the theory per year in the BIOSIS literature search service, but from 1984 to 1989 the average dropped to 16 per year and continued to decline. He concluded that r/K theory was a once useful heuristic that no longer serves a purpose in life history theory.

For newer thoughts, see:

• D. Reznick, M. J. Bryant and F. Bashey, r-and K-selection revisited: the role of population regulation in life-history evolution, Ecology 83 (2002) 1509–1520.

See also:

• Innan Sasaki, How to build a business that lasts more than 200 years—lessons from Japan’s shinise companies, The Conversation, 6 June 2019.

Among other things, she writes:

We also found there to be a dark side to the success of these age-old shinise firms. At least half of the 17 companies we interviewed spoke of hardships in maintaining their high social status. They experienced peer pressure not to innovate (and solely focus on maintaining tradition) and had to make personal sacrifices to maintain their family and business continuity.

As the vice president of Shioyoshiken, a sweets company established in 1884, told us:

In a shinise, the firm is the same as the family. We need to sacrifice our own will and our own feelings and what we want to do … Inheriting and continuing the household is very important … We do not continue the business because we particularly like that industry. The fact that our family makes sweets is a coincidence. What is important is to continue the household as it is.

Innovations were sometimes discouraged by either the earlier family generation who were keen on maintaining the tradition, or peer shinise firms who cared about maintaining the tradition of the industry as a whole. Ultimately, we found that these businesses achieve such a long life through long-term sacrifice at both the personal and organisational level.

14 Responses to Shinise

  1. Ravi Ranjan says:

    This is a bit off-topic but since you have written about Lotka- Volterra models, you might find it interesting. Jim Mallet has an interesting paper about how the notion of carrying capacity isn’t great, and many of the problems of the r-K paradigm stem from the use of a version of the logistic equation with r and K.

    It is called: The struggle for existence: how the notion of carrying capacity, K, obscures the links between demography, Darwinian evolution and speciation

    https://dash.harvard.edu/handle/1/30212075

    • John Baez says:

      Thanks! I’m interested in population biology and the general lessons we can learn from it, and I realize I need to catch up on new ideas regarding the r-K paradigm. Clearly there’s a lot more to life than the logistic equation!

  2. scentoni says:

    As far as I know, no organism except humans deliberately tries to plan anything in the long term. I’m not sure “maximizing lifetime” is a useful qualifier here.

  3. Bruce Smith says:

    “As far as I know, no organism except humans deliberately tries to maximize the lifetime of anything.”

    Depending on what you mean by “deliberately”, this seems dangerously close to a trivial tautology, even in the more general form “no organism except humans deliberately tries to do X” (for most kinds of X). Is there something specific you can imagine other organisms doing, that they don’t actually do? Certainly there are a few kinds of organisms with much longer individual lifetimes than humans.

    • John Baez says:

      I wasn’t trying to say anything profound there. I wouldn’t say it’s a trivial tautology, just an observation that (apparently) no organisms other than humans deliberately try to maximize their species’ lifespan. This makes the fact that some but not all have enormous lifespans all the more interesting: why does this happen just in the cases that it does?

      (Of course you could argue organisms try to maximize their individual lifespan, in the sense of “trying to not die”. And these days epigenetics is giving new life to Lamarckism. But I’m not going to argue that organisms are effectively trying to increase their species’ lifespan.)

  4. Bruce Smith says:

    That said, this general topic is very interesting — my main reaction is not nitpicking, but intense curiosity about how an organization manages to survive so long. Also, was it really “deliberate” or was it largely luck? I imagine both are required!

  5. Japanese manufacturing culture is very interesting at many levels. There are still a few old men making bespoke knives in little shops. The baton was handed over from generation to generation. I have a hand made kitchen knife with my name stamped in it made by one such shop. The big knife manufacturers (eg from Germany) now account for most of the sales of high end knives. I recall a single Japanese machinist in a cluttered little shop who did precision machining for Airbus and possibly NASA. There is a video of him in his 80s doing the final cut on the lathe by ear! He could tell by the sound when it had reached its dimension. The Nissan GTR engines are hand assembled and the technician’s name is put on a plate on the engine.

  6. allenknutson says:

    I recently enjoyed

    “How Soy Sauce Has Been Made in Japan for Over 220 Years”
    which details the process at a certain Japanese factory. What was most interesting about it was watching this guy carrying out the steps of the same process as has been used for hundreds of years (e.g. in giant barrels built a hundred forty years ago), while discussing the science of what’s going on using knowledge gained much more recently.

  7. Nikolaj-K says:

    I’m a bit surprised that growing would not also be a life maximizing strategy as well?

    In any case, I’m very sympathetic to searching other metrics than growth in the capitalist sense. I personally know of bakery owners who “made it big” and told me that they didn’t plan to. They wanted to stay a cozy bakery, but business growing suppliers told them they would supply to bigger bakeries unless they would not also extend their orders. So they would have gone out of business if they didn’t go along with expanding. It’s out of a Marxist textbook.

    • John Baez says:

      Yeah, you’d think that growing a business bigger would tend to make it more robust and able to survive downturns… but I guess this is just part of an optimal strategy if your goal is to maximize the lifetime of a business. Maximizing expected growth in the next 5 years (say) may involve taking risks that are likely to kill off your business before a hundred years go by. And it could be that for a business to survive for a thousand years, size plays a very small role. Studying thousand-year-old businesses would be the best way to find out what works. (But the next thousand years are going to be quite different than the last thousand.)

      Interesting to hear about the pressure that was put on that bakery to grow. It’s pretty annoying!

    • Giampiero Campa says:

      Well i think growth can have different meanings here. Other than increase profits, a company might decide to grow its profit margin, market (number of customers), market share, size (number of employees), capital investments, and so on.

      It seems to me that long living companies (must) achieve just the right size in terms of market share so that they can stably occupy one (or more) niches. So if your niche is “small” then you can stay “small”, but if your market has a large size, you have to grow your market share to occupy a good portion of it. Which normally means growing in the other dimensions too.

      This is an article with interesting reflections: https://medium.com/the-long-now-foundation/the-data-of-long-lived-institutions-4e7743c95f07

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