Economies suffer when family businesses fail to survive the transition to new generations. Kyoto is unusual in being home to large numbers of companies already hundreds of years old that continue to thrive, how do they do it? Innan Sasaki (Lecturer Strategic Management) has explored the hidden story behind some of the world's most successful historic companies.

The mantra of businesses globally is the imperative of change for survival. And yet many of the longest-lasting businesses are those that have entirely rejected the idea of change. So business sustainability isn't underpinned solely by technology - the rush to new efficiencies from digitisation and Artificial Interlligence - but can also be made through more human characteristics, such as an insistence on tradition, integrity and quality.

The idea is epitomised by the shinise of the Japanese city of Kyoto. Shinise are firms that have survived for more than a century, often three or four keeping ownership within the family, and have a focus on a traditional line of business, typically sectors like sake brewing, confectionaries, templeornaments, and textiles. What's particularly interesting about the shinise is their high status within the city - not only because of a reputation for quality - but through a more complex role within the community in helping to preserve a cultural identity.

One day on our way to an interview with the president of one of the oldest sake brewers in Kyoto, we realised we has forgotten our gift. All the local shinise stores were closed, so we had to buy a confection from a local, non shinise store. As our contact opened the packaging, he politely indicated that this particular firm did not have a long history and set aside the gift without any further comment. There are a host of benefits for businesses who achieve shinise status that allows them to fend off competition and cope better with external market pressures in general. They are recognised in the city as a distinctive category of firm and collectively held in high regard. This means formal and informal recognition: awards from local authorities, a position as a preferred provider, consumer loyality, as well as access to preferential purchases, exclusive circles and leadership of local associations. Kyoto department stores provide seperate sections for shinise foods, for example: Younger firms aspire to reach the shinise stage, which acts as a guide and pressure on their behaviour. In turn, the businesses gain increasing respect as "shinise-in-the-making."

HOW TO EARN LONGEVITY

Wespoke with more than 100 owner-managers, family members, and employees of shinise alongside representatives from the local communities (city council staff, trade associations, chambers of commerce, monks, tourist guides). It was inspiring to interview business people whose main motivations were quite different to the norm: they were proud of their heritage, of their craft and the quality of products. Their purpose was to work on behalf of their ancestors and for family members to come: they were, after all, only a small part of the company history, perhaps just 30 years out of 300 or more. Rather than just a technical or economic utility, the value of the shiniseand the source of their resilience can be found in how they work as an identifiable cluster to support the wider city's sense of its own heritage and identity. The community and the businesses provide a glue of cohesion and sustainability for each other. It's not just a case of CSR or philanthropy.

At the same time, the high status needs to be eamt and carefully maintained. Shinise play an important role in contributing to keeping tradition alive not only by offering the physical artefacts required by the performance of cultural practices, but by embodying the values of local communities, such as what are known as the "commitments", to family ownership, the continuity of the household, the quality of the products, the welfare of the community, and the perpetuation of traditions.

In all the firms we investigated, for instance, it was customary that the elder son would eventually become the leader of the firm. He would be groomed and prepared from an early age, working side-by-side with his father and, often, grandfather for many years. This succession practice reflects the patriarchal nature of Japanese society and a traditional Japanese family system, called "ie", that dates back to the feudal Edo era (1600- 1868). The President of Kanshundou confectioners stressed that "to continue the tradition, it is very important that the three generations live near one another. Without including grandparents in the family, continuation is impossible."

Shiniseneed to demonstrate a commitment to thrift and perseverance. In two-thirds of the firms, the interviewees expressed their concern at the "greedy" attitude of some non-shinise firms. Eight of them offered examples of how, in the past, they or their predecessors had rejected opportunities for expansion and short­ term financial return so as not to endanger the continuity of the firm.

"We do not want to make profit in the short term ... " said the President of Unsoudou textiles, "I am grateful to my ancestors, because we are doing business with what they left us. I feel very strongly about this ... If there is a business opportunity, I do not reject it. However, I do not think exploiting this opportunity is always the best option, because it is just a small part of a long history. What is important is to create a business that can live for a longtime." The Vice President of Shioyoshiken confectioners, said: "In 'regular' firms, they cannot set a goal that does not achieve economic profit. In the case of my firm, if we cannot manage to produce a large quantity of products, we decline the order. If we cannot make products that meet the quality standard I am satisfied with, it is better not to make them at all."

Most of those we spoke with mentioned the care they take to protect traditional skills, production methods, and the defining characteristics of their products over evolving technologies and changing lifestyles. Firms who introduce changes can lose their status as shinise.

A Kyotoite commented that: "It is not enough that the shop has been standing for a hundred years. If the original product is different from today's product, if the product has changed many times during history, or if the owner of the company has changed, other shinisein Kyoto will not accept a firm as a shinise simply for its long life."

Several shinise donate to welfare facilities, act as patrons to artistic and cultural events, and regularly sponsor and personally attend local festivals. During the three days of the Setsubun festival in the Kaso shrine, for instance, the company presidents serve free tea and confections to the local citizens. Many also support the maintenance of various cultural assets in Kyoto, repairing and maintaining traditional architecture and gardens in temples and shrines. The Deputy Section Chief for the Kyoto prefectural government, Department of Industrial and Labor Affairs, said: "Kyoto holds the headquarters of many Japanese cultural activities such as tea ceremony and flower arrangement, and shinisein Kyoto prepare tea cups and kettles, tea spoons, hanging scrolls, flower baskets, flower-cutting scissors and other tools used by them. This culture is preserved because shinise protect traditional production technologies."

Supporting shinise- and the traditional values that they embody- is a way for Kyoto to protect its distinctive identity and its sense of a cultural superiority, compared to much larger and economically successful rival cities that paved the way to Japan's modernisation. Kyotoites consider themselves the custodians of national traditions, and see adherence to traditional values of modesty, sobriety, manners, perseverance, solidarity, spirituality, and respect for ancestors as distinguishing them from what they describe as the fast-moving, risk­taking, showy, greedy cultures of Tokyo and Osaka.

There can also be a 'dark side' to the model, what might be seen as a form of 'benign entrapment'. The pressure from peers and family means that people involved with shinisehaveto make personal sacrifices, in terms of their career plans, the level of time and commitment they need to give to the business, in the effects on their freedom in general, to consistently meet with the expected standards of behaviour.

The shinise situation is very specific to one location and culture, but there are lessons for businesses and regional economies looking for improving longevity and levels of sustainability. There are similar heritage-based clusters in the West, for example in the champagne and cognac regions of France; in Italy with design and fashion.

Working with communities, sharing and reinforcing their values, brings long­term benefits for both sides. Taking a more human approach to decision­making over strictly rational efficiency and profit over all can also bring its own variety of advantages. When local government and trade associations think more broadly in terms of cultural and social value over just short-term economic returns, they can create conditions that are the basis for generation after generation of rewards and a real sense of pride, of being part of something worthwhile.

Dr lnnan Sasaki, Lecturer in Strategic Management, Department of Entrepreneurship and Strategy i.sasaki®lancaster.ac.uk