GeminiAtlas

The Demise of Japan as an Economic Power?

I will have to agree with Nagano Jim here.
The role that the Japanese goverment has played in the business affairs has created more or less a state capitalist society ( i.e. Japan, Inc.) or neo-mercantalist policies to produce an export driven economy. Basically the investment decisions are driven by high level industrial policy of the government. So investments haven't gone to what the Japanese domestic population would want to buy. Also, would add to Jim's comment that the high level of government intervention also produced risk averse enterprises, or at least 'zombie' entities that produce less value than they are worth.


On Nov 05 04:35 PM Nagano Jim wrote:

> I disagree with the premise of the article. The problem is not that
> the Japanese don't spend enough. Nations do not become wealthy because
> simply because their people spend a lot. This is kind of like saying
> a child becomes tall because he eats a lot. If the child is not growing,
> eating a lot will just make him fat. What makes the child taller
> is growth. That Japan's citizens don't spend a lot is a symptom,
> not the disease.
> To generate growth, the private enterprise in a nation must create
> new and better products and services. What made Japan flourish in
> the 1970s and 1980s was primarily that its manufacturing might was
> constantly finding new ways to produce high quality products that
> people wanted faster, cheaper, and at better quality.
> What Japan needs now is a major injection of entrepreneurship. I
> read a statistic somewhere recently that as much as 80% of all the
> companies in Japan date from the Meiji period (starting in the 1860s).
> Japan needs to unleash its creative minds to generate the new items
> and services that will capture the world's imagination. It needs
> to remove the barriers in its legal and economic system that are
> strangling entrepreneurship. Entrepreneurship is risk taking, and
> the Japanese are highly risk averse. Therefore, there needs to be
> a concerted push to come from the top to get people to try to make
> their ideas into reality. Only then will Japan be able to create
> value and start to significantly grow again.