Business and Economics in Japanese
This article examines how Japan managed to achieve its post-war economic miracle. It discusses the role of fiscal policy, competitive kaisha, and the compulsion to copy and compete. Readers will be able to apply what they learn to their own organizations and the world at large. It is highly recommended for anyone wishing to learn more about Japanese business culture. This article is not intended to be a comprehensive review of business and economics in Japan.
Japan's post-war economic miracle
Japan's post-war economic miracle was built on a large scale manufacturing industry, long-term employment, and supportive government policies. However, the post-war model has been challenged by the rise of debt in the country, as household savings were trapped in the banking system and invested in government bonds. The country's debt increased steadily over the years, and the economy was in recession in the late 1980s. After this period, Japan's economy began to recover and GDP began to grow strongly.
The post-war years also saw social and economic changes in Japan. The population was stabilized by a significant decline in the birth rate. The population shifted from rural areas to urban centers. At the same time, a high-educated population delayed marriage to pursue higher education. This trend was fueled by increased individual independence and the conviction that having fewer children would be better for their economic future. However, despite this shift, Japan remained the world's most densely-populated nation.
In the 1940s, light industries began to disappear. Cotton and silk mills were turned into aircraft and shipbuilding plants. As a result, the Japanese government realized its goal of a heavily industrialized nation by the time it surrendered to the Allied forces in World War II. But the prospects for future prosperity looked bleak. It took a long time for the economy to recover from this catastrophe. But in the 1960s, a new industrial policy emerged, which shaped the structure of the Japanese economy.
Its fiscal policy plan
The government of Japan has recently presented a new fiscal policy plan. This plan aims to make the country's fiscal balance sustainable over the long term by reducing social security expenditure and raising tax revenues in the post-pandemic phase. The government of Japan has a massive debt level of more than 250 percent of GDP, the largest among industrialised nations. While the government debt is likely to fall from its current level of 254 percent of GDP to about 230 percent in fiscal 2021, it remains high and should be addressed in the medium term.
In the current Japanese environment, the government should focus on maintaining economic growth and reducing the deficit and debt levels. The benefits of fiscal deficits are substantial and will improve supply over time. The costs of public debt will be relatively small. This means that a new fiscal policy plan is needed to address Japan's debt problems. However, this fiscal policy plan may be a mistake. The economy is not doing as well as it could, and the government needs to make some tough decisions to correct the situation.
Rising government debt levels and fears about future pension plans are delaying Japan's economic turnaround. These concerns stem from the eroding sustainability of Japan's generous social security system and wage system. To address these issues, the government must create new safety nets and implement measures to return the economy to fiscal balance. Although this plan is far from perfect, it will be helpful to the economy. For example, higher public spending will help support employment levels and increase the social rate of return. Similarly, increased public spending will help Japan tackle climate change and raise its fertility rate.
Its competitive kaisha
One of the many reasons why the Japanese economy continues to thrive is its kaisha, or business firms. Japanese companies are among the biggest in the world, providing lifetime employment for 40% of its workforce. In contrast, many other countries see their companies go out of business, but Japan has remained remarkably stable. This is partly due to the high quality of the kaisha, which have a strong tradition of integrity.
Its compulsion to copy and compete
Why is Japan so difficult to enter? Among the advanced capitalist countries, the Japanese market is still one of the most difficult to penetrate. Most of the barriers are built into the system of institutions and business practices, which have evolved for other purposes than protection. The following are some examples of Japanese business practices and economics that have resulted in the country's unique competitive advantages. A: Japan has a very small public sector budget, which encourages the makers of goods and services to offer heavy discounts. These discounts can reach 80 percent or more, which is considered a natural phenomenon.
In Japan, it is common for career bureaucrats to spend every evening until late in the evening at their ministry, and only take two or three days of annual vacation time. Despite recent scandals and political unrest, career bureaucrats do not receive public criticism. They also know they can always count on one another for mutual support, particularly in disputes with politicians or other ministries. However, this deep ministerial loyalty can turn into an obsession with preserving the status quo, no matter what it takes to get there.
The ancestors of today's Japanese bureaucracy were the samurai who ruled Japan during the feudal era. After the Tokugawa shogunate enforced two-and-a-half centuries of peace, these warriors gradually became "governmentized classes" or "service nobility" who accounted for about six or seven percent of the population. The resulting system eventually became what we know today as the bureaucracy.
The bureaucracy of Japan is intimately linked to its business environment. Many big corporations in Japan hire amakudari, or retired civil servants, to be their counselors. While this is an honorable practice for the company, it also becomes a costly proposition for the company. These professionals are paid a very high salary, and often receive a large retirement allowance. These individuals are considered an indispensable part of the company's decision-making process.
Its forest resources
The "1966 Basic Plan" provided background for the policy to expand coniferous forests in Japan. It pointed out that the country had huge potential to increase its forest resources, but its production capacity of industrial roundwood was very low, and the lack of forestry roads posed a serious threat to Japan's reliance on imported wood. In response to this, the government decided to actively develop its domestic forest resources.
Before World War II, Japan relied on imported forest products, but this has been difficult as the war intensified the demand for forest products. Figure 1 shows the area of forestation and cutting in Japan from 1922 to 1955. Forested area refers to the total area planted with trees. While there was a significant difference between forested and cutover land, it was generally greater around 1945. In addition, a policy to increase the area of plantations was implemented.
Despite this policy, many Corporations failed to properly predict log prices. They were overly optimistic. At the time, Japan was enjoying rapid economic growth, and the price of logs was increasing. With the government's financial conditions, these factors provided the preconditions for planting policies. This was the basis of the 1966 Basic Plan, Japan's most basic forestry plan. In that year, the price of timber had risen by nearly 20 percent.