To boost economy productivity, Japan has so far relied on IT, intangible property investments, drastic changes in companies’ management, outsourcing etc., but from now the key factor will be
the strategy to ensure economy develops in pace with the rapidly advancing globalization.
Following the era of increased direct investment in the 1990s, we have entered the age where capital and technology move easily across borders. Thus, having technical knowledge in the research and development area no longer necessarily means productivity gains for Japanese businesses. The reason is that the latest technology from Japanese companies may be used for production in China and India.
Attracting highly-skilled foreign labor can be considered a vital issue that needs to be addressed in order to improve the potential for economic growth in Japan. Competition for skilled labor is intensifying globally, including Europe and US.
With the intensifying divisions in the fast growing regions in Asia, degree of dependence of Japanese economy on trade will also rise drastically. This means that it will be increasingly difficult for Japan to control its industry as a single package, as this will impact its efficiency and competitive edge.
With this in mind, it is crucial to enhance and promote industries with high-added value, such as IT, finance and insurance as this will add extra value to the Japanese economy.