Japan's new industrial era— I. Restructuring traditional industries

Abstract

If the 20-odd years preceding 1973 were to be described in the history of the Japanese economy as a period of rapid growth, the following 10 years would be marked as a period of slow growth, or one of economic adjustment to the high cost of energy in the aftermath of the oil crises. Having adjusted to high oil prices, Japan is about to set sail on a brand-new course of further economic development. The mainstream of the new development is bound to be microelectronics technology and the progress of information and service-oriented industries. Although this emerging trend is unlikely to spark in the economy a momentum as powerful as was seen in the period of rapid growth, it has already demonstrated a revolutionary force in all levels of activity, from commodity, corporate and industrial levels to even the social level. Adding steam to the economy is the vitality of the private sector, offsetting the budgetary deficit with its well-timed, increased participation in infrastructural investment. Indeed, the Japanese economy has gathered enough momentum to grow at 5 per cent or more on the average in the coming years. In the meantime, developments on the international front have made it much easier to identify areas with and without growth potential; the former include the Pacific Basin region as it prepares for action in the front lines of the world economy. In the midst of these new trends, there is mounting pressure on Japan to commit itself to the world economy and bear its share of the leadership. This commitment will be the greatest challenge for the Japanese economy during the remaining years of this century.