A new generation of young, innovative firms is crucial to economic recovery
Revitalizing Japan’s economy is no pipedream. Yes, on the surface, the economy seems intractably stagnant and the country’s politics disappointingly unresponsive. Beneath the surface, however, reason for hope arises from tectonic shifts in civil society, megatrends that encompass technology, generational changes in attitudes, gender relations, demographics, globalization and, importantly, the political stresses produced by low economic growth.
These shifts have not yet reached critical mass. To do so, they need nurturing by policymakers.
If that happens, these shifts could help redress the primary problem behind Japan’s seemingly intractable economic malaise is that, unlike North America and Europe, Japan no longer enjoys the “creative destruction” that fueled the post-WWII economic miracle, i.e., the regular replacement of moribund older companies by more dynamic newer ones. Newer firms tend to be the conveyor belt for new ways of thinking, new technologies, and new strategies. By contrast, falling stars find it harder to toss aside the obsolescent methods that produced their original triumphs. That’s why SONY, for example, tried—and failed—to produce a globally competitive PC, smartphone, tablet, and e-reader. That’s why dynamic economies need to have a regular turnover of leading firms.
This is the topic for my forthcoming book. The attached articles give an outline of how I saw the problem when I began my work in 2016.