Economic development in Japan

Economy in Japan

The growth and development of the Japanese economy is one that has been achieved through proactive government effort, extensive investment in education, commercial investments, and improving agricultural productivity. In other words, to help the Japanese economy overcome the debilitating effect of World War II, the government and the public worked together to help the country progress. As the government made extensive investments in developing infrastructural facilities, the labor force, too, contributed to help the economy achieve unprecedented heights. One of the reasons why the Japanese economy was able to become so successful was the existence of a highly skilled labor force. The government had already made an extensive investment in educating the existing labor force and the younger generation. This made it possible to use the labor force in commercial activities that required skilled labor. Hence, the economy automatically began to thrive. The Japanese government was quick to recognize that labor was an asset, and if educated, the asset can be used to produce capital. The government was able to implement this notion successfully across all sectors of the Japanese economy, including industries. 

Some of the features of the economic development of Japan are as follows:

Strong industry

Japan was initially a traditional country. Post World War II, a democratic form of governance was set up in Japan, and hence, a pro-capitalist kind of economy was established. Since Japan was a new modernization, it would not be making the same mistakes the other nations which had learned modernization the hard way had made. Having learned from the different economies, the Japanese government was quick to recognize that a robust industrial base was essential to making the economy thrive. Hence, the Japanese government was ready to invest in industries like heavy engineering, manufacturing industries, as well as agro-based industries. The Japanese government also understood the importance of consumer goods. Hence, it also supported the establishment of industries related to the manufacturing of consumer goods, primarily electronic and electrical devices suitable for domestic usages. This diversification of industries and strong industrial growth cemented the foundation of the Japanese economy, and soon it emerged as one of the strongest economies of the world.

Excellent labor force

A significant contributor to the growth of the Japanese economy is the labor force of Japan. The Japanese government was quick to recognize that creating a skilled labor force was essential to help the economy thrive. To do so, the government needed to invest heavily in the educational sector. Initially, the investment did not produce quick returns, but in the long run, it was one that proved to be most sustainable. Moreover, this investment produced a continuous performance. The availability of a skilled labor force meant the government did not have to depend on any foreign investment. The skilled labor force proved to be highly beneficial in the long run, and Japan became one of the world leaders in technology, software, and Information Technology. Japan was quick to accept and implement digitization because of the easy availability of a skilled labor force. Japan also had a broad base of semi-skilled labor. This primarily consisted of agricultural laborers who were also quick to acquire the skills required to migrate to becoming industrial labor. In the 1960s, as Japan became industrialized, the agrarian laborers started becoming industrial laborers in return for daily wages. Although wages earned by industrial laborers rose significantly during this time, the companies always maintained good relationships with the unions, to ensure that the salary growth never affected productivity. The profitability of the companies was never affected even after paying high wages and salaries. This relationship between the companies and the unions also helped industries thrive.

Investments made by the government and public

The Japanese economy encourages people to save and invest. Unlike many economies of the advanced nations of the world, the Japanese economy heavily relies on savings. Savings are often closely related to increased rates of investments. Higher savings mean more opportunity for the banking sector to make investments in the commercial sector. Increased investment in the industrial sector means increased opportunities for employment for the skilled labor force of Japan. Subsequently, this will give a boost to the tertiary sector of the economy. It is often considered that the tertiary sector of the economy has the highest capacity to generate revenue.

Additionally, as the people of Japan tend to save more, the chances of wastage of capital are reduced. Moreover, any form of consumer wastage, which can prove to be detrimental for the economy and lead to inflation, is also reduced. Bad credit, writing off of loans by banks are things that will occur less in an economy where people tend to save. Thus the tendency to save too helped strengthen the foundation of the Japanese economy.

Consolidation of industries

After World War II, there was a growth of small and medium industries throughout Japan. These industries were self-sustaining, but soon entrepreneurs discovered that by collaborating, they would be able to build more robust industries. Thus, small and medium enterprises were consolidated to form larger units. This improved the productivity of the individual units. The entrepreneurs discovered this not only increased the revenue earned but also helped generate more employment. Thus, mergers, acquisitions, and consolidations of smaller units to form larger units helped improve the industries of Japan. In the long run, it helped strengthen the Japanese economy.

Thus, the Japanese economy underwent a lot of changes after World War II. However, the things that helped it to become one of the strongest economies of the world are a proactive effort by the government of Japan and its public. The development of a skilled labor force played a crucial role in helping Japan emerge from being completely devastated by World War II into one of the leading economies of the world. ThereforeEconomy in Japan, the development of the Japanese economy is one that involves the strategic implementation of economic policies like the development of a skilled labor force.


Reference URL

https://en.wikipedia.org/wiki/Economic_history_of_Japan

https://www.tmf-group.com/en/news-insights/articles/2018/june/economic-development-outlook-japan/

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1004 Words

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May 29, 2020

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3 Pages

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