Economic Growth Initiative
for Innovation and Growth in Productivity
Ichiro Sakata, Ph.D.
The Ministry of Economy, Trade and Industry
The University of Tokyo
Cross-Sectorial Policy Measures for Productivity Reform
■
Aims at realizing Japanese Economic Growth Model that problems associated with the declining
population to be overcome.
■Three essential points for economic growth shall be defined as “Productivity improvement,”
“Technological
innovation” and “Co-development of Asian countries and Japan.”
■Aims at establishing institutional environment that compares favorably with international standards
in terms of five business essentials comprising Human Resource Development, Infrastructure Building, Financial
Capability, Technological Development and Protection of Intellectual Property Rights
Principal Policy Measures
○ Accelerated investment in technological innovation (Investment tax reduction for investing in R & D, IT facilities, and Human
Resource Development)
○ Enhancement of legal framework to promote technological innovation (Innovation Promotion Act)
○ Promotion of collaborative projects joined by industrial, academic, and administrative sectors (in such strategic business areas
that include robots, semiconductors and tissue engineering)
○ Expanded implementation of practical professional education under collaboration between industry and administration
○ 50% reduction in logistics costs and lead-time in the regional production within ASEAN territory
○ Establishment of educational framework to invite talented foreign students to Japanese universities and graduate schools
( “Foundation of Asian young leaders development fund initiative”)
○ Formation of Regional Cluster
Principal Policy Measures dedicated to Service Industry
To accelerate accumulation and diffusion of such intangible assets as technological expertise,
professional knowledge and production know-how, efforts shall be exerted to establish research
center facilities, introduce of technological know-how owned by industries, amplify educational
capabilities, and provide creative investment incentive measures
○ Establish “Council for Improving Productivity of Service Industry” (to discuss
collaboration issues between industry and administration)
○ Accelerate progress of service innovation (establishment of Service Engineering Research
Center, Designing Research Road Map)
○ Introduction of production control know-how
○ Establishment of Benchmark System to evaluate service quality (“Customer Satisfaction Index”)
○ Foster highly specialized human resources (amplification of postgraduate specialist courses,
formulation of skill standards etc.)
○ Create award granting system praising companies with excellent business models
○ Implement sectorial policy measures to improve productivity—especially with respect to such service industry
sectors as financing, healthcare, distribution, information services and contents development
Economic Growth Initiative
Basic Concept
Efforts to enhance the growth potential and international competitiveness
(1) Realization of “affluent, strong, and attractive” Japanese economy
䂓 Realize a “strong economy and secure society” in Japan by creating a virtuous circle of “Economic
Growth Initiatives” and “Integrated Reforms of Expenditures and Revenues”
(2) New growth to overcome a declining population
䂓To realize “ the Japanese Economic Growth Model” in which sustainable and stable growth is driven by
private demand even amid a society with a declining population
Three essential factors for economic growth
㽲 Productivity improvement
㽳 Technological innovation
㽴 Co-development of Asian countries and Japan
<Target of growth in GDP>
Over 2.2% annual growth in the next 10 years
Main Policies
1. Strengthen International Competitiveness
2. Improve Productivity
(through IT and innovations in services industries)
3. Revitalize Regional Economies and SMEs
(Regional Revitalizing Strategy)
4. Create New Demand through Resolute
Implementation of the Reforms
5. Establishment Institutional Infrastructures to Improve
Productivity
Economic Growth and Poverty- The Rising Tide Lifts?
•
•
Sustained economic growth creates larger employment opportunity, and pulls up the life standard of most
unprivileged classes. In the United States in 90s, the lowest 20% earning class saw about 15% increase in their
earning level （Hines et al (2001)）.
In Japan, the number of households newly applying for Public Assistance for reason of decreasing Labor
income has been reduced significantly since the beginning of current recovery process.
The Number of Households Newly Applying for Public Assistance for
Thousand Housholds
Reason of Decreasing Labor Income
6%
3.5
5.4
Number of Newly Applying
Households
3.0
5.3
5%
5.0
Unemployment rate (right axis)
4.7
4.7
4.7
4.4
2.5
4.1
2.0
3.4
4%
3.4
3.2
2.8
2.6
1.5
3%
2.9
2.8
2.5
2.5
2.3
2.1
2.8
2.2
2.1
1.0
1.9
2.0
2.1
3.0
2.6
2.3
2%
1.5
0.5
0.8
1.0
0.7
0.7
0.6
0.4
0.3
0.3
0.5
0.5
0.7
0.7
1%
0.7
0.0
0%
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Ministry of Health, Labour and Welfare
Shadow area corresponds to Recession period.