Rejuvenating Japan: Back to the Future

January 1, 2014

In spite of its unstable political leadership and change-resistant government, there is a viable and sustainable path to social and economic rejuvenation in Japan. The way forward, ironically, is recasting Japan’s traditional strength in a high-tech future.

How Japan responded to the March 2011 triple disasters (earthquake, tsunami, and nuclear power station failure) is highly illustrative. The behavior of the Japanese society and its people in the aftermath of the triple disasters highlighted some of Japan’s most abiding strengths, which are clues to a viable path of rejuvenation.

A pattern of self-reliance, mutual care, resolve and creativity emerged in how Japanese people coped with the triple disasters at the grassroots level. Their ability to maintain social cohesion and to improvise to sustain local communities even as the whole world seemed to crumble about them is truly impressive. These very same strengths could be harnessed for creating a more viable, community-based strategy to regenerate Japan’s economy.

This report critiques the so-called “standard remedies” for Japan’s economic ills, and makes the case that they are largely misdiagnosis of the problems. Instead, it advocates focusing on Japan’s SMEs, especially those with strong ties with local communities serving Japan’s fast aging population. For example, fusing the traditional with the latest in communications technologies could generate substantial new business opportunities and thereby economic growth in Japan.

Japan’s “internet-GDP” has been expanding by over 8% annually in recent years, out-performing all other business sectors. And it is estimated that in areas where Japanese SMEs are conducting online businesses their sales are 20-30% higher than those without online presence. These are tantalizing clues to how Japan’s past and future can be combined to forge a successful way forward.

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