Strategies for Revival of Japan as Affluent Society

Atsuo MIHARA (Representative, Office Mihara)

It should be clear to everyone that gigantic changes, almost like big explosions, are currently taking place in the world, which is "flat" and dominated by a huge amount of money. We seem to have been adversely affected by these changes, as we have been sticking to our "success experience" in the past, and trying to maintain our affluent life unsuccessfully. Now, it is necessary for us to change ourselves, our organizations, and our nation to deal with these changes actively, rather than withdrawing from reality, for regaining our advantageous position in the global economy. For that purpose, what we need is a set of strategies based on a sound philosophy with clear objectives for the revival of our affluent society.

It is widely said that China is surpassing Japan economically. Although that may be true in terms of annual production, income, or their growth, Japan is still well ahead of China or any other countries, except the US, in terms of accumulated money, financial assets, or wealth. Then, Japan should set up a strategy to fully utilize its accumulated assets for further economic growth. In fact, without utilizing its accumulated wealth, Japan could not grow anymore, as its population is beginning to decline. As a result, Japan’s social system, including the pension system, might collapse. Thus, there is no choice but a strategy to be adopted for Japan to make full use of its strength, that is, its accumulated wealth.

It is true that the Japanese government has recently been emphasizing the importance of "investment" rather than "savings." However, it has only been in words, and never backed by effective policy measures. Although some preferential taxes for investment incomes have been adopted, they remain only temporary, not permanent, and can be abolished anytime. Another problem is that in Japan there are no systematic programs to train financial planners or portfolio managers, who are needed to help utilize the accumulated assets of individuals, organizations and the government in the globalized financial market. Therefore, Japan should do a number of things based on its strategy in this regard.

Financial capital is not the only resource that Japan can make use of. Human capital should also be reevaluated and more fully utilized in Japan. One can even talk about "intellectual capital" to increase the value of human resources, as it is a result of the know-how and wisdom that have been developed and accumulated. It sometimes takes the form of brands and intellectual properties. For example, developing more famous Japanese brands would be quite effective in increasing the presence and influence of Japan in today’s global economy. Domestically, Japan could overcome the phenomenon of declining population by increasing the value of human capital, where one person can play a double or even triple role in business and society. This would also be a key to solve the problem of economic disparity, as those who do not have financial assets can make use of their human capital to redress the balance.

In conclusion, Japan should look at its accumulated resources of financial capital and intellectual human capital, and adopt a set of strategies to make full use of those assets, which interact with each other to increase the total value of human activities in the economy. We need to break away from our "success experience" as a nation of export-oriented manufacturing industry with group-oriented hardworking "salary-men." We need to train ourselves in managing our financial and human resources efficiently and wisely, while the government should support such individual efforts by adopting permanent policy measures based on a sound philosophy with clear objectives to revive Japan as an affluent society.