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  5. Aging Society Cannot Survive Low Economic Growth

2009 Vol.1
Aging Society Cannot Survive Low Economic Growth

2009/01/01

Japan’s population is expected to continue rapidly aging. If nothing is done, the burden imposed on the active working population will grow even heavier, and it will be difficult to avoid their impoverishment under slim income growth. In order for Japan to survive the aging of its society, it will be absolutely critical to improve the economic growth rate. However, the Japanese economy today shows few traces of the vitality it had in the past, and has fallen into a long phase of stagnation. This is because the economic environment has changed, and Japan has not yet been able to adapt.
Back when the national income level was low, the traditional Japanese value of “working hard together” blended well with society because of the visibility of the market, and Japanese society exerted tremendous power. This is referred to as the “age of production”. However, while production became more efficient on the one hand, the market became less visible due to progress in the diversification of products. Along with the increase of risk, the adequacy of corporate decision making on issues such as product planning, technological development and the formulation of corporate strategies has started to affect added value. Companies are now pressed to take on high risk challenges, but those which avoid challenges from fear of failure will eventually decline, since no value will be generated. The economic environment has precisely changed to an “age of win or lose”. Winning is not necessarily done by “working hard together”, and requires “talented people” who are skilled in the game. However, in Japan, these “talented people” seldom emerge because they are not given recognition in respect to Japanese values, nor the opportunities to demonstrate their skill. This is why Japanese companies are not good at taking on challenges and going for the win, instead avoiding such situations. This is the reality of non-adaptability.
In light of the aforementioned issues, this paper will seek the background of how this Japanese value system emerged and clarify its fundamental nature by turning back the clock four hundred years. Furthermore, I will propose how to revitalize the Japanese economy by reforming the “Japanese way of doing things” and facilitating adaptation to the “age of win or lose”.

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