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2015 | OriginalPaper | Buchkapitel

Recent Industrial Policies in Japan

verfasst von : K. Ali Akkemik

Erschienen in: Economic Planning and Industrial Policy in the Globalizing Economy

Verlag: Springer International Publishing

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Abstract

Traditional Japanese industrial policies have, since the 1990s, evolved towards knowledge-based industrial policies. In this chapter, we first explain the salient features of both the traditional and knowledge-based industrial policies and compare them from the perspective of the role of the government. Knowledge-based industrial policies emphasize the role of the government as a facilitator and coordinator rather than a guide. Accordingly, the policy instruments differ as well. The changing global economic environment in the era of the knowledge economy and the emergence of new regional rivals, Korea and China, also led to significant changes in policy design and corporate governance styles as well. On the other hand, we argue that there is still an influence of the developmental state practices in policy-making. To present a full account of the recent industrial policies in Japan, we present the recent changes in the policy-making process as well as the economic mindset with reference to the official documents on industrial policies.

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Vorheriges Kapitel National Planning, Industrial Policy and the New Statism in Contemporary South Africa

Nächstes Kapitel The New Industrial Policy in Europe a Decade After (2002–2012)

It is true that most of the publicly controlled funds, especially postal savings in the Fiscal Investment and Loan Program, were used for infrastructure and welfare-state purposes. However, this shall not degrade the substantial amount of funds reserved for industrialization notwithstanding the private funds that were mobilized indirectly by government guidance for the same purpose.

The reader is guided to Dobrinsky (2009) for a thorough debate surrounding a large number of concepts, such as codified and tacit knowledge, appropriability, knowledge spillovers, innovation, national innovation system, horizontal and vertical policies, knowledge externalities, innovation intermediaries, seed-and-breed support institutions, cluster policies, and so on, as paradigmatic foundations of the knowledge-based industrial policies. Dobrinsky explains the paradigmatic shift in large detail. Early on, knowledge was treated as a homogeneous public good with the characteristics of nonrivalry, nonexcludability, and nonappropriability. Endogenous growth theory distinguished rivalrous and nonrivalrous components of knowledge and knowledge is not treated as a homogeneous good any more. Evolutionary economics, for instance, made a distinction between codified knowledge (such as published scientific knowledge) and tacit knowledge (such as skills and know-how).

Pack and Saggi (2006) argue that the government can play a role in enforcing property rights over knowledge and government intervention for this purpose can be tolerated.

Dobrinsky (2009) also shows that in various countries the promotion of small and medium-sized enterprises (SMEs) in a specific sector can be called a hybrid system incorporating elements of traditional and knowledge-based industrial policy.

A notorious case is MITI’s order to Honda Motor Company to give up their decision to enter the automobile market in the 1960s. Despite the government’s resistance, Honda entered the market and proved to be a competitive firm at the global scale in the future.

It is noteworthy that the contribution of automotive industry, an industry Japan traditionally had a comparative advantage, to the economy declined from 2.5 % of GDP in 2001 to only 1.1 % in 2007 (METI 2010).

According to KPMG, corporate tax rates for the USA, China, Germany, France, Italy, Korea, Singapore, Taiwan, and the UK are 40 %, 25 %, 30 %, 33 %, 31 %, 24 %, 17 %, 17 %, and 23 %, respectively (http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx, retrieved 4 June 2013).

For a long time, politicians have had secondary roles in the economic decision-making process. Economic bureaucrats were the principal decision makers with their strong influence in the respective markets they regulated. However, it seems that policy formulation surrounding various economic issues has recently been passed on to politicians. Economic bureaucrats seem to have receded from their historical strong position.

Fujimoto (2006) also tests this hypothesis using survey data from Japanese firms. He found a positive correlation between the integral architecture characteristic of manufactured products and export to domestic production ratio. This result holds also when overseas manufacturing activities are taken into account. This finding can be taken as evidence for the comparative advantages of Japanese manufacturing firms in integral manufacturing products.

Fujimoto (2006) argues that integral manufacturing architecture requires the existence of highly capable supporting industries (typically, SMEs) and high level of human capital. Some Japanese SMEs (especially in Ota-ku in Tokyo and Higashi Osaka in Osaka) are well-known technology creators with strong base of innovation. The Japanese government is expected to play an important role in assisting private firms, especially the SMEs, in enhancing and continuously upgrading the technological capabilities of their production lines and workers. According to Fujimoto, the Japanese government had achieved limited success in such policies.

We do not elaborate on the content industry here but the government is highly ambitious about promoting this industry. Study Group on the Content Industry’s Growth Strategy, which was established under METI, submitted its final report in May 2010. The report concluded that the content industry, i.e., design, fashion, traditional culture, and media products (such as anime and manga) with brand names, has a big potential to develop in the future as an engine of growth and to become a major export industry (SGCI 2010).

Japanese government aims to facilitate this restructuring by providing financing through Innovation Network Corporation of Japan, supporting flexible labor market practices of private firms, and developing the legislation required for effective restructuring of industries, among others.

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Titel: Recent Industrial Policies in Japan
verfasst von: K. Ali Akkemik
Verlag: Springer International Publishing
Buch: Economic Planning and Industrial Policy in the Globalizing Economy
Print ISBN: 978-3-319-06473-4

Electronic ISBN: 978-3-319-06474-1

Copyright-Jahr: 2015
DOI: https://doi.org/10.1007/978-3-319-06474-1_9

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