LECTURE FOR U.S. TEACHERS ON JAPAN’S ECONOMY
Date: November 16 (Th), 2006
Place: Keio Plaza Hotel, Shinjuku, Tokyo
Participants: Approximately 100 School Teachers from the U.S.
Sponsor: Fulbright Memorial Fund
Professor Takahiro Miyao, Economic Education Network member, gave a
lecture on Japan’s Economy to about 100 school teachers visiting from
various parts of the U.S. on a Fulbright Memorial Fund program at Keio
Plaza Hotel in Tokyo on November 16. The following is a summary of
Professor Miyao’s lecture, which may be of some use for Economic
Education Network members.
"Prime Minister Abe's Economic Agenda: Innovation and Challenge"
by Takahiro Miyao (Professor, International University of Japan)
Prime Minister Abe's Economic Policy Agenda may be summarized as
"the economy grow again and individuals try again," that is, to achieve
higher economic growth and to give a better chance for individual
success, where innovation and education/training are emphasized for
First of all, why economic growth? In reality, the Japanese economy is now growing again after the "lost decade" and a half (15 years) of stagnation. At the same time, higher growth is necessary for the sake of dealing with a number of serious economic problems such as (1) the government's huge budget deficit, (2) increasing social security burden and (3) future tax hikes in the aging, low-birthrate economy.
The question is how to achieve higher growth. Abe seems to be a supply-sider, emphasizing supply-side factors such as innovation, technology, investment, etc., but not mentioning any demand-side factor at all. A related question is how to accelerate innovation. It is well known that innovation is up to the private sector and is something the government cannot manipulate. Most likely Mr. Abe himself does not know how to do it and how to spur new venture-type business in Japan.
As for better chance for individual success, the issue is a widening gap between the rich and the poor in Japan. This is partly due to severe market competition on the global scale, but partly due to the lack of challenge spirit on the part of some young people: there are now so many NEET (people Not in Education, Employment or Training) and Freeters (living on short-term temporary jobs) in Japan.
Why is this a problem? The widening rich/poor gap might be used as a pretext for opposition to reform. Also an increasing number of non-working youth may well become an obstacle to growth due to the lack of skilled work force as well as the fiscal burden to provide social security to them, especially to those who might be called "elderly NEET." Here Mr. Abe's policy priority seems to be placed on the NEET/Freeter issue.
Then how to reduce NEET/Freeters? There is no easy solution, but the government will try to offer job counseling/training for them to find regular jobs, while business itself is to create more regular jobs and give on-the-job training to young people. And they themselves should learn more basic skills, especially math and science. But the question will remain as to whether young people would "try again" once they fail in education, employment or training.
In this connection, a more fundamental socio-economic issue is how to foster "challenge spirit," especially among young people to take risk for a better life in Japan. Such attitude will certainly affect the outcome of innovation and new business, and thus the speed of job creation. Willingness to take risk will lead to more investment and more consumption, contributing to higher growth. Hopefully, Prime Minister Abe can realize this and do something about it.
For a Japanese summary and some pictures, see: