Despite the country’s small size, Japan has depicted quite contrasting economies before and after the Second World War. Up to the moment, the country has had three distinct political and economic periods; the Edo which began in 1603 and went on up to 1868, the Meiji Restoration and the final period which began after the Japan’s defeat in the Second World War in 1945 and runs up to now. Each of the three economic periods was characterized by unique factors which necessitated the government to initiate remedies so as to avoid plunging the country into an economic crisis (Karan, 2010). Defeat, therefore, served as an eye opener to Japan and subsequently elicited the need to establish a self-sustaining economy that would grant the country independence to initiate and fund all its projects. Since then, Japan has successfully seen its economy move from that of a young growing nation into a mature economy capable of sustaining itself without much dependence on donors or other aid agencies.
Just before the Second World War, Japan was ranked among the developing economies which primarily relied on industrialization and fishing as the major economy boosters. The general landscape of Japan cannot support extensive agriculture and thus farming was only done for subsistence consumption. However, after World War II, Japan became one of the world’s fastest growing economies and diversified its economy boosters to include sophisticated technology and further developed its motor vehicle manufacturing industry to become the world’s leading producer. Something worth noting is that currently, the economy of Japan is ranked the third largest in the world regarding nominal gross domestic product and the fourth largest in the world by purchasing power parity. Similarly, Japan is currently the world’s second largest developed economy after China.
Japan, just like the United States of America did not have elaborate and much developed technological innovations before the World War II. For instance, little was known about Japan’s automobile industry, and in most cases, a majority of buyers would rather purchase such products from renowned manufacturers such as Germany rather than Japanese products. The fact that most Japanese products could not compete favorably on the global markets implied that Japan could not effectively sustain its economy since most of the country’s revenue comes from the sale of its high-tech products.
Lack of incorporation of sophisticated technology did not only affect the automobile manufacturing sector but the entire industrialization sector in Japan. However, the impact on the automobile sector is often referenced to due to the significant impact that came with the incorporation of such technology in the sector. In the same manner, continued reliance on ancient production methods also meant that the entire production was significantly slow and yielded inconsistencies in the market supply. In fact, before the Second World War II, Japan did not rank its automobile industry as one of the major pillars of its economy (Karan, 2010). The automobile sector during this time was ordinary just like most vehicle manufacturers. The industrial sector in Japan was therefore meant for more local consumption than it offered to the export market.
After the World War II, most countries sought business allies and partners with the major aim of establishing and sustaining long-lasting relationships that would spearhead economic recovery and development. In fact, the Second World War had split countries into antagonistic groups depending on which party they supported during the war. Having been defeated, Japan similarly followed suit, and since the country’s rugged terrain lacks the numerous natural resources that support most economies of the world, most of the economic recovery activities took a research approach (Karan, 2010). For instance, rather than seeking economic partnerships, the Japanese government hugely invested on research and innovation, and as a result, Japan established a hub for technological innovation.
According to the “The Keiretsu of Japan”, the incorporation of technology is what resulted into a high demand for Japanese manufactured products. Having realized that the country could easily face a labor shortage, experts began investing into robots and automated systems that could take up some of the positions that were filled by the existing labor. Meanwhile, the semi-skilled and unskilled laborers took up some of the duties and light tasks that could either not be fully automated or were semi-automated. Although robots were brought into the industrialization sector to boost production, they, later on, came to increase efficiency in production as well as help solve labor shortages that came up later as the sector grew and widened.
Currently, the country employs the finest levels of technology in all its manufacturing processes. Japan, for instance, was the first company to employ robots in industrial processes. The country further went ahead to break the technological record by being the first country ever to manufacture a self-driven car that could be remotely controlled without necessarily having a driver to direct it. Besides helping fetch an incredible market for Japanese products, technology has also been cited as a major contributor towards Japan’s economy. The country exports not only technological products but also sends out technological experts to different parts of the world at a cost. As a result, therefore, technology and related innovations remain fundamental pillars of Japan’s economy (Imai, 2014).
There have also been contrasting performances of Japan’s economy regarding labor and workforce. To begin with, the Japan is densely populated. However, due to the general landscape, most of the population, especially the unskilled labor, is found in rural homes. This, therefore, means that at some given time, the country faces labor shortages, not because the available skills are missing but due to restricting settlement patterns that limit the population to certain geographical locations. During the Edo economy, the Japanese ironsmiths supplied the country with just enough manpower that was required to work on the iron ore that was the major raw material available in Japan. In other words, Japan did not experience any labor shortages during this period since most of the population was involved in either fishing or agricultural production.
Similarly, since ironsmiths learned by apprenticeship, it was so easy to find replacements for either the old ironsmiths or even those who gave up the art. During this period too, the service sector did not contribute significantly towards Japan’s economy. For example, it is not recorded anywhere that Japan once exported iron ore, an implication that most of the ore was locally consumed by the few companies that were operational at that time. The only major service sector whose contribution was significant to the economy was the banking sector which employed a smaller section of the economy.
In the current economy, Japan relies on raw materials that are imported from abroad. For example, it is believed that the iron ore deposits in Japan were long depleted despite the continued manufacture and production of steel coated and aluminum products. As a result, therefore, the country needs highly skilled labor force. In the year 2015, Japan experienced a 3.6 percent shortage of skilled labor force. The major different between the workforce in the Edo period and the current labor force sustaining Japan’s economy is that the latter is highly skilled, a reason that has yielded periodic labor shortages and the recent increase in inflation. In Japan, inflation is about 3.2 percent (Fujioka, 2009).
Just like most industrialized countries, such as China and the United States of America, the service industry accounts for a significant percentage of Japan’s economy. For instance, the service sector contributes about 71.4 percent of Japan’s gross domestic product. Hence, another distinct disparity between the contributions of the service sector to the economy is that the current service sector has a significant impact on the overall economy of the country, unlike the previous one. As a result, therefore, Japan subsequently sends a huge percentage of the government’s revenue in education and training programs meant to address specific needs of the labor market. In fact, the education and training programs in Japan are adjusted from time and again so as to churn out labor force that matches the demands of the country at any given time.
The fact that Japan’s economy has performed outstandingly amidst the global economic recession did not come without the support of the government. Economic performance goes hand in hand with the governance in place and for Japan; the government has greatly supported all programs aimed at empowering its citizens economically. Besides Japan, China and America have been identified as countries with extremely sophisticated technology. The Japanese government has thus established strong links with these countries so as to benefit from their creativity and innovation regarding the application of technology to design and produce new systems (Imai, 2014). For instance, the Japanese government has exchange programs with the United States of America where engineers from the two countries organize forums through which they discuss emerging technological trends as well as exchange ideas on such trends. Similarly, the exchange programs allow such technocrats to jointly work on new technologies to ensure that they release the best products onto the market. Hence, the Japanese government has been on the forefront establishing collateral partnerships with potential market countries as well as other stakeholders with a view of finding a ready market for the country’s exports and thus helping develop the economy of Japan.
Finally, from time to time, the Japanese government has strived to maintain peace and stability in the country so as to encourage economic activities. Political instability and related conflicts discourage investment (both local and international) and also lowers the performance and hence productivity of the labor force. When personal security is threatened, people live in constant fear of their lives and at times, might keep off their workstations for the sake of personal safety. Japan is one of the most peaceful countries of the world. As a result, therefore, the labor force is free to work without worrying about their safety as the case with countries of the Middle East such as Syria.
References
Fujioka, T. (2009). “Japanese Jobless Rates rises to Five-Year-High of 5.2%”. Bloomberg News. Retrieved 2016-12-28
Imai, M,. (2014). Kaizan: The Key to Japan’s Competitive Success. New York, NY, USA: Random House
Karan, P, (2010). Japan in the 21st Century: Environment, Economy and Society. University Press of Kentucky
