Japanese Economy

closed policyHere is brief overview of Japanese economy from 17th century to now that may help you to understand Japanese way of business. You might find a hit or two to do business in Japan.

In Edo area Japan took closed policy and that made people grow domestically. Making local special products was common way of increasing revenue at local governments. Even today, you'll be surprised that they will show you something special wherever you go.

The rice production was essential at that time and the crops were gathered in Osaka by ship. There had been commodity market and Osaka has been the capitol of merchants since then. They have made the basics of Japanese way of business.

Japan ended the policy at Meiji restoration and absorbed western technology, social system and culture. They tried everything form western cloths to meat eating habits to become one of great powers in the world not to be invaded like the Qing dynasty had. People threw Japanese culture away and loved import goods.

Before the WWII, industries were controlled by Zaibatsu, combines like Mitsui, Sumitomo and Mitsubishi and most farmers were sharecroppers. The occupied forces ordered Japan to dissolve the combines and buy all lands landlord owned to sell them to tenants at minimum price.

Japanese agriculture business has been well protected since then. Most of Japanese farmers has been very small size and had low efficiency. TPP, Trans Pacific Partnership, will divide farmers into two groups, the one who sees opportunity to export goods to expand their business and the other who fears severe competition against import goods that has been protected with high customs and subsidies. It might change whole game plan.

Tokyo after bombardmentAs for industry, Japan recovered from destruction by the war, thanks for the Korean war, population growth and the first Tokyo Olympics. Japan became the world's factory with low labor cost and low currency rate. At first Americans did not know that Japanese could reproduce products by watching production lines or chatting with developers. Japanese continuous improvement gradually drives out western products such as cars and consumer electronics and Japanese companies tends to invest less on research. Introducing totally innovative products are weak point of Japanese industries. If you have new technology or service, you have good chance to win in Japan market.

Long suffered by the bubble burst in 90's, Japan could not afford to suffer form the Lehman Shock and the earthquake with the nuclear power plant accident. Of course, the .com bubble did help but not completely. Still, it is too soon to decide Japan have sunk forever. Exporting companies like automakers are enjoying low currency rate, combined with profit earned by their cost reduction. Others see chances abroad. Renewal energy generation and energy saving technology will be founded well by the government. In addition, Tokyo Olympics in 2020 will take a great roll psychologically.

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