Ch. 32   Post-War Economy

export orientation to utilize human resources, develop modern, high profit industries

"Ladder of Development," shift from using hands to using brains to using knowledge and capital
 
 

Problems:

• competition -- other people can work with hands and brains
• requires perpetual innovation
• market saturation
• global economic restructuring
• displaced workers, political backlash

Ch 33  Employment

•      Family based organization,
•   lifetime employment
•   cohort promotion, seniority
•   weak unions, few strikes (1/3 membership)
•   consultation, consensus
•   low differentiation
•   blue/white collar
•   salaries differences are low

 Industrial Clusters

zaibatsu (formal holding company)--pre war

Keiretsu (informal clustering)--post war

•  Business Financial Organization

 finance from banks, long term, concerned about growth, market share, not profit

 very little pressure from individual shareholders for quarterly profits

Problems in 2003
 

• collapse of bubble economy, real estate, stock market prices down
• non performing loans affect banking system

• Internal structures have problems
• employment system too rigid, difficult to hire, fire, or transfer
• age hierarchy diminishes creativity, entrepreneurial spirit of young people
• group spirit diminishes individual creativity
• Keiretsu reduces competitive pressures

• National Setting
• increased government spending has not helped the economy much (marginal returns are low)
• MITI suggestions sometimes wrong (HD TV, super computing)
• environmental contraints
• demographic change: graying, of population, increased dependency ratio, new values of youth

• International issues
• increased global competition, esp. from China
• economic competition with products
• demand for global resources
• strategic/military?
• Japanese firms shifting some work to China Feb2006
• Energy Crunch -- aggressive energy savings because Japan has no petroleum Feb2006
• US in post-cold war mode, less concerned about Japan, less willing to keep economic door wide open.

Koizumi's privatization policy