Economic and Industrial Policy Bureau

Following the collapse of the economic bubble, the Japanese economy suffered long-term stagnation as known as "lost decade." As a result of economic structural reforms based on deregulation and institutional reforms, however, Japan's economy finally emerged from that dark tunnel of economic sluggishness and the country is currently enjoying a sustained and structural reform-driven economic recovery.

The economic environment surrounding Japan, however, is constantly changing. The nation faces monumental challenges, including rapid aging and very low birthrate to an extent unseen anywhere else in the world. Added to this are a shrinking population, huge fiscal deficits, energy and environmental constraints, the existence of regions left behind in the economic recovery, and intensified international competition spurred by the advance of globalization. It is necessary to establish a clear path for resolving these issues, and the trend of current economic recovery is to be transformed into robust medium- and long-term economic growth.

In July 2006, the "Economic Growth Initiative" was formulated under agreement between the government and the ruling parties. Covering 10 years until 2015, when population decline is anticipated to become full-fledged, the strategy addresses the problems of how to overcome constraints on growth and how to place the Japanese economy on a growth track. Inseparably connected with the reform of expenditures and income, the Economic Growth Initiative which is a cross-sector growth strategy aims to improve the three factors of economic growth (capital, labor, and productivity) in each and every industrial sector. The Economic Growth Initiative is designed to be revised in each fiscal year to reflect the result of an annual progress review conducted by using the PDCA cycle. In June 2007, the revised Economic Growth Initiative was reported to the Council on Economic and Fiscal Policy, and the content of the Initiative was fixed, along with the Economic and Fiscal Reform 2007. In order to achieve strong growth led by the private sector, the Economic and Industrial Policy Bureau continues to work for further enhancement and strengthening of the measures and policies of the Economic Growth Initiative while also proceeding examination of new policies.

The Economic and Industrial Policy Bureau is implementing a wide range of activities from a medium- to long-term strategic perspective; some examples are listed below.

• Realization of "a nation founded on human assets"

This will be realized through the establishment of science classrooms to prevent children from turning away from science, along with career education, development of "basic abilities as members of society," collaboration between industry and academia at universities and elsewhere to foster human resources to support skilled manufacturing, and the realization of the Asian Human Resource Development Fund concept to foster personnel who will build bridges between Japan and Asia.

• Strengthening human capital to complement economic growth strategy

In order to brush up the abilities of our human resources, the people who constitute a major source of economic growth, examination of best-case examples of socioeconomic systems to contribute to strengthening human capital, particularly the multi-tracking and diversification of work styles and reform of the safety net will be conducted.

• Improved corporate productivity (innovation and business rejuvenation)

This involves the promotion of innovation through corporate collaboration and of measures for greater corporate productivity, including the cross-sectoral integration of management resources and improved facilitation of early business rejuvenation in local economies.

• Promotion of intellectual property policy

Improvement of safeguards to protect companies against infringement of trade secrets to protect the brand value of their products against copycat or pirated products or versions, thereby maintaining an appropriate competitive environment will be pursued, along with the promotion of "intellectual property management" that capitalizes on corporate know-how or other strengths not shown in financial information, etc.

• Promotion of start-ups that ignite economic growth

Development of the "Angel Investor Tax Preference Program" that helps start-ups raise funds, and the creation of the entrepreneur support network.

• Improvement of corporate systems that draw upon management resources

Fair M&A rules, diversification of industrial organization types, promotion of market competition, etc. will be implemented.

• Construction of industry financial systems to promote economic growth and industrial development

This involves expansion of the supply of risk money through the creation of a mechanism that facilitates financing secured by movables or receivables, the preparation of an electronically recorded receivables system, and support for the financing activities of companies expanding business globally, etc.

In addition to the above-mentioned initiatives, the Economic and Industrial Policy Bureau will implement extremely diverse measures and policies, including surveys and examinations of best-case examples of corporate systems and behavior based on the realities of Japan's economy and industry. The Bureau must view the Japanese economy from a wide variety of angles before putting any measures and policies into practice.

Japan's economy and society can be vigorous only if they are supported by the vitality of the nation's regions. In order to create innovation and eliminate disparities among regions, regional economies must shift to a more autonomous structure. A "glocal" perspective that promotes workable strategies utilizing regional strengths in order to cope with globalization is therefore necessary.

The Regional Economic and Industrial Group therefore partners with regional economic and industrial bureaus to support regional initiatives to build vigorous, self-sustaining regional economies. Such efforts center on the following initiatives.

First, in order to realize the concepts of the "Economic Growth Initiative," the Group promotes the

"Irodori (leaf) Business"
in the town of Kamikatsu, Tokushima Prefecture

relocation of companies to regional areas. It supports maximizing of the attractiveness of each area. By working to promote regional industry, it helps to promote dynamic regional economies.

Second, the Group is pushing ahead with the "industrial cluster program," which aims to help create clusters of companies that are internationally competitive and give rise to innovation, new businesses, and new start-ups in the regions.

Third, the Group actively engages in new initiatives, such as strengthening regional living infrastructure and promoting community-based businesses that target living and working in regional areas.

Statistical data that enable quick and accurate identification of changes occurring in the structure of the economy are necessary in order for the government to draw up and implement proper policies and for business enterprises and individuals to make informed decisions.

The Research and Statistics Department within the Bureau conducts statistical surveys over a wide range of sectors, including commerce, industry and services, and provides the data obtained. It also provides economic indicators such as the Indices of Industrial Production and the Indices of Tertiary Industry Activity.

In recent years, the Bureau has created the "Economic Census," which provides a comprehensive and detailed picture of the national economy, and drastically upgraded the service statistics that widely cover the service industry, which accounts for 70 percent of GDP. It thus prepares statistics that are responsive to social and economic change.