Economic and Industrial Policy Bureau

Great Challenger Festival organized on February 11, 2005
by the Dream Gate project (a project to encourage
and support young Japanese who aspire to become new,
independent entrepreneurs)

Japan's economy and society currently face enormous structural changes such as the IT revolution, inversion of the age pyramid, and economic globalization. The keys to coping with these changes and locking in self-sustained economic growth will be appropriate macroeconomic management accompanied by a socioeconomic system built to keep up with medium-term changes, and enhanced competitiveness of the Japanese economy.
To meet these two requirements, the Economic and Industrial Policy Bureau promotes structural changes of the Japanese economy, development and improvement of the infrastructure that supports the private sector's economic activities, and revitalization of regional economies. Together with these efforts, we conduct surveys to obtain various data that are useful in the social context and vital to the planning and implementation of policy, then compile and analyze statistics from the results.
The mission of the Economic and Industrial Policy Bureau is to consistently examine and rebuild those systems related to the economy and industry to assure a bright future for Japan.

>	Necessity of Economic Structural Reform

Japan's current economic and social environment is embroiled in major changes, such as the inversion of the age pyramid at home, and on-going globalization, global environmental issues and the rise of the BRICs economies abroad.
Under such circumstances, the Japanese economy experienced the so-called "lost decade" in the 1990s after the burst of the bubble economy. To emerge from the aftermath and pursue further economic growth, the Government has been pushing forward economic structural reform and has already achieved some progress in bad-debt cleanup and industrial revitalization, and the creation of new markets through regulatory reform; however, the reform is still midway through completion as the Japanese economy continues to be afflicted with major problems such as persisting deflation, huge budget deficits, and faltering international competitiveness.

>	New Industrial Structure ("N Report") and competitiveness-enhancing measures

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To address these issues, in May 2004 we drew up the New Industrial Structure ("N Report") aimed at surviving fierce global competition and achieving stable economic growth over the mid- to long term. The strategy proposes fostering three industrial groupings as pillars to support the Japanese economy over the next ten to twenty years, capitalizing on Japan's strength that lies in the high-level concentration of materials, parts and equipment manufacturing industries and an industrial structure that enables such products to be matched and coordinated as well as the human resources that underpin such industries and structure. The three groupings concerned are:
(1) Industries capable of surviving international competition such as the fuel cell industry and the digital consumer electronics industry
(2) Industries such as the health and welfare devices and services industry that meet market needs in keeping with social changes while at the same time creating jobs
(3) Industrial clusters for regional revitalization

With a view to implementing the above strategy, we have prioritized our policy resources and are promoting the strategy ministry-wide.
The Economic and Industrial Policy Bureau is also working on several priority tasks intended to enhance competitiveness, such as developing industrial human resources, promoting utilization of intellectual property, industrial revitalization, pioneering and nurturing new businesses, enacting or revising industrial organization laws, and reforming corporate governance and corporate accounting systems.
To enhance corporate competitiveness under private sector initiatives, it is necessary to create a system that facilitates proper evaluation of human resources and technology as elements of corporate value, thereby promoting their improvement and utilization. Industrial human resources, which serve as a source of economic dynamism, have been severely affected by the corporate restructuring activities and the collapse of the lifetime employment system that characterized the 1990s, giving rise to problems caused by interrupting the handing down of technologies to subsequent generations and curtailed investment in human resources. We have created a system that promotes technological succession and corporate investment in human resources in an effort to foster younger generation resources. At the same time, we are providing protection to technologies and know-how owned by companies, and creating an environment that permits proper evaluation of intellectual property, thus backing up companies' strategic utilization of intellectual property.

>	Appropriate macroeconomic management

In managing the nation's macroeconomy, another important aspect of the Bureau's mission is to maintain a comprehensive perspective on the whole economy, and analyze the economy and formulate policies from the standpoint of those who work in industry. In particular, the Bureau is working on corporate and industrial revitalization, and the creation and development of new industries. In this way we are promoting efficient utilization of management resources and diversification of industrial finance providers as well as their financing methods and risk management.
In an environment where the inversion of the age pyramid is advancing, the nation's macroeconomy will be greatly affected by the increasing burden of public costs such as taxes and pension contributions imposed on companies, changes in employment structure, and a shrinking labor force. The Bureau will consider this situation from the perspective of ensuring compatibility between the nation's economic competitiveness and sustainable social systems, and promote policies designed to invigorate the private sector's economic dynamism including economic management at the Council of Economic and Fiscal Policy.

>	Toward the independent development of local economies

Real GDP and Level of Contribution/Nominal GDP and Level of Contribution

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Revitalization of regional economies is essential to ensure prompt economic recovery and provide the Japanese economy with lasting dynamism.
In full collaboration with the regional economic and industrial bureaus, the Regional Economic and Industrial Group is implementing policies designed to help regional economies achieve self-sustaining development. Specifically, the Group is linking regional business executives, researchers and fund lenders by means of a network of human contacts, providing support for regional technology development and reinforcing its incubation function of creating new businesses in each region, and thus pushing forward an industrial cluster plan intended to form internationally competitive industrial clusters in each region.
We are also recommending that each region creates its own product brands taking advantage of unique local resources, sending advisors and offering support to regional efforts to cultivate markets or create demand for the region's products and services.
In addition, we provide regional governments and public agencies with analytical know-how on regional economies to support them in planning, formulating and implementing effective regional economic development policies.
Through all these measures and policies we seek to help each region create an increasing number of independent and autonomous projects aimed at efficient use of their own resources, enabling them to make the most of their strengths.

>	Surveys and analyses of economic activities

The economy changes every day. Hence, there is increasing demand for statistical data that quickly and accurately identify any changes occurring in the structure of the economy in order for the government to draw up and implement proper policies as well as for business enterprises and individuals to make correct decisions. The Research and Statistics Department has been established within the Bureau for this purpose. In this department, statistical surveys are conducted in a wide range of sectors including commerce, industry and services, and a broad range of statistical information reflecting both internal and external needs, including the results of these surveys as well as economic indicators such as the Indices of Industrial Production and the Indices of Tertiary Industry Activity, is provided.
We will continue to streamline statistics so that they reflect the changing economy and society, and to encourage effective implementation of surveys and more extensive usage of survey results.