While on a recovery track driven by private sector-led structural reform, the Japanese economy is faced with a number of urgent challenges, such as the falling birth rate, aging society and declining population, energy constraints including soaring prices of oil and other raw materials, and intensifying international competition.
Amid such circumstances, it is the policy challenge of the Ministry of Economy, Trade and Industry (METI) to generate high-value added industrial and economic activities through constant innovation, send out values that are acceptable worldwide, create high-quality employment opportunities, and further, promote smooth development of external economic relations, and thereby realize the sustainable growth of our economy and contribute to the stable development of the international economy as well.
In fiscal 2006, METI laid down three new strategies by “innovation,” “productivity improvement,” and the “Asian dynamism”: the “New Economic Growth Strategy” designed to achieve the nation’s new growth in the face of constraining factors derived from a declining population and other challenges, by using “innovation,” “productivity improvement,” and the “Asian dynamism” as leverage, as well as by building the nation of Japan on human resources that capitalizes on talented Japanese nationals as the nation’s assets; the “Global Economic Strategy,” under which Japan will aggressively take in Asian vitality through improvement of business environments across Asia and use it for the new growth of our economy, and the “New National Energy Strategy,” which is aimed at overcoming constraints posed by natural resources and energy and form a basis for growth.
Based on these three strategies, the “Economic Growth Strategy Initiative” and the “Progress Schedule” were developed in 2006 that organized the measures and policies to be implemented over the ten years to FY2015. Thus, METI created a framework under which the whole governmental organization makes concerted efforts toward realization of the “New Growth.”
METI works to implement and upgrade the measures and policies stated in the Initiative and the Schedule, and confidently and boldly push ahead with policies aimed at enhancing Japan’s potential growth.
We indicate below the six pillars that represent the whole picture of the policy challenges METI is currently tasked with that include the measures and policies stated in the Initiative.
The Japanese economy is faced with substantial changes, such as a declining population, an aging society, the progressing globalization, intensifying international competition, and increasing energy and environmental constraints. Amid such changing circumstances, METI works to implement measures and policies designed to reform and rebuild the existing socioeconomic system so that Japan may generate high-value added industrial and economic activities through constant innovation, send out values that are acceptable worldwide, and create high-quality employment opportunities.
Firstly, in recognition of our people as the nation’s assets METI works to realize “a nation built on human resources” ― a national system that is capable of improving productivity per capita and sending out many innovative human resources. METI continues to improve the environment for development of high-quality human resources in industrial and educational circles, local communities, and further, outside of the country.
Secondly, aiming to be the world’s top-level innovation center, METI builds a virtuous circle that continuously creates internationally competitive products and services, and realizes a socioeconomic system that can continue to send out new values to the world. METI supports leading-edge, innovative research and development, and ensures that fruits derived from intellectually creative activities (“Intellectual Property”) performed by Japanese companies are properly protected both at home and abroad, and then improves the environment so that such fruits may lead to the creation of new markets.
Thirdly, METI works to upgrade the environment for realizing improvement of corporate productivity through efficient utilization of management resources. To provide a basis for companies to develop international competitiveness capitalizing on Japan’s strengths, METI pushes ahead with the reform of the “corporate system” including the existing company and taxation systems, inter-business relationships, utilization of IT including electronic tags, and logistics and distribution systems.
Fourthly, METI works to improve the market environment for consumers’ worry-free transaction of safe goods and services, protect their lives and property, and thereby realize healthy development of the national economy.
METI also steadily and efficiently upgrades industry statistics by radically expanding service statistics and creating an economic census.
Economic globalization is advancing at a speed and on a scale hitherto unknown. International movement and transaction of people, goods, money, and information ― key factors of economic activities ― are becoming increasingly active and brisk. Especially Asian nations are achieving dramatic growth as the “growth center of the world.” In the East Asian region, Japan has built a tight-knit network of international division of labor, which has led to the formation of the de-facto “East Asian Business Zone.” On the back of such economic realities, international economic systems, such as the WTO, have become more sophisticated, and the establishment of order in the area by means of EPA, FTA or other types of agreements have been advancing. On the other hand, however, the area has seen new problems emerging that require a global solution, such as concerns over trade security.
In view of such situations, METI will continue to strategically utilize economic cooperation, and while supporting economic development principally in East Asian countries, carry out external economic policies under Japan’s strong initiative. Specifically, METI will proactively address the matters negotiated at the WTO Doha Round, push ahead with talks for signing an economic partnership agreement (EPA) with Asian and ASEAN member countries, promote study on a wide- area economic partnership in East Asia, work for the establishment of the Economic Research Institute for ASEAN and East Asia (ERIA) ― an international research organization designed to provide intellectual support toward the economic integration of East Asia ―, create an industrial infrastructure based on Japan’s experience and wisdom for common use across Asia, and properly provide Japanese companies with information on overseas investment and trade. Thus, METI will work toward smoother trade and investment.
METI will also build a proper trade control system based on multilateral values whose importance has been recognized over the past years, such as a nation’s security, safety and peace of mind, and protection of the environment and of intellectual property, minimize its control or regulation of free trade, and realize smooth development of external trade.
Cross-industrial productivity improvement, promotion of innovation, and higher international competitiveness of each industry are essential to the realization of sustainable economic growth into the future.
In the first place, for manufacturing industries to continue to drive economic growth as a key industry in supporting the Japanese economy, METI will work to implement measures and policies designed to accelerate innovation, such as support to advanced research and development, and to promote development of “manufacturing experts” by awarding “The Japan Manufacturing Gran Prix.” METI will also prompt domestic demand-dependent industries to become higher-value added and support their efforts to have stronger international competitiveness. METI will also implement measures that assure people of a safe and worry-free life by stepping up the chemical substance control system, and thereby provide people with an improved environment for using products in a worry- free manner.
In the next place, METI will strengthen information and service industries that are key to the future growth of the Japanese economy. Information industries have been home to constant technological innovation and international competition. To help our economy achieve growth and step up productivity, and secure for people a safe and worry-free life, it is necessary to provide high quality products and services and build and develop an infrastructure that will support the next generation info-economic society. To that end, METI will work to strengthen information industries by supporting their R&D and commercialization efforts, organizing standards, protecting intellectual property, and ensuring information security.
Productivity improvement in the service industry will be of the utmost significance for raising the level of the national economy as a whole. METI will accelerate productivity improvement of the service industry through establishment of the “Council on Improvement of the Service Industry’s Productivity” jointly by industry, academia and government. METI will address tasks, such as improvement of the market environment, for greater utilization of IT and higher reliability of service quality.
SMEs are the basis of the Japanese economy and the source of its industrial dynamism as well. METI will work to implement a diverse range of measures aimed at revitalizing SMEs in recognition of their central role in regional revitalization and their existence as backing to Japan’s international competitiveness.
Specifically, by way of supporting regional SMEs embarking on new businesses backed by their wisdom and motivation, METI will promote development and marketing of new products and services that take advantage of regional strengths provided by regional resources. METI will also work to have funds more smoothly provided to SMEs, have their business succeed more smoothly, support their R&D activities, provide vitality to micro retailers and shopping streets, and promote development of small-scale enterprises, and thereby revitalize SMEs.
Given that corporate site selection now invites international competition, METI will provide such regions as are making efforts to promote or revitalize industrial agglomeration taking advantage of regional strengths, with support that fits their realities and characteristics, and thereby promote improvement of the regional business environment and revitalization of the existing industrial agglomeration.
METI also will promote the “Industrial Cluster Plan,” which is designed to create new businesses utilizing the region’s industry-academia-government network. In addition, METI will work to support those who will make efforts to revitalize the region through support to community business activities.
For sustainable economic growth, it is important to give consideration to reduction of environmental burdens that are derived from securing, or use of, energy and mineral resources.
For Japan, which depends on imports for the majority of its energy, an issue of utmost importance if to secure stable energy supply because a stable energy supply is a prerequisite for the subsistence of Japan’s socioeconomic society.
After experiencing two oil crises, Japan carried out measures aimed at securing oil substitutes and energy saving, while oil prices basically stayed at a relatively stable and low level until the 1990s. In recent years, however, a sharp increase in energy demand in Asian countries has caused international energy markets to become structurally tight and energy resources producing countries to strengthen the state’s control on such resources. At one point, the oil price jumped to the $70 range, and thereafter has continued to stay high to date, although somewhat lower than it was some time ago.
In view of such energy situations it is necessary for Japan to push ahead with a comprehensive, consistent energy policy over a long period of time. Specifically, METI will work to promote energy-saving measures, implement next-generation energy consumption measures in the transportation sector, promote introduction of new energy and nuclear power generation that includes the nuclear fuel cycle ― which is predicated upon absolute safety ― and thereby realize the world’s most advanced energy demand/supply structure, and secure oil, natural gas, and mineral resources in a comprehensive manner.
Solutions for environmental problems, such as global warming and industrial waste disposal, are an urgent task to be addressed on a global scale. Along the basic way of thinking that “the environment and the economy must be compatible with each other” it is important to consider environmental problems not merely as constraining factors but as a potential source of our industry’s new competitiveness, and have such problems lead to the formation of a recycling-based society. It is also necessary to promote development of innovative technologies that will serve as key to the solution of medium-to-long term environmental problems, and address the reform of our management and business models as well as of the social system in order for such technologies to be widely applied.
To combat global warming METI will make utmost efforts, pursuant to the Kyoto Protocol Target Achievement Plan, to comply with the 6% reduction of greenhouse gases in the first commitment period that starts in 2008. For the next framework to be implemented following the Kyoto Protocol, it is essential that major emitting countries, such as the United States, China and India, participate in discussions and establish equitable objectives that properly reflect the efforts made by each country toward energy efficiency improvement. METI will lead international discussions to have such objectives established.
In
view of the internationally tightening demand/supply situation and
increasing importance of the efficient use of resources, METI will push
ahead with the 3R’s (reduction of waste generation, reuse of products
and parts, and recycling of wastes as raw materials) and promote
formation of a recycling-based society. METI will also work for
development of environmental business, promote environment-friendly
business management and effective environment management by companies,
while promoting environmental cooperation toward Asia.
Given
potential risks involving the use of energy and industrial activities,
an important task is to properly control such risks and ensure people’s
safety when using energy or performing industrial activities.
In
the field of nuclear power safety, fully aware of the risks inherent in
nuclear power, METI will properly regulate the use of nuclear power by
means of correct examination and inspection, have all necessary
measures in place against any accident or terrorist acts that may occur
to or be performed on nuclear power facilities, and thereby ensure the
safety of nuclear power and of the nation as well.
Specifically,
METI will work to improve the inspection system, increase the
sophistication of the method to evaluate earthquake-proof safety, step
up safety regulations applicable to the disposal of high-level
radioactive wastes, and thus upgrade or strengthen safety regulations
to cope with progressing nuclear power policies. Further, METI will
continue to carry out public hearing and publicity activities on these
efforts, and have the nation deepen understanding of the efforts and
thereby develop peace of mind.
In the field of
industrial
safety, given that the facilities that handle high pressure gas, LPG or
explosives, or facilities that generate electric power or supply city
gas or operate mines each has different sorts of hazards, such as
explosives, and poses potential harm to humans, it is important to
properly implement regulations according to the characteristics of each
of such facilities. METI will work to prevent disasters and accidents
from occurring based on reasonable judgment derived from scientific
knowledge, and thereby realize a safe, worry-free society.
Also
in consideration of diverse challenges posed by increasing awareness of
society’s “safety and security” triggered by accidents caused by
gas-consuming appliances, the problem of businesses’ noncompliance with
legal requirements, advanced age deterioration of equipment at
industrial complexes, etc., METI will pursue the role to be performed
by industrial safety administration under the principle of
self-imposed, self-observed safety.
| ＜ back to the previous section | go to the next section ＞ |