Japan’s Industrial Development 3.Japan’s Industrial Slowdown Rising Importance of the Service Industry Change in Work Attitude Asian Currency Crisis Global Competition

Japan’s Industrial Development 3.Japan’s Industrial Slowdown Rising Importance of the Service Industry 1980s : Japanese became richer Used more services than goods Growth in service sector resulted in labour shortage in mnfg ind

Japan’s Industrial Development 3.Japan’s Industrial Slowdown Change in Work Attitude Post-war generation better educated; different work attitude Do not find wage system linking pay rise to length of service attractive Many have interests outside their work Japan Productivity Centre survey : Fewer employees want to work for the same company until retirement 22% in 1975; 16% in 1992 This has affected productivity in mnfg sector

Japan’s Industrial Development 3.Japan’s Industrial Slowdown Asian Currency Crisis Late 1990s : exports of Jap products to Asian countries fell 21% - Asian currency crisis 1997 : Asian countries such as South Korea and Indonesia hit by currency crisis Their currency value fell against the US$ Thus more expensive for locals to buy imported goods that are paid in US$ Sales declined in these countries – less imports Japan exports more than 1/3 of its goods to Asia – badly hit

Japan’s Industrial Development 3.Japan’s Industrial Slowdown Asian Currency Crisis Several factories in Japan suffered huge losses – unsold goods Jap assembly plants in Asian countries similarly affected Made Jap companies less competitive

Japan’s Industrial Development 3.Japan’s Industrial Slowdown Global Competition Rising challenges from China, Taiwan and US Cut into traditional Japanese markets Their goods have also entered Japan 1998 : Over-supply of computer parts Fierce competition from NIEs pushed prices down Made it less profitable for Jap companies to produce computer parts

Japan’s Industrial Development 4. Future of Japan’s Manufacturing Industry Japan must continue to live by its wits Have to continually upgrade her technology and create new products Companies that are far-sighted, innovative and adaptable will do better

Japan’s Industrial Development 5. Conclusion Japan has come a long way Transformed from a war-torn country into a highly industrialised country Mainly the result of efforts by the Jap govt, people and private companies Japan’s experience in industrial development provides many valuable lessons for countries in the areas of industrial planning & development

The Straits Times 4 Mar 2002