The government has drawn up a preliminary draft of its new growth strategy centering on measures to increase productivity through cutting-edge technologies.
This is the fifth growth strategy worked out by the second Cabinet of Prime Minister Shinzo Abe, which was launched in December 2012. Even though the government has characterized its past growth strategies as the cores of its "Abenomics" economic policy mix, none of them has produced outstanding results. It's not enough to just put up empty slogans.
As part of its new growth strategy, the government intends to inject policy resources intensively into the distribution sector, which is seriously short of labor. Specifically, the government plans to invest in the development of self-driving trucks and drones.
Efforts to promote the introduction of medical services using artificial intelligence (AI) and nursing care robots were incorporated in the growth strategy.
The United States and Germany are advanced in the development of these new technologies called the "fourth industrial revolution." Japan also needs to step up efforts to develop these technologies.
Last year, the government pledged to strive to promote the fourth industrial revolution. In other words, the government has run out of specific measures that can be incorporated into its growth strategy. The government's ability to produce results in the strategy is being tested now.
A shortage of workers resulting from the declining population is becoming serious. The ratio of job offers to job seekers has risen to a level higher than that during the speculation-driven, asset-inflating "bubble" economy in the late 1980s and early 1990s.
To solve the problem, it is indispensable to implement a wide variety of policy measures, ranging from technological innovation to the empowerment of women, elderly people and foreigners. Questions remain as to how enthusiastic the Abe administration has been about implementing these measures.
The Abe government's first growth strategy clearly mentioned the need to expand job opportunities for women. However, the government's efforts to support childrearing are insufficient as is shown by the fact that the government delayed its goal of eliminating day care waiting lists. Moreover, the government has also decided not to abolish a spousal tax deduction system, which has been criticized for hindering women's employment.
Deregulation, which spurs the restructuring of industries, is indispensable for increasing productivity.
As part of its growth strategies, the government has set a goal of being ranked by the World Bank as at least the third easiest country for launching new businesses among developed countries. However, Japan was ranked 26th last year. Cumbersome administrative procedures as a result of a lack of progress in deregulation have blocked entrepreneurs from launching new businesses.
Relaxation of the central bank's monetary grip and proactive fiscal policy, which are part of the Abenomics policy mix, have had only temporary effects in stimulating the economy. To achieve sustainable economic growth led by the private sector, it is essential to carry out all measures incorporated in the growth strategy.
Japan's potential growth rate, which shows the country's economic might, remains less than 1 percent. This is apparently the result of the government's failure to steadily implement policy measures incorporated in its growth strategies while relying on easing credit and use of taxpayers' money to implement stimulus measures.
The Nikkei Average of 225 selected issues at the Tokyo Stock Exchange, a key stock index in Japan, has recovered to the 20,000-yen level but the main factor behind this is investors' expectations for U.S. economic performance. The government should deal with unaddressed challenges instead of just showing relief at high share prices.