“Ethical Markets welcomes this well-researched report on Japan in it its new Reiwa era which began in Spring of 2019, “What the world can learn from Japan”, The Economist,12/11/2021,p.14.
The report sees Japan with new eyes, in much the same way I did in my article published in The Japan Times, Japan at a GDP Crossroads, (2014). Japan was already the bellweather country that had achieved the pinnacle of materialistic, GDP-measured economic growth and developed an orderly approach to social well-being.
This form of development beyond GDP is similar to the Calvert-Henderson Quality of Life Indicators, launched by the Calvert social investment fund with my research, at the USA National Press Club in 2000, and which I also presented at the European Parliament’s BEYOND GDP conference in 2007(www.beyond-gdp.eu).
My message in The Japan Times to the Japanese economic ministries was “Time now to shift beyond the outdated GDP growth model and adopt these new indicators of Quality of Life“, (Ethical Markets and Globescan, Global Survey/Beyond GDP)! Simply change to the new scorecard and proclaim victory beyond materialism toward broader social goals and longer-term sustainability!
Today, after 193 member countries adopted the UN’s Sustainably Development Goals (SDGs), most countries will be following Japan’s lead and its new challenges of sufficiency, stability as its declining birthrates become the new normal worldwide.
~Hazel Henderson, Editor“
Two tales are often told about Japan. The first is of a nation in decline, with a shrinking and ageing population, sapped of its vitality. The second is of an alluring, hyper-functional, somewhat eccentric society—a nice place to eat sushi or explore strange subcultures, but of little wider relevance to the outside world. Both tales lead people to dismiss Japan. That is a mistake.
As our special report this week argues, Japan is not an outlier—it is a harbinger. Many of the challenges it faces already affect other countries, or soon will, including rapid ageing, secular stagnation, the risk of natural disasters, and the peril of being caught between China and America. The fact that some of these problems hit Japan early makes it a useful laboratory for observing their effects and working out how to respond.
One lesson is that societies must learn to live with risk. As the climate changes and natural hazards proliferate, countries must be able to bounce back from shocks. Painful experience has led Japan to invest in resilience. Bridges and buildings are retro fitted to make them earthquake-proof. After a big quake hit Kobe in 1995, leaving many without water, the city built an underground system to store 12 days’ supply for residents.
Many Japanese people understand that responding to disasters is everyone’s problem, not just the state’s. That has helped during the pandemic: mask-wearing has been virtually universal. Among g7 countries, Japan has the lowest death rate from covid-19 and the highest rate of double-vaccination.
Another lesson is that demography matters. Most societies will ultimately age and shrink like Japan. By 2050, one in six people in the world will be over 65 years old, up from one in 11 in 2019. The populations of 55 countries, including China, are projected to decline between now and 2050. Recent data suggest India will shrink sooner than expected.
Like climate change, the demographic sort is vast, gradual and seems abstract—until it is not. And like climate change, it will demand a transformation both of institutions and of individual behaviour. Remaining active for longer is essential. The Japanese government urges firms to keep staff until they are 70. Many stay on: 33% of 70- to 74 -year-olds now have jobs, up from 23% a decade ago.
Demographic change brings big economic challenges. Japan owes its sluggish growth in large measure to its shrinking population. If you look at the well-being of indi vidual Japanese people, however, the picture is far rosier. In the decade from 2010 to 2019, Japan enjoyed the third-highest average rate of gdp growth per head in the g7, behind only Germany and America.
Japan is a major creditor and the third-largest economy at current exchange rates. Its people live longer than the citizens of any other country. It is home to the biggest technology investor on the planet, a pioneering 5 g firm, and a host of global brands, from Uniqlo to Nintendo. Expertise in robots and sensors will help its firms make money from a wide range of new industrial technologies. Geopolitically, Japan plays a pivotal role between China, its largest trading partner, and America, its key security partner. It should not, in short, be a global afterthought.
One way to cope with a shrinking population is to get the most out of people. Japan will never live up to its potential while so many of its highly educated citizens are denied the chance to live up to theirs. Seniority-based promotion at traditional companies, combined with excessive defer ence to grey hairs, silences young voices and stifles innovation. That is why many of the brightest new graduates prefer to work for startups. Japan has done a good job of getting more women into the workforce in recent years, but they still have too few chances to rise. A dual-track labour system traps young people and women in precarious part-time jobs (which, among other things, makes them less keen to have children).
Politicians tolerate all this in part because they feel little pressure to do otherwise. The Liberal Democratic Party has remained in power almost uninterrupted since 1955, thanks to a pathetically weak opposition. Senior figures, typically old men from political dynasties, are more conservative than the public they supposedly represent. For the public, in turn, today’s comfort dulls the impulse to press for a brighter tomorrow. Japan’s final lesson is about the danger of complacency.