Much water has flowed under the bridge during the ensuing 30 years. 1989 saw the end of the most rapid period of economic growth in Japanese history: the Nikkei hit 39000 on the last trading day of the year, before the country’s legendary bubble economy burst, triggering the so-called “Lost Decade” of deflation and GDP stagnation, which has since been expanded into a Lost 20 Years. Japan’s population started to age and grey, its rock-bottom fertility a cause of existential angst. Meanwhile, its gaming, manga and anime culture attained global appeal; women entered the workplace in unprecedented numbers; and the country experienced the strongest earthquake ever recorded in its history, triggering the Fukushima nuclear disaster.
ESG – Governance in the spotlight
Past performance should not be seen as an indication of future performance.
Past performance should not be seen as an indication of future performance. The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.
The digital society
Japan has a reputation as an early adopter of new technology, but in some critical areas it has actually lagged other societies, notably e-commerce and e-payments. However, the digital transformation is now gathering speed, and one of the major themes that emerged from the conference was the potential for e-commerce players to see growth many times higher than the broader Japanese economy.
Solutions for a shrinking nation
Japan was one of history’s great experiments in isolationism. Its Tokugawa shogunate, terrified of the destabilising influence of foreign ideas, prevented anyone leaving or entering the country. This all changed in 1853, when US Commander Perry steamed into Tokyo Bay, compelling Japan to open its borders to trade.
Modern manifestations of this insular past remain, most visibly Japan’s traditional aversion to immigration. The country is one of the most homogenous nations on earth, but this might gradually be changing.
One of the most frequent laments I heard during my trip was a shortage of labour – understandable given that the working age population is dropping by almost one million people a year. Japan’s foreign worker population has doubled in the last five years, now sitting at 1.28m. Prime Minister Shinzo Abe is quietly liberalising visa laws further, and easing language requirements for workers in sectors suffering the most serious labour shortages. The target is for another 500,000 overseas workers by 2025, but far more may come.
Concerns on China
Japan looks to be embracing the next stage of the international destiny foisted on it so shockingly by Commander Perry almost 170 years ago.