Japan, Moving toward a More Advanced Knowledge Economy - Vol. 1

Japan, Moving toward a More Advanced Knowledge Economy - Vol. 1

Japan, Moving toward a More Advanced Knowledge Economy - Vol. 1

Japan, Moving toward a More Advanced Knowledge Economy - Vol. 1


These two volumes analyze Japan from the Knowledge Economy perspective, covering a wide range of sectoral issues in development including the macro economic framework, education and skills training, the national innovation system, science and technology, information and communication technology, and infrastructure. While 'Volume 1' explores the four pillare of the 'Knowledge for Development' framework, the second volume presents up-to-date case studies of outstanding Japanese private companies that each characterize different aspects of the Knowledge Economy. By combining economics and business, these volumes allow readers to grasp the full scope of today's knowledge economy.


Knowledge has long been recognized as a key source of economic growth and a valuable asset that can be leveraged, especially now in an era of increasing globalization. As a result of deeper integration among economies and fueled by the revolutionary advances in information technology (IT), the supply of and demand for knowledge and its application have led to significant challenges as well as opportunities for both developing and developed countries. To create and sustain an effective knowledge economy, countries and companies worldwide must become more knowledge-competitive. This book analyzes Japan as a knowledge economy, with a view to providing lessons for the developing world.

Japan’s rapid economic recovery after World War ii, assisted by imported technology, was indeed remarkable. in the mid-1960s, it was the second largest World Bank borrower, while only two decades later it was the second largest contributor. Already in the mid-1960s, Japan’s gdp was beginning to catch up with some of the European economies.

In the 1970s and 1980s, Japan was held up as a model of economic growth for developing countries; and in the 1980s, companies in the industrial countries realized that they could also learn a great deal from Japanese firms. Some analysts even believed that Japan would dominate the world economy in most major industries because of its advanced production system. Then, in the 1990s, a long period of economic stagnation, especially relative to the resurgence of it companies in the United States, led many to dismiss Japan as an important source of ideas.

These polar opposite perceptions, however, do not reflect the real Japanese economy past or present. the earlier positive assessments ignored the existence of a substantial number of uncompetitive industries, while the more recent dismissals ignore some highly competitive companies and industries. This book provides a more balanced account. in particular, it assesses Japan’s status as a knowledgebased economy, applying the “four-pillar” analysis developed by the World Bank Institute (WBI), and highlights the success of several knowledge-advanced Japanese companies.

In mid-2006, the Japanese economy appears to be emerging from a lengthy stagnation. Japan has been a source of global best practices in both manufacturing processes and management; and although many of its characteristic large-firm management approaches may seem ill-suited to the evolving global economy, others have been adapted and continue to be on the cutting edge. On a macro level, Japan has become the world’s second largest economy and has a very high level of social equity.

At the same time, Japan is facing many challenges as it moves into a more advanced position in the global knowledge economy, including the need for a more flexible labor market, and the provision of risk capital, safety nets, and lifelong learning. Some of these issues are also relevant to developing countries.

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