Level of economic development: Japan

Background
1. Second most powerful economy after the USA
2. Few mineral or energy resources
3. Tertiary sector now accounts for 3 quarters of Japanese GDP
4. Low growth phase from 1975-2005
5. Did not start to industrialise until the second half of the 19th century - nearly 100 years later than the UK
6. its physical and industrial infrastructure lay in ruins at the end of WWII
7. High growth phase from 1955-1975
Internal factors
1. Human resources
  1. 150 million population
  2. strong work ethic
  3. healthy attitude to wealth
  4. willingness to embrace new work practices and new technology
  5. strong loyalty to employer
  6. As Japan has prospered, the labour force has expected higher pay
  7. no development of real trade unions
  8. rising cost of labour explains why manufacturing has moved abroad
2. Government intervention
  1. often cited as the supreme example of the free-market economy (no gov intervention)
  2. Since WWII Japan's economy has been carefully managed by its gov in a variety of ways
  3. Maintained strict control over the banks
  4. Made sure that the Yen has been slightly undervalued
  5. used to benefit exports but not imports
3. Business culture
  1. 'Just in time' system: a manufacturing system designed to minimise the costly holding of large ordering and reliable delivery of inputs.
  2. TNCs main cause for economic development
  3. most economic power and wealth mainly in a small number of huge trading companies with considerable overseas business interests
  4. new production techniques seeing commercial spin-offs from new technology and undertaking the most through market research
External factors
1. Trade
  1. one of the leading trade nations
  2. Due to the lack of raw materials and energy resources
  3. needs to seek out overseas market for its huge output of manufactured goods
2. Overseas direct investment (ODI)
  1. Main way that businesses from one country become involved in the economic life of another
  2. Aims to take advantage of cheap labour and raw materials or to gain better access to foreign markets
3. Aid
  1. interested in ensuring future supplies of energy and raw materials, as well as opening up new markets for its manufacturers
  2. Japan has always had a pragmatic approach to aid
  3. Ensuring aid is returned

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Level of economic development: Japan

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