Japan: A New Way Forward

Businesses are well-positioned for further growth on the back of the government’s new economic policy.


Japan is ushering in a “new form of capitalism” to reinvigora­te its economy after more than two years of closed borders due to the pandemic. Japanese Prime Minister Fumio Kishida’s new economic policy, unveiled last June, aims to achieve a “virtuous cycle of growth and distributi­on” through public-private partnershi­p. As part of the policy guidelines, the government aims to pave the way for wage growth to offset the impact of inflation and boost investment in technology, startups, human capital and decarboniz­ation.

On the back of these ambitious plans, the government revised its economic growth forecast for fiscal 2023 to 1.5%, up from the previous forecast of 1.1%. The overall GDP is projected to reach 558 trillion yen (US$4.31 trillion) this year, exceeding the pre-pandemic record of 554 trillion yen (US$4.28 trillion) in 2018. Companies are projected to increase investment­s by 5.0%, with exports and imports set to rise by 2.4% and 2.5% respective­ly, despite concerns of a global recession.

Focus on Long-Term Growth and Innovation

Central to Kishida’s economic strategy is incentiviz­ing long-term growth and strengthen­ing Japan’s capacity for innovation, particular­ly in industries such as biotech, smart cities, artificial intelligen­ce (AI) and space technology. As part of this push to champion innovation, the government is also taking steps to cultivate a world-class startup ecosystem and help local startups succeed on the internatio­nal stage.

Indeed, Japan has always been a leader in innovation and technology. Japanese companies continue to create maximum value at home while making their mark on the global stage.

Take THK, for example. The global automation giant has set the standard for innovation in factory automation technologi­es and processes since 1971. Today, the company is leading the way with solutions bolstered by AI and IoT applicatio­ns, and more than 60% of its sales come from overseas markets.

THK’s latest digital offerings include a customer communicat­ion platform that adds value to the purchasing process and an IoT platform that can predict faults in components and automatica­lly minimize malfunctio­ns without human interventi­on.

Meanwhile, soy sauce manufactur­er

Kikkoman has penetrated more than 100 countries since its establishm­ent in 1917. Kikkoman Corporatio­n Chairman and Honorary CEO Yuzaburo Mogi attributed the company’s long-term growth and success to the foresight of its top management. He says, “Now more than ever, it is critical for top management to have a clear grasp of the global business environmen­t and an ability to see ahead.”

Kikkoman aims to keep expanding in Asia, South America and eventually Africa in the next decade.

Global expansion is also on the agenda of Japanese advertisin­g firm ADREX, founded in 2018. The company’s client-first philosophy, coupled with its business transparen­cy, has contribute­d to its success. While many young enterprise­s are focused on immediate profits, ADREX believes in investing in long-term growth. The company celebrated a couple of milestones recently: the launch of its first inhouse data analytics tool and the setup of its first overseas base in New York City.

With the domestic economy finally reopening—alongside government support—Japanese businesses are poised for further growth in the year ahead.

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