Characteristics Of The Economy Of Japan Coursework Paper (Coursework Sample)

Characteristics of the Economy of Japan
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Despite the country’s small size, Japan has depicted quite contrasting economies before and after the Second World War. Up to the moment, the country has had three distinct political and economical periods; the Edo which began in 1603 and went on up to 1868, the Meijji Restoration and the final period which began after the Japan’s defeat at the Second World War in 1945 and runs up to now. Each of the three economical periods was characterized by unique economical factors which necessitated the government to initiate remedies so as to avoid plunging the country into an economical crisis. ( Karan, 2010). Defeat therefore served as an eye opener to Japan and subsequently elicited the need to establish a self-sustaining economy that would garneted the country independence to initiate and fund all its projects. Since then, Japan has successfully seen its economy move from that of a young growing nation into a mature economy capable of sustaining itself without much dependence on donors or other aid agencies.
Just before the Second World War, Japan was ranked among the developing economies which primarily relied on industrialization and fishing as the major economy boosters. The general landscape of Japan cannot support extensive agriculture and thus farming was only done for subsistence consumption. However, after World War II, Japan became one of the world’s fastest growing economies and diversified its economy boosters to include sophisticated technology and further developed its motor vehicle manufacturing industry to become the world’s leading producer. Something worth to note is that currently, the economy of Japan is ranked as the third largest in the world in terms of nominal gross domestic product and the fourth largest in the world by purchasing power parity. Similarly, Japan is currently the world’s second largest developed economy after China.
Japan, just like the United States of America didn’t have elaborate and much developed technological innovations before the World War II. For instance, little was known about Japan’s automobile industry and in most cases, most buyers would rather purchase such products from renowned manufacturers such as Germany rather than Japanese products. The fact that most Japanese products could not compete favorably on the global markets implied that Japan couldn’t effectively sustain its economy since most of the country’s revenue comes from the sale of its high-tech products.
Lack of incorporation of sophisticated technology did not only affect the automobile manufacturing sector but the entire industrialization sector in Japan. However, the impact on the automobile sector is often referenced to due to the significant impact that came with incorporation of such technology in the sector. In the same manner, continued reliance on ancient production methods also meant that the entire production was significantly slow and yielded inconsistencies in the market supply. In fact, before the Second World War, Japan didn’t rank its automobile industry as one of the major pillars of its economy. The automobile sector during this time was ordinary just like most vehicle manufacturers. The industrial sector in Japan was therefore meant for more local consumption than it offered to the export market.
After the World War II, most countries sought business allies and partners with the major aim of establishing and sustaining long-lasting relationships that would spearhead economic recovery and development. In fact, the Second World War had split countries into antagonistic groups depending on which party they supported during the war. Having been defeated, Japan similarly followed suit and since the country’s rugged terrain lacks the numerous natural resources that support most economies of the world, most of the economic recovery activities took a research approach. For instance, rather than seeking economic partnerships, the Japanese government hugely invested and research and innovation and as a result, Japan established a hub for technological innovation.
According to the “The Keiretsu of Japan”, the incorporation of technology is what resulted into a high demand for Japanese manufactured products. Having realized that the country could easily face a labor shortage, experts began investing into robots and automated systems that could take up some of the positions that could be filled by the existing labor. Meanwhile, the semi skilled and unskilled laborers took up some of the duties and light tasks that could either not be fully automated or were semi-automated. Although robots were brought into the industrialization sector to boost production, they later on came to increase efficiency in production as well as help solve labor shortages that came up later as the sector grew and widened.
Currently, the country employs the finest levels of technology in all its manufacturing processes. Japan, for instance, was the first company to employ robots in industrial processes. The country further went ahead to break the technological record by being the first country ever to manufacture a self-driven car that could be remotely controlled without necessarily having a driver to direct it. Besides helping fetch an incredible market for Japanese products, technology has also been cited as a major contributor towards Japan’s economy. The country exports not only technological products but also sends out technological experts to different parts of the world at a cost. As a result therefore, technology and related innovations remain fundamental pillars of Japan’s economy. (Imai, 2014)
There has also been contrasting performances of Japan’s economy in terms of labor and workforce. To begin with, the Japan is densely populated. However, due to the general landscape, most of the population, especially the unskilled labor, is found in rural homes. This therefore means that at some given time, the country faces labor shortages, not because the available skills are missing but due to restricting settlement patterns that limit the population to certain geographical locations. During the Edo economy, the Japanese ironsmiths supplied the country with just enough manpower that was required to work on the iron ore that was the major raw material available in Japan. In other words, Japan didn’t experience any labor shortages during this period since most of the population was involved in either fishing r agricultural production.
Similarly, since ironsmiths learnt by apprenticeship, it was so easy to find replacements for either the old ironsmiths or even those who gave up the art. During this period too, the service sector didn’t contribute significantly towards Japan’s economy. For example, it is not recorded anywhere that Japan once exported iron ore, an implication that most of the ore was locally consumed by the few companies that were operational at that time. The only major service sector whose contribution was significant to the economy was the banking sector which employed a smaller section of the economy.
In the current economy, Japan relies on raw materials that are imported from abroad. For example, it is believed that the iron ore deposits in Japan were long depleted despite the continued manufacture and production of steel coated and aluminum products. As a result therefore, the country needs highly skilled labor force. In the year 2015, Japan experienced a 3.6 percent shortage of skilled labor force. The major different between the labor force in the Edo period and the current labor force sustaining Japan’s economy is that the later is highly skilled, a reason that has yielded periodic labor shortages and the recent increase in inflation. In Japan, inflation is about 3.2 percent. (Fujioka, 2009)
Just like most industrialized countries, such as China and the United States of America, the service industry accounts for a significant percentage of Japan’s economy. For instance, the service sector contributes about 71.4 percent of Japan’s gross domestic product. Hence, another distinct disparity between the contributions of the service sector to the economy is that the current service sector has a significant impact on the overall economy of the country unlike the previous one. As a result therefore, Japan subsequently sends a huge percentage of the government’s revenue in education and training programs meant to address specific needs of the labor market. In fact, the education and training programs in Japan are adjusted fro...