The Power to Compete: An Economist and an Entrepreneur on Revitalizing Japan in the Global Economy

Chapter 2The Power to Operate

Workforce Fluidity

Hiroshi:

I would like to discuss the power to operate. There is this impression that Japan's power to operate is extremely high—after all, everyone knows about Toyota's high levels of productivity.

Ryoichi:

The power to operate—would that be the operational capacity needed to realize innovation?

Hiroshi:

You can call it operational capacity or productivity, but either way, looking at the overall statistics, Japan is actually extremely inefficient. Looking at data from the International Labour Organization, Japan's gross domestic product (GDP) per worker is U.S. $44,500. This puts Japan at 23rd in the world. It is clear that Japan is extremely inefficient. The reality is pretty shocking and very different from what the general population assumes to be true.

What's more, this figure was from 2011. Accounting for the weak yen and the current yen-dollar exchange rate, Japan's GDP per worker drops even further. I estimate that number is now probably less than U.S. $40,000. On top of that, the size of Japan's workforce is actually shrinking. I believe we are facing a very grave situation. Japan's power to operate is so low because of the underutilization of IT and the excessive costs of the public sector. [I will examine these two issues in more detail in Chapter 4.]

Going back to Japanese employment, I think we have to address the lack of balance. On the one hand, you have insufficient workers in sectors such as nursing care and ...