The Policy-making Process of Japan’s Industrial Competitiveness Policies (Japanese)

Junko Watanabe

Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper analyses and traces the formation process of industrial competitiveness policy in Japan from the late 2000s to the early 2010s. After the bursting of the bubble economy, Japan's economy went through a period of industrial revitalisation, including corporate restructuring, as well as financial revitalisation centred on the disposal of non-performing loans, which came to an end in the mid-2000s. The Law on Special Measures for Industrial Revitalisation and Industrial Innovation (Industrial Revitalisation Law), enacted in 1999, which supported industrial revitalisation from a policy perspective, continued to operate through legal amendments while shifting its focus to growth strategies, and was succeeded by the Act on Strengthening Industrial Competitiveness enacted in 2013. This paper clarifies the process from the 2007, 2009 and 2011 amendments to the Industrial Revitalisation Law to the enactment of the Act on Strengthening Industrial Competitiveness in 2013, based on various documents. The Industrial Revitalization Law enacted in 1999 was intended to support industrial revitalization after the collapse of the bubble economy through taxation and other policy measures. In response, the Industrial Revitalization Law shifted its policy focus to more forward-looking business restructuring and innovation creation. The Act on Strengthening Industrial Competitiveness inherited many provisions from the Industrial Revitalization Law and included tax incentives and deregulation measures to support capital investment with the new goal of eliminating (1) underinvestment, (2) excessive regulation, and (3) excessive competition, in order to “dramatically increase profitability and revive domestic manufacturing industries so that they can compete globally.†Although the above laws have had some success in terms of increasing corporate productivity and creating new businesses, further verification of their policy effects and challenges is needed.

Pages: 29 pages
Date: 2024-12
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