Toward Strengthening Industrial Competitiveness Following the Great East Japan Earthquake: Efforts by the industrial sector and policy response

Half a year since the March 11, 2011 earthquake, Japan is making all-out efforts to rise to its feet from the grave damage inflicted on its economy, industries, finance, society, and people's everyday lives. However, the Japanese economy is still facing daunting challenges. While economic activities in the Tohoku region, which was the hardest hit by the quake and tsunami, have yet to be restored, Japanese companies must rebuild their supply chains across and outside the country in view of ensuring business continuity into the future, and power supply constraints must be overcome. In addition to these pressing needs caused by the disaster, Japan is confronted with long-standing chronic problems such as the continuing appreciation of the yen with no sign of subsiding and massive fiscal deficits, the largest among the advanced economies. Immediately after the earthquake, the Research Institute of Economy, Trade and Industry (RIETI) has been dedicating research efforts to explore immediate policy measures needed to overcome the unprecedented challenges as well as a medium- to long-term policy direction.

This policy symposium will explore how Japanese industries, which have been affected significantly by the quake, can and should restore and remarkably enhance their competitiveness through the rebuilding of their supply chains and incorporation of new technologies to help reconstruct the Tohoku region and the Japanese economy as a whole, and eventually overcome the doldrums that have been haunting Japan ever since the bursting of its bubble economy. It will also discuss policy responses needed to help achieve that goal such as making greater use of market mechanisms and promoting further liberalization in the areas of trade and investment.