Major Policy Research Domains
I. Maintaining Economic Dynamism under the Adverse Demographic Conditions of Low Fertility and Aging Population
Japan is faced with a challenging task of achieving sustainable economic growth at a time of unparalleled declining fertility and aging population. In order to help policymakers meet this challenge, RIETI will undertake comprehensive and integrated research on means of promoting structural change in the economy; increasing labor force participation rates of women, the elderly and young people; increasing productivity of both labor and capital; identifying a social security system that can secure an optimal intergenerational and intra-generational balance of benefits and contributions under the public pension system; and designing effective fiscal policy and restoring the nation's fiscal balance.
II. Promoting Innovation and Strengthening International Competitiveness
Continuous innovation is vital to strengthening the international competitiveness of Japanese companies. However, the effects of innovation and policies that promote it are extremely difficult to measure. Therefore, in undertaking research in this field, it is necessary to have an analytical framework, both theoretical and empirical, that clarifies the correlations between innovations at corporate and industry levels and total factor productivity (TFP). RIETI will evaluate and analyze conditions surrounding Japanese industry and specific industrial and technological policies to produce findings the government can utilize in formulating policies to promote innovation.
III. Formulating Japan's Strategy in Response to Globalization and Deepening Economic Interdependence in Asia
As the world economy becomes increasingly globalized, particularly as Asian countries rapidly develop closer economic relations, Japan needs to establish a comprehensive strategy for implementing policies that respond to international trade rules - such as those under the WTO and FTAs - and facilitate trade and investment. With an aim to contribute to the formulation of Japan's international strategy for developing trade and other policies, RIETI will conduct analysis on the value chain of trade, direct investments and technological development in Asia, as well as the transformation of Asia's monetary and foreign exchange systems, thereby presenting policy proposals for Asia and the world. At the same time, RIETI will survey and sort out cases of the actual implementation of trade rules, analyze the economic conditions and trade strategies of Japan's major economic partners, and conduct research on business environments and other factors that influence the successful operation of Japanese companies in the global arena.
IV. Compilation of the History of Japan's Trade and Industry Policy
Knowledge of the history of trade and industry policy provides the foundation for formulating future economic and industrial policy. The Research Institute of Economy, Trade and Industry (RIETI) is undertaking comprehensive, systematic research to compile Japan's history of trade and industry policy, seeking cooperation from external experts including economists and historians.
Adjacent Basic Research Areas
A. Institutions Related to Financial and Labor Markets, and New Corporate Law and Governance
RIETI will research the development of new economic institutions which allow for both risk-taking and stable growth.
B. Regulatory Reforms and Evaluation Frameworks for Deregulation
RIETI will research the remaining regulatory reforms to be tackled and develop microeconomic models for objective assessment of government policies.
C. Compilation of Micro Panel Data on Firm Activities, Trade, Energy, and the Elderly; and Model Building and Operation
Microdata will be reinforced and improvements will be made on model operation in the fields of trade, pensions, energy, and the environment. This will strengthen the necessary infrastructure for RIETI's research.
About Policy Research Domains
After completing its initial five-year plan, the Research Institute of Economy, Trade and Industry (RIETI) has begun its second midterm period as of April 2006. During this period, RIETI is continuing to endeavor to achieve its mutually compatible dual targets: maintaining high academic standards and ensuring its research-based policy proposals successfully meet concrete economic and industrial policy requirements. To this end, RIETI is managing research activities by assessing specific policy contributions made by individual research projects.
To achieve these objectives, the Ministry of Economy, Trade and Industry (METI) has identified four Major Policy Research Domains for which RIETI should continually carry out research through the second midterm period. These domains have been chosen from RIETI's various areas of research coverage.
The Major Policy Research Domains are as follows.
I. Maintaining Economic Dynamism under the Adverse Demographic Conditions of Low Fertility and Aging Population
II. Promoting Innovation and Strengthening International Competitiveness
III. Formulating Japan's Strategy in Response to Globalization and Deepening Economic Interdependence in Asia
IV. Compilation of the History of Japan's Trade and Industry Policy Primarily of the 1980s and 1990s
Furthermore, RIETI is conducting its research not only in the abovementioned Major Policy Research Domains, but also in the Adjacent Basic Research Areas including:
A. Institutions related to financial and labor markets as well as new corporate laws and governance
B. Regulatory reforms in such areas as electric power, transportation and health care and evaluation frameworks for deregulation
C. Compilation of micro panel data on firm activities, trade, energy and the elderly; and model building and operation
In these Adjacent Basic Research Areas, RIETI can choose newly emerging relevant policy issues from a medium- to long-term perspective in a more timely and flexible manner by responding to changes in socioeconomic conditions.
All research is coordinated so as to seek synergy among individual activities.
Research Process
To further improve on the quality of research, RIETI ensures that at least three discussion fora are organized for each research project through workshops and symposia, where Japanese and foreign experts and policymakers participate to deepen the research.
