Policy Research Domains (Major Policy Research Domains) II. Promoting Innovation and Strengthening International Competitiveness

Productivity of Companies and Industries, and Japan's Economic Growth

Project Leader/Sub-Leader


FUKAO Kyoji Faculty Fellow



2007 - 2008

For the Japanese economy to retain its vitality under conditions of decreasing population and the aging of society, it will be essential to achieve economic growth based on accelerated productivity growth. With this challenge in mind, this project, as a rule, annually updates the Japan Industrial Productivity Database (JIP), a basic source of data for analyzing Japan's economic growth and changes in its industrial structure, and analyzes the trends in TFP on a detailed industrial level with their determinants. In addition, by participating in "EU KLEMS," a joint international project on productivity in the European Union (EU), we compare Japan's industrial structure and productivity growth by industry with that of other industrialized countries, including the United States, the EU member countries and South Korea. Finally, we analyze the impact of the globalization of firms and their accumulation of intangible assets on their productivity. This is done using the JIP Micro Database, which covers most Japanese firms including those in the non-manufacturing sector, and microdata from government statistics.


In the Japan of the future in which the working population is declining, raising productivity will be the principal source of economic growth. In addition, total factor productivity (TFP) determines the rates of return of physical and human capital, and it is also an important determinant of capital and educational investment. In our research we will be able to analyze the latest productivity trends in the Japanese economy by updating the Japan Industrial Productivity (JIP) database annually. In fiscal 2006 we aim to cover the years from 1970-2004. In addition, by integrating microdata covering all economic activity in Japan with macro industry-level data we will analyze increases in total factor productivity and labor productivity at macro industry level from the perspectives of increases in productivity within individual firms and factories, the reallocation of resources among firms and factories, and entry/exit behavior. At present, the work of creating productivity databases at the two-digit level (for the entire macroeconomy; 72 sectors) is being conducted through the KLEMS project led by the University of Groningen with regard to the core EU countries and the United States, and at Seoul National University with regard to South Korea. The JIP database is participating in the EU KLEMS project on behalf of Japan. By collaborating with these organizations and Dale W. Jorgenson (Samuel W. Morris University Professor, Department of Economics, Harvard University), we will make detailed international productivity comparisons at the industry level. In addition, in collaboration with various bureaus and divisions at METI, research will be conducted into such matters as the impact of internationalization on firm productivity (Policy Planning and Research Office, Trade Policy Bureau), estimation of stocks of intangible assets at the macro and industry level (Technology Promotion Division), and productivity in service industries.

Until April 30, 2008

Major Research Results


RIETI Discussion Papers


RIETI Discussion Papers

RIETI International Symposium


RIETI Discussion Papers

RIETI Policy Symposium