Research Programs: Raising Industrial and Firm Productivity

East Asian Industrial Productivity

Project Leader/Sub-Leader


FUKAO Kyoji (Program Director, Faculty Fellow)



Japan's economy these days is sometimes called a "hypothermia economy," in which sluggish growth in aggregate demand and supply due to the aging and shrinking of the population and declining capital formation has become the norm. However, taking a more careful look at data on Japan's industrial structure as well as labor and capital input, one finds that, hidden underneath this low growth, Japan's economy is undergoing rapid structural change. Examples include demand shifts across industries such as expanding demand for nursing care on the one hand and sluggish export demand due to the deceleration of China's economy on the other; substantial improvement in manufacturing markup ratios under the depreciation of the yen brought about by Abenomics (in terms of the real effective exchange rate, the yen is the weakest it has been since the early 1970s); an increase in hours worked and a decline in labor quality due to the increased (primarily non-regular) employment of women and the elderly; the spread of new information and communication technology driving the so-called fourth industrial revolution; and the growing dependence of prefectural economies on income transfers and net imports. In order to design appropriate growth strategies and to prepare for "black swan" events like economic crises, it is necessary to accurately comprehend such structural changes.

This project aims to carefully examine structural changes in the Japanese and East Asian economies and contribute to the design of growth strategies based on evidence through the following:
(1) Analyses of changes in labor and capital input (including intangible assets) and total factor productivity growth at the detailed industry level, using the JIP 2018 Database, which has been fully revised to correspond to the new SNA.
(2) Analyses of China's economic slowdown, using the new China Industrial Productivity (CIP) Database.
(3) International productivity comparisons and analyses in collaboration with the World KLEMS, EU KLEMS, and Asia KLEMS projects and the OECD.
(4) Analyses of productivity, the fourth industrial revolution, international competitiveness, dual structures, etc., using official firm and establishment data as well as data from the East Asian Listed Companies (EALC) database.
(5) Analyses of regional productivity differences in Japan through collaboration with the Regional-level Japan Industrial Productivity (R-JIP) project.

April 1, 2019 - March 31, 2021

Major Research Results


RIETI Discussion Papers

RIETI Policy Discussion Papers


RIETI Discussion Papers