RIETI Report June 30, 2023

Study on the History of Making Industrial Competitiveness Policies

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Welcome to RIETI Report.
This bi-weekly newsletter will keep you updated with the recent columns, event information and research results by RIETI fellows and other leading economists in Japan and around the world.

In this edition, we are introducing RIETI’s “Policy-Making Process of the Industrial Competitiveness Policies in Japan” Study led by Faculty Fellow Junko Watanabe. The research project mainly covers the Heisei era (1989-2019) and focuses on the process of the enactment and amendment of the Act on Strengthening Industrial Competitiveness, but it also broadly covers related industrial policies.

We hope you will enjoy it. If you have any feedback, we would love to hear from you (news-info@rieti.go.jp).
Editors of RIETI Report (Facebook: @en.RIETI / Twitter: @RIETIenglish / URL: https://www.rieti.go.jp/en/)

This month's featured article

Study on the History of Making Industrial Competitiveness Policies

WATANABE JunkoFaculty Fellow, RIETI

From Industrial Revitalization to Enhancement of Industrial Competitiveness

I would like to introduce the research project which we are working on titled "The Policy-Making Process of the Industrial Competitiveness Policies in Japan." The project mainly covers the Heisei era (1989-2019) but has a taste of the “Showa era” (1926-1989) as explained below.

As a part of the growth strategy under Abenomics, the government of Japan (the second Shinzo Abe administration) enacted the Act on Strengthening Industrial Competitiveness in December 2013. The Act aims to bring Japanese industry out of its prolonged stagnation and put it back on the track of sustainable growth through promoting deregulation, vitalization of capital investment, industrial and corporate reorganization, and industrial metabolism.

Not limited to the second Abe administration, industrial competitiveness policies have been maintained for the long term and continue until the present.

Before the Abe administration, industrial competitiveness policy originated from the Act on Special Measures for Industrial Revitalization, which was enacted in October 1999. At the time of its enactment, the Japanese economy was in a long period of stagnation after the bubble economy collapsed and bad loans had grown into a serious problem triggered by the instability in the financial system which occurred from 1997 to 1998, bankruptcies of Sanyo Securities and the Hokkaido Takushoku Bank, voluntary closure of Yamaichi Securities, and temporary nationalization of the Long-Term Credit Bank of Japan and the Nippon Credit Bank. Bankruptcies of many companies were expected in the bad-loan disposal process, but, in addition to financial revitalization, corporate rehabilitation and industrial revitalization through the organization of useful corporate resources and facilitating business-unit M&As were prioritized in order to prevent further deterioration of Japan's industrial competitiveness. The Act on Special Measures for Industrial Revitalization aims to support and promote such moves for industrial revitalization from the institutional framework, including taxation.

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[List of upcoming and past symposiums]
[List of upcoming and past BBL seminars]

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