Why has Japan’s economy been staggering? A competitiveness perspective

Abstract

Purpose

Once one of the most prominent economies in the world, Japan is currently suffering from economic stagnancy. To revitalize the economy effectively, the core problems of Japan and its economy need to be first identified. This paper aims to understand accurately what the fundamental reasons are for Japan’s current economic stagnancy.

Design/methodology/approach

The generalized double diamond model, which is an extension of Porter’s original diamond model is used to incorporate internationalization which is very important for Asian countries, notably Japan. Furthermore, its competitiveness is compared with neighboring countries that are in competition in the global market.

Findings

Japan’s current economic problems and its slow recovery are because of a lack of globalization vis-à-vis its counterparts in the region, rather than specific macro-economic factors. Hence, further globalization is crucial toward ensuring a further take-off for the economy.

Practical implications

Macro-economic policies may be important but cannot directly improve a nation’s competitiveness. This paper highlights the importance of globalization and concludes that multinational activities are crucial to enhance a nation’s competitiveness in both domestic and international scope.

Originality/value

This paper adopts the concept of national competitiveness to examine the fundamental economic problems of Japan’s slow recovery and stagnancy more comprehensively. In particular, it compares the competitiveness of Japan with its neighbors which are its economic competitors.

Citation

Parc, J. (2018), "Why has Japan’s economy been staggering? A competitiveness perspective", Competitiveness Review, Vol. 28 No. 4, pp. 433-450. https://doi.org/10.1108/CR-01-2017-0005