Cultivating Japan's Up-and-Coming Industrial Leaders

ABSTRACT

Following the burst of the bubble economy, the slump in the automobile and semiconductor industries-previously the leaders of Japanese economic growth-has hindered present economic growth. These circumstances have intensified the yearning for new leaders and the rebirth of traditional leading industries.

Industries that possess the potential for leading the economy have been selected from perspectives on four different trends: industrial structure, leading industries, society and demand, and the development of scientific technologies. Trends in the industrial structure point toward information services; changes in leading industries indicate the potential of the telecommunications industry; social and demand trends lean toward the medical and welfare industries, including those specializing in caring for the elderly, telecommunications, and environmental and biochemical industries; lastly, trends in the scientific technology field point to telecommunications, biochemical, and environmental industries.

These candidates for industrial leadership do not all have equal potential, however. With the Internet at its core, the telecommunications industry is the base upon which heavy telecommunications user industries, such as retailing, are founded. Similarly, industries related to caring for the elderly, as well as biochemical and environmental industries, share many characteristics with heavy users of telecommunications but are independent from the telecommunications industry as they are able to create demand on their own.

The use of the Internet is essential for any company or industry to become a leader. It is therefore necessary to improve the information-use prowess of top management, to reform businesses in order to improve the efficiency of information-related investments, to establish a specialist division to guide such operations, and to build a new business model with the Internet at its core. Reducing telecommunication fees, promoting competition through deregulation, and enabling long-term stays of capable software engineers from abroad will be necessary. Such measures are prerequisites for Japan to exploit its manufacturing expertise and bolster its economy.

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