The Positive Sum Strategy Harnessing Technology for Economic Growth (1986) / Chapter Skim
Currently Skimming:
The Macroeconomic Background for High-Tech Industrialization in Japan
The Macroeconomic Background for High-Tech Industrialization in Japan
Pages 569-582
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 569... ...
Increasing direct investment by Japanese companies may pose a hitherto unknown pol~tical-economic problem. This discussion of the macroeconomic background for high-tech industrialization in Japan focuses on the following questions: Will not the fiscal stringency currently exercised by the Japanese government reduce the effectiveness and feasibility of industrial policy and thus make the future of high-tech industrialization rather dismal?
|
From page 570... ...
The Tanaka cabinet elected in 1972 tried to solve He deficiencies of social infrastructures and private housing stocks by He now-notorious "National Land Reform Plan." The publicity that attended the plan came at a time when the increased international competitiveness of the Japanese economy made it almost im* See Yukio Noguchi.
|
From page 571... ...
In reaction to this anti-inflationary policy, the so-called "on diet" management, which sought to reduce redundant employment as well as excessive borrowing from banks, became the catchword among the business community. Despite the somewhat mystified practice of lifetime employment, a substantial amount of employment adjustment occurred even in major corporations.
|
From page 572... ...
Increasing international criticism of Japanese trade bamers led to ad hoc, but significant, steps toward successive liberalizations of trade and capital flows in the late l970s. In order to solve the deficit problem from a longer-n~n point of view, a temporary council headed by a widely respected businessman, Toshio Doko, was set up in 1981 and empowered by the government to recommend wideranging, extraordinary measures for simplifying administrative structures to save on government costs.
|
From page 573... ...
general restraint on public expenditures, with the possible exception of defense expenditures; and (4) implicit social agreement between management and labor that annual wage revisions should be made as consistent as possible with the security of the job and control of inflation SETTING NEW NATIONAL GOALS TlIE MID-1980s As we have seen, the 1970s was not, in retrospect, a decade In which the Japanese economy was directed by a well-designed policy based on a welldefined set of rules for macroeconomic management.
|
From page 574... ...
IS TARGETING OF HIGH-TECH INDUSTRIALIZATION COMPATIBLE WITH MACROMANAGEMENT RULES? Sectoral economic management, such as that administered by indlls=based bureaus of He Ministry of International Trade and Industry, is often regarded as more important than macroeconomic management in explaining Japanese economic performance.
|
From page 575... ...
First, the new macromanagement rule (3) has made it increasingly difficult for the MOF not only to distribute incremental assistance evenly to various sectors, but even to single out a favored target sector into which generous fiscal and talc backing can be directed.
|
From page 576... ...
The MOF disappointed both by deciding that the stock to be liquidated publicly will first be allocated to the National Bonds Redemption Special Account; the proceeds from stock sales and dividend receipts therefrom will be used exclusively for the redemption of national bonds. The estimated amount of net redemption of national bonds in 1986 is 1.6 trillion yen.
|
From page 577... ...
Which sector of the economy will absorb this excess saving? According to a basic macroeconomic accounting identity, excess savings of the household sector must be equal to the sum of the excess of investment over saving of the corporate sector, government deficit, and current external surplus.
|
From page 578... ...
Or will some over means of financing high-tech industrialization develop with He background of a relatively ample supply of savings? A comparison of the financial mechanisms of the United States and Japan leads me to conjecture that the main supply-side causes of the relatively advanced development of the venture capital market in this country are artnbutable to He combination of He following Tree factors: the relative scarcity of capital supply to He business sector, the relatively nsk-taking attitudes of investors, and He current tax structure, which treats capital gains relatively favorably.
|
From page 579... ...
While Japanese engineers and managers are not entirely conformists lacking any inclination toward independence, as often caricatured in the West, Japanese corporations have developed a moderate organizational innovation that will reduce the technocratic stifling of individual initiatives and the poor communication that are often observed in highly integrated corporate firms. Since the mid- 1970s, there has been an increasing tendency among large corporate firms to hive off fully or partially owned subsidiaries, to invest in joint ventures with other corporate firms (the so-called corporate partnership)
|
From page 580... ...
This hiving-off tendency is certainly different from the spinning off of venture business fimns from established firms by the aid of venture capital markets as observed in this country. However, it should be noted that the relative merits of small-scale firms in high-tech industrialization, such as the more direct exposure to market incentive, the creation of an atmosphere favorable to individual initiative, the savings on the cost of informational exchanges by reducing hierarchical layers, the flexible and ad hoc adjustments of labor conditions, and so on, also apply, at least potentially, in those subsidiary corporations.
|
From page 581... ...
MACROECONOMIC BACKGROUND FOR HIGH-TECH INDU~TION IN ] ~^ 581 porat~ons to acquire know-how.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.