GDP of Japan which used to be the 2nd largest in the world fell to 3rd after China.
This news itself is not so much to worry about because GDP is strongly affected by the size of the population. China with population 10 times larger than Japan to overtake her (Japan’s) position of the 2nd in the world ranking of the GDP was something that was predicted for a long time the only question being ‘when’.
What truly matters is the GDP per capita. Japan has fallen off the position of the 2nd in GDP per capita the world and has keeping places somewhere around 18th or so for quite a while. This is not surprising, since, to begin with, Japan’s GDP has not grown in the least for these 15 years. I suspect that Japan is the only nation in the OECD (in Japanese) that has not achieved any growth in GDP for these 15 years.
Up to date no signs of growth are observed in Japan, and few in the world expects little sign of change from Japan, thus no investments come to Japan. Changes in other OECD nations are obvious since the 2008 ‘Lehman Shock’ but Japan is still lingering in that terrible situation of ‘no economic growth, increasing its dept only.’
The Economist, as always, is pointing out the important issues clearly in its article of August 19th ‘Watching China whizz by’ (Click here for Japanese translation of the article). Views of Professor Ishikura, one of my friends, appear in the article, too. As I say, larger corporations can not make decisions or is late when they do. As the article points out, big companies are basically all the same in their conducts, our government does not dare to let incompetent companies down so it makes many ‘Zombie companies’ surviving. This will discourage new enterprises to emerge. Don’t they realize that the market and business of the world has changed drastically? We are now in the age of ‘Demand-driven、Open and Disruptive Innovation.’
Anyway, as you see in the chart in The Economist the rate of growth of economy in China is extraordinary.
Not knowing your partners, not having multitudes of networks of friends of long time in growing developing nations can constitute big handicaps for our future growth. Just to give you an idea, for example, the estimated growth rate of the whole Africa is 5.6%. What are your business strategies?