Country Analysis: Japan
Danny S. Whilden
Florida Atlantic University
Country Analysis: Japan
The island nation of Japan is a sovereign country located on the eastern coast of the Pacific Ocean in East Asia. Also known as “The Land of the Rising Sun,” Japan is home to the world’s tenth largest population at 127 million people, 7% of which live in the nation’s capital of Tokyo. Japan is known for its high quality of life and generally higher levels of happiness among citizens, as the country has one of the lowest mortality rates and highest life expectancies among developed nations throughout the world. Japan is also renowned for its healthy economy, with a GDP that follows the United States and China. Japan is also home to some of the world’s most prominent brands including Toyota, Honda, Canon, Sony, Nissan and Toshiba. Among the major industries in Japan are automobile production, electronics, telecommunication, steel and metals, and agriculture.
Economic Performance
Japan has established itself as a perennial powerhouse of automobile production and global leader of ship production. Although China remains the world leader of automobile production, Japan is known for producing vehicles with the highest quality and value. More than 27% of the country’s GDP is accounted for by its manufacturing industry. Since only roughly 15% of Japan’s land is usable for agriculture, only about 1.5% of the contry’s GDP is accounted for by agriculture. Where Japan excels in agriculture is fish, with the country accounting for 20% of the world’s fish exports.
Despite inflation woes, Japan’s success with exports has managed to continue the country’s greatest economic growth in the past ten years. In the first three months of 2017, GDP increased 1.7 percent while net exports added 0.1 percentage point to growth, after contributing 0.2 percentage point and 0.4 percentage point in the previous quarters (Ujikane, 2017). Tourism is among the growing segments of the country’s economy, with tourism improving by 21% from 2015 to 2016. China is Japan’s highest spenders of tourism, raking in approximately $2 billion each year. Japan is hoping to increase tourism to 40 million visitors by 2020.
Economic Strategy
Japan is still facing struggles as it continues to recover from the nuclear disaster of Fukushima and the earthquakes that devastated the country in 2011. The country formulated a plan for recovery in a plan titled “Rebirth of Japan: A Comprehensive Strategy.” This document prioritizes four key areas of policy for the country’s rebirth to include: green (energy and the environment), life (health sciences), agriculture, and SMEs. This plan addresses a number of challenges the country faces to include: reconstruction, social, and economic challenges as it progresses forward. It also establishes the country’s strategy for recovery while reaffirming their position as a global leader of technological innovation.
On the frontier of science and technology, Japan is a global leader. The country has utilized a budget equivalent to $130 billion for scientific research. This has led to the development of various technological advancements in robotics and engineering. Japan is among the leading countries of the world for scientific research and employs the third most scientists and engineers in the world. Surprisingly, Japan falls behind other countries in the field of aeronautics as it has not had any major advancements in the field in recent years.
Contextual Elements
Japan is largely known for its culture in art, architecture, literature, and philosophy. Japanese culture can be seen all over the world. From tattoos to public art, Japanese culture has made a significant impact in regions all over the world. Japanese cuisine has largely influenced culture in the west, particularly in the United States where it has become a staple of American food culture.
Healthcare in Japan is universally covered by the Japanese government locally and nationally. This has been a contributing factor to the country’s prominence in the frontier of the medical field, as Japan continues to remain a leading example of universal government healthcare. Japan is also one of the leading countries in education, particularly in the math and science. Its education system largely contributed to the country’s growth following the world wars.
Energy Growth in Japan
Despite only having a population of roughly 127 million people, Japan is the world’s fourth largest consumer of energy. It is estimated that energy will have the largest impact on industries in Japan. Due to the country’s lack of resources, over 80% of oil has to be imported into the country, primarily from the Middle East. The largest energy sources used in Japan are oil and coal, which amounts to over 60% of total energy usage in Japan. (GENI, n.d.). Because of this, there is much potential for the country to capitalize on clean energy sources for use in country as well as export to other countries. A company growing in the manufacture of renewable energy solutions is SolarCity, a subsidiary company of Tesla Inc. Despite having solar energy companies in Japan, few companies have emerged as leaders in the industry. Where SolarCity differs is its of solar roofs. This technology is achieved through the use of photovoltaic energy devices. Currently, Japan is the fastest growing nation that is promoting PV and now leads the world Photovoltaic market. In fact, 45% of photovoltaic cells in the world are manufactured in Japan.
In addition to being environmentally friendly, production of this technology is relatively low cost. Both Japan and SolarCity could benefit from the emergence of this energy technology within the country. Furthermore, since SolarCity is a subsidiary of Tesla, there is opportunity for an expansion of zero emissions vehicles in Japan. In fact, Japan is currently on path to revealing autonomous vehicles as early as 2020. These autonomous vehicles will likely utilize clean energy to operate, and with the push for zero emissions, solar is a promising alternative in the automobile segment. As the country continues to improve efficiency of solar technology, it will establish itself as a leader in a segment that continues to grow worldwide, benefiting the country and its economy. Japan has also invested heavily in transportation, as the country continues to improve its vast network of highways and roadways. Car transportation accounts for a modest 50% of travel in the country. This could improve significantly with the introduction of autonomous vehicle technology and solar producing vehicles.
References
Foreign Policy. (n.d.). Retrieved April 11, 2018, from http://www.mofa.go.jp/policy/
Global Energy Network Institute. (n.d.). Retrieved April 11, 2018, from http://www.geni.org/globalenergy/library/energytrends/currentusage/renewable/solar/japan/summary.shtml
Honcho, N. (2016, september 20). Society and Growing Industries in Japan Beyond 2020: Key Research Findings 2016. Retrieved April 11, 2018, from https://www.yanoresearch.com/press/pdf/1586.pdf.
Japan. (n.d.). Retrieved April 11, 2018, from http://reports.weforum.org/manufacturing-growth/japan/
Japan GDP Growth Rate 1980-2018 | Data | Chart | Calendar | Forecast. (n.d.). Retrieved April 10, 2018, from https://tradingeconomics.com/japan/gdp-growth
Japan Industry Sectors. (n.d.). Retrieved April 12, 2018, from http://www.economywatch.com/world_economy/japan/industry-sector-industries.html
The Japanese Economy in 2018: On Track for a Record-Setting Growth Streak. (2018, January 09). Retrieved April 9, 2018, from https://www.nippon.com/en/currents/d00375/
Ujikane, K. (2017, May 16). Japan Is Set for Its Longest Run of Economic Growth in a Decade. Retrieved April 11, 2018, from https://www.bloomberg.com/news/articles/2017-05-16/japan-is-set-for-its-longest-run-of-economic-growth-in-a-decade