Japan National Day: Lessons from Japan’s rapid post-war expansion

Muhammad Faisal, Company Secretary Pakistan Japan Business Forum

Japan’s rapid post-war expansion propelled by highly successful automotive and consumer electronics industries ran out of steam by the 1990s under a mounting debt burden that successive government failed to address. The 1997 Asian financial crisis and spells of recessionled to major banking, public spending and private sector reforms. Japan with small territorial land as compare to world leading economies like America, China and many in Europe have secured a significant position in leading economies since the 2nd Half of the 20th Century. The thing that makes Japan contemporary to match with leading states is not its wealth nor a dominant military but reforms to prepare for competitiveness in the world of trade.

The question that arises is that Japan having no significant resources like vast land, oil, gas, precious and non-precious metals, mine reserves, young population nor cheap labor. How then, Japan has an edge over the world in exports?

The key factors of their economy which they considered essential for their growth is reflective in their desire to have their labor trained and towards which the Government continuously contributes a lot for the industry. Organizations were established for the purpose and it is common knowledge that their manpower were sent in the formative stages to the developed worlds to learn manufacturing techniques to enhance production capabilities.

Similarly, calling of technical and production experts from these countries to disseminate their knowledge in every corner of Japan was undertaken. Japan did not have big factories as we thoughtnor did the Japanese require big capital to start their business/industry. People started small business after getting knowledge from vocational institutes with the help of their relatives, friends, colleagues’ neighbors etc. A group of five to eight persons would run a business with an accountant to manage accounts, a manager to look after marketing and sales and perhaps another to manage inventory. No wonder then that even today, SME’s contribute to over 90% of GDP to the Japanese economy.

The nation’s greatness is reflected on it scarifies. We have seen after 1945 how this nation became a quality producer of automobiles and electronics. In 2011 Fukushima incident the area had high radioactivity, but the work had to be done there, most old people volunteered to work in radioactive areas as they said we have lived our life if we can still contribute in any way, we will.

Japanese initially were not an inventor in all fields, but rather learning from the advance economies. The concentration was more in textiles and in which Pakistan played a major role but extending suppliers credit for buying cotton and jute. In return, Pakistan was helped by their technological advances by way of supplying textile machinery and related equipment. Later their Government supported the small industries who were able to establish manufacturing units and were also rewarded their performance and achievements. Now, manyof their mid-20th century small manufacturing units blossomed into big Japanese conglomerates and they now possess their own innovation and incubation centers by the help of which they successfully lead in trade, investments and further innovationwith some assuming iconic positions. They are common people but their working techniques like Kaizen, TPM, commitment with time etc. make them at difference.

The Japanese government help came in the form of improved communication systems building highways, railway network as also air services. Similarly, technological advances gained prominence as in their 1964 Tokyo Olympics, the world first saw the electronic score board. Much of Japans’ success can be attributed to their investments in human resources both in education and capacity building.

Apart from the nation’s integrity, Japanese way of doing business is very professional and based on the honesty. They want the problem to be addressed specifically, explore all possible avenues, think out of box and then resolve. They take their sweet time to reach to the resolution. However, once they have decided on resolution then they go all the way with the plan. They do not like generalities and short cuts.

The essential lesson to be learned from the “Japanese rapid post war expansion” is that well-designed systems and institutions have an important role to play in promoting the efficient allocation of resources and stimulating national growth.We should understand the spirit of the Japanese post war expansions and must develop new institutional mechanisms conducive to the massive allocation of resources for technological research and development.

Copyright Business Recorder, 2021