Japan growth strategy draft calls for digitalisation, greener society

TOKYO: Japan’s government called for raising the country’s economic growth through innovation, which it hopes will lead to a boost to real wages and the labour participation rate, an outline of this year’s economic growth strategy showed on Wednesday.

In the draft plan, the government called for stimulating innovation in areas such as digital transformation, a greener society, and revival of businesses hit hard by the impact of the coronavirus pandemic, such as restaurants and hotels.

The Growth Strategy Council, a government panel including private-sector members, presented the outline, which will form part of the government’s economic policy, at a meeting in the prime minister’s office.

The government will seek to make the car production supply chain more carbon friendly and intends to review regulations for digital technology, such as for using artificial intelligence in car inspections and financial product sales, the outline showed.

The government will consider ways to fund production of goods and technologies that are important for supply chains over the mid- to long-term at an early stage, the outline said.

It also raised the issue of supporting research into the design and manufacture of high-tech semiconductors.

Japanese firms’ share of sales in the global semiconductor market has dropped to 10% as of 2019 from about half of the total in 1988, while almost two-thirds of domestic demand for semiconductors was being imported from overseas, the outline said.

The government hopes to approve the final version of this year’s growth strategy through a cabinet decision around mid-June, after taking into account deliberations about the plan by ruling party politicians, a government official said.

Other issues the outline called for were considering the introduction of policies to allow workers to take three days off each week instead of having a two-day weekend, and whether to allow firms to list through Special Purpose Acquisition Companies (SPAC) on exchanges.

The world’s third-largest economy has struggled to overcome the impact of the pandemic, falling back into contraction in the first quarter as a resurgence of coronavirus infections hit consumer and business spending.

The sharp contraction and extended state of emergency curbs for Tokyo and other major areas have heightened the risk that the economy may shrink again in the current quarter and slide back into recession, some analysts say.