Research by the Bank of Japan and the IMF takes a snapshot of the management and policies in companies in the land of the rising sun
Productivity as the ultimate objective. With everything that it entails in terms of production organisation and job motivation. It is one of the basic principles of modern business management. A manufacturing culture focused perhaps more on looking inside the factory rather than outside it. A model which, nevertheless, still needs to be “handled” and fine-tuned. Even in the advanced and dynamic economies. This is the case of Japan, which recently asked itself about the reasons for its slowdown, a phenomenon it shares with other economies.
The topic was investigated by Koji Nakamura (from the Bank of Japan), Sohei Kaihatsu (from the International Monetary Fund) and Tomoyuki Yagi (also from the Bank of Japan) in a study which was recently published on Economic Analysis and Policy.
“Productivity improvement and economic growth: Lessons from Japan” is a piece of research which begins precisely with the consideration that the growth in labour productivity in developed countries has experienced a slowdown in recent years. The three researchers naturally focus their attention on the context relating to the recent low labour productivity growth in Japan. They then identify two reasons. First of all, they explain, the technology and ideas accumulated from research and development and management resources such as capital and labour are not used efficiently – according to the analysis of the three authors. Secondly, these resources are not allocated efficiently among companies.
The recipe indicated by Nakamura, Kaihatsu and Yagi envisages an effort (also political), for the flexible redistribution of management resources such as capital and labour. An objective that, according to the three, could be achieved by “changing the working processes at company level in accordance with the changes in the socio-economic context and the advent of new technologies, as well as by improving the efficiency in the labour and capital markets”. An ambitious goal, that set by the researchers from the Bank of Japan and the International Monetary Fund, so much so that the same is set for the medium-to-long term, yet a goal that overall is common to many other economies.
The research by Nakamura, Kaihatsu and Yagi is a good example of a “local” investigation that provides a snapshot of the path – cultural as well as political and managerial -, that all economies must sooner or later undertake.
Productivity improvement and economic growth: Lessons from Japan
Koji Nakamura, Sohei Kaihatsu, Tomoyuki Yagi
Economic Analysis and Policy, 2018