11.4 Vision and development objectives of Japan’s Bioeconomy
In June 2023, the Japanese government unveiled a revised version of the “new capitalism” initiative led by Prime Minister Fumio Kishida, aiming to shape a robust and sustainable economic landscape for the nation. The original 2022 plan, titled ‘Grand Design and Action Plan for a New Form of Capitalism,’ set ambitious objectives, emphasizing investments in human capital, startups, green and digital transformations, as well as advancements in science, technology, and innovation. These investments were envisioned to spur economic growth while addressing critical issues like stagnant wage growth and climate change. The 2023 revision builds upon this foundation by outlining a more tangible and concrete strategy for enhancing wage levels, boosting productivity, and fostering a virtuous cycle of equitable income distribution and sustainable growth. Crucial components of this vision and plan include:
Labor Market Reform for Enhanced Productivity:
A prominent theme in the 2023 revision, labor market reform is pivotal for bolstering productivity. This strategy focuses on improving individuals’ capacity to acquire new skills and knowledge, facilitating labor mobility into high-growth sectors, and advocating job-based employment. Recognizing that Japan’s productivity growth has been stagnant, the government is pushing for reskilling opportunities and workforce mobility.
Expanding Investment in Human Resources:
Private companies, driven by factors like Japan’s aging population, a labor shortage, and rapid technological innovation, are increasingly investing in human resources. Reforms in personnel systems aim to attract and nurture talent, including foreigners. Deliberations in the Diet for budgetary measures to support these initiatives are set to commence in 2023, gradually increasing opportunities for reskilling and career transitions.
Addressing the Gender Wage Gap and Non-Regular Workers:
To ensure sustained wage growth, the government is implementing measures to close the gender wage gap and establish reskilling programs for non-regular workers, which constitute a significant portion of the workforce. Active labor market policies, akin to those in Northern Europe, are being considered to support non-regular workers who seek job transitions.
Fostering Start-up Ecosystem:
The Start-up Development Five-year Plan, part of the 2023 revision, aims to reinvigorate the economy through support for start-ups. This plan includes a comprehensive roadmap for start-up development and emphasizes the importance of fostering a competitive environment that encourages the emergence and closure of businesses.
Doubling Asset-based Income:
The 2023 revision introduces the Doubling Asset-based Income Plan, encouraging households to diversify their financial assets away from traditional deposits and into investments. The goal is to enable households to benefit not only as employees but also as shareholders in the growth of Japanese companies, thereby augmenting their income.
Improving Investment Performance:
To realize these income-boosting goals, Japan must work on enhancing the investment performance of asset management institutions and promoting Japanese companies’ long-term corporate values. The ultimate objective of this growth strategy is to bring about substantial changes in Japan’s socio-economic system, particularly within the labor market. Success hinges on effective collaboration between the government, private sector, investors, financial institutions, and individuals, while concurrently reshaping the policy environment. Given mounting pressures such as labor shortages, global supply chain shifts, geopolitical risks, and industrial structural changes, there is an increasing impetus to invest in Japan. Prime Minister Fumio Kishida is poised to lead these transformative plans, accelerating and intensifying efforts for fundamental reform while ensuring Japan remains an attractive destination for investments, both domestically and globally.