With Japan mired in a long recession following the collapse of the economic “bubble” even as the United States economy booms, the tables of optimism and pessimism have, it seems, been completely turned. Findings from an analysis of the strength of Japan’s manufacturing industry in the 1980s were universalized in the form of the “business reengineering” concept, which has reinvigorated the production process in U.S. manufacturing over the past 10 years. The emergence of superstars such as Microsoft and Netscape has also led to the assessment that U.S. industry has been reborn.
The long-standing boom in the U.S. economy, which has now given rise to the “New Economy” doctrine, is indeed the “peace dividend” following from the end of the Cold War. The dramatic cuts in the U.S. defense budget has freed talented scientists formerly tied up in defense research, while vast amounts of advanced technologies formerly hidden behind the wall of defense secrecy have now been released for application in the many fields of industry. In the opinion of this writer, these factors constitute the fundamental motive force supporting the development of the U.S. economy today.
At the same time, the flexibility of the economy and society in the United States has without a doubt facilitated the commercialization of new technologies. Formerly, much envy focused on the low capitalization cost in Japan during the 1980s. Even today, Japan remains a nation with the world’s biggest savings, while the United States is the world’s biggest importer of capital. However, few voices express envy of Japan these days. Rather, the immaturity of the Japanese financial market is now a general assumption worldwide. This is true not only of financial markets. It is now generally recognized that the introduction of competitiveness in Japan’s service sector such as the transport and energy sectors, which have been spared the pressure of competition, is the key to rectifying high costs in the manufacturing industries. In this context, deregulation is now considered the pressing new issue for the Japanese economy in the 1990s.