Mobilising towards a new era of innovation

Page 25 

©Reuters

Some 50 years ago, Japan entered into the period of post-recovery after the Second World War, while consolidating its path for economic growth and making a comeback on the international scene. Japan’s accession to the OECD was symbolic in that respect. Another symbol was the Tokyo Olympic Games, which triggered a transformation of Japan’s international image, thanks to improvements in its physical infrastructure, transportation systems and services. A new expressway network had been built across Tokyo, the new Shinkansen high-speed “bullet” train now relayed Tokyo and Osaka in four hours, and television began broadcasting in colour.

These developments did not happen by chance, but were the result of determined individual efforts. They also owed much to investment in technology and human capital. During the catch-up phase of the 1960s, Japanese companies were understandably concentrating their efforts on incremental, rather than radical, innovation, as their follower’s status obliged them to do. Around this strategy, institutional complementarity with education and training systems, to name a few, were structured and consolidated. In sum, Japanese people felt confident that they were advancing along the path to a “better life”.

Half a century later, after a long period of economic stagnation, Prime Minister Shinzo Abe has affirmed that “Japan is back”. His Japan Revitalisation Strategy, as the third arrow of his  “Abenomics” policy, following a bold monetary policy and flexible fiscal policy, focuses on structural reforms and innovation. The recovery from the Great East Japan Earthquake is entering into a new advanced phase, moving from short-term actions to designing the future. On top of this, Tokyo has been chosen to host the 2020 Olympic and Paralympic Games. Indeed, Japan seems to be entering a post-recovery period, rather like it did 50 years ago when it joined the OECD. But this time, it faces a radically different international environment, which may demand radical, rather than incremental, policy responses.

The process of value creation through provision of goods or services is no longer contained within a company or a single country, but in several locations along what are now called global value chains (GVCs). The capacity to design and orchestrate the full process by mobilising the most appropriate actors along the chain and around the world is critical in this new framework. In the same vein, the concept of an “economic centre of gravity” is losing its raison d’être, since economic activities are becoming increasingly integrated and interdependent, crossing geographical borders, disciplines and industrial sectors, and tapping into the talents of new actors from emerging and developing countries. GVCs could be seen as the result of this new configuration.

GVCs rely on connectedness. This is a more generalised phenomenon underpinned by the internet. From the “internet of information” to the “internet of things”, opportunities for exploiting new ways to create knowledge, business and social value are unfolding every day. We are entering a new era of innovation, with its lights and shadows.

The timing could not be better. From the structural point of view, a majority of OECD countries, such as Japan, are under severe demographic pressure from ageing populations. This pressure has important implications for assuring the labour supply, meeting expanding health care costs and maintaining proper social security systems, to name but a few. Every innovative idea, including those related to social engineering, should be considered if we are to maintain, let alone raise, the quality of life of every single citizen.

Japan has demonstrated its capacity to transform constraints into advantages as, for instance, after two consecutive oil shocks in the 1970s. It must show this capacity again. That means mobilising its innovative strength, both technological and intellectual, readjusting the gender balance, and taking advantage of today’s new environment by drawing on connectivity, places and people. The huge potential of Japan’s human and knowledge capital has yet to be fully exploited. It is a tantalising prospect, and today’s policymakers must get to the task of realising it. The 50th anniversary of joining the OECD is the perfect time to start.

For more on the Japan Revitalisation Strategy, see www.kantei.go.jp

Visit www.oecd.org/innovation

©OECD Observer No 298, Q1 2014




Economic data

GDP growth: +0.6% Q3 2017 year-on-year
Consumer price inflation: 2.3% Sept 2017 annual
Trade: +4.3% exp, +4.3% imp, Q3 2017
Unemployment: 5.7% Sept 2017
Last update: 14 Nov 2017

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Papers show “past coming back to haunt us”: OECD Secretary-General Angel Gurria tells Sky News that the so-called "Paradise Papers" show a past coming back to haunt us, but one which is now being dismantled. Please watch the video.
  • The annual OECD Eurasia Week takes place in Almaty, Kazakhstan 23-25 October. Writing in The Astana Times, OECD Secretary-General Angel Gurría urges Eurasia countries to stay the course on openness and international integration, which has brought prosperity but also disillusionment, notably regarding inequality. The OECD is working with this key region, and Mr Gurría urges Eurasia to focus on human capital and innovation to enhance productivity and people’s well-being. Read more.
  • When someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. But I know that the reality is still so much different. By Alda, 18, on International Day of the Girl. Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • How do the largest community of British expats living in Spain feel about Brexit? Britons living in Orihuela Costa, Alicante give their views.
  • Brexit is taking up Europe's energy and focus, according to OECD Secretary-General Angel Gurría. Watch video.
  • OECD Chief Economist Catherine Mann and former Bank of England Governor Mervyn King discuss the economic merits of a US border adjustment tax and the outlook for US economic growth.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2017