The Economy of Japan

Economists believe that Japan's economy is the 2nd biggest economy of the world, if the GDP is to be accounted while deciding the ranking. It is the 3rd biggest economy in the world as far as purchasing power is concerned.

This has happened mainly because Japan's economy is technologically driven and has a very huge amount of skilled manpower with serious national integrity. Adding to these factors is the highly efficient infrastructure, which has been the foundation for economic success of Japan.

The currency of Japan is called Yen. The financial year begins from 1st of April and ends on the 31st of March. Though the economy of Japan had seen some severe slow down in the last 2 decades of the 20th century, it has started showing positive signs of growth in the new millennium. The fall in economy of Japan is mainly due to its dependence on foreign countries for various materials required for its diverse manufacturing industries.

Services

The services sector composes nearly 75% of Japan’s economy including:

  • banking
  • retailing
  • transportation
  • logistics
  • insurance
  • telecommunications
  • technology servicing

Within transportation, Japan Airlines is considered to be one of the largest airlines in the world. Although recent debt issues have stopped some operations, growth is expected to be noticeable in the next decade.

Also, Japan is known for being the leader in high-speed trains since the late 1960s. With economically efficient trains, more countries are taking note of successful transportation methods. Other countries are using Japanese innovation to fuel their own expansion. Japan currently holds almost 330 service spots in Forbes’ global listing of top companies.

Industry

Japan is known for making reliable, quality, and efficient products.

Auto Industry

Honda and Toyota (two of the world’s largest auto manufacturers) are based out of Japan. Considering the world’s economic climate, consumers are looking for more fuel-efficient transportation. Japanese-based motor companies have made an image for this consumer market. Exports have gradually increased over the past 10 years. This increase shows growth in this area of business. With the rapid growth of Lexus, Toyota has also begun making its stand in luxury markets across the world.

Main companies in the auto market:

  • Toyota
  • Honda
  • Nissan
  • Mazda
  • Mitsubishi
  • Subaru

High Technology

Japan is also known for its high-tech consumer electronics. With communication and entertainment needs at an all time high, many companies such as Sony, Panasonic, Sharp and Toshiba are key players in market trends. Mergers of these companies are also occurring, in order to form more powerful alliances and operations for more or less high-tech markets.

Some of the important fields of business that contribute towards Japan's economy are:

Telecom

Japan has the best telecommunication network than several developed nations in the world. It has 5G technologies along with a network of several satellites and submarine cables network with the 2 largest economies, which are the United States and China.

Other types of major manufacturing industries in Japan are:

  • aerospace
  • biotechnology
  • consumer electronics
  • food processing
  • semiconductor devices
  • computer peripherals
  • ship building
  • pharmaceuticals
  • petrochemicals
  • iron ore and steel

Japan - A Leader in Technology

Technology is thriving in Japan. The nation is very well known for their consumer electronics, robotics, and automotive industry. After the United States, Japan is considered the most technologically innovative nation in the world.

Japan has a strong reputation for bringing many hi-tech products into the U.S. market. As a result, they have transformed the way businesses and societies are run. Advances created in Japan have amazed the world for centuries and continue to affect our lives in many ways.

Electronics and Automotive Industry

Japan is famous for its automotive and electronics industries throughout the world. Compared to most other countries, Japanese electronics make up a large part of the world’s market. They are one of the leading nations in fields such as scientific research, technology, machinery and medical research. Japan has also received the most Nobel prizes for science in Asia.

Japan is home to large international corporate chains such as Fuji (which developed the nation's first electronic computer) and Sony. They also have many other well-known technology companies such as:

  • Panasonic
  • Canon
  • Fujitsu
  • Hitachi
  • Sharp
  • NEC
  • Epson
  • Toshiba
  • Nintendo

Japan also currently owns more than half of the world's manufacturing robots.

How Japan Has Become Successful

Many people question how Japan develops new technology so quickly and successfully. One answer to this question is the amount of research they do. In 1999, Japan had accounted for a quarter of the world’s research and development. They are also such a powerful force because of the establishment and regulation of The Ministry of International Technology and Industry (now METI). Created in 1945, METI has played an important role in making sure that research operates as quickly and smoothly as possible.

The Future of Japanese Technology

The future of robots is very important to Japan. With more than a fifth of the population 65 or older, the country is putting faith in robots to assist with the work force and care for the elderly. In the past several years, the Japanese government has generously funded robot-related research and development. It is clear that Japan is very confident about the future of robotics and their obvious advantages. With this confidence, it seems as though Japan will continue to pave the way for cutting-edge technological development.

Imports: Opportunity for the Westerns

The archipelago of Japan is known for its rare amount of natural resources and land suitable for cultivation. Mining, lumber production, and farming are extremely limited. Because of these restrictions, Japan has to import many of its goods. However, Japan is still an extremely industrialized nation, with plenty of free trade (imports / exports).

The most popular and important of these imports are raw materials such as wood, oil, food items, and other materials not found on the island chain. Most of these imports come from Japan’s close partners, China and the United States. Without these imports, Japan’s chance of survival as a country and business associate would be severely reduced.

The well-balanced nature of these imports and exports makes Japan’s economy 3rd largest economy in the world. Japan is also known for highly protecting imports. Crops such as rice, which are extremely important to the economy, are taxed with high tariffs.

Exports: a Strong and Competitive Japan

In order to remain as the 3rd largest economy, Japan must provide a decent amount of exports in relation to imports. Japans major exports are manufactured goods such as cars, electronic devices, and computer parts. Although Japan provides most of its goods to China or the United States ($148.1 Billion to the United States in 2006), these other countries receive a significant share of these exports:

  • South Korea
  • Taiwan
  • Singapore
  • Thailand
  • Germany

The export of electronic devices makes Japan one of the largest players in the communication industry next to the US and China.

Other exports such as transportation vehicles (tankers / aircraft) and chemicals are on rise, making Japan a key player in these industries as well. This is due to the quality nature of the products seen by the consumer.

Translation: Strategic Approach

Japan understands the limitations of the Japanese language. Most Japanese manufacturers will create their manuals, user guides, brochures, and other marketing materials in both Japanese and English.

English is the connection hub with all other languages, thus the language that Japanese companies use as the start-point for translating into other languages such as:

  • Portuguese
  • Spanish
  • Russian
  • Italian
  • German
  • French
  • Chinese

Finding a Japanese translator to Portuguese or Spanish, for instance, would be more difficult than finding an English to Portuguese or Spanish translator.






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