The world is in an era of Schumpetarian competition. With its population declining, Japan’s survival hinges on innovations to increase added value. It goes without saying that the source of innovation is people. Japan’s rapid economic growth in the wake of World War II was achieved thanks to innovators such as Honda’s Soichiro Honda and Sony’s Masaru Ibuka. It is therefore essential to nurture innovators from a long-term perspective.

In Japan, the skills of working adults are normally improved through OJT, for example. Compared with other advanced countries, the proportion of working adults making use of institutions of higher education such as universities and graduate schools is extremely small. The potential demand for graduate schools that offer practical education to working adults is large. The number of graduate schools providing opportunities for professional education in various fields needs to be increased, and doing so would also help make Japan more competitive.

Whereas the number of students from countries such as China, India, South Korea studying overseas is on the rise, the number of Japanese students studying abroad has been declining (from 83,000 in 2004 to 60,000 in 2012). The number of international students coming to Japan from overseas is also small. Japan also ranks very low, 28th place, in the national rankings of TOEFL scores for countries in Asia. To make Japan grow, increasing its global human resources will be vital, and a national strategy should be formulated and implemented to achieve that.

The city of Takeo in Saga prefecture, which is the first municipality to outsource the management of city libraries to the private sector, having awarded the contract to Tsutaya, is also enthusiastic about deploying IT in education. All elementary and middle school students are given a tablet device such as an iPad, on which are installed apps for drilling and testing and an app that works in conjunction with the blackboard. The utilization of IT in education transforms and expands the types of education that can be provided in schools. We hope this initiative spreads nationwide to improve the quality of education.

With the aim of receiving the best higher education in the world, each year 700,000 students from around the world go to the U.S. to study. But even in the U.S., education reform has been regarded the top priority for the government. The principle of competition has been introduced at public schools, and poor performing schools are closed down. In addition, teachers with low levels of ability are dismissed and schools are allowed to offer attractive packages to top-flight teaching personnel. If the world’s leading education country is enthusiastically reforming its education system, then Japan’s education reforms will need to go even further.

Only two Japanese universities, the University of Tokyo and Kyoto University, are in the World University Rankings, which is published each year in Times Higher Education, a British newspaper supplement. In the 2015 rankings, the positions of the two Japanese universities fell sharply. The University of Tokyo slipped from 23rd to 43rd place, while Kyoto University dropped from 59th to 88th place. The principle of competition should be introduced at universities to make them stronger, and they should aim to become the world’s number one in fields in which Japan is strong.

From a global viewpoint, the market for agricultural products is a highly promising growth market. The global food market, which is now 340 trillion yen, is expected to double in 2020 to 680 trillion yen. Fortunately, Japanese food has proven popular around the world as evidenced by its designation by UNESCO as an intangible cultural heritage. The issue is how to connect this brand value to exports. As long as we do not fail to implement the right strategy, we can make Japanese agriculture, forestry, and fishery globally competitive export industries.

 

Japan Agricultural Cooperatives (JA) is a financial institution on the scale of a megabank combined with the largest insurance company in Japan, with total deposits of about 90 trillion yen and total assets of its insurance business of around 50 trillion yen. It is a financial and distribution conglomerate that monopolizes/oligopolizes agricultural distribution. Under the post-WWII government policies to reduce rice acreage and maintain high prices for rice, Japanese agriculture has been declining, but JA alone has enjoyed continued prosperity. To strengthen the competitiveness of agriculture, it is essential to introduce the principle of competition in the distribution process.

 

Agriculture is protected by the hardest of the so-called “bedrock” regulations. In discussing issues regarding trade liberalization, such as the Trans-Pacific Partnership (TPP), the structure of “manufacturing versus agriculture” is often mentioned. This is an erroneous characterization. What actually exists is a conflict of interests between small-scale farmers with vested interests protected by regulations versus new entrants and agricultural reformers. Even under the current situation in Japan, there is some agriculture that is still globally competitive. It is necessary to transform Japanese agriculture, which has been locked up by regulation and thereby weakened, into a strong growth industry.

 

Economic growth basically keeps pace with population increase. Both the rapid economic growth in Japan and the recent growth in emerging economies are mainly attributed to the “population dividend.” However, Japan today is becoming a society with a low birthrate and aging population. In order for Japan to achieve economic growth despite a declining population, consideration of how to increase the number of workers among the current population is necessary. The focus should be on women, older people, and foreign nationals.