Parties should devise long-term strategies to invigorate private sector

The Yomiuri ShimbunIn order to revitalize the economy, it is indispensable to enhance the vitality of domestic industries. Political parties should compete among one another with policies that use the digital revolution to reinforce competitiveness.

The Abenomics economic policy package has realized an improvement in corporate performance and employment through monetary easing on an unprecedented scale. Yet a growth strategy designed to advance technological innovation and productivity in the private sector has achieved little. Each party is urged to put their minds to the task.

The Liberal Democratic Party has pledged to support the “Fourth Industrial Revolution” through the use of artificial intelligence, the internet of things (IoT) and data, while also pushing for autonomous driving and cashless settlement systems.

The Democratic Party for the People has advocated the promotion of “open innovation,” through which a broad range of wisdom and technologies from different fields are brought together. The Constitutional Democratic Party of Japan has called for promoting research and development in advanced technologies, including AI, with the expansion of subsidies.

In every case, the course of action is understandable, but the parties lack concrete details outlining how each idea is linked to the earning power of companies.

Companies have internal reserves totaling about ¥450 trillion. It would be a waste not to make use of these ample, surplus funds.

Relieve industry concerns about the future and encourage companies to make investments positively. In order to do so, it will be necessary to boldly narrow the range of fields eligible for central government support.

Many companies have been focusing on making labor-saving investments to overcome manpower shortages. In nursing care, beds that can automatically help people roll over or robots that can deliver food to patients are expected to gain wider use.

Support industry

Why not reinforce such attempts by companies, thus helping to enhance productivity in such sectors as medical care, in which demand is growing in the nation’s graying society?

It is also important to change conventional business practices. In Japan, the corporate mind-set at many companies continues to adhere to a policy of in-house research and development. It has been pointed out that this has also been a factor hindering technological innovation.

How new services can be created with the use of the high-speed, large-capacity, next-generation 5G communications standard is also up for debate, with potential applications ranging from autonomous driving and remote medical care services to virtual-reality based entertainment.

It will be necessary to combine the capabilities of companies in various industries, not only telecommunication firms. There may also be cases in which corporate reorganization would prove effective. Concrete measures to realize open innovation are required.

Also worrisome is the shortage of AI specialists. Workforce fluidity must be increased to create an environment in which people can shift into growth sectors more easily.

Efforts must be made to advance structural reforms related to the fostering and utilization of human resources, including a review of college education.

If a strong growth trajectory returns through the revitalization of industry, it would also help rebuild public finances and stabilize the social security system. It is crucial for each party to devise long-term strategies, not put forward pork-barrel policies for the issues immediately in front of us.

(From The Yomiuri Shimbun, July 15, 2019)Speech


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