Sound development and growth of the economy by raising market quality

Author: Yuichi Furukawa, Faculty Fellow, RIETI

Throughout history, innovations have appeared, revolutionized the world’s economic and social activities and made our lives more prosperous. The development and spread in the 20th century of automobiles, computers, the Internet, etc.—examples of such innovations are too numerous to count here.

In recent years, innovation efforts in Japan appear to be robust. For example, Japan ranked fifth in the World Economic Forum’s innovation ranking (2015-2016). Moreover, in the ranking of Nobel laureates by country (2016), Japan came in fifth in the natural sciences field, following the U.S., UK, Germany and France. While some have pointed out the recent decline in Japan’s international presence in such specific areas as innovation capabilities and business-academia collaboration, it is safe to say that Japan has been playing a crucial part in the world’s innovation.

On the other hand, what about prosperity? In terms of the levels of per capita GDP, Japan has continued to lag behind the U.S. and the industrialized countries of Europe. In various surveys measuring happiness, including the World Values Survey, Japan’s happiness index has been low across the board in comparison to other industrialized countries. These phenomena strongly point to the fact that many Japanese people are not fully experiencing prosperity.

Why is it that innovation in modern Japan has not sufficiently led to prosperity?

Read the entire article on the RIETI website

Image taken by Leng Cheng and sourced from Flickr.

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