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Productivity improvement and economic growth: lessons from Japan

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  • Nakamura, Koji
  • Kaihatsu, Sohei
  • Yagi, Tomoyuki

Abstract

Labor productivity growth in major advanced countries has been experiencing a slowdown in recent years. This paper examines the background of recent low labor productivity growth in Japan. There are two reasons behind the productivity slowdown in Japan. First, technology and ideas accumulated by research and development (R&D) as well as management resources such as capital and labor are not utilized efficiently. Second, these resources are not efficiently reallocated across corporations. In order to improve Japan’s productivity in the medium to long-term, it is desirable to encourage the flexible reallocation of management resources such as capital and labor by changing working process at the corporate level in accordance with changes in the socio-economic environment and the advent of new technologies, as well as by improving efficiency in the labor and capital markets.

Suggested Citation

  • Nakamura, Koji & Kaihatsu, Sohei & Yagi, Tomoyuki, 2019. "Productivity improvement and economic growth: lessons from Japan," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 57-79.
  • Handle: RePEc:eee:ecanpo:v:62:y:2019:i:c:p:57-79
    DOI: 10.1016/j.eap.2018.11.002
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    1. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Poverty Reduction in Recipient-Countries," EconStor Preprints 213807, ZBW - Leibniz Information Centre for Economics.
    2. Denford, James S. & Dawson, Gregory S. & Desouza, Kevin C., 2019. "Performance impacts of structure and volition in implementing policy through IT-enabled government-to-citizen and government-to-employee interactions," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 116-129.
    3. Ferreira, João J.M. & Fernandes, Cristina I. & Ferreira, Fernando A.F., 2020. "Technology transfer, climate change mitigation, and environmental patent impact on sustainability and economic growth: A comparison of European countries," Technological Forecasting and Social Change, Elsevier, vol. 150(C).

    More about this item

    Keywords

    Productivity; Potential growth; Intangible assets; Resource reallocation;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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