Japan's New Industrial Policy: A Comparative Analysis with Traditional Industrial Policy

In this paper, I offer a brief survey of Japanese industrial policy from the 1950s to the 2020s and on this basis discuss the industrial policies currently being formulated by the Japanese government. My analysis focuses on industrial policies aimed at fostering specific industries, which once attracted particular attention. Specifically, the paper examines industrial policies that promoted industrialization through heavy industries like steel, shipbuilding, and chemical manufacturing when the Japanese economy was rapidly growing, and using this analysis as a foundation, it considers the new industrial policies implemented since the 2020s that aim to achieve economic growth while advancing economic security. I address the objectives, instruments, and impacts of industrial policies throughout the paper. The paper is organized as follows. Chapter 2 comprises a brief historical survey of Japanese postwar industrial policy. Chapters 3 and 4 analyze the industrial policies implemented during the high-growth period and since the 2020s, respectively. Chapter 5 concludes the paper. This paper is part of KIET's Global Perspectives series, commemorating the 50th anniversary of its founding. Shujiro Utaro is one of Japan's leading trade economists . He is currently a professor emeritus at Waseda University and the Chairman Emeritus of the Research Institute of Economy, Trade, and Industry. Keywords: industrial policy, Japan, economic security, global value chains, GVCs, manufacturing, trade, trade policy