However still increasing, the population of Japan is increasing at a lower rate than that of a decade ago. Not only the reduced birth rate contributes to the demographic decrease, but also the more and more obvious market liberalization and individuals' migration towards better paid jobs in other countries. This means that the country is left with less young workers and more retired people with no other income that their pension. In the times to come, the larger number of pensioners than that of the working population will turn out to be a bourdon upon the shoulders of Japan.

Also, another demographic factor of great importance is the recent migration from the country side to the city. Rural areas tend to be neglected and the industry of those regions seems to literally die. More and more peasants move to urban areas in search of easier, safer and better paid jobs. This movement throws more industrial emphasis on the technologically developed activities in the urban factories, and neglects land working activities in the villages.

Both population decrease and urban migration are demographic factors common to most international economies, therefore, these changes do not imply discrepancy between world economies, nor do they throw a bad light upon the Japanese community.

Privatization of Japan relevant issue of Japanese mentality was given by the attempted privatization of several companies belonging to numerous industry branches. The young generation saw privatization of the public sector as an investment opportunity and a chance of growth for the respective companies. However, older decisive members portrayed privatization as harmful outside force intended to take control of the national Japanese industries.

From this point-of-view, especially due to the two contrary opinions, Japan's privatization process has been considerably slowed down. This was definitely a disadvantage for Japan, as most of their important international business partners such as The United States or The United Kingdom were not faced with this insufficiency. However, things are starting to brighten up in the privatization of Japan, as more and more local companies open up to external investment opportunities, economic growth and international acknowledgment. The first major Japanese companies that agreed to initiate the privatization process were Japan Tobacco and Salt Public Corporation (JTSPC), Nippon Telegraph and Telephone (NTT) and Japan National Railways (JNR).

Globalization

The term of globalization is used to define a multitude of economic, political, technological, social and cultural changes that are intended to bring together and ease work and communication between partners located in different regions of the globe. "Globalization is an unavoidable current which brings about both chances and risks. Majority of firms grow to be multinationals under the globalization move."

However, the careful Japanese nation does not have full and unconditioned trust in the process and prefer to approach it slowly and carefully. They do get involved in international economic activities and adopt culture and social patterns such as fashion, but they also prefer to keep a certain distance from the rest of the world in order to be able to better protect themselves in case of international collapse or any other social or economic disaster.

In regard with the Japanese's attitude towards the process of globalization, one could easily observe that is highly similar to the attitude adopted by Great Britain. United Kingdom also gets involved in the process, but unlike the United States, who puts their hearts and souls into the process, the English prefer to keep a certain distance and realistically analyze both advantages and disadvantages of globalization.

Other changes

On the RIETI web site (Research Institute of Economy, Trade and Industry), Professor Kodama Toshihiro mentions four "signs of changes in the Japanese economy noted in TAMA (technologically advanced metropolitan area)." These signs are:

the emergence of small and medium-size enterprises as engines for new growth;

the formation of a Japanese version of a modular cluster; the roles of venture businesses and human resource issuing from large enterprises; the formation of a municipal alliance and industrial policy based on the process of concept sharing.

Another relevant factor of change is the approach of knowledge by the Japanese community. In the book Japan, Moving toward a More Advanced Knowledge Economy, professors Hirotaka Takeuchi and Tsutomu Shibata emphasize on some of the reasons behind the great economic success of Japan. One of these reasons is Japan's self-teaching nature and the continuous desire to learn more and improve their work capabilities and techniques.

When looking at the other strong international economies, the two professors believe that the entire globe ought to learn from the previous experience and economic history of Japan's. "Three main reasons...

These elements are:
1. Views a company like a living organism, rather than just a machine

2. Focuses on justifying belief much more than on seeking truth;

3. Emphasizes tacit knowledge over explicit knowledge;

4. Relies on self-organizing teams, not just existing organizational structures, to create new knowledge;

5. Turns to middle managers to resolve contradictions between top management and front-line workers;

6. Acquires knowledge from outsiders as well as insiders."

5. Statistics

Currency - 1 Japanese Yen (¥ JPY)

Fiscal Year - April 1 - March 31

Trade Organizations - APEC, WTO and OECD

GDP ranking - 3rd by volume (at PPP in 2005)

12th by per capita (at PPP in 2005)

GDP - $4.9 trillion (2005)

GDP growth - 2.4 (2005)

GDP per capita - $30,700

GDP by sector - agriculture 1.3%, industry (25.3%), services (73.5%) (2005)

Inflation - -0.5% (2004)

Population below poverty line - 5%

Labor force - 66.4 million (2005)

Labor force by occupation - agriculture (4.6%), industry (27.8%), services (67.7%) (2004)

Unemployment - 4.1% (2006)

Main industries - motor vehicles, industrial and transportation equipment, electronics, chemicals, steel, machine tools, processed foods and nonferrous metals

Trading Partners:

Exports - $550.5 billion f.o.b. (2005)

Main partners - U.S. 22.7%, China 13.1%, South Korea 7.8%, Taiwan 7.4%, Hong Kong 6.3%

Imports - $401.8 billion (2004)

Main partners - China 20.7%, U.S. 14%, South Korea 4.9%, Australia 4.3% (2004)

Source: Wikipedia, the Free Online Encyclopedia, November 9, 2006, Economic History of Japan

Bibliography

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Valignano, Alessandro, 1584, Historia del Principo y Progresso de la Compania de Jesus en las Indias Orientales

Answers.com, Economic History of Japan, Answers Corporation, 2006, http://www.answers.com/topic/economic-history-of-japan, last accessed on November 26, 2006

Wikipedia, The Free Online Encyclopedia, November 21, 2006, Economy of Japan, http://en.wikipedia.org/wiki/Economy_of_japan,last accessed on November 26, 2006

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http://www.sjsu.edu/faculty/watkins/japan.htm, last accessed on November 26, 2006

Toshihiko

Kino*****a, November 2003, Observation on the Japanese and East Asian Economies, London School of Economics

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Takeuchi, Hirotaka; Shibata, Tsutomu, Japan, Moving toward a More Advanced Knowledge Economy