this country was supposed to be the future but today it's not living up to that potential so
that it's not developing you know 4 30 years Japanese tech companies used to be household
names there's nothing left really today most of its phone and Gadget companies have been
surpassed by the likes of Huawei and xiaomi in China and Samsung in South Korea a number of
patents technology in Japan used to be very high Japan is now the world's third largest economy
behind the US and China but it will continue to slip down Japanese phones you speak good until
iPhones came into right it was one of the world's best until iPhone took over today you'll find more
Tech enabled infrastructure in China and Korea than you will in Japan Japan's economy has been
stuck for decades of the crises and disasters over over Japan Japan has the world's third largest
economy but Germany is quickly catching up its GDP growth rate has averaged just 1.1 percent per year
it since 1991 shrinking population shrinking labor force and aging population have negative impact on
both sides of the economy Japan's population will fall by 30 percent by 2070. in addition
to dealing with the shrinking population it also suffers from a lack of innovation and there are
cultural issues at play this is one of the reason that the creativity culture and Innovative culture
is faded unlike other major economies it has not really opened up to immigrants to combat
its economic challenges it's not very common to see foreigners so there are several reasons behind
this so one reason is social reason cultural reasons its currency has fallen a lot in recent
years to the US dollar just look at this chart for years one dollar got you around 110 Japanese Yen
but it's weakened a lot at one point recently reaching 150 Yen so what's happening in Japan
and why is it stop here are four reasons why it's stuck number one an aging population and shrinking
Workforce its population is now declining at a very rapid rate today Japan's population is 125
million people by 2100 that's expected to be just 75 million it will lose more than half a million
people per year many people here just don't want to have babies and its fertility rate has
plummeted Japan has one of the oldest populations in the world and a declining birth rate with an
increasing life expectancy will create a problem so low birth rate but living for a longer period
so this means population became old because this puts a massive strain on the labor market when
you have fewer younger workers entering the workforce to replace those who are retiring
the shrinking Workforce hampers economic growth and productivity and that leads to stagnation of
the economy aging population and shrinking labor force had significant consequences and significant
negative impacts on Japanese economy number two high debt and deflation Japan has been grappling
with high levels of government debt for many years now in fact its debt to GDP ratio is one
of the highest in the world to counter deflation and stimulate economic growth the government has
relied on borrowing which has only contributed to the rising debt burden and the high debt levels
limit the government's ability to invest in things like infrastructure education in other areas which
would ultimately Drive long-term economic growth Central Bank or government try to accelerate or
stimulating a Japanese economy but it all fails it doesn't change that's almost but in these days
after the massive rise of U.S inflation Japanese inflation rate does a little bit higher number
three structural issues and lack of innovation in 1989 more than half of the world's top 20 most
valuable companies or Japanese today none are Japanese so when we study the history
of development of Japan those people who funded current large companies like Mitsubishi Honda
Toyota and so on they were creative people and that had this entrepreneurship culture for making
job creation new technologies and so on however in the younger generation of Japan I don't see
that much risk taking the country has been slow to adopt new technology let alone create new
technology and it lacks innovation in many sectors traditional Industries are dominating the economy
but new Industries struggle to emerge and this lack of innovation and resistance to change by its
people are killing productivity growth and making it harder for Japan to compete globally number
four corporate culture and inefficiencies Japan's corporate culture is often criticized because it
doesn't allow for risk-taking and it's resistant to changes people here dedicate their life to
a single company and seniority gets promotions and better salaries rather than better employees
in Japan the salaries and wages are based on Age based on seniority so then if we want to let the
people work until die so they are happy because their salaries are increasing but actually this
is killing motivation for the younger generation on top of all of this a rigid work environment
discourages entrepreneurship and Innovation all those big cars and manufacturers they don't even
manufacture the stay in my hotel cars within the country but all of the factories are outsourced
all those young workers are now older they're not doing the groundwork no one's a construction work
or manufacturing jobs so can this country get unstuck and if so how well it will need to change
its economic policies and make some major changes because in older population presents a challenge
for its economy they already have houses they no need to change their cars they married already to
the expenditures and the expenses on consumption is much lower and no need to travel for one it
would need to increase its birth rate or bring in foreigners to work if you don't have enough
working population you don't have enough taxpayers to finance the government's budget to pay for the
government budget and then government find problem for paying for the Social Security pension and so
on welcome wall foreigners and to encourage them to stay much longer and enjoy their culture food
and go spend money it's declining population also means that existing homes malls and offices are
going to be left sitting empty in some parts of Japan you see deserted shopping centers in
Japanese economy facing several structural issues especially after the Bears of the bubble in 1990s
Japanese economy went into a long-term economic recession which is so-called lost decade although
the length of this recession is more than one decade and still Japanese economy is facing with a
low economic growth rate of course Japan has tried New Economic policies and reforms over the years
but that impact has been limited several policies for opening the borders toward foreign migrants
have been taken and for example one of them was providing a highly skilled foreign professional
Visa it's a VISA type a five years Visa that gives you as a foreigner the same right as a Japanese
you can establish company you can do any type of business to change its course it will need to
change its labor market to promote flexibility and increase Workforce participation we need
reforms such as for example reforms regarding the working population increasing the retirement age
bringing more females as a labor force accepting more migrants from other countries it would need
to Foster Innovation and competition and improve productivity and efficiency but Japanese are set
in their ways of tradition and culture they are deeply rooted here change does not happen easily
if at all over the years investors have been wary of Japan for fear that its growth won't pay off
but that could also be changing too as billionaire investor Warren Buffett is going all in on Japan
lately but many people I speak to here sound frustrated and worry about their country's future
what else and we lost Japan's Tokyo as a financial Hub to Hong Kong now there's nothing left really
and Technology I mean Sony Panasonic yeah well it's almost certain that its population is going
to continue to go down drastically the bigger question is what will happen to Japan and its
economy its wealth its standard of living the next few decades if we don't observe a
drastic change then definitely Japan wouldn't be in the top 10 large economies in the world
so Japan will be a smaller size economy and not with this level of GDP per capita.