Transcript Productivity Improvement and Productivity Measures in Japan

The Productivity Improvement and Development
of Productivity Measures in Japan
Presented at the Coordination Meeting and Launching
Ceremony of Special APO 50th Anniversary Publication on
September 7, 2011
Tsutomu Miyagawa
(Gakushuin University)
Contents
1. An Overview of Productivity Improvement
in Japan
2. The Development of Productivity Measures
in Japan
3. The Role of Productivity Measures on
Economic Policies
1. An Overview of Productivity Improvement in Japan
• As Young (1992) and Krugman (1994)
pointed out, the high economic growth in
the emerging economies were attained by
the accumulation in production factors.
• In contrast to their findings in the 1990s, in
the high economic growth era (the late 50s
and the 60s) in Japan, the contribution of
TFP growth to economic growth was about
60% (Kosai and Ogino (1980)).
1. An Overview of Productivity Improvement in Japan
• However, the TFP growth in the 70s
declined drastically due to the oil shocks.
• Although the TFP growth recovered in the
80s, the low TFP growth continued after the
collapse of the bubble economy.
%
Growth Accounting in Japan
6
5
4
TFP
3
Non-IT capital
IT capital
2
Labor
Output
1
0
-1
-2
(Source) APO Productivity Databook
1. An Overview of Productivity Improvement in Japan
• The productivity growth in the manufacturing
sector was a main driver of the whole Japanese
productivity growth. →However, due to the two
major shocks (Leaman shock and the 3.11
Earthquake), the international competitiveness in
the Japanese manufacturing sector may lose.
• The productivity growth in the nonmanufacturing sector is slower than that in the
manufacturing sector. Due to the slow growth of
domestic demand, firms in the service sector tried
to increase productivity through restructuring.
6
2. The Development of Productivity Measures in Japan
• After WWII, Japanese economic leaders believed that
productivity improvement would lead to economic
prosperity.
• They founded Japan Productivity Council (JPC) in 1955.
• The role of JPC
(1) Learning management methods to improve productivity
in the US and other advanced countries and transmitting
them to Japanese firms
(2) Issuing productivity measures
A brief history of the Japanese economy and the prodctivity measurement
1955
1958
1961
1973
1979
1985
1990
1996
1997
2003
Japan Productivity Council (JPC) was established.
JPC started to issue the productivity measure
Asia Prodcutivity Organization (APO) was established.
The flexible exchange rate system started.
The first oils shock
The second oil shock
Plaza Accord
The collapse of the bubble economy -starting the slow growth era.
Keio Economic Observatory published KEO database.
Asian currency crisis
Financial crisis in Japan
Professor Fukao and others published Japan Industry Productivity
(JIP) database.
2008 Leaman shock
The East Japan Earthquake and severe accident of Fukushima
2011
nuclear powerplant
2. The Development of Productivity Measures in Japan
• The high growth era (the 60s): Policy makers and
economists focused on the capital deepening effect
on the economic growth. Therefore, they
developed policies which enhanced capital
accumulation.
• The 70s and 80s:Due to the two oil shocks,
economists studied the effects of energy price on
productivity growth.
2. The Development of Productivity Measures in Japan
• The 90s and the 2000s: Due to the long-term
stagnation of the Japanese economy, policy
makers and economists reconfirmed that
productivity growth is a key driver of
economic growth.
• At the same time, productivity measures
and productivity studies based on
productivity database at the industry level
were developed.
Growth strategies after 2000
Month and
year issued
Prime
Minister
Forecasting
period
Jan. 2002
Koizumi
2002-2006
The vision in the 21 century
April, 2005
Koizumi
to 2030
Economic growth strategy
July, 2006
Koizumi
to 2016
The forecast and strategies in the
Japanese economy
Jan. 2007
Abe
2007-2011
The forecast and strategies in the
economic and fiscal policies in the
next 10years
Jan. 2009
Aso
2009-2018
June, 2010
Kan
to 2016
Mid-term forecast of structural
reform, economy, and the
governmant budget in Japan
New growth strategy
2. The Development of Productivity Measures in Japan
• Two major productivity database in Japan
(1) KEO database: KEO database is
constructed by the Research Institute of
Industries in Keio University which has led
the productivity analysis in Japan. This
database is used in the APO Productivity
Databook.
2. The Development of Productivity Measures in Japan
(2) JIP database: Japan Industry Productivity (JIP)
database is constructed by Professor Fukao of
Hitotsubashi University and others and first
published in 2003. This database is extended almost
every year and published at the website of Research
Institute of Economy, Trade, and Industry (RIETI),
http://www.rieti.go.jp/jp/database/JIP2010/index.ht
ml. The productivity data in JIP is provided to
OECD STAN database and EUKLEMS database.
The database is also comparable to productivity
database at the industry level in China and Korea.
Productivity database in Japan
JIP 2011 database
KEO database
Industry classification
108 industries（including
52 manufacturing
industries）
43 industries（including 22
manufacturing industries）
Estimation period
1970-2008
1960-
Price
2000 constant price
2000 constant price
Labor account
gender：2
gender：2
age：15classifications
age：11classifications
employment status：
3clasiifications
employment status：
3clasiifications
education：4 classifications education：4 classifications
Capital account
aaaset classification：37
aaaset classification：42
depreciation rate:
following BEA's
depreciation rate
depricaition rate：
estimating depreciation
rate from National Wealth
Survey
3. The Role of Productivity Measures on Economic Policies
• The development of productivity database has
contributed to the better understanding of longterm economic slowdown of the Japanese economy.
• An example: Slow productivity growth in the
service sector→The productivity improvement in
the service sector is one of key economic
policies→JPC supported activities of Service
Productivity & Innovation for Growth (SPRING)
in the late 2000s.
3. The Role of Productivity Measures on Economic Policies
• The Japanese government plans to issue
official productivity measures.
• Staff members of KEO database and JIP
database help to construct better official
productivity measures.
Thank you for your attention