5 Major Problems Leading to Japans Downfall In Economic Growth

In Japan there is a very strong tradition and culture. The culture involves things such as respect the elders, and never question them even if you know they are wrong. This creates big difficulties, in the sense that they become very close minded and do not think for themselves. This is seen in the article below. Why the west is so great at higher level thinking is because we are told to always question something that we do not believe, which enable us to come up with the best solution to our problems with a group of people. While in Japan, most times one person knows what is the best for the company and noone is to question it. The culture also concider it weird to have women as the very high officials of a compnay. This is not a very good thing, since women do also have many great ideas.

Another problem that is mentioned in the article below is that many Japanese companies are living in the past. They are living in the glory days of 20 or 30 years ago. The bad thing about this is that the parliament of Japan have an overload of papers and are not using enough computers to sort out papers which would increase efficiency. The universities of Japan are not using technology to a very great extent either, which means that the efficiency in the classrooms are not to the point where they could be. This gives Japan a huge disadvantage to the countries that are using technology to increase its efficiency. It also gives the people of Japan the disadvantage of not knowing how to use technology as well as other people from other countries when they get out to the working world.

The third problem Japan is having is that they are giving to high salaries to their workers which means that most business will not do very well. This is because of the law of demand states that as price rises, demand decreases. Therefore, countries such as South-Korea and Vietnam where labor cost is much lower will have more business. Which is taking away opportunities for Japan to make money.

The fourth major problem is also that of deflation. According to Takahide Kiuchi, the chief economist of Nomura Securities, deflation is a major problem and is very dangerous. Japan cannot do anything about it right now and Takahide says that Japan should have pushed against the deflation in the 1990s but at that time noone could have guessed that deflation was this dangerous. He also argues that it is to late to change that now.

The last major problem is that Japan is not having enough new born children and in 2030, about one third of Japan’s population will be 65 or older years old. This will mean that the country will not be getting as much tax revenues because these people are not pulling in any money and also the healthcare costs will boost up for the country. The country will have a real struggle to come up with the money to afford the boost of healthcare when the time of 2030 comes. Will they not have enough money to take care of everyone at that time I recon that many will die ahead of time.