Political Parties Not Heavily Debating Economic Growth Strategies As Focus Stays on Short-Term Achievements

By Azusa Nakanishi / Yomiuri Shimbun Staff Writer

14:42 JST, February 3, 2026

Ahead of Sunday’s House of Representatives election, debate over growth strategies has remained subdued despite the vital need for discussions on how to bolster the Japanese economy and ensure that recovery remains firmly on track through growth strategies.

With the various parties prioritizing immediate measures for high prices, growth strategies have been pushed to the sidelines of their economic policies.

“Nuclear fusion power generation could become a next-generation mainstay industry for Japan, earning ¥20 trillion to ¥30 trillion every year,” emphasized Satoshi Konishi, chief executive officer of Kyoto Fusioneering Ltd. The Tokyo-based startup develops equipment for nuclear fusion power generation, a technology that utilizes deuterium and other isotopes that can be collected from seawater.

Accelerating the pace of development will require a multi-pronged approach, including vast capital investment, the cultivation of highly specialized talent and further deregulation. “It is a technology that must be cultivated over several decades. I want the government to present a long-term vision,” said Konishi.

Japan is being left far behind in the race for private nuclear fusion investment, with its €230 million (about ¥42 billion) paling in comparison to the United States’ €6.9 billion, China’s €4.4 billion and Germany’s €610 million, according to an EU report.

Japan’s late start is evident in the fact that its national strategy for nuclear fusion power was only formulated in 2023.

Diminishing results

Once the world’s second-largest economy behind the United States, Japan has seen its economic standing erode since the burst of the bubble economy. By 2024, its nominal gross domestic product per capita had tumbled to 24th among the 38 member countries of the Organization for Economic Cooperation and Development.

Science and technology indicators from the Education, Culture, Sports, Science and Technology Ministry show that Japan’s expenditures on research and development in 2023 had grown by just 1.4 times in nominal terms since 2000. This is significantly less growth than that of South Korea, at 8.6 times, as well as the United States at 3.6 times and Germany at 2.6 times.

The government has formulated growth strategies almost every year since 2006 under then Prime Minister Junichiro Koizumi’s administration, but has failed to produce any noteworthy results.

Former Prime Minister Shinzo Abe launched the “three arrows” of fiscal stimulus, monetary easing and growth strategies upon the start of his second administration in 2012. Abe championed deregulation through measures such as the promotion of National Strategic Special Zones as part of his growth strategy, but these initiatives failed to gain momentum.

Former Prime Minister Yoshihide Suga’s Cabinet was preoccupied with responding to the coronavirus pandemic, and the subsequent administrations of former Prime Ministers Fumio Kishida and Shigeru Ishiba introduced “new form of capitalism” with an emphasis on distribution. However, these efforts eventually faded, ending with diminishing results.

“With few administrations lasting as long as those of Koizumi or the second Abe Cabinet, the government has lacked the continuity needed to foster growth potential from a long-term perspective,” said Naoki Hattori, senior economist at Mizuho Research & Technologies Ltd.

Often overshadowed

Each party has integrated growth strategies into its campaign pledges for the lower house election. While the ruling parties often prioritize the promotion of capital investment by companies, opposition parties lean toward investing in human capital to enhance workers’ skills.

The Liberal Democratic Party plans to conduct intensive investment in 17 strategic sectors, including artificial intelligence and semiconductors, along with fields related to economic security. Meanwhile, the Japan Innovation Party argues for bolstering private sector vitality by promoting deregulation.

The Centrist Reform Alliance intends to bolster “investment in people” through measures such as expanding free education and supporting recurrent education for working adults.

The Democratic Party for the People is pledging to reach a nominal GDP of ¥1 quadrillion, driven by a doubling of the budget for education, science and technology.

While short-term achievements are frequently highlighted during election campaigns, debates over growth strategies often get buried because of how long they take to show results.

Gakushuin University Prof. Tsutomu Miyagawa pointed out that Japan has endured a prolonged period of stagnant domestic capital investment and flat productivity. “Breaking away from this long-term stagnation is no easy task,” he said.