Growth Strategies: Enhance National Strength through Bold Investment

Editorial

15:35 JST, November 12, 2025

Accelerating growth strategies is essential to rebuild the Japanese economy, which has been stagnant for a prolonged period. The government needs to work together with the private sector to map out a medium- to long-term vision and stimulate corporate investment.

Prime Minister Sanae Takaichi’s administration held the inaugural meeting of the Council for Japan’s Growth Strategy and began discussing concrete measures. It intends to incorporate some policies into the Comprehensive Economic Measures to be finalized within the month, and then to devise new growth strategies next summer.

A key pillar of the strategies is to expand investment in critical industries from an economic security perspective. Defined as “investment that enhances resilience against crises,” this is designed to make preemptive moves to address risks and issues such as energy security, food supply and the need to strengthen the nation’s response to major disasters.

Investments will be made through public-private cooperation in 17 fields, including artificial intelligence, semiconductors, biotechnology, shipbuilding and defense.

To facilitate private investment planning, the government will secure budgets for multiple fiscal years, and it will also consider tax cuts to promote investment.

It is important to formulate a clear vision and promote it so that companies can increase investment for business growth.

While U.S. President Donald Trump’s high tariff policy threatens the free trade system, China continues its economic coercion by restricting trade with other countries.

Under these circumstances, there are concerns that supply chains could be disrupted when companies construct factories and procure raw materials, among other efforts. It is crucial for companies to coordinate with the government to address these issues.

However, public-private cooperation tends to foster mutual dependency, potentially leading to an unclear locus of responsibility and lax management of investment risks. It is vital to mitigate risks through such means as making use of financial experts.

Japan’s competitiveness has languished for years. Japan ranked first until 1992 in competitiveness rankings by an influential Swiss business school, but it plummeted to a record low of 38th in 2024.

The economic policy dubbed Abenomics under then Prime Minister Shinzo Abe’s administration leaned heavily on monetary and fiscal policies, while its growth strategy failed to produce results. The subsequent administrations of prime ministers Yoshihide Suga, Fumio Kishida and Shigeru Ishiba were not able to establish a clear strategy.

Japan’s potential growth rate, which indicates the underlying strength of its economy, has remained below 1% for nearly 20 years. Improving productivity is essential.

Regarding growth strategies, it is necessary to steadily advance measures from a medium- to long-term perspective, spanning five to 10 years.

There are many challenges to be addressed, including facilitating smooth labor mobility to high-productivity sectors, implementing university reforms to develop human resources and increasing investment in science and technology. Strengthening financial functions to support emerging companies is also essential. Concrete measures that help enhance the nation’s strength will be needed.

(From The Yomiuri Shimbun, Nov. 12, 2025)