What the U.S. can learn from Japan
What the U.S. can learn from JapanJapan and the Four Little Dragons in order to achieve their
industrialization goals have a diverse set of policies ranging from
limited entitlement programs to a education and government bureaucracy
that stresses achievement and meritocracy. But one of the most
significant innovations of Japan and the Four Little Dragons is there
industrial policy which targets improving specific sectors of the
economy by focusing R&D, subsidies, and tax incentives to specific
industries that the government wants to promote. The United States
could adopt some of these industrial policies to help foster emerging
high tech businesses and help existing U.S. business remain
competitive with East Asia.
In Japan the government both during the Meiji period and the
post World War II period followed a policy of active, sector selective
industrial targeting. Japan used basically the same model during both
historical periods. The Japanese government would focus its tax
incentive programs, subsidies, and R&D on what it saw as emerging
industries. During the Meiji period Japan focused it's attention on
emulating western technology such as trains, steel production, and
textiles. The Meiji leaders took taxes levied on agriculture to fund
the development of these new industries. Following World War II
Japanese industries used this same strategic industrial policy to
develop the high-tech, steel, and car industries that Japan is known
for today. Some American industries are currently heavily supported by
the government through subsidies and tax breaks to farmers, steel
producers, and other industries that have been hurt by foreign
competition because they are predominantly low-tech industries. But
this economic policy of the U.S. is almost a complete reversal of the
economic policies of Japan and the Four Little Tigers;...
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