The good news about Japan's economy is that macroeconomics matters a lot less these days. The country has escaped the persistent deflation that dogged it for decades, while unemployment is still low. Macroeconomic normalization frees Japan's leaders to start thinking about the country's more long-term problems, including population aging, slow productivity growth, and slow wage growth.

One thing the Japanese government can do to promote productivity and wage growth is to encourage capital formation. Since a lot of new technology is embodied in machines and software, capital purchases are an important potential lever of productivity growth. Business investment also raises labor demand.

Japan has a reputation for investing a lot, but these days it pours far less of its GDP into gross fixed capital formation than China or Korea. Unfortunately, Japan's population is shrinking, and businesses have little reason to invest in a shrinking market. This means that to invest more, Japan will have to pump up exports. Despite a recent surge, Japan's exports are lower relative to its economy than in many other rich countries. Exports can also directly boost productivity, since they nudge Japanese companies to compete in world markets. And increasing exports would help increase the value of the yen.

One policy that can address both the investment drought and the insufficiency of exports is greenfield foreign direct investment. Greenfield FDI is when a company builds a factory, office, research center, or other real productive asset in a foreign country. TSMC's fabs in Kumamoto Prefecture are a perfect example of greenfield investment, and are promising to reinvigorate the Japanese semiconductor industry. In addition to boosting overall capital purchases in Japan and directly providing employment for plenty of Japanese people, greenfield investment can help reintegrate Japan's economy into global supply chains, thus fighting "Galapagos syndrome".

Japan's economic policy should therefore focus on getting more foreign companies to invest in the country.

Japan's policymakers and business leaders are not accustomed to courting FDI, because traditionally, this kind of investment was mostly mergers and acquisitions. Thus, unlike, Poland, Singapore, or other countries that have gotten rich off of FDI, Japan has largely ignored the power of greenfield investment. It's time for that to change.

The first thing Japan should do is to emulate the successful tourism promotion campaign that began two decades ago. Many companies would probably see the benefit of locating their factories and offices in Japan, but they haven't yet thought about it. What's needed here is an information and marketing campaign by the central government. Companies and investors throughout the world have to know that Japan is the perfect place for greenfield FDI.

Such a promotion campaign is likely to be successful, because Japan is a very favorable place for multinationals to invest. Japan has a large amount of underutilized talent, especially engineers in hardware industries. It has a favorable regulatory climate, where permits for new factories, infrastructure, housing, and offices are approved quickly and predictably. With many companies anxious to diversify their operations out of China but wanting to stay in East Asia, Japan provides a natural alternative.

The other reason Japan will have an easy time attracting greenfield investment is that people all over the world — including the engineers, managers, and executives of multinational companies, as well as venture investors — want to live in Japan. The popularity of Japanese culture and cities has soared to almost unimaginable heights around the world, as evidenced by Japan's glut of tourists and by the popularity of cultural exports such as anime and manga. Large portions of the global populace can now be described as "weebs" — an international slang word for foreigners who love Japanese culture.

In the past, Japan's government has sought to promote the country's soft power and cultural exports. That goal has been attained. The next step is to use Japan's soft power to revive its economy — not just by selling anime and video games, but by attracting foreign investment dollars, technology, and human talent to the country.

In addition to a promotion campaign, Japan's government should make it financially and logistically easier for foreign companies to relocate their operations. Foreign companies need an easier way to open bank accounts in Japan. They also need help sourcing local talent. And tax credits for things like research and development should be increased in order to encourage multinationals to put their highest-value facilities in Japan.

Greenfield investment is one of the big things Japan's economy lacks. Right now is a golden opportunity to add this missing piece.