Embracing a New Order

Accelerating globalization and the phenomenal economic growth of emerging countries are not merely transforming the global economic power balance, but are also profoundly affecting national frameworks and the values of economic societies. The traditional common wisdom no longer applies in this historical epoch of integrating global markets, and we need to shift our way of thinking—to what could even be called a New Order.

The root of mankind's remarkable prosperity unmatched by any other living being is probably innovation in production technology and the division of labor. Production technology, borne of the need for self-sufficiency, has improved production efficiency wildly through the division of labor and has expanded the economic scales of villages, cities, and nations. Such divisions of labor now span national boundaries, and a number of issues in the process of spreading to the marketplace have arisen.

From the viewpoint of pursuing innovation with divisions of labor and rational resource allocation, protective walls between nations should be falling—yet those walls still stand strong in order to secure the sustenance and identities of peoples. Perhaps the current conflict between integrated states and regional societies under the Euro should be considered an ideological struggle against walls between nations.

In constructing a New Order, three factors must be balanced for a sound view of the world: self-reliance of the private sector, nations and governments with vision, and new public-private collaboration. Further, establishing a business model focused not simply on globalization, but also on addressing human issues like environmental resources and income disparities, will help ensure the sustainability and stability of mankind.

Japan has recently been faced with a number of challenges and roiled by international political circumstances. The problems are still ongoing and Japan must brace itself for ‘birth pains’ as a New Order is established. But some beginnings are emerging. Economic collaboration among multiple countries with different views is a new challenge that requires a balance among private sector self-reliance, nations and governments with vision, and new public-private collaboration. Furthermore, promoting innovation that addresses human issues would raise Japan's international stature as a frontrunner in building a New Order. It will be critical to be aware of what the next challenge is within the big picture.