[ Nippon Keidanren ] [ Policy ]

A Call for a Japanese New Deal:

Promoting National Projects to Ensure Employment Security, Create Jobs, and Enhance Japan's Growth Potential

February 9, 2009

Nippon Keidanren

1. Introduction

As the world economy slips into a global recession, Japan is also confronted with exceptionally harsh conditions.

Drawing on all policy measures, the public and private sectors should do everything in their power to prevent the economy from further deterioration and to maintain and stabilize employment. The business community will do everything it can to maintain and stabilize jobs and will fully cooperate in national and local government measures. The government should radically enhance the job safety net and hasten to develop the infrastructure so that the workforce can smoothly shift to growth industries and industry itself can adopt a new structure.

At the same time, the public and private sectors should join hands at the economic situation such as today, and launch and vigorously promote national projects as a Japanese New Deal that will lead to the creation of new jobs and strengthen Japan's mid- to long-term growth potential to be ready for the future. Through these national projects, Japan must strive to quickly emerge from the current tunnel of economic stagnation and lead the world economy in the 21st century.

2. Maintaining and Stabilizing Employment and Improving the Safety Net

The business environment is harsher than it ever has been in the past. Amid these conditions, companies must make every effort to maintain employment. Individual companies are already promoting measures to maintain and secure employment based on dialogues between management and labor, including reallocation, suspending operations, cutting overtime work and shortening working hours, and various other means, such as work sharing and permitting side jobs. Fully recognizing that stabilizing employment is a Corporate Social Responsibility, companies must eliminate the public's anxiety by actively promoting these kinds of measures on an ongoing basis.

Companies must also make every effort to provide living assistance, including offering displaced workers a place to live, as an emergency measure.

At the same time, the public and private sectors are being called to join hands to strengthen the employment safety net. For example, under the Hometown Employment Revitalization Special Grant, funds are to be set up in each prefecture and measures are to be implemented to support enterprises that hire local jobseekers and aim to operate in a way that takes advantage of the conditions and creativity of the region, such as developing local-brand products. A framework should be established for companies to contribute to the funds, and ways to provide ideas, human resources, and facilities to support individual projects should be considered.

The government has submitted to the Diet an amendment bill to expand the scope and benefits of the unemployment insurance program to supplement companies' efforts to maintain employment. The government is also easing the conditions required for the Employment Adjustment Subsidy Program, but it should further expand the program with an eye on the labor market situation.

To stabilize people's livelihoods and maintain and enhance economic dynamism through the expansion of job opportunities, national commitment must be made to promote measures to create jobs. With an eye to ensuring smooth labor mobility and having human resources settle into fields where job creation is anticipated, the government should hasten to develop and implement public training programs where people can gain the needed expertise and skills and further refine those abilities. In addition, the government should enhance the economy's ability to adjust workforce demand and supply by developing one-stop employment-support centers that perform the full range of services, including job placement. Companies also should actively contribute to the improvement of training programs by providing training facilities.

IC cards should be introduced to promote the use of the Job Card system.

With the deteriorating labor market situation, the number of displaced workers who are falling out of the safety net is increasing. To address this, the government should first work to ensure the full use of existing systems, including having all workers enrolled in social and labor insurance programs. It is also vital that the government require full compliance from all parties, including companies sending/hiring dispatched workers. The government should quickly consider frameworks for using funds in the General Account to provisionally offer livelihood assistance benefits with the condition that recipients receive job training.

In the mid- to long-term future, revision of the unemployment insurance program to address employment diversification should be discussed.

3. Promoting National Projects

To create new jobs and heighten Japan's mid- to long-term growth potential, the government should have all government offices and ministries join hands to address the priority areas of (1) enhancing industrial competitiveness, (2) improving quality of life, (3) revitalizing regions, and (4) creating a low-carbon, recycling-oriented society. National projects should be promptly launched through focused investment of the human and physical resources and funds of the public and private sectors.

(1) Enhancing Industrial Competitiveness

To succeed in the increasingly intense global competition, Japan needs to develop high-level human resources and radically enhance its technological strength which will serve as the foundation. In addition, Japan needs to fortify its industrial competitiveness by accelerating infrastructure development.

Various policies to heighten Japan's technological strength are laid out in the Third Science and Technology Basic Plan, but many issues have arisen, including the fact that governmental R&D investment has fallen substantially below the initial plan. Japan needs to steadily implement the Basic Plan and accelerate human resources development and advanced R&D in the field of information and communications technology (ICT) which has major ripple effects on other industries as basic technology. In the area of infrastructure, development of the distribution and transportation network has lagged behind in some regions, creating large bottlenecks to economic development in those areas, and priority investment is called for in both equipments/facilities and services.

Through these measures, Japan will be able to further enhance its productivity and create new demand and jobs.

(2) Improving Quality of Life

Creating a safe, secure, and convenient society is an issue that is intimately related to quality of life and is a key issue that the government must address, overcoming the barriers between government offices and ministries and those between regional and national governments.

Japan is among the world's most advanced nations in terms of IC technology and infrastructure; however, the nation lags behind greatly in its application in public systems. With the promotion of e-government, citizens will easily be able to receive government services. Moreover, by building an observation and positioning system that utilizes satellites and by upgrading the transportation system and other infrastructure, Japan should strive to create a comfortable and safe society.

At the same time, it is important that we make it possible for citizens to enjoy safe and secure lives even in our advanced aging society with the declining birthrate. This can be achieved by securing sufficient child daycare and nursing care workers and developing a framework for the local provision of services.

(3) Revitalizing Regions

For Japan to revitalize its regions, it is critical that each region make maximum and effective use of its resources and develop new industries and businesses. For example, each region must continue to strive to form local industrial clusters while supporting its small and medium-sized enterprises by taking advantage of the various systems already in place as well as partnerships among industry, academia, and government.

In addition to these conventional efforts, Japan can recover the dynamism of its regional economies and create new jobs by promoting more effective use and enhancement of each region's agriculture and tourism resources. The field of agriculture in particular has great potential to revitalize through reutilizing abandoned cultivated land and expanding partnerships among agriculture, commerce, and industry. We should strive to achieve this through the active support of the government with an eye on using the Special Zones for Structural Reform.

At the same time, to promote growth for Japan overall through "reform starting from the regions," Japan should promptly enact the Basic Act on the Promotion of Reorganizing the Current Local Governments ("doshu-sei", a kind of Federation) (provisional name) and give citizens a detailed implementation schedule for the system and then steadily follow the schedule.

(4) Creating a Low-Carbon, Recycling-Oriented Society

Japan's industrial sector boasts one of the world's highest levels of energy efficiency. To create an even more advanced low-carbon society, we must strengthen efforts in the consumer and transport sectors in particular. We need to spread low-carbon technologies, including promoting the introduction by households of highly efficient machines that are energy-saving and use new forms of energy, developing next-generation vehicles and encouraging their use, and improving transportation and urban infrastructure. At the same time, raising the level of recycling technologies and reforming the related social systems are urgent issues for Japan to create a recycling-oriented society.

Japan is a resource-poor nation. From the perspective of energy supply, it is critical that the nation strive to actively harness untapped energy resources in Japan and its coastal seabed and steadily promote nuclear power generation.

By further refining its world-class environmental and energy technologies and promoting society's efforts to spread them, Japan can expand domestic demand through the strengthening of its international competitiveness and the creation of new industries. As such, Japan can play a leadership role in the resolution of global-scale issues.

Priority Projects (Reference)

1. Enhancing Industrial Competitiveness

(1) Improving Technological Capabilities

  1. 1-1. Project to create a center for nanoelectronics research
  2. 1-2. Development and utilization of next-generation microelectronic devices
  3. 1-3. Development and spread of robots in nursing care and social welfare services
  4. 1-4. Promotion of innovative regenerative medicine

(2) Developing Human Resources

  1. 1-5. Training and securing of high-level human resources
  2. 1-6. Acceleration of high-level ICT human resources development

(3) Enhancing Infrastructure

  1. 1-7. Upgrading of Japan's ports as hubs
  2. 1-8. Full implementation of key infrastructure improvement plans in the three major metropolitan areas (Tokyo, Chubu, and Kansai)

2. Improving Quality of Life

(1) Enhancing Convenience

  1. 2-1. Project to promote e-government
  2. 2-2. Quasi-zenith satellite system plan
  3. 2-3. Construction of a system to provide real-time observation data using low-earth-orbit satellites

(2) Improving Security and Safety

  1. 2-4. Next-generation transportation system project
  2. 2-5. Project to develop human resources in nursing care and child daycare
  3. 2-6. Project to improve regional frameworks for nursing care and child daycare

3. Revitalizing Regions

  1. 3-1. Super special zones for the revitalization (re-farming) of abandoned cultivated land and the development of new farmers
  2. 3-2. Super special zones for the development of partnerships among agriculture, commerce, and industry
  3. 3-3. Super special zones for the promotion of agricultural product exports
  4. 3-4. Project for regional revitalization through tourism

4. Creating a Low-Carbon, Recycling-Oriented Society

(1) Reforming the Demand Side of Energy

A. Spread of Energy-Saving Goods
  1. 4-1. Promotion of introduction by the household sector of machines meeting a certain standard that save energy or use new forms of energy
  2. 4-2. Project to promote the large-scale spread of heat pumps
  3. 4-3. Project to promote the large-scale spread of stationary fuel cells
B. Greenification of the Transport Sector
  1. 4-4. Active promotion of the project to promote the widespread use of electric vehicles (EV) and plug-in hybrid electric vehicles (PHEV) (Model Town Concept)
  2. 4-5. Project to improve and spread fuel-cell vehicles and the hydrogen supply infrastructure
  3. 4-6. Urban revitalization project through the introduction of new urban transportation systems

(2) Reforming the Supply Side of Energy

A. Development and Effective Utilization of Untapped Resources
  1. 4-7. Project to develop methane hydrate
  2. 4-8. Integrated utilization of biomass resources in a way that does not compete with food and feedstuff
  3. 4-9. Establishment of carbon capture and storage (CCS) technologies and technologies to harness untapped energy, such as low-grade coal, biomass, and waste plastics
  4. 4-10. Development and introduction of technologies for advanced and effective use of fossil resources
  5. 4-11. Space photovoltaics system
B. Steady Promotion of Nuclear Power Generation
  1. 4-12. Steady promotion of nuclear power generation

(3) Creating a Recycling-Oriented Society

  1. 4-13. Water resources project
  2. 4-14. Production technology infrastructure project oriented toward high-level recycling
  3. 4-15. Promotion of the smooth disposal of polychlorinated biphenyl (PCB) waste (low-level PCB waste in particular)
  4. 4-16. Low-carbon city revitalization project
  5. 4-17. Project to create a low-carbon, recycling-oriented model city

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