The Medium-Term Forecast for Japanese Industry
and the Challenges it Must Face:

Improving Japan's Quality of Life and Ensuring Full Employment Through Structural Economic Reform

3. Creation of a New Industrial Infrastructure Through Structural Reform

In order for Japan to adjust to the changes in the domestic and international environments and create a vigorous economy and society that can meet the challenges of the 21st century, the individual contributions of corporations will be essential, as a matter of course. However, it is also essential that the government undertake bold policy reforms simultaneously in order to create a new industrial infrastructure that will enable corporations to take risks and generate innovative ideas. The actions that the corporate community expects the government to undertake are as follows.

  1. Implementation of Measure to Stimulate the Economy
  2. (abridged)

  3. Deregulation
  4. (abridged)

  5. Corporate Tax Reform to Stimulate the Business Activities
  6. (abridged)

  7. Development of a New Social Infrastructure
  8. In order to raise Japan's standard of living and strengthen the foundation upon which industry depends, we must create a new social infrastructure supported by an improved information and telecommunications system, a revamped educational system and an expanded research and development network -- all of which will complement the continued construction of "hard" infrastructure. As for the more conventional forms of public works projects, an allocation system of public spending must be undertaken since this system has become too rigid and is no longer responsive to Japan's changing needs. As well, efficiency in public works projects should be improved by contracting out the planning and design work which is now done by the national and local governments.

    We must also work to improve the quality of life through expanding government support of programs to address the major social changes occurring in Japanese society -- including the rapid aging of the population, the decreasing birthrate and the increase of women in the workforce. To accomplish these initiatives, we must dedicate specific funding within the new 630 trillion yen the Basic Plan for Public Investment and we hope that the implementation of the program will be expedited.

  9. Support for New Industries and Businesses
  10. (abridged)

  11. Creating a Mobile Workforce and Supporting Human Resource Development and Re-Education
  12. We must create a mobile, vital workforce, if we are to build a vigorous society and continue sustained economic growth in the time of major change in both the domestic and international economic climates. Management and labor unions must re-evaluate Japan's unique employment practices and begin to create a more "open" employment system. At the same time, the government must develop a system to accelerate the mobility of the workforce, by liberalizing the regulations on provision of temporary staff, making pensions portable and revising the tax on retirement allowances, which now favor those who remain in long-term service in one company.

    It is also essential to reform our educational system if we are to build a workforce of creative individuals and to establish a re-education program to enable mature workers to change careers in order to keep pace with the needs of the changing industrial structure.

  13. Strengthening R&D to Address Environmental Problems and Environmental Cooperation in Developing Countries
  14. (abridged)

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