Japan Echo Web

Shifting to a Country that Increases Gross National Income (GNI) Instead of gross Domestic Product (GDP)

The Great East Japan Earthquake has forced Japanese companies to renew their awareness of the risks of operating in Japan. Meanwhile, the extremely strong yen, at less than 77 yen to the dollar, has become a persistent condition. Japanese companies, mainly manufacturers, are hit hard by the reduced export competitiveness resulting from the exchange rate. The yen is expected to remain strong for some time since investors have no choice but to buy yen given the euro zone debt crisis and the slumping economy in the United States.

On top of this, rapid aging of society and the declining birthrate have made falling domestic demand inevitable. This has accelerated a trend in which even companies from domestic demand-oriented industries, such as retail and service, seek new opportunities in overseas markets. It is time we stop regarding overseas shifts of companies as a negative movement that hollows out domestic industry, reduces domestic employment and income, and eventually reduces consumption. Instead, we now need to seriously consider how to make Japan an “investment-oriented nation” that invests wisely overseas, earns profits and brings those profits back to Japan to boost income.