Government-industry cooperation, a strong work ethic, mastery of high technology, emphasis on education and a comparatively small defense allocation (1% of GDP) have helped Japan advance with extraordinary speed to become one of the largest economic powers in the world along with the US and European Union. For three decades overall real economic growth had been spectacular: a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s largely because of the after effects of overinvestment during the late 1980s and domestic policies intended to wring speculative excesses from the stock and real estate markets. Government efforts to revive economic growth have met with little success and were further hampered in 2000-2001 by the slowing of the US and Asian economies.
Distinguishing characteristics of the Japanese economy include the working together of manufacturers, suppliers, distributors and banks in closely-knit groups called keiretsu; the powerful enterprise unions and shunto-; cozy relations with government bureaucrats, and the guarantee of lifetime employment (shushin koyo) in big corporations and highly unionized blue-collar factories. Recently, Japanese companies have begun to abandon some of these norms in an attempt to increase profitability.
The government of Junichiro Koizumi has enacted or attempted to pass (sometimes with failure) major privatization and foreign-investment laws intended to help stimulate Japan's dormant economy. While some of these laws have been enacted, the economy has yet to respond, and Japan's aging population is expected to place further strain on the economy in the near future.
Agricultural sector
Japan's small agricultural sector is highly subsidized and protected, with government regulations that favor small-scale cultivation instead of large-scale agriculture as practiced in North America. Imported rice, the most protected crop, is subject to tariffs of 490% and restricted to a quota of only 3% of the total rice market. Although Japan is usually self-sufficient in rice (except for its use in making rice crackers and processed foods), the country must import about 50% of its requirements of other grain and fodder crops, and relies on imports for its supply of meat. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch, prompting some claims that Japan's fishing is leading to over depletion in fish stocks such as tuna. Japan has also sparked controversy by supporting quasi-commercial whaling.
Industrial sector
Industry, one-fourth of Japan's GDP, is heavily dependent on imported raw materials and fuels. Internationally, Japan is best known for its automotive and electronics industries, as the home of big manufacturers such as Toyota, Honda, Matsushita, Sony, Nissan, and Toshiba. Japan also holds a large market share in high-technology industries such as semiconductors, industrial chemicals, machine tools, and (in recent years) aerospace. Construction has long been one of Japan's largest industries, with the help of multi-billion-dollar government contracts in the civil sector. Robotics constitutes a key long-term economic strength, with Japan possessing 410,000 of the world's 720,000 "working robots."
Service sector
Japan's service sector accounts for about three-fourths of its total economic output. Banking, insurance, real estate, retailing, transportation, and telecommunications are all major industries. The Koizumi government is attempting to privatize Japan Post, which is also one of the country's largest company for savings and insurance services, by 2007.
For more information, please visit Japan at Wikipedia.org, Economy of Japan, and List of Japanese Companies.