Industrial Policy in Japan

Japanese industrial policy had been well known to be about specific sectors and technologies. About 1990 economic growth stopped after decades of a remarkable process of catching up with the US. The potential to borrow technologies and ideas from other countries has become exhausted and Japan had to develop own technologies. The article descibes structural reforms in competition policy, corporate governance, management of intellectual property and mobility of researchers. Industrial policy has now more to do with horizontal policies and framework conditions than with targeting. Even if the “new economic growth strategy” – drawn up by the economics ministry [Ministry of Economy, Trade and Industry (METI)] and improved by government in 2006 – defines industrial areas with strong growth potential, these areas are obvious and there are no instruments available to promote them specifically. METI has become a proponent of government wide deregulation and will play as a leader of reforms.