TOKYO, Jan. 17, 2020—In December 2020, as reported earlier, the Japanese government blared a new industrial policy for the first time in years, a sharp green shift to next-generation energy sources by 2050 from fossil fuels. Corporate responses to the announcement was muted as they saw the plan as next to impossible to achieve and costly. More than that, history of similar Japanese government plans all failed, leaving the world’s fastest aging country with hardly any industry to general much-needed income.
Yoshihide Suga, the increasingly unpopular prime minister, told a Dec. 25 news conference that his ‘green growth strategy towards 2050 carbon neutrality’ to achieve carbon neutral in 2050 would create a new dynamic economic and environmental paradigm. (https://www.meti.go.jp/english/press/2020/1225_001.html) It seeks to generate up to 60 percent of electric power generation with renewable energy, now at 20 percent; ban sales of gas-powered motor vehicles in mid-2030; significantly boost hydrogen production to be used for motor vehicles, plus numerous other measures.
Shortly before the announcement, the gist of it was released a few days earlier. Industry responses were that the plan was unrealistic and difficult to do. Toyota Motor Corp. CEO immediately blasted: ‘the auto industry’s business model will die’ if motor vehicles’ powertrains are replaced by electric motors.
Akio’s comment reflected his concerns that Toyota’s suppliers would be critically impacted by the powertrain shift as EVs use far fewer auto parts than conventional engines so the automaker won’t need as many suppliers as now, as well as doubts about the government’s measures to switching all new cars to EVs in the mid-2030.
True to such skepticisms, anecdotal evidences point to many hurdles for Japan to clear for the grand plan, e.g., whether the country can build sufficient numbers of off-shore windmills and how to lower EVs’ lithium-ion battery prices of Japanese battery makers that are few and unproductive.
Given that Japanese industry’s history since the country ended its locked society policy and opened its ports to imports and foreigners in 1854 has been one of failure after failure, and defeat after defeat, the green growth strategy looks hollow and a work of bureaucrats that must have wasted hundreds of hours to draft it, all on the desk and drawing on data and information from the internet.
The Ministry of Economy, Trade and Industry, which wrote the new strategy is infamous for drafting all sorts of papers that they brand as ‘vision,’ ‘policy,’ ’strategy,’ ‘’plan,’ and ‘program,’ This is the government entity that presented to the former prime minister, Abe Shinzo, the ‘Go To Travel’ and ‘Go To Eat’ campaigns that subsidize Japanese tourists’ domestic travels and dining and ended up spreading the Covid-19 virus across the country – an undeniable, clear disastrous failure.
The first failure since Japan’s opening in 1854 to the world was the silk-making industry. Japanese silk yarn dominated the world in latter half of the 19th century through 1929, commanding the top share in key export destinations like the United States and Europe. Silk exports accounted for 40 to 70 percent of total Japanese exports in that period. The industry suffered a devastating damage after the 1929 Great Depression and it is now nonexistent.
The industry, which was started by a private, Eiichi Shibusawa, was put under government controls over decades and given a gradual decimation to death.
Cotton yarn and fabric-manufacturing also underwent a similar destiny and disappeared in the 1970s, as well as numerous other industries that still are surviving but positioning near the bottom of global ranking, including steel and electrical products, despite the fact that the trade ministry tried to promote them to dominate the world.
One has to wonder why the Japanese industries that listened to the government failed. The reason can be traced to the fact that Japanese bureaucrats have not been immersed in real manufacturing and business practices, drafting ‘visions’, ‘policies,’ and ‘plans’ as their desk work in search of greater added value industries. To their eyes, silk and cotton were thin value industries.
So, the Japanese industry with the government at the helm next went to steel, metal fabrication such as toys and kitchen ware, then on to electrical and electronics including ‘transistor radios’ that made Sony world-famous, television sets and audios, further to semiconductors, PCs and smart phones.
Those industries are still producing but when compared with China and other countries, at a pittance and likely to vanish like silk and cotton in several years as they will be overwhelmed by imports from China, Korea and elsewhere. And bureaucrats of course are not helping their demise.
Few new industries are remaining for bureaucrats to cultivate added values but as they have done with the green growth strategy, they will continue churning out papers that few bother to read so bureaucrats can continue creating their own jobs.
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Insight Into the Future