Japan and the Asian Dragons: Economic Growth Strategies

The Economic Success of Japan

The Japanese economy is the second largest worldwide after the United States. Cooperation between government and industry, the Japanese custom of hard work, and mastery of technology have led to the economic success Japan enjoys today in less than half a century.

Factors of Economic Growth

Japan's rapid economic growth was due to:

• Investment from the U.S. after World War II.
• Government Policies: The Japanese government, in collaboration with private companies, opted for industrialization and technological development.

The strategic sectors of the Japanese economy, as is widely known, are manufactured goods and technology, especially cars, electronics, and the steel industry. The finance sector is currently developing very largely due to its currency and the guarantee of lifetime employment for most workers. Notable features of the Japanese economy include a strong unity between producers, manufacturers, and distributors gathered in groups known as keiretsu—strong business associations.

The Rise of the Asian Dragons

Asian Dragons is the name by which four countries and territories of the region have been known: South Korea, Taiwan, and the city-states of Singapore and Hong Kong. Across the region, the four dragons have experienced the highest economic growth and the greatest potential for development over the last three decades.

Characteristics of the Economic Strategy

These countries are characterized by an integrated and diversified economy, high ratios of foreign trade, and exports that include a high range of industrial products. You can say that the overall characteristics of the economic growth strategy developed by these newly industrialized economies have been informed by:

• A growth strategy oriented toward the outside (like Japan).
• Plentiful and cheap labor.
• Support for industrial development, with differences depending on the economy, through investment support, subsidies, export subsidies, and other discriminatory measures.
• Fiscal discipline.
• Public intervention in the economy, though not widespread.
• A relatively large internal market and very relevant savings and investment rates.

These countries are characterized by a diversified and integrated economy, high ratios of foreign trade, and exports that include a high range of industrial products.