Japan is not No. 1. After 20 years of stagnation-punctuated decline, it should not be news to anyone that Ezra Vogel got it wrong in his 1979 best-seller, ¡°Japan as Number One: Lessons for America.¡± Yet, in their endless navel-gazing and wheel-spinning (which, sadly, continues even in the face of natural and nuclear disasters of historic proportions ¡ª exhibit No. 1 being the political class¡¯s recent solipsistic no-confidence motion), most of Japan¡¯s governmental elite continues to behave in the same ¡°if it ain¡¯t broke, don¡¯t fix it¡± way they did when Japan was top dog. Politicians talk today about the need for far-reaching and innovative policies. But talk is cheap and action has been meager.
One key measure of a country¡¯s economic well-being is its global competitiveness. According to the IMD business school¡¯s annual survey, Japan was ranked No. 1 in competitiveness in 1989, the first year the survey was conducted; by 2010, it had sunk to No. 27, behind China, South Korea, Taiwan, the United States and many others.
Until recent events shifted people¡¯s attention to more immediate concerns, there had been a lot of teeth-gnashing as Japan at last slipped behind China as the world¡¯s second-largest economy. This concern is misplaced; given its vast population and sustained growth, China¡¯s ascendance was just a matter of time. The real tragedy is the interminable downward spiral in Japan¡¯s competitiveness.
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