Japan’s new vision for economic growth | East Asia Forum

Revised Implementation Plan for Prime Minister Fumio Kishida’s ‘New Capitalism’ Initiative

Author: Yuri Okina, Japan Research Institute

In June 2023, the Japanese government published a revised version of the implementation plan for Prime Minister Fumio Kishida’s ‘new capitalism’ initiative. The original 2022 version, titled ‘Grand Design and Action Plan for a New Form of Capitalism’, had outlined ambitious goals calling for increased investment in people, start-ups, green and digital transformations, science, technology, and innovation.

These investments were intended to both foster economic growth and solve social problems, such as the long-term stagnation of workers’ wages and climate change. The 2023 revision builds on the original plan by establishing a more concrete strategy to increase wages, improve productivity, and achieve a virtuous cycle of sustainable growth and equitable income distribution.

Labour Market Reform

To improve productivity, smooth labour mobility into growth sectors is crucial. The prominence of labour market reform as one of the main themes of the 2023 revision is a promising sign. The labour market reform plan aims to improve individuals’ ability to acquire new

SDGs, Targets, and Indicators

1. SDG 8: Decent Work and Economic Growth

   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
   • Indicator 8.2.1: Annual growth rate of real GDP per employed person.
   • Indicator 8.2.2: Proportion of youth (aged 15-24 years) engaged in education, employment, or training.

2. SDG 10: Reduced Inequalities

   • Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, to progressively achieve greater equality.
   • Indicator 10.4.1: Labour share of GDP, comprising wages and social protection transfers.
   • Indicator 10.4.2: Proportion of people living below 50 percent of median income.

3. SDG 17: Partnerships for the Goals

   • Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships.
   • Indicator 17.17.1: Amount of approved funding for developing countries to promote the development, transfer, dissemination, and diffusion of environmentally sound technologies.

Explanation:

1. SDG 8 is addressed in the article through the discussion of increasing productivity, improving wages, and achieving sustainable growth. The targets identified are 8.2, which focuses on economic productivity, and the indicators mentioned are 8.2.1 and 8.2.2, which measure GDP growth per employed person and the proportion of youth engaged in education, employment, or training.

2. SDG 10 is connected to the article’s discussion of reducing inequalities, particularly in terms of wages and income distribution. The target identified is 10.4, which emphasizes adopting policies for greater equality. The indicators mentioned are 10.4.1, which measures the labour share of GDP, and 10.4.2, which measures the proportion of people living below 50 percent of median income.

3. SDG 17 is relevant to the article’s emphasis on partnerships and collaboration between different stakeholders. The target identified is 17.17, which promotes effective partnerships, and the indicator mentioned is 17.17.1, which measures funding for developing countries to promote environmentally sound technologies.

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Source: eastasiaforum.org

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