PESTLE Analysis of Japan
1.Analyse Japan’s recent developments and its contribution to the Global economy (Max 750 words)
2.Critically evaluate 3 keys points that the new government should prioritise over the next 2-3 years and justify how Japan might emerge from its current situation.
Japan’s economy is highly developed and market oriented economy. It is third largest economy because of its growth. Due to its innovative technology approach, it is called world’s best innovative country. In task 1, this report examines the recent development in Japan through its political, economic, social, technological, environmental and legal factors. It emphasis on political factors which help in development of global economy. Japan’s economy is helping the world by contributing major part in GDP. Further, it will put emphasis on changes in Japan that allow low skilled workers to get work in Japan. Later on, it will discuss about technology of japan, new technological innovation of Japan. In environmental factor, report will focus on environmental changes that Japan has made to keep the country sustainable as well as clean. It will highlight the changes in law of Japan that help the economy globally. In second task, the japan has many hindrances to economic growth. Majorly japan is trying to expand its energy venture floating on the water bodies. The more aging population is another drawback, which can show their worth in tourism sector. Japan has to increase return on equity as it has many companies that attract foreign investment. Feed-in tariff system allows the accelerated use of renewable resources like wind or solar energies in form of electricity.
Political factors- there are various political factors that help in development of Japan. In the last years, Japan has developed the economy by the development of e-commerce (Sirois, 2018). In Japan, more than 600million people are using internet that is the biggest advantage to Japan economy. Japan is involved in G8 and ASEAN whose aim is to solve the problems across the world. Japan also has good relations with South Korea, China, Taiwan and Russia. In 2013, Japan was the biggest e-commerce market in the world that enables other countries to use such practices.
Economic factors- In last years, Japan growth rate in GDP was $4,949,272 million that indicate the growth in Japan (Country economy, 2017). Reports suggest if Japan continue at this rate, it will soon become the country with highest GDP rate. Development in Japan is possible due to its citizens. Japan population add more and more value in the society. Economic of Japan is so strong.
Japanese culture contributes a major part to their society. Japanese schools has special program for this. In schools, students discuss, resolve problems and recommend president for class to lead discussions. By doing this, Japanese schools allow students to develop their skills for future. Due to population crisis, Japan is working hard to change its strict immigration policy to allow low skilled workers in their country. For this, Japan has started new visa facilities for non-professional workers (Yoshida, 2018). Japan economy contributed their major part in the global economy by exporting steel products, automobiles (Amadeo, 2018).
Economic Factors
Social factors- there are various social factors that support the global economic development of Japan. The current population of Japan is 12.7 Yen which paves the way for growth of overall country. Due to its population, Japan has most talented workforce who is scientist as well as technology expert.
Due to its best internet facilities, it gives the way to big companies like Facebook, Amazon, Google, You Tube and Yahoo. Internet services have provided various benefits to the social and cultural life of Japan.
Technological factor – Japan has most effective telecommunication system in the world. It has most advanced technology in every field like Hospitals, restaurants and airports. Japan in today’s economy is leader in innovative aspects of business. In spite of various innovations, Japan contribution best in health care all over the world (Foreign policy, 2018).
Japan gave the world, Bullet train that is best technological innovation in Japan (Marsh, 2017). Due to its best technological innovation, Japan is using best technology for sustainable development (Sachas, 2016). Japan has introduces various technologies which is helpful in expansion of many industries all over the world. In the upcoming year, Japan will be launching various new technologies so to help other countries. Except bullet train, various technologies help the global economy being innovative. Best technologies of Japan includes vending machines, toilet paper making machines which helps the people in making toilet papers by the wastage of office, braille technology on beer cans which help the people in distinguishing between non-alcoholic drinks and alcoholic drinks (Ranker, 2018).
Environmental factors- due to various environment issues in Japan, Japanese government has done research and adopted the clean technology, which helps in the development of global economy (Smith, 2015). Japan is using most refined recycling system in the world that helps the global economy in minimising waste. To control pollution in the economy, it is setting targets to control pollution and providing more and more education as well as healthcare facilities.
Legal Factors- Japan has started various reforms in law that help the economy in becoming better economy. Japan has started e-commerce by which it tried to remove the unfair trade practices. The main motive behind this is to contribute more and more globally. It started putting restrictions on trading with competitions. In addition to this, Japanese government put emphasis on internet transactions, so that people become aware of the latest technologies (CPI, 2017).
Social Factors
As for now, japan has more aging population. Japan should open such opportunities in which aging population can benefit the economy through the existing potential that the country already has, which is advanced technology. For the next 2-3 years, Japan should focus on developing tourism hubs in the country to attract the people. As if now, Japan does not have sufficient inflow of revenue through tourism (Seaton, & Yamamura, 2015). Tourism directly contributes to the GDP of the country. Japan should focus on providing leisure industry to the people. Japan should focus on constructing hotels, resorts, airports and improving traditional heritage that can attract more people with more revenue. The main benefit of tourism is generation of employment (Christian, 2015). Aging population can help in giving assistance to this industry like for the reception services. It increases the jobs within the travel industry. Many indirect contributions cannot be avoided. The capital investment increases by various sectors like passenger transportation system, visitor`s residence availability. It also increases the supply of goods from domestic industry. By increasing the number of hotels, the requirements also increases to enhance support system by various products. Travel and tourism invites investment. Through tourism trade become advanced by lowering prices. Travel and tourism also helps in development of infrastructure by improving the urban-rural network. Tourism also helps in improvement in the lifestyles of local people.
Japan`s economy already has a great and huge unemployment. Japan has a threat of economic collapse. Japan is still struggling to recover the affected areas of 1991 crashes. It already took to more than 12 years to recover from such a crash by japan GDP. Due to crash, japan is still bearing the load of fiscal deficit. The economic crisis appeared to be followed by economic boom where the valuations of assets were speculated and shown a false boom. Japan almost lost a decade because of great recession (Yeager, 2018).
On realising that the asset bubble was unsustainable. Japan raised interest rates to cover the speculation. But it totally led to stock market crises, as the borrowers failed to make interest and the principal amount. Japan`s public started spending less and saving more, has reversely affected the aggregate demand. As japan has high potential in technology. Japanese corporates are profitable. The leverage extension is also low. Japanese companies should focus on increasing return on equity and deliver cash to them (Eder, 2016).
Technological Factor
Japan is in poor countries especially because of its lack of natural resources. The natural resources are damaged because of radiation effect by 1945 disaster also the emission from Fukushima have proven harmful effects on the ecosystem. Various radioactive atomic energies are tested under the sea polluting the whole sea. Government should ban them as the radiations affects the natural resources of the countries also the tectonic plates starts shivering during the atomic eruption under the seas (Yasuba, 2017). The frequency of movement in tectonic plates increases which can cause various natural disaster like flood and earthquake. The land is limited in japan. The mountains, islands limit the flat ground. The government can try to remove mountains in far areas to establish the nuclear energy which can fulfil their needs by reducing imports (werber, 2016).
The country should focus on establishing its own nuclear power by using its technology. The country can take a risk to construct floating solar farms on water bodies. Japan ministers should take steps in investing majorly in its renewable resources, so that it need not depend more on imports (Patrick, 2012). Additionally, the government have to in of focus on minimising the potential damage by radiation so that at least the water and food is quality can be maintained. Japan relying on other countries for nuclear energy becomes its weakness. Japan should invest more in large-scale operation on resources which it really has potential in. Together adapting energy production on large scale can reduce its cost by assisting installation of machinery in one take. But the main problem it don`t have much space to store that produced energy. Japan should arrange cheap gasoline by either producing or getting it from poor country. Now, Gasoline costs are three times higher in japan than in US. Japan uses the energy efficiently to develop cement, steel and electricity than other countries. Japan has started taking steps to accelerate or increase investment in renewable energy through Feed-in tariff system that forces to purchase the electricity from various wind and solar sources but spreading electricity to urban areas will incur a huge cost.
Waste management is the biggest problem that Japan is facing. A huge problem for pollution is found in Japanese industries. So to avoid this issue, government of Japan should put effort to manage the waste of industries, government should made such technologies which will help Japan in recycle the wastage material. For stoping pollution, Government should shift industries that are located in urban area. By doing this government can increase the tourism in Japan like other countries. For the next 2-3 years, Japan government should put emphasis on controlling pollution and removing environmental issues (Hays, 2013).
Environmental Factors
Conclusion
Through the above discussion, it can be concluded that Japan is world’s third largest economy due to its GDP growth as well as development. Technology of Japan is the main factor by which it is best leading country in the world. In spite of its various issues related to environment, japan government has started some policies to control the problems in the industries. However, it is better understood that Japan has made efforts in developing the global economy by its technology innovation. Japan has started a law that enable the unprofessional to come there and get job. Legal changes in Japan have made several changes in various countries. Japan has most of technological resources. Nevertheless, some problems are faced by japan, which hinders its economic growth. Country with maximum youth will undoubtedly have more ability to work and provide worth to the economy, but Japan has major population of aging people. Aging people can assist in growing tourism. Tourism also contributes to GDP of the country. Japan also has less natural resources that forces them to incur more imports of energy. Japan has its technology to use as a potential in growing its nuclear plants. After the crisis, 1991 japan struggled to spend a lot of fiscal deficit just to recover the loss incurred.
References
Christian, (2015). Economic Contribution of Travel and Tourism. Retrieved from: https://www.aalep.eu/economic-contribution-travel-and-tourism
Werber, C. (2016). Japan’s innovative solution to its energy and space crisis: The world’s largest floating solar power plant. Retrieved from: https://qz.com/603830/japans-innovative-solution-to-its-energy-and-space-crisis-the-worlds-largest-floating-solar-power-plant/
Patrick, S. M. (2012). Why Natural Resources Are a Curse on Developing Countries and How to Fix It. Retrieved from: https://www.theatlantic.com/international/archive/2012/04/why-natural-resources-are-a-curse-on-developing-countries-and-how-to-fix-it/256508/
Yasuba, Y. (2017). Natural Resources in Japanese Economic History. Retrieved from: https://cliometrics.org/conferences/ASSA/Jan_94/Yasuba/index.html
Hays, J. (2013). Environmental Issues and Pollution in Japan. Retrieved from: https://factsanddetails.com/japan/cat26/sub162/item870.html
Yeager, T. (2018). Institutions, transition economies, and economic development. US: Routledge.
Eder, N. R. (2016). Poisoned Prosperity: Development, Modernization and the Environment in South Korea: Development, Modernization and the Environment in South Korea. US: Routledge.
Seaton, P., & Yamamura, T. (2015). Japanese popular culture and contents tourism–Introduction. In Japan forum, 27(1).
Freu, K. (2016). Pestle analysis of Japan. Retrieved from: https://pestleanalysis.com/japan-pestle-analysis/
Foreign policy, (2018). Japan is a technology and innovation leader. Retrieved from: https://foreignpolicy.com/sponsored/japanus/discovery/
Gray, A. (2017). The world’s 10 biggest economies in 2017. Retrieved from: https://www.weforum.org/agenda/2017/03/worlds-biggest-economies-in-2017/
Smith, B. (2015). Environmental Policies of Japan. Retrieved from: .https://www.azocleantech.com/article.aspx?ArticleID=539
CPI, (2017). Competition Law in Japan: An Overview of Developments, 2016 to mid-2017. Retrieved from: https://www.competitionpolicyinternational.com/competition-law-in-japan-an-overview-of-developments-2016-to-mid-2017/
Marsh, J. (2017). Earprints, tail therapy and calorie scanners: Japan’s latest inventions. Retrieved from: https://edition.cnn.com/2017/11/16/asia/cea-tec-on-japan/index.html
Lockwood, W. W. (2015). Economic Development of Japan. New Jersey: Princeton University Press.
Country Economy. (2017). Japan GDP- Gross Domestic Product. Retrieved from: https://countryeconomy.com/gdp/japan?year=2017
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