It's the mobile phone, stupid
A professor of economics at Kyoto University, who is also the director of the university's Institute of Economic Research has sent a letter to The Japan Times, analysing the decline of the Japanese economy from a variety of viewpoints.
His basic statement is that consumer demand is the main driver for the growth of the Japanese economy, and consumer demand wasn't stipulated enough to kick the economy out of recession over the last 13 or so years.
He outlines different reasons:
1.) "Japanese companies have failed to develop revolutionary consumer products that create substantial new demand instead of merely replacing existing products." as a consequence, demand from consumers is low.
This might be true, but another reason is that consumers don't want to consume if they are not certain of their own economic future. If I am threatened with unemployment, I don't want to spent. And in the end, Japan experienced deflation - which allowed consumers to wait until the next month with their purchase to check, if prices of a product have further declined - and so on.
2.) "Consumers tend to look for entertainment when they have enough of life's necessities. Movies, music, other forms of entertainment, sports and travel should attract more consumer spending. In today's Japan, services to provide entertainment are insufficient."
In this context, he also mentions the Internet as one of the culbrits that booksales are down. The professor fails to see that animation studios in Japan in their favourite Manga characters is taking the world by storm.
3.) "Television viewing has been on a downtrend, eroding the impact of television ads on consumer demand. As a result, fashion is losing its relevance. One factor is the deterioration in the quality of television programs, especially from private broadcasters."
Couldn't it be true that the decline of advertisement is caused by too much advertisement and the failure of the advertising industry to grasp how consumers learn about and purchase new products.
Finally, the professor manages to blame cell phones for the decline of the economy. Japanese telephone bills are too high, so they cannot buy items that would have a greater multiplier effect on other sectors in the economy. In addition, and since mobile phones are so small, their own multiplier effect is pretty limited.
Now, in the end, the professor writes that "Many young people addicted to cell-phone communications buy few books or even comics. They waste hours each day in text-message communications and Internet games with little time left over for other forms of enjoyment. The cell phone is the cause of the business slowdown as well as the erosion in young people's intelligence and scholastic abilities."
That tops it!!
His basic statement is that consumer demand is the main driver for the growth of the Japanese economy, and consumer demand wasn't stipulated enough to kick the economy out of recession over the last 13 or so years.
He outlines different reasons:
1.) "Japanese companies have failed to develop revolutionary consumer products that create substantial new demand instead of merely replacing existing products." as a consequence, demand from consumers is low.
This might be true, but another reason is that consumers don't want to consume if they are not certain of their own economic future. If I am threatened with unemployment, I don't want to spent. And in the end, Japan experienced deflation - which allowed consumers to wait until the next month with their purchase to check, if prices of a product have further declined - and so on.
2.) "Consumers tend to look for entertainment when they have enough of life's necessities. Movies, music, other forms of entertainment, sports and travel should attract more consumer spending. In today's Japan, services to provide entertainment are insufficient."
In this context, he also mentions the Internet as one of the culbrits that booksales are down. The professor fails to see that animation studios in Japan in their favourite Manga characters is taking the world by storm.
3.) "Television viewing has been on a downtrend, eroding the impact of television ads on consumer demand. As a result, fashion is losing its relevance. One factor is the deterioration in the quality of television programs, especially from private broadcasters."
Couldn't it be true that the decline of advertisement is caused by too much advertisement and the failure of the advertising industry to grasp how consumers learn about and purchase new products.
Finally, the professor manages to blame cell phones for the decline of the economy. Japanese telephone bills are too high, so they cannot buy items that would have a greater multiplier effect on other sectors in the economy. In addition, and since mobile phones are so small, their own multiplier effect is pretty limited.
Now, in the end, the professor writes that "Many young people addicted to cell-phone communications buy few books or even comics. They waste hours each day in text-message communications and Internet games with little time left over for other forms of enjoyment. The cell phone is the cause of the business slowdown as well as the erosion in young people's intelligence and scholastic abilities."
That tops it!!
posted by Andreas @ 2:39 pm
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