It left American executives quaking in their loafers and cheered a generation of Japanese salarymen. “The extent of Japanese superiority over the United States in industrial competitiveness is underpublicised,” trumpeted Ezra Vogel of Harvard University 30 years ago in “Japan as Number One”, which became one of the most-discussed business books of its time.
Yet things didn’t quite work out the way Professor Vogel expected. Japanese industrial production rose by 50% in the decade after 1980—a remarkable trajectory for a country crammed into an area the size of Montana. But growth was driven by financial leverage and overinvestment. Property and share prices bubbled, rising as much as sixfold.
The bubble’s collapse, beginning 20 years ago, led to almost two decades of economic doldrums. It took 15 years for industrial production to surpass the 1991 peak. In the current crisis it collapsed to levels last seen in the 1980s. In time America’s fearful “Japan bashing” gave way to sniggering, then indifference. Last month a poll of market professionals by Bloomberg, a news provider, put Tokyo last among several big cities as a financial capital. In the 1980s all of the world’s top ten banks measured by deposits were Japanese.
Why didn’t Japanese business regain momentum?
Japan as number one
Land of the setting sun
Nov 12th 2009
Japan’s economy was on course to surpass America’s. What happened?
The Economist
http://www.economist.com/node/14861545
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One side of the success story
Jan 19th 1980
Japan As Number One
The Economist
http://www.economist.com/node/14838406