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Cool Japan Strategy Cool Japan Strategy January 2012 Creative Industries Division Ministry of Economy, Trade and Industry The Japanese economy—status and issues: Population decline and decreased growth potential Japan’s nominal GDP decreased by 55 trillion yen over the three years from 2008 to 2011. Japan's real economic growth rate fell to 1% and below during the 2000s. In the future, the declining population of productive age is expected to lower growth potential. 55 trillion yen decrease ○ Nominal GDP (annualized), January–March 2008: 517 trillion yen in nominal GDP in ○ Nominal GDP (annualized) April–June 2011: 462 trillion yen three years Past and projected change in Japan's population of Past and projected economic growth rates productive age (10,000 persons) 00～–1414 population歳人口 1515–～6464 population歳人口 6565 歳以上人口and older population (Change（年度平均変化率：％） in average annual rate: %) Impact就業者数の変化の影響 on number of persons employed 14,000 Productivity生産性（就業者一人当たり実質 (real GDP per employed person)GDP ）成長率growth rate 13,000 4.5 Real実質 GDPGDP growth成長率 rate 12,000 2,941 4.0 1.2 11,000 10,000 3.0 9,000 8,000 2.0 3,764 1.5 7,000 3.3 0.7 0.4 0.3 0.5 1.0 6,000 8,128 1.0 1.0 1.0 1.0 5,000 0.0 4,000 4,930 -0.3 -0.6 -0.7 3,000 -1.0 2,000 19801980s年代 19901990s年代 20002000s年代 20102010s年代 20202020s年代 (fiscal（年度） years) 1,000 1,648 821 0 Note: Labor force participation rates by sex and age are assumed to remain level from 2009. The increase in the labor productivity rate is fixed at 1.0%. 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Sources: Calculated using Cabinet Office, "System of National Accounts"; Ministry of Internal Sources: Actual values: Ministry of Internal Affairs and Communications, "Japan's Estimated Population."(年) Affairs and Communications, "Labor Force Survey"; National Institute of Population Future projections: National Institute of Population and Social Security Research, "Japan's and Social Security Research, "Future Population Estimates" (midrange estimates for Future Population Estimates (December 2006 estimates)" (midrange estimates). births and deaths). 1 The Japanese economy—status and issues: Negative employment impacts from hollowing out With the rapid rise of the yen causing a sudden acceleration of the shift to overseas production, new businesses and industries in Japan may not be able to mature fast enough to keep up. If the domestic automobile industry is hollowed out, service industries may not be able to absorb displaced employment. This could result in the loss of 600,000 jobs. Past and projected change Projected employment if hollowing out occurs in domestic automobile production (Comparison of numbers employed in 2009 and 2015) (10,000（万台） vehicles) 輸出台数No. vehicles exported 国内販売台数No. vehicles sold in Japan If automobile 1000 国内生産台数 Projected Ordinary No. vehicles produced in Japan industry hollows scenario out 800 Manufacturing industries -20,000 -450,000 -470,000 600 Service industries, -240,000 400 etc. +90,000 -150,000 200 Increase/decrease -690,000 in jobs +70,000 -620,000 0 199394 95 96 97 98 99200001 02 03 04 05 06 07 08 09 10 15 20 Sources: Created from Japan Automobile Manufacturers Association and Cabinet Office, "SNA (Year)（暦年） Input-Output Tables" and "System of National Accounts"; Japan Institute for Labor Policy Source: Japan Automobile Manufacturers Association and Training (2011), "Labor Force Demand Estimates‖. Note: The number of vehicles produced in Japan for 2011 and beyond assumes Note 1: The "ordinary scenario" uses estimated values from the Japan Institute for Labor Policy continuation of the average annual growth rate from 2005–2010. The number of and Training. For "if the automobile industry hollows out," the impact on employment if vehicles exported for 2011 and beyond assumes a 50% decrease by 2020. domestic automobile production follows the trend shown in the table at left was estimated using the Input-Output Tables. Note 2: Numbers of persons employed in 2009 were as follows. Manufacturing industries: 10,730,000, Service industries: 40,570,000, Other: 11,520,000, Total: 62,820,000. 2 Towards the future Japanese economy The Japanese economy has fallen into a vicious circle of stagnant domestic demand. Incorporation of global demand, regional economic revitalization, and transformation of industrial structure are necessary. This eliminates uncertainty by ensuring the employment of young people and the survival of medium and small businesses. "Defensive" corporate management → Stagnation in value added 1) Unearthing of 2) Incorporation of latent domestic demand global demand Continued deflation Worsening employment situation → Decline of the anticipated growth rate → Declining in labor income Vicious circle of stagnant domestic 5) Appropriate 3) Smoothing the transformation macroeconomic management demand of industrial structure Increased anxiety about the future Slumping domestic consumption Higher domestic reserves 4) Elimination of national anxiety about the future 3 The world loves Cool Japan In Europe, the United States, and Asia, there are many popular Japanese products and services (creative industries). In addition to anime and manga, these include food culture, express delivery services, Japanese-style inns (ryokan), and traditional arts and crafts. → Capitalizing on the popularity of "Cool Japan" can accomplish the following: 1) unearthing of domestic demand, 2) incorporation of foreign demand, and 3) transformation of industrial structure. These accomplishments can secure new income sources and jobs, leading to regional economic revitalization. Anime and manga ○ The Japan Expo, held on June 30 through July 3, 2011, in Paris, received about 200,000 visitors over those four days. ○ The New York Anime Festival, held in New York City on October 8 to10, 2010, received about 18,000 visitors. Food culture Express delivery services Japanese-style inns Traditional arts and crafts Ajisen Ramen Yamato Transport Co. Kagaya Kumano makeup brushes Yamato Transport is expanding its express delivery services across Originating in Ishikawa Prefecture, Kumano (Hiroshima) Asia. Japanese-style services the company has opened a makeup brushes are highly The chain serving Kumamoto- such as designated delivery time Japanese-style inn (ryokan) in regarded and have many style ramen has restaurants in and refrigerated packages are Taipei, where it implements fans in Hollywood and 63 Chinese cities. highly regarded in China. "Japanese hospitality." elsewhere overseas. 4 Turning Cool Japan into a revenue source Japan's fashion, food, and content are very popular overseas, but they are not necessarily profitable. Strategic expansion overseas can turn popularity into added value, making them into revenue sources. State of fashion from Japan State of Japanese restaurants Japanese fashion magazines are very popular in China. ■ There are about 9,000 restaurants in the United States that advertise themselves as serving Japanese food (2.5 times as many as 10 years ago). Rankings of Chinese women's fashion magazines (second half of 2009) → Japanese-owned restaurants account for less than 10% of the total. (They are most commonly run by immigrants from 1 Ray Japan Chinese edition Japan (Shufunotomo Co.) other Asian countries.) 2 VIVI Japan (Kodansha Ltd.) ■ There are 200–300 Japanese restaurants in Paris 3 ef Japan (Shufunotomo Co.) → They are polarized between Japanese owned ("upscale") 7 GLAMOROUS Japan (Kodansha Ltd.) and non-Japanese owned ("mass appeal") restaurants 10 an-an Japan (Magazine House) State of development of so-called Japanese restaurants Source: Century Chinese International Media Consultation Inc. around the world → However, Japan's textile industry has a low export rate. Region No. of restaurants North America about 10,000 （単位：(Unit: 100million万ドル） dollars) Asia about 6,000–9,000 30,000 27,256 日本だけ、 Exports輸出 Imports輸入 23,870 Japan's export rate is Europe about 2,000 25,000 uniquely輸出の割合が極端に低い low South America about 1,500 20,049 18,684 20,000 Russia about 500 14,117 13,913 15,000 Source: Council of Advisors for the Recommendation of Japanese Restaurants Outside Japan, Ministry of Agriculture, Forestry and 9,166 Fisheries 10,000 3,744 Success stories 5,000 2,183 485 ● Pokémon-related products have brought in worldwide revenue 0 of about 3 trillion yen. This is about one-fourth the size of the 日本Japan South韓国 Korea フランスFrance イタリアItaly Germanyドイツ 1:50 1:2 1:2 1:0.67 1:2 entire domestic content market (about 12 trillion yen) in 2009. Source: "Textile Handbook 2009" Source: "Japan and the World Content Database vol. 4 2010" (Humanmedia Inc.) 2:100 1:2 1:2 3:2 1:2 5 Cool Japan's potential The size of the world market for culture industries (1) will be more than 900 trillion yen (estimate for 2020). The aim is to capture 8–11 trillion yen of this. Five culture industries United Kingdom Russia South Korea (fashion, food, media content, tourism, Germany skilled manufacturing/regional 3% 10% 4% 396 3% 486 specialties) 287 172 China 107 156 387 227 322 297 422 132 France 2009 2020 2009 2020 227 337 2009 2020 Unit: 100 billion yen United States 2,281 4% 2009 2020 11% 25 Turkey Japan 4% 272 425 1,550 1% 2,333 219 346 4% 2009 2020 734 863 69 112 10 751 1,448 Spain Italy 1,544 513 706 670 2009 2020 India 211 577 977 3% 5% 2009 2020 2009 2020 362 622 249 11% 374 222 321 490 Saudi Arabia 2009 2020 295 488 2009 2020 218 373 150 8% 115 365 2009 2020 Total for target countries 2009 2020 Singapore 53 (not including Japan) 22 Hong Kong Brazil 2009 2020 7% 9,324 4% 423 12 26 7% 10% Indonesia 18 27 Thailand 2009 2020 829 2009 2020 South Africa 10% 283 707 8% 4,639 6,828 230 3% 127 39 89 46 2009 2020 46 65 2009 2020 2009 2020 3,392 2009 2020 CAGR(2009-2020) 2,073 1,020 Strategic goal: 8–11 trillion yen Media&Contents 2009 2020 Food & Beverage (1) Eighteen countries ("major countries") were selected by extracting countries and regions that will, as of 2020, have a GDP of at least US$ 2 trillion (about 200 Fashion trillion yen) and those with important continental cities that will have a GDP per capita of at least US$ 10,000 (about 100,000 yen).
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