Abenomics Strategy Shifts to Robots to Offset Labor Shortage

Japan Business News

Robots offset Japan’s rapidly aging workforce.

17 Jul, 2015 –

Japanese Prime Minister Shinzo Abe said he plans to hold a formal dialogue with the business sector on ways to boost investment, signaling a shift in the focus of his growth strategy toward capital expenditure.

The government unveiled an outline of its strategy to boost Japan’s growth potential, highlighting the need to increase investment on artificial intelligence and robots to help offset the impact of a rapidly aging society on the labor market. “Discussions with the business sector on raising wages and prices have yielded some results,” Abe told a meeting of a government panel debating the growth strategy.”In addition to this, I would like to propose creating a venue for dialogue between the government and the private sector on measures to nurture investment for the future,” he said.

Economics Minister Akira Amari later told reporters that the meeting will take place this autumn, and would be attended by Abe, key economic ministers and the heads of business lobbies. Boosting wages and capital expenditure are key to the success of Abe’s strategy to boost growth and conclusively lift the economy out of a long, debilitating phase of deflation by encouraging companies and households to spend more now rather than save.

The strategy, dubbed “Abenomics,” consists of a “first arrow” of aggressive monetary easing, a “second arrow” of flexible fiscal policy and a “third arrow” of measures to boost Japan’s long-term economic growth. Abe met business executives last year to pressure them to boost wages and succeeded in persuading many companies to raise salaries for the first time in years. Now, the premier has his eyes set on increasing capital expenditure, which is showing signs of life after years of stagnation.

The need to increase investment on cutting-edge information technology has become increasingly urgent. Heavy doses of monetary and fiscal support have revived demand in the economy, while also exposing supply constraints, such as labor shortages and low productivity, that could hamper long-term growth. “As the working-age population can’t be expected to increase much for the time being, Japan will face limits to growth unless it boosts productivity,” the growth strategy paper said. “In order to heighten productivity, it’s crucial to invest more.”

(Source – “The Fiscal Times,” Pic – Japan’s Robots / “Hot Sauce Drops“)

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