Japan's Lost Decades
Planet Money
Population Decline and Productivity: Challenges in Japan's Economy
Population decline in Japan poses challenges for economic growth as a shrinking workforce makes it harder to increase production. The lack of productivity in Japan's economy is exacerbated by a rigid labor market, where it is difficult to hire or fire employees. This rigidity leads to inefficiencies, with employees in big companies sometimes not actively contributing to work, known as 'Madogiwa Doku'. Additionally, there is a lack of dynamism in the corporate sector, with many established companies being unproductive and uninnovative, yet they are not replaced by younger, more innovative firms. These deep-rooted issues inhibit innovation and hinder progress in Japan's economy, despite the country having successful companies like Toyota known for efficiency.
