Classic Computer Magazine Archive CREATIVE COMPUTING VOL. 10, NO. 8 / AUGUST 1984 / PAGE 120

Second Japanese miracle on the horizon. Christopher Mead.

In recent years Americans and Japanese alike have grown used to the idea of a mature Japanese economy whose "miracle" growth of the late fifties, sixties, and early seventies has petered out. Observers from all sides see sluggish Japanese growth ahead--perhaps a bit better than that of other advanced nations, but nowhere near the former GNP growth rate of about ten percent a year. The miracle, by almost all accounts, is over.

This view of Japan's economic future coexists with another view, equally prevalent, of the island nation's bright technological future. As Japan has taken the lead in consumer electronics, applied robotics and other forms of factory automation, photographic equipment, random access memory chips, supercomputers, and a host of other high tech fields, it has appeared to many that Japan is going to be the standardbearer of the 21st century. Ambitious projects such as the Fifth Generation Computer program and Nippon Telegraph and Telephone's Information Network System (INS) are good evidence of this leadership potential.

The critical question which few have addressed is: can the first view of Japan's future be reconciled with the second? Can Japan have a lackluster economy while making significant breakthroughs in more than a dozen high tech, commercially promising fields?

The answer is no. Japan's preeminence in these advanced industries will inevitably result in a new period of rapid economic growth. As Japan's computer, telecommunications, eemiconductor, robotics, and related industries grow, the will carry the nation's economy along with them. Already these industries have reached the point where, for the first time, their export value is greater than that of Japanese automobiles. The new technologies are beginning to reinvigorate the Japanese economy--activity which shows no sign of slowing.

The secret to the high growth of the electronics and information-related industries is, of course, productivity. Integrated circuit memory costs are falling at more than 30 percent per year, and each price reduction has made the technology available for many new uses. Almost overnight, new products such as personal computers and videotape recorders have been born, and new industries like personal computer software publishing have emerged.

These new fields are not high tech abstractions; they are proven money makers. As the pace of innovation quickens and these industries advance further, their growth will transform the economy around them. In the same way that the economies of eastern Massachusetts and northern California have been lifted by microelectronics-related companies, so the economy of the entire nation of Japan will be lifted by similar activity.

It appears that the United States will lag behind Japan in extracting economic benefits from microelectronics technology. Japn has concentrated on commercially attractive technologies, while American researchers have devoted undue efforts to intellectually interesting projects of no monetary value. Many such projects have been commissioned by the U.S. Department of Defense, which clearly lacks the Midas touch: every year it turns $300 billion into objects of no economic value.

Other examples of the problem abound. While American researchers were racing to produce an "elegant," technically advanced 64K RAM chip, Japanese technicians slapped together a workable product and took the lion's share of the world market from the Americans. Similarly, the average American robot is more complex, expensive, and interesting than its Japanese counterpart, but Japan is far ahead of the United States in making robots that are suited to factory work.

Given the relative weakness of Americans in making money from their technology, it is no wonder that so many fail to see the economic implications of Japan's high tech industry. Yet it is time to realize that a new period of economic growth will emerge from the advances of the Japanese. Within five to seven years, Japan will begin registering annual GNP growth rates which match or even surpass those of any year since before the first oil crisis. Out of that growth will emerge a second Japanese economic miracle, which will have greater global impact than the first high growth period because the nation's economy will be so much larger.

The first economic miracle literally ran out of gas. Japan's old economy, heavily dependent on the automobile and other oil-dependent mechanical devices, could not withstand large oil price increases. The second miracle will be powered by microelectronics, which require very few natural resources. Relatively free of the danger of resource scarcity, Japan will therefore be free to lead the world into a resumption of the general trend which has been evident since the beginning of the Industrial Revolution--slowly, increasing GNP growth rates, which rise in parallel with technological advancement.