The Japanese Business System in the 21st Century: A Comparative Analysis

Japan, the leading Asian economy and the second most powerful economy in the world, is currently recovering from a long and harrowing period of recession. In order to maintain the current positive momentum, and to have any chance of maintaining relativities with rapidly developing China and India, numerous commentators have suggested that fundamental changes to the Japanese business system are urgently required. The common wisdom is that changes towards a more US style, market driven economy would be beneficial. To better understand the dynamics and logics surrounding such claims, an appropriate departure point would be a structured analysis of Japan's contemporary business system. Within this context, the fundamental objective of this paper is to present an introductory, but necessarily brief descriptive overview and analysis of the current Japanese system. For this purpose, an adaptation of Redding's (2005) comparative business systems model will be utilised.