Japan’s Liberal Democratic Party, which held power almost continually for 50 years, was well suited to a world based upon Taylorist mass production. They created the Japanese system of “jobs for life,” cross-shareholding between banks and firms, and pay rates based upon seniority – all of which delivered rising living standards more or less equally across the nation.
However, since the “Bubble Economy” finished in 1990, globalization has forced Japan’s economy to partially open too, exposing the chronic weaknesses inherent in the old system.
But the Liberal Democratic Party continued to bury Japan under highways and bridges that weren’t needed (eloquently described in the book Dogs and Demons) simply to buy the votes of its rural and blue collar power base, while running up a massive national debt.
The rigid education system delivers math and science skills needed for mass production – but not the creativity, imagination, and people skills required by the creative economy. Young Japanese people are no longer offered jobs for life on a large scale, but are stuck in a world of unstable, temporary work as “freeters” (more about the freeter lifestyle).
Japan’s recent election of the Democratic Party of Japan is the first time that Japan’s “lost generation” has stood up to be counted, with a turnout of around 70 percent. The DPJ listened to these people; many of the new DPJ politicians are younger than those they replaced and female. In many areas, this desire for change was so strong that entire cities were carried by the DPJ.
Young Japanese people are attracted to Tokyo, Yokohama, Osaka, Nagoya, Kyoto, and Fukuoka, where they can escape the formal social straitjackets of their home towns and be somewhat anonymous. This does not account for the whole change by any account, but I think it might have some correlation to the graphs shown on the Creative Class website outlining people who are “open to experiences.” A report released by the National Institute of Population and Social Security Research predicted that almost half of Japan’s 47 prefectures will see their populations fall by more than 20 percent over the three decades from 2005. With job seekers flocking to the capital, Tokyo is expected to account for 11.5 percent of Japan’s total population in 2035, up from 9.8 percent in 2005, the report said. But internal migration is drying up – in 2008, only Nagoya and the areas directly around Tokyo showed net inward migration.
Japan’s rapidly aging population, which has been shrinking since 2005, raises issues that all countries should pay attention to. Its birthrate is around 1.3 children per woman, but it has been falling for decades (pdf). Many of Japan’s youth are voting with their feet for a Creative Class lifestyle – but there is a large gap in the average age of prefectures. What happens when entire regional economies hollow out, and local governments cannot afford to support the remaining elderly citizens?