Editorial

16:29 JST, January 10, 2025

Will Japan be able to make a smooth transition to a growth-oriented economy led by high wages and active investment and completely break free of deflation? This year, the nation’s power will be tested.

The potential of Japanese companies should be high. It is hoped that they will not just avoid risks but will take bold steps toward a growth strategy.

What is needed now for Japan to transform itself into a growth-oriented economy is a change in the mindset of top management.

During the long period of stagnation known as the “lost 30 years” following the bursting of the bubble economy, Japanese companies have focused so much on cutting costs to make products more cheaply that they have not sufficiently created new hit products or groundbreaking services.

In the meantime, U.S. tech giants such as Google LLC and Apple Inc. have achieved phenomenal growth, and China has taken the world by storm with its solar power generation equipment, electric vehicles and other products for decarbonization.

Japanese companies should also feel a sense of urgency that, if they do not accelerate their pace of growth, they will be left behind.

The Nikkei Stock Average last year surpassed the previous record set in the bubble era, exceeding 40,000 and breaking free from a prolonged spell of stagnation.

However, internal reserves held by corporations reached a record high of about ¥600 trillion at the end of last fiscal year, and they are not actively........

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