In our newest SVNJ Working Paper, "Abenomics and Japan's Entrepreneurship and Innovation: Is the Third Arrow Pointed in the Right Direction for Global Competition in the Digital Era of Silicon Valley?" Kenji Kushida evaluates the efficacy of Abenomics’ third arrow of comprehensive economic structural reform towards leading Japan to compete in an era dominated by Silicon Valley firms.
As Japan's political economy evolves over time, a critical question is whether or not it is adjusting effectively to the dynamics of global competition. While Japan has historically shifted from its status as one of many countries aiming to catch-up to global leaders to becoming a leader in many areas of global competition, recently global leadership has shifted to the economic ecosystem of Silicon Valley. In the past couple decades, global value creation has been driven by the Silicon Valley model - not only a geographic region but a distinct ecosystem of complementary characteristics.
Since assuming power, the Abe administration has put forth a well branded and enthusiastically promoted economic reform package, "Abenomics" consisting of three arrows. The third arrow in particular, was a comprehensive reform strategy that recognized Japan's need to restructure many aspects of its economy to compete in the current digital, globalized era. Policy evaluation is one of the pillars of the Silicon Valley-New Japan Project, and this new paper seeks to evaluate whether third arrow reforms move Japan closer to a Silicon Valley model of entrepreneurship and innovation.