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CAN JAPAN COMPETE? By Michael E. Porter, Hirotaka Takeuchi and Mariko Sakakibara. London: Macmillan Press. 2000. xi, 208 pp. (Graphs, tables, figures.) US$49.50, cloth. ISBN 0-333-78658-0.
Will greater competition revive Japan's economy? This is the question asked by Michael Porter, one of America's foremost specialists on corporate management and strategy. Japan's economy suffered a lost decade during the 1990s, when it was plagued by poor economic growth, bankruptcies and rising unemployment. Porter and his research team argue that new approaches to competitive strategies (micro-economic variables) are required to restore economic vitality, rather than macro-economic policies associated with government spending and generating increased consumer demand.
The key to understanding Porter's thesis is the knowledge that the Japanese economy is really a dual economy, one comprised of a few outstanding industries and firms (electronics and automobiles) alongside a wider array of uncompetitive industries with very low productivity and high cost structures (agriculture and food products, as well as most service sectors such as banking, retailing, construction, transportation...