Japan ranks in the 9th place in the Global Competitiveness Index. Why is that so?The 12 pillars of Japan say so. I compared it with India to better understand it.

1. GLOBAL
COMPETITIVENESS INDEX
OF JAPAN

3. JAPAN
‘The Land of Rising Sun”
 CAPITAL : TOKYO
 CURRENCY : YEN
 LANGUAGE : JAPANESE
 POPULATION : 12.7 CRORES
 PRIME MINISTER : SHINZO ABE
FLAG  Rectangular white banner with Crimson-red disk at
its center (Nisshoki or Hinomaru).

4. PILLAR 1 : INSTITUTION
 Property Rights : A person can possess ownership if he/she
stays for more than 20 years.
 Japan Terrorism Index shows an increase of 3.60
 Yazuza Clan, the organised crime group for more than 400
years.
 Reliability of police force is high.
 Auditing system is best in Japan. They use many auditing
standards from Business Accounting Council(BAC), Auditing
Standards Committee Statement(ASCS), Quality Control
Standard Committee Statement(QCSCS) which are issued by
the Japanese Institute of Certified Public Accountants(JICPA).

5. JAPAN INDIA

6. PILLAR 2 : INFRASTRUCTURE
 Japan promotes quality infrastructure “Investment through
Partnership for Quality infrastructure : Investment Asia’s Future”,
in collaboration with other countries and international organisations. Eg:
India-Delhi metro, Mangolia : Ulan Bator Railway Flyover, Vietnam :
Nhat Tan Bridge.
 Ranks highest in their infrastructure.
 It uses less energy per person compared to other countries.
 Seven Japan Railway Group companies cover most of Japan.
 Bullet train with new technology break the world record with a train
travelling at a speed of 603 Km/hr.
 Fourth largest passenger air market in the world with 10,59,13,000
passengers.
 Japan has more than 98 airports.
 Japan has over 994 ports and 662 ships with a volume of 1000 gross
register tons.

7. JAPAN INDIA

8. 3 PILLAR: MACROECONOMICENVIRONMENT
 The stability of the macroeconomic environment is important for
business and, therefore, is significant for the overall competitiveness
of a country.
 The economy cannot grow in a sustainable manner unless the macro
environment is stable.
 It is important to note that this pillar evaluates the stability of the
macroeconomic environment, so it does not directly take into account
the way in which public accounts are managed by the government.

10. GOVERNMENT BUDGET BALANCE

11. GROSS NATIONAL SAVINGS

12. INFLATION
Inflation is a sustained increase in
the price level of goods and services in an
economy over a period of time.
 A chief measure of price inflation is the
inflation rate, the annualized percentage
change in a general price index, usually
the consumer price index, over time.

14. 4 PILLAR: HEALTHANDPRIMARY EDUCATION
 A healthy workforce is vital to a country’s competitiveness and productivity.
 Workers who are ill cannot function to their potential and will be less
productive.
 Poor health leads to significant costs to business, as sick workers are often
absent or operate at lower levels of efficiency.
 In addition to health, this pillar takes into account the quantity and quality of the
basic education received by the population, which is increasingly important in
today’s economy

15. INFANT MORTALITY:
Infant mortality rate of Japan fell gradually from 16.2 deaths per 1,000
live births in 1967 to 2 deaths per 1,000 live birth in 2018.
LIFE EXPECTANCY:
The average life expectancy of japanese is 88 years. This is because of
the food habits and modern medicines.
HIV PREVALANCE:
 Japan's population of HIV affected people remains low in comparison
to other developed countries such as the United States and other
European countries.
 Today, Japan remains one of the top providers funds for global efforts
such as the Global Fund to Fight AIDS, Tuberculosis, and
Malaria and World Health Organization for HIV/AIDS prevention and
treatment.

16. MALARIA INCIDENCE:
 In fact, the total number of the patients with acute malaria in
Japan has been around 100-150 annually for the last 10 years.
 Of those, about 75% are Japanese and 25% are foreigners,
and about 75% are male and 25% are female.
PRIMARY EDUCATION:
 Children who have their 6th birthday on or before April 1
enter the first grade of elementary school of that year.
School year starts in April and ends in March.
 For Japanese nationals, six years at elementary school and
three years at junior high school (total nine years) are
compulsory.

17. 5TH PILLAR: HIGHER EDUCATION AND
TRAINING
JAPAN INDIA
WHY THIS DIFFERENCE BETWEEN JAPAN AND
INDIA???

20. TRAINING AT JAPAN
 Employers are encouraged to provide vocational training and
development for employees by both legislation and government
support
 There is an apprenticeship-type "dual system" of initial vocational
training, whereby an individual combines instruction at an
education/training institution with practical on-the-job training
provided by an employer, with which he or she has a part-time,
fixed-term employment contract.
 Some employers operate unpaid internship programmes for
students, or employ them temporarily through temporary work
agencies, usually during their vacations, as a means of pre-selecting
suitable graduates for recruitment.
 These organizations include the Employment and Human Resources
Development Organization of Japan (EHDO), Overseas Vocational
Training Association (OVTA), and The Japan Vocational Ability
Development Association (JAVADA).

21. 6TH PILLAR : GOODS MARKET EFFICIENCY
JAPAN
INDIA

22. INTENSITY OF LOCAL COMPETITION
JAPAN
 Japanese customers can be very
demanding, and often have quite different
tastes and needs than Western
customers.
 Therefore in many cases western
companies must redesign or redevelop
products in order to succeed with Japanese
customers.
 Japan has many very strong local
companies.
 As an example, eBay lost in Japan
against local competition and withdrew
from Japan.
 Japanese companies also will not usually
welcome a new competitor, but develop
strategies to compete hard against new
entrants
INDIA
 New Initiatives like Make in India
and Start up India tries to develop
local competition
 For eg. The success of Amazon in
India
 The key to Amazon’s strategy in
India is its ability to think
globally but act locally –
leveraging its massive scale,
logistics capabilities and balance
sheet while creating customized
local offerings developed ground-
up for the Indian market.

23. ANTI-MONOPOLY LAW
JAPAN
prohibitions against three types of
anticompetitive conduct
 private monopolization
 unreasonable restraints of trade
and
 unfair methods of competition
INDIA
 prohibiting agreements or practices
that restrict free trading and
competition between business
 banning abusive behavior by a
firm dominating a market
 supervising the mergers and
acquisitions of large corporations,
including some joint ventures.

25. 7 PILLAR: LABOUR MARKET EFFICIENCY
 Efficient labor markets match workers with the most
suitable jobs for their skill set.
 Allocating a country’s human resources to its most
productive sectors points to the importance of labor
market flexibility.
 Employment protection policies, such as rules and
regulations for firing workers, have been shown to lead
to a decrease in employment, consumption, and
productivity.

26. JAPAN:

27. INDIA:

28. 8 PILLAR: FINANCIAL MARKET DEVELOPMENT
 Liberalisation of financial markets in the 1990s and
2000s is considered to have contributed to the 2007/2008
Global Crisis. But we can forget the important
contribution of financial markets to economic
development.
 In poor countries, investment, even foreign direct
investment (FDI), is costly.
 Well-developed financial markets may help to fund such
investment.
 To achieve this, financial markets require depth, access,
efficiency and stability (World Bank 2016c)

29. JAPAN:

30. INDIA :
RANK/137 VALUE

31. 9TH PILLAR
japan
india

32. REASONSFOR TECHNOLOGYDEVELOPMENTIN JAPAN
On August 19, 2011, the Japanese government issued the 4th Science and
Technology Basic Plan, a five-year national strategy on science, technology, and
innovation with the outlook for the coming decade.
This is a notable step as it was the first basic plan that designated S&T
diplomacy as an issue of national importance.
Japan was the first major non-Western nation to take on board the Western
technological and organizational advances of the century after the first
industrial revolution.
Japanese government has played an important supportive role in the
continuing innovation.

33. 10TH PILLAR
japan india

34. REASONSFOR INCREASINGMARKETSIZE IN JAPAN
Japan is a member of the G7. According to the International
Monetary Fund, the country's per capita GDP (PPP) was
at $38,937(2016).
The Japanese domestic market has been growing significantly since
the late 90's.
Many car enthusiasts are attracted to the Japanese domestic market
in different continents such as North America, Europe, and Asia.
As of June 2018, Japan’s exported goods were valued at $369.5
billion.

35. 11th PILLAR –
BUSINESS
SOPHISTICATION
12TH PILLAR -
INNOVATION

36. 11TH PILLAR
Index component Rank Value
Local supplier
quantity
53 4.6
Value chain breadth 30 4.5
Extent of marketing 61 4.5
Nature of competitive
advantage
28 4.4

37. Index component Rank value
Capacity for
innovation
42 4.5
Quality of scientific
research institutions
35 4.7
Company spending
on R&D
23 4.5
Availability of
scientists and
engineers
32 4.6

38. 11TH PILLAR
LOCAL SUPPLIER QUANTITY
The quantity supplied describes the amount of
goods or services that are supplied at a
given market price.
VALUE CHAIN BREADTH
A value chain is a set of activities that a firm
operating in a specific industry performs in order
to deliver a valuable product or service for
the market.

39. COMPETITIVE ADVANTAGE
When two or more firms compete
within the same market, one firm
possesses a competitive advantage
over its rivals when it earns (or has the
potential to earn) a persistently higher
rate of profit.

40. 12TH PILLAR
CAPACITY FOR INNOVATION
It refers as innovation is often also viewed as the
application of better solutions that meet new
requirements, unarticulated needs, or
existing market needs.
RESEARCH AND DEVELOPMENT
It refers to the work a business conducts toward the
innovation, introduction and improvement of its
products and procedures. Simply, it is a series
of investigative activities to improve existing products
and procedures or to lead to the development of new
products and procedures.