Final Remarks

Abstract

In this chapter, we will summarize the lessons learned from the two lost decades. Successful Japanese electronics companies were experiencing steady decline in the early 1990s, but they continued to invest in declining segments to maintain employment. Ultimately, employment adjustments were frequently made till the first half of the 2010s, to resolve overcapacity problems that were abandoned in the first lost decade. Japan has been constantly facing new entrants and technological changes. As fruitful outcomes of the massive downsizing in the electronic products unit, some companies have achieved concentration in core competence and their performance has improved. However, most declining electronics companies are still struggling. Worldwide new entries and technological changes are taking place in many industries after the two lost decades, and it is still a major issue to prevent profitable companies that are beginning to fade from easy investment and outdated R&D. Instead, labor market reform, capital market reform advocating investment activism, spinoffs, M&A, buyouts, open innovation, and corporate venture investment are necessary to regain technological advantages and to acquire the seeds of growth.

All remaining errors are our own. Any opinions, findings, or conclusion expressed in this book are those of the authors and do not reflect the views of the Development Bank of Japan or the authors’ affiliations.