Japan is poised to emerge stronger and more competitive from the COVID-19 crisis. Where Abenomics failed, the ¡°coronanomics¡± depression has the potential to be a catalyst for genuine structural and behavioral reform.
Positive signs are emerging already. Corporate managers famously resistant to change are all of a sudden forced to embrace smartphone and information technology as passionately as Japanese teenage girls have been for decades. And, with an urgency not seen since the Meiji modernization drive, Japan¡¯s captains of industry, commerce and finance are serious about the digitalization of bottom-up decision-making.
If I am right and the novel coronavirus kills entrenched resistance to long-overdue reform in corporate decision-making processes and workflow management, it will do more to boost future productivity than anything Prime Minister Shinzo Abe¡¯s ¡°third arrow¡± of structural reform could have hoped for. Corporate culture is always the key driver ¡ª or obstacle ¡ª to productivity at the microeconomic level of individual firms.
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