Growth and the ‘Dual Economy’

The postwar years to the end of the 1980s, but particularly what can be regarded as the golden era during the high-growth phase from the end of the 1950s to the beginning of the 1970s, were very good years for the gestation of leading medium-sized enterprises in Japan. In the process there were three determinants specific to the period which assisted the outcome. The first of these was the emphasis placed on economic growth to the virtual exclusion, in the early stages at least, of broader social considerations. In this environment, the hopes of equitable dealings between all actors in industry and commerce were unceremoniously quashed in favor of an unremitting drive to catch up with and achieve parity with the most advanced economies. The second determinant was policy, and specifically industrial policy and small business policy, which over time merged to become in practice virtually indistinguishable. During the initial stage, first industrial policy and subsequently and briefly small business policy as an adjunct, were positive boosters of growth and therefore of the type of company that could make this happen, to wit the LME in many cases. Third was international pressure consequent not least on the first, for to gain the higher reaches of credibility Japan had to prove its standing by becoming an accredited and ranking member of the world’s new postwar economic mediators — GATT (the forerunner of the World Trade Organization), the World Bank, the IMF, and the OECD. For gaining such status it was incumbent upon Japan to conform to the demands of these organizations, most notably trade and financial liberalization, which conversely menaced growth ambitions predicated on protectionist inclinations.