Abenomics – Womenomics

Given the present context of globalisation it seems inevitable for countries and their governments all over the world to become or stay an attractive target for foreign investments. Arguably, it seems as if industrialized countries increasingly fall behind their developing counterparts – albeit their growth rates or economic progress. Japan, which used to be the Asian advanced culture for decades, seems to be one of those economies, which are affected immensely by the rapid growth of developing countries. Especially, the geographic closeness to rising economies such as China and Indonesia, make their economic ‘decline’ even more apparent. Facing this, a national debt of 250% of GDP as well as a greying and shrinking labour force, Japan needs to find ways how to escape the current deflationary economic development and to stimulate economic growth. Japans answer to these problems is minister president Shinzo Abe’s extensive reflationary programme entitled ‘Abenomics’. In fact, with this programme Japans government takes, amongst others, expedient measures to increase potential growth (see Figure 1). One key feature of the Abenomics programme is Womenomics – efforts taken to improve Japan’s female labour participation. For the purpose of this paper, an interview with a young female Japanese working for the Japan subsidiary of a German based company and a short interview with Jesper Koll, Managing Director of J.P. Morgan Japan, were held. Furthermore, information and examples provided by lecturers during the Harvard Project for Asian and International Relations, especially given by Katy Mitsui, as well as facts provided in the Goldman Sachs portfolio entitled ‘Womenomics 4.0: Time to Walk the Talk’ were used for this article.

 Womenomics – working women as a signature feature of Japan’s growth strategy – should help Japan to overcome challenging economic times. The country is challenged by an ageing population with currently one out of four citizens being older that 60 years old rising to one out of three being over 60 years old by the Olympic games in Japan in 2020. This development will result in an acute labour shortage and a further declining economy within the next decade if no measures are taken by the government. Besides the fact that women could fill this widening gap, Goldman Sachs estimated that improving female employment rates could boost Japan’s GDP by up to 13%. In fact, incentive systems can be created by deregulating and subsidizing the children day care sector, changing current tax systems which discourage married women from participating in the workplace, creating flexible work environments, setting diversity targets and encouraging gender equality at home within the Japanese society. It is widely held that especially the latter of the above mentioned measures might cause difficulties to the realization of Abe’s change programme. To further clarify this, masculinity is deeply rooted in Japanese culture, with women receiving less respect and status within the society than their male counterparts. Although women are well educated – a multitude of them hold higher education degrees – most of the married women stay at home as soon as they get married. However, boosting female employment no longer seems to be an option, but rather needs to be viewed as an imperative. Contrary to industrialized countries around the world, which try to create gender diversity in the workplace to improve productivity and to enable women’s’ self-fulfilment, the incentive for Japan to improve female labour participation rates is even more urgent. Similarly, Goldman Sachs’ report stresses that  “Japan can no longer afford not to leverage half its population”. It can be argued that Japans need for women in workforce sheds a completely new light on gender diversity in business. In fact, the society needs women – and is dependent on their support.

 In general, Japans strategies tackling problems related to the demographic change seems to be of general interest all over the world, as most developed countries will face similar issues within the next decades. Industrialized countries, including European countries, will be confronted with retirement booms, which will affect economies and businesses immensely. As Japan seems to be the first country facing and solving these problems it might be argued that developed countries all over the world glance across at Japan. For a multitude of governments Japan may be a potential role model if it finds effective solutions to overcome the multitude of problems arising from increasingly ageing populations.

 For Japan in general and its Womenomics feature in specific, it is to be hoped that this new leverage position may boost women’s position and reputation within the society. However, critics argue that the Japanese society might not change that fast, which may be a potential cause of failure of minister president Abe’s Womenomics strategy.

Author: Julia Prommegger