The book Megachange: The World in 2050 by journalists of The Economist magazine in Britain offers a pessimistic forecast for Japan in the middle of the current century. Professor Matake Kamiya examines the book’s prescriptions.
The world’s most aged society will emerge in Japan in 2050, when the median age will climb to 52.3 years and the number of dependents will be neck and neck with the working age population. The annual GDP growth rate during the period between 2011 and 2050 will average 3.7 percent worldwide, 5.2 percent in developing countries in Asia, and among developed countries, 2.3 percent in North America and 1.8 percent in Western Europe, while the same number will be merely 0.9 percent in Japan. Japan’s GDP, based on purchasing power parity, accounted for 5.8 percent of world GDP in 2010, but will end up declining to 1.9 percent in 2050. As for GDP per capita (PPP based), Japan ranked with other developed nations in 2010 as it stood at 71.8 percent that of the United States, while the ratio is projected to drop to 58.3 percent in 2050, which is close to China (52.3 percent) and around half of the figure for South Korea (projected to make a huge leap from the current 63.1 percent to 105.0 percent). Looking at the field of science and technology, Japan is currently the top technological superpower among non-Western countries, but its basic science research does not correspond to the level seen in the West. To date, a total of 15 Japanese people have won the Nobel Prize in the sciences, and this is just one person more than that from Australia, a country that has less than 7 percent the population of Japan. As a result, Japan will rapidly lose its presence by 2050, when the Asian economy is expected to account for half of the world economy.
This projection is what shapes the pessimistic forecast for Japan in the middle of the current century in the book Megachange: The World in 2050 on projections of the near future written by journalists of The Economist in Britain. These projections appear to have garnered attention not only in Japan, but also worldwide. But is this — that is, what the book cites — actually a surprising new fact? For quite a long time, Japanese experts have repeatedly sounded alarm bells about the problems pointed out by Megachange, including the continuing low birthrate and an aging population, resulting in an unprecedented aged society, and a decline in share of the global economy caused by the prolonged economic slump. Japanese people have also been hearing much about the weakness of Japan’s scientific research in the field of basic sciences since the country’s rapid economic growth period (in the late 1950s to the early 1970s).
Readers overseas may be surprised to learn that Japan, which has been a world economic power for more than 40 years, is in such a dire predicament. However, this should have been a widely held notion, at least among the Japanese. My focus in this book’s account of matters related to Japan was not that it saw through something that had never been imagined before about Japan’s future, but rather, it was that there was virtually nothing new. This actually provided me with a sense of relief.
It might sound strange to state the words “sense of relief” in this context. This is what I mean: Japan’s existence at the moment can be likened to a patient who has suffered a chronic illness over a long period of time. The patient is vaguely aware of deteriorating health, but he must be prepared to experience pain and side effects in order to treat the illness. The patient prefers to put off any treatment because the symptoms are advancing slowly and the pain has not yet been too bad. And then, a group of doctors from overseas (the writers of The Economist) decided to examine the patient again as they were unable to bear seeing his condition. As a result, although the illness already evident may be fatal in the future, no new illness was found. This, at least, is not a hopeless diagnosis for the patient.
Besides, the illness Japan is suffering is not necessarily incurable. This is obvious given the fact that Japanese experts in various fields have been making reasonably convincing proposals on the problems and reading thoroughly the projections by The Economist makes it even clearer. Megachange explains that the various challenges that Japan is facing at the moment are also problems that other countries will not be able to avoid in the future. From here on out, Europe and China will not be able to avoid a shortage in the labor force or the country’s deteriorating finances due to an aging population. A decline in the share of the global economy is also a serious problem for North America (from 21.5 percent in 2010 to 12.3 percent in 2050) and Western Europe (also from 18.7 percent to 8.9 percent). In other words, this means that Japan is experiencing various types of illnesses early, way before many of the nations around the world will be affiliated in the future. And Megachange is trying to present a prescription for these illnesses to the world. In this context, it is not fun for Japanese people to see a description, over and again, that a country could end up like Japan without a swift and thorough treatment. I won’t complain here since it would sound a little like it’s the consequences of one’s own actions. What is clear here is that making use of a prescription to treat an illness is not only available to all countries other than Japan, but is a path that Japan can take. Japan’s illness can be treated as long as there is a will to do so.
Some of the points described in Megachange can be seen as unfair to Japan. For example, is the aging society something that can only be lamented? Doesn’t this indicate that Japan has achieved longevity — a dream for mankind — at unprecedented levels? Various problems are certainly associated with the aging of the population, such as a decline in the percentage of the population engaged in production and an increased burden on the working generation to support social welfare for elderly people. The fact that Japanese society has become unprecedentedly aged, however, also means that the Japanese have achieved unprecedented longevity — another fact that people in other countries may envy, and which should not be forgotten. It is not appropriate to emphasize only the negative aspects of the aging of the Japanese population. Also, the descriptions in Megachange about the winners of the Nobel Prize in science and technology fields only look to static numbers and do not take heed of dynamic trends in recent times. Since the beginning of the 21st century, Japan has had nine winners of the Nobel Prize in Chemistry, Physics and Physiology or Medicine (10 including Professor Nambu Yoichiro, who has been naturalized in the United States), and ranks second in the world following the United States. Megachange points out that the problem of insufficient research in basic science is a dark cloud that hangs over newly developing nations in Asia, including China. However, this no longer applies to Japan. Japanese people should be more confident regarding this point.
That said, it is true that the future projections in Megachange did arouse a serious sense of crisis in me.
First of all, I was shocked by the fact itself that a number of Japanese people have been shocked by the way Japan was described in the book. As was mentioned earlier, most of these descriptions were supposed to be old news for the Japanese. Nevertheless, many people in Japan became upset when the book presented an outlook of what would happen to their country in 37 years if the situation progressed. Why?
I think this is a reflection of the trend that most people in Japan, while saying that “we are in deep trouble,” have actually been avoiding looking squarely at how serious Japan’s problems really are, such as the low birthrate rate, aging population and the economic slump since the burst of the bubble economy. They have not faced up to the possible outcomes of such disease in the event of being neglected and receiving no treatment. If people had seriously thought about the future of their country and their descendants, they must have been able to fully imagine the situation that Japan could fall into by the middle of this century without being alarmed by foreigners. As I noted earlier, Japan’s illness is not an incurable disease. And the Japanese have the capability to confront this type of serious illness, as seen during its remarkable renaissance after the war. But the illness cannot be cured unless treatment starts and is carried on with a will not to be discouraged by pain. And lack of such a will is in fact the greatest reason behind Japan’s worsening illness over the last 20 years. Megachange ridicules Japan by saying that the country cannot see what it should aim for next, after having caught up with Western nations in terms of abundance in the quality of life. It says that Japan is truly losing its passion for new things and is just biding time living in a torpid world. Japanese people cannot deny that this feeling of pessimism is permeating their own society.
Can the Japanese rid themselves of this apathetic attitude? If the answer is yes, what incentives can we find to promote necessary behavioral change?
Interestingly, proposals have recently been made from both inside and outside the country that Japan should regard the current situation in which it suffers from various illnesses ahead of many other countries in the world not only as a crisis but also as an opportunity for itself. The Economist does not appear to have given up on Japan. The copy in the advertisement for the conference, Japan Summit 2012, held in Tokyo by the magazine in last December opined as follows:
Japan is not alone in facing big questions ahead….Japan is on the front line of many of the key issues that lie ahead: aging, energy security and the rise of China, to name a few. But Japan can also turn the future to its advantage. Its relentless sprit of industrial innovation, its technological expertise, its bright workforce and its enormous wealth provide it with the capacity to thrive in adversity. It can give lessons to the rest of the world on how to create new approaches to energy and aging. It can become a pillar of the new Pacific community, in terms of both trade and security. To achieve that, it needs to map out a vision of where its future lies.
The same kind of view can be heard among Japanese people. For example, Hara Masato of the Asahi Shimbun newspaper, comments as follows.
An aging population is not an international anomaly. In fact, it will advance for sure…the pain of the super aging population that Japan will experience from here on forward is something that other countries will also have to experience. Japan is the … lead runner of the world… It is not easy to be the leader in technological development. But if it rises to this challenge and succeeds, a major dividend can be gained… Can’t the same thing apply to creating a new social system that deals with a super aging population?
This concept points to Japan developing various methods to cure its own illness and selling these methods to the world. This will not only help Japan gain its health, but also help reinforce its presence in the world and will lead to a profit, in an economic sense. This concept points to a critical incentive that would help trigger a much-needed change in attitude that would help Japan rid its symptom of just putting off treatment to cure an illness.
Japan still has latent human resources that can be utilized to realize this: they are women and the elderly. As Megachange points out, the pace of women’s social advancement in Japan has been slower than in other major countries. But this means that Japan will be able to discover a new working population amid an advancing aging population if it can unearth the latent capabilities of women. And when realizing this, a new role can be given to the elderly. The greatest headache for Japanese women who would like to balance their career while giving birth and raising children today is that there is no system in place in Japan that can look after children in a flexible manner, even outside of regular hours, to match their work schedule. This type of demand in the United States is satisfied mainly by female high school students who have part-time jobs as babysitters. In Japan, where the aging society is advancing, the concept of having a system of elderly babysitters may be plausible as a new way to tap into the strength of the elderly. While utilizing elderly people, we also need to ask them to “be patient and endure.” In an aging society, voting by the elderly significantly affects the outcome of elections. If they “‘get their way”‘ to pursue their own personal interests only, “the nightmare vision will be realized,” Megachange alarmingly predicts. That is because if “‘a political bias to favour spending on the older rather than the young'” is intensified and necessary reforms are blocked, a state may be “‘felled by its own weight as it struggles with the rising social burden of an older society.”‘
However, Megachange notes it is possible for a state to have a different future. Economic growth requires money being spent on young people, especially on education. Politicians have to demonstrate to society the necessity of “‘farsighted reform” for promoting a “knowledge economy and sustaining longer working lives,” along with cuts in pension and healthcare spending. Elderly people, for their part, must cast their votes in consideration of their descendants and the future instead of their own interests alone. Whether they are able to do so or not will distinguish a “smart state” from other states. Are elderly people in Japan, especially the baby-boomer generation, able to voluntarily endure the pain of pension and social security cuts for the sake of the public interest? The future of Japan largely depends on the elderly population’s responsibility on this point.
There can be various other ideas for the Japanese in terms of what they should do in order to confront the long, painful illness they have suffered. What is clear is that the Japanese are now being challenged to swiftly move out of their torpidity. The Japanese need not be discouraged by the near-future projection of Japan in Megachange. But the Japanese people should look at the country’s condition as a precious medical note from a doctor that indicates, in a straightforward manner, what would happen if they were to continue dwell in this torpor.
The author revised and amended the original English article. The original article appeared in The Japan Journal, Vol. 9, No. 10 (January 2013).
The views expressed here are the author’s own and do not necessarily represent or reflect those of the National Defense Academy of Japan or the government of Japan.
Matake Kamiya is a professor at the National Defense Academy.