Japan's back. After nearly a decade of economic stagnation, this country is getting its act together.
A key part of this new business landscape is the country's belated embrace of the digital economy. Andrew Shipley, economist at Schroders, a British investment bank, noted in his most recent report that growth of IT production is way ahead of that of the economy as a whole. In the July-Sept. quarter, more than half of output growth in the entire economy came from IT. Employment in IT services rose 3.9 percent in July-Sept; overall, employment dropped 0.5 percent during the same period. Shipley concludes that "IT production is the driving force in the domestic economy."
Shipley's language is sober, but the market is pretty giddy. Valuations of Internet and telecommunications companies in Japan are reaching heights that would make Silicon Valley drool. Softbank has climbed over 500 percent this year, Hikari Tsushin is up almost 1,000 percent. BusinessWeek reports that the market value of small high-tech companies has soared 250 percent this year.