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 — or obstacle — to productivity at the microeconomic level of individual firms.