After the devastation of WWII, Japan’s government set out on a course to become a modern, innovative, technologically advanced nation. Political leadership knew it would be a decades-long quest, and it was. But the hard work, sacrifice, and dedication paid off. By the 1970s, the nation was among a small group of developed economies that were at the forefront of most major tech innovations.
Since the 2011 Fukushima nuclear disaster, several years of financial struggle, a rapidly aging population, and the COVID pandemic, the Land of the Rising Sun might be losing its grip on its title as a leading technology hothouse. There’s evidence for and against that assertion. Here are a few of the key factors that most significantly impact Japan’s place at the forefront of the global tech industry.
The Chinese-originated COVID-19 virus has hit Japan very hard. In a nation of 126 million people on a land mass that measures just 146,000 square-miles, it’s no surprise that a highly contagious viral pandemic would wreak major havoc, and it did. In early 2020, when the virus first made its way out of China, Japanese political leaders took swift action, voting for lockdowns, store closures, and a virtual shutdown of the nation’s 24/7 economy. Now that the pandemic is rearing its head yet again, and the city of Tokyo is currently under a state of emergency declaration, the second round of financial bad news is beginning to take its toll. This is not a boost for the country’s technology markets.
Slow To Adopt Cryptocurrency
For many reasons, Japanese citizens have not been quick to adopt cryptocurrency, which is, for many nations, a key part of the technology sector. For one thing, Japan’s population is much older than ones in other developed economies, which doesn’t bode well for the popularity of cryptocurrency in general. Additionally, there’s a local cultural preference for paying cash when possible, and not resorting to plastic credit cards, checks, or alternative forms of money. If there’s one thing the Japanese people dislike, it’s financial volatility. Bitcoin and other leading cryptos are a hard sell in a nation where stable prices are cherished. So unlike places like Europe or the U.S., where crypto acceptance is more advanced, the adoption of crypto trading platforms catering to a domestic audience is playing catch up in comparison. It’s also less common for Japanese citizens to own any crypto at all.
With the rise of China, South Korea, and Vietnam as major tech innovators, Japan’s place as the sole or co-leader of that race is all but over. The small nation, so bashed by the COVID virus, a major nuclear disaster in 2011, and an inability to acknowledge the viability of cryptocurrency is finding it increasingly challenging to compete with growth-crazy China and Vietnam. As for South Korea, that nation is turning out to be what some economists in the 1980s were calling Japan at the time, the Asian miracle. Amid a triple-play of local competition, a disastrous pandemic situation, and inherent resistance to blockchain technology, it appears that the Japanese leadership in the tech sector is finally coming to an end. The matter of how far they’ll fall and how fast are anyone’s guess.