Prepared for Presentation at World KLEMS Conference at Harvard University August 19-20, 2010
Evolving Spatial Economy of Asia-Pacific and Growth Strategy · 2015-07-14 · RIETI World KLEMS...
Transcript of Evolving Spatial Economy of Asia-Pacific and Growth Strategy · 2015-07-14 · RIETI World KLEMS...
Masahisa FujitaRIETI/Konan University/Kyoto University
RIETI World KLEMS Symposium“Growth Strategy after the World Financial Crisis”
2014 May 20, JP Tower & Conference, Tokyo
1. Introduction: The Three Priority Viewpoints of RIETI
In the face of rapid globalization, technological changes, and decreasing and aging population,
i. how to incorporate the growth of the world economy?
ii. how to develop new growth areas?
iii. how to create new economic and social systems for sustainable growth?
i ii iii enhancing the productivity and vitality of the Japanese economy and society in the long‐run
Supporting the “Third Arrow” of “Abenomics” in the long‐run
2
2. The evolution of the global economy in the recent past: from the viewpoint of spatial economics
Rapid Progress in ICT and Transport Technologytogether with the promotion of free trade through WTO・FTAs・EPAs
Local Agglomerationof
production consumption R&D
Globalization of production・trade・investment
and finance
A Complex, Networked WorldEfficient and growth‐enhancing under normal conditions
butVulnerable to major local disasters / shocks
dense networks
3
World GDP and Trade
0
2
4
6
8
10
12
14
16
0
10
20
30
40
50
601970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
World GDPWorld Trade (Right scale)
Source: UN National Accounts Statistics Database and WTO Time Series on International Trade
(2005 price trillion dollar)
GDP annual growth rate Trade annual growth rate 1970‐2000: 3.2% 1970‐2000: 5.6%2000‐2008: 3.0% 2000‐2008: 6.5%2008‐2009: ‐2.0% 2008‐2009: ‐5.1%2009‐2012: 3.9% 2009‐2012: 8.8%
GDP Trade
4
ICT revolutionTT developmentWTO / FTAs / EPAs
major reductionin
“transport costs”
more even distributionof
economic activity on earth ?
common sense
the prediction of spatial economic theory
only when transport costsbecome sufficiently low
majoragglomeration
“concentrateddispersion”
further reductionin
“transport costs”
utilizingscale economies
(home‐market effects)
Impact of Decreasing “Transport Costs”
5
Source: the Earth at night 2012, NASA Earth Observatory/NOAA NGDC (http://earthobservatory.nasa.gov/Features/NightLights/)6
GDP shares in the world total:East Asia, EU, NAFTA
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
NAFTA
EU
East Asia
Three polars total (right scale)
Source: IMF World Economic Outlook database October 2013By courtesy of Professor Nobuaki Hamaguchi
7
East Asia = ASEAN‐10 plus China, South Korea, Japan, Taiwan and Hong Kong
GDP shares within East Asia
0%
10%
20%
30%
40%
50%
60%
70%
80%1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Japan
the Rest
China
China
Japan
the Rest
Source: IMF World Economic Outlook database October 2013By courtesy of Professor Nobuaki Hamaguchi 8
Income divergence / convergence in East Asia
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.61950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
(Source) Penn World Table Version 8.0 By courtesy of Professor Nobuaki Hamaguchi
GDP per capita at 2005 price US$, Japan=1
Singapore
Hong Kong
Japan=1
TaiwanKorea
MalaysiaThailand
China
Lao PDRVietnam
Philippines
Phase 1 Phase 2 Phase 3
9
Share of intra‐regional trade in each region
0%
10%
20%
30%
40%
50%
60%
70%1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
EU27
EU15
NAFTA
East Asia
North‐East AsiaASEAN
Source: RIETI‐TID By courtesy of Professor Nobuaki Hamaguchi 10
Consumption Goods
Intermediate Goods
Asia
USA USAAsia
International Trade Structure (2006)
Source: 2008 White Paper on International Economy and Trade
3. Is Asia still the World Factory?
11
Trade between the US and East Asia
0
100
200
300
400
500
600
700
800
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
(billion US dollars)
Figure 1. The Value of US Exports to China and East Asia and China’s and East Asia’s Exports to the US.Source: US Census Bureau.Note: East Asia includes China, Japan, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand.(Figure made by Dr. Willem Thorbecke at RIETI)
East Asia’s Exports to the US
China’s Exports to the US
US Exports to East Asia
US Exports to China
12
US Trade Deficit
0
100
200
300
400
500
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
(billion US dollars)
Trade Deficit with East Asia
Trade Deficit with China
Trade Deficit withnon‐East Asian Countries
Figure 2. US Trade Deficit with China, East Asia, and non‐East Asian Countries.Source: US Census Bureau.Note: East Asia includes China, Japan, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand.(Figure made by Dr. Willem Thorbecke at RIETI) 13
Sendai
Bangkok
Tohoku
East Asia today: the World Factory based on supply chain networks centered around
dozens of major cities and industrial agglomerations
14
Agglomeration through snowball effectsExample: auto/electric machinery industry
auto / electric machinery
cars/appliancesDomestic
Overseas
labor capital
key partsmaterials
Domestic
Overseas
Key factors for agglomeration: scale economies and low transport‐cost
partsmaterials
set makers
suppliers of parts and materials
15
World parts and components trade shares by region
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%19
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Source: RIETI‐TID ROW: Rest of the World By courtesy of Prof. Nobuaki Hamaguchi
IntraRegionalto the ROW
IntraRegional
to the ROW
IntraRegional
to the ROW
NAFTA
EU
EastAsia
16
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: OICA
Automobile production by area (All types)
4. Auto Industry: global supply chain and its vulnerability
Europe
China
South America
NAFTAJapan + Korea
ASEANSouth Asia
17
Automobile production in ASEAN
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: OICA
Thailand
Indonesia
Malaysia
PhilippinesVietnam
18
Automobile industry (together with supporting industries) production of a car ← assembling 20,000~30,000 parts
scale economies in production low transport costs
each key part produced at only one (or a few) locationsin Japan (or East Asia)
multilayered complex supply chain networksfrom procurement of parts to delivery of finished
productsthrough just‐in‐time procurement policy
Quite efficient under normal conditionsbut
Quite vulnerable to major disasters
Quite efficient under normal conditionsbut
Quite vulnerable to major disasters
minimizing inventory stocks
19
日経ビジネス2010・10・18号
Agglomeration of auto and supporting industries in Japan
Oversea production : 16 million cars(using key parts from Japan)
domesticsalesDomestic production
per year10 million cars exports
: about half
: about half
Tohoku
Tokai
Kyushu
20
Supply chain of automobile parts in ASEAN countries
Source: IDE‐JETRO and WTO 2011, Trade Patterns and Global Value Chains in East Asia: From Trade in Goods to Trade in Tasks21
2008 2009 2010 2011
TohokuJapan
Lehman Shocks Quakes and Tsunami
Index of Automobile production in Tohoku and in Japan(synchronized impacts)
Source: R. Wakasugi, RIETI Symposium on Great East Japan Earthquakes, 2011.11.0722
The Global Impact of the Japanese Quake and Thailand’s Flood
‐57.3
‐60.1
‐39.0‐25.2
‐67.6
‐85.0
‐27.6
‐100.0
‐80.0
‐60.0
‐40.0
‐20.0
0.0
20.0
40.0
60.0Janu
ary
February
March
April
May
June July
August
Septem
ber
Octob
er
Novem
ber
Decembe
r
Japan Guangdong‐China Thailand USA
Source: JAMA, Statistic Bureau of Guangdong Province, TAIA, Federal Reserve BoardBy courtesy of Professor Nobuaki Hamaguchi
‐85.7
2011, Japan, Guangdong (China), Thailand, and the USAutomobile production (y‐o‐y % change)
Japanese Quake
Thailand’s Flood
23
‐25
‐68‐85
‐25 ‐23
30
‐8
74
23
0.7
‐57‐40
‐100
‐80
‐60
‐40
‐20
0
20
40
60
80
100Janu
ar
February
March
April
May
June July
August
Septem
ber
Octob
er
Novem
ber
Decembe
r
Thailand Malaysia Indonesia Philippines
Source: TAIA, AAM, GAIKINDO, AAP By courtesy of Professor Nobuaki Hamaguchi
Japanese QuakeThailand’s Flood
2011, ASEAN automobile production (y‐o‐y % change)
24
Impact of natural disasters and international conflicts on automobile sales in China
60
40
20
100
0
‐20
‐40
‐60
%
80
Toyota
Nissan
Honda
2011/2 5 8 11 12/2 5 9 11 13/1~2 54
East Japan Earthquake
(11/3)Thai Flood(11/9~)
Senkaku Conflict(12/8~)
Source: The Nikkei, 10 October 2012 and 5 June 2013 (two diagrams combined by the author) 25
No place in the world would be risk‐free!
International cooperation for mainstreaming the global resilience of supply chains
Possible large‐scale disruption of supply chainsfrom any major disaster:
QuakeTsunamiFloodTyphoon / Hurricane・・・
Natural disastersNatural disastersAir / Water pollutionEpidemicsFinancial / Monetary shocksTerrorismPolitical conflictsMilitary conflicts / WarGlobal warming・・・
Social disastersSocial disasters
Secondary disastersTransport disruptions, Nuclear Power plant accident, Demand/Supply disruptions …
26
Asia30%
North America26%
Europe29%
LAC8%
ME∙NA4%
SSA2% the Rest
1%
5. The Asian Century?: Prospects and TasksThe Scenario of the Asian Century (ADB, ASIA 2050)
Global Population: 7.1 billionAsian Population : 3.9 billion (55%)
9.2 billion4.8 billion (52%)
Global GDP: $70 trillionAsian GDP : $21 trillion (30%)
$335 trillion$174 trillion (52%)
marketFX rate
4.2% / year
5.8% / year
Asia52%
North America16%
Europe18%
LAC6%
ME∙NA3%
SSA2% the Rest
1%
2012 2050
27
In order to realize the expected Asian Century
Asia as the World Factory today
a World Center ofAdvanced Production
networksHigh Quality Markets
Innovation networks+ +
I. Rebuilding more resilient and inclusive Supply‐Chain‐Networks, and
II. Strengthening the Brain‐Power‐Network for the future Asia
International Cooperation
based on the extensive supply chains utilizing huge wage‐disparity
28
globalization ofthe world economy
Development ofBrain Power Society
The major reorganization ofglobal economic・political・social systems
Revolutionary development in ICTand Transport Technology
Development of the Brain Power Society since the late 20th century
6. Developing the brain‐power‐network in Asia
29
Number of papersmost cited (top 1%)
Number of papers
Number of patentapplicationsGovernment R&Dexpenditure
Private Sector R&D
NIKKEI ASIAN REVIEWMarch 20, 2014
30
Eruptionof
Innovation
0
5
10
15
20
25
30
35
40
45
501981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
trillion yen
US
China
Germany
UK
Japan
FranceS. Korea
47.4
18.919.8
17.1
0.8
6.0
16.9
R&D expenditure by country (OECD PPP)
31
US
China
France
Germany
Japan
UK
S. Korea
Data source: National Institute of Science and Technology PolicyDiagram made by Dr. Isamu Yamauchi at RIETI
Number of patent applications by nationality
0
100
200
300
400
500
60019
81
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
(thousand)
32
Germany
US
China
UK
JapanFrance
S. Korea
Data source: National Institute of Science and Technology PolicyDiagram made by Dr. Isamu Yamauchi at RIETI
Number of papers cited frequently (top 10%)
0
10,000
20,000
30,000
40,000
50,000
60,000
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
33
The fundamental resources in the Brain Power Society
Individual Brain Power
Diversity in people・brainsin the society
Diversity in cultures among different regions
Synergy through heterogeneouspeople・brains
Synergy through heterogeneouscultures
Importance of International Cooperation throughdiversity and culture in the Brain Power Society
34
for resolving this fundamental problem
close cooperation ofheterogeneous K‐workers
antinomy
in the short‐run in the long‐runthroughclose communicationssynergy
Common knowledgediversitysynergy
(e.g. “nominication” in Japan)
Promote active interactions among diverse regions and countries 35
Diversity and creativity: National Institute for Materials Science (NIMS)
Figure 1: share of foreign researchers at NIMS
Share of fo
reign reseache
rs (%
)
2001 2011
• Among high‐ranking papers at NIMS in termsof citations, the number of papers written byauthor(s) including foreign researcher(s)
among top‐10 papers: 8among top‐31 papers: 24
SOURCE: Ariga and Urao, “Productivity enhancement of a researchinstitute through the contribution of foreign researchers,”Science & Technology Trends No.127, 2012, 1•2, Ministryof Education and Science
Table 2. World ranking in terms of citations in materials science
36
Table 1. The number of foreign researchers in public researchinstitutes in Tsukuba (2011, March)
(NIMS)
The Map of international research cooperation in Solar Cellsthe number of papers and international coauthorship (published between 1945 and 2009)
Ranking in the numberof papers
Source:I. Sakata, H. Sasaki, H. Nakamura and Y. Kajikawa "Maps of international research collaboration in clean energy"Journal of Energy and Power Engineering 7 (2013)
1st: US, 2nd: Japan, 3rd: Germany, 4th: China, 5th: India, 6th: France, 7th: England, 8th: South Korea, 9th: Spain, 10th: Italy(but, weak research cooperation in Asia)
37
7. The Growth Strategy for Implementing the “Third Arrow”
Making the economy grow while the population decreases Enhancing the TFP of economy
I. “Silver” is beautifulII. “Small and creative” is beautifulIII. “Open and connected” is beautiful
38
But, how? : Innovation everywhere involving everyone!
Advancing the bold new strategy reflecting new valuessuch as:
23%→40%Japan
11→37Korea13→37
Hong Kong9→33
Thailand9→32
Singapore
7→29Vietnam
14→26Canada
8→28
China
5→21Cambodia
5→21Malaysia
6→24Mexico5→21
Bangladesh
13→24
US
4→16Laos
5→18Myanmar
5→16
India
5→17Indonesia
4→12Philippines
Flying Geese of Aging Society in Asia‐Pacificthe population share (%) of aged people over 65: year 2010 → year 2060
Source: UN World Population Prospects, The 2012 RevisionSource for Japanese data: National Census of Japan, National Institute of Population and Social Security Research, “Population Projections for Japan (2012 revision)”
Let Japan be a leader of
the innovative silver society
Who are the aged? Why fix the dividing line at 65?
The average life expectancy in Japanactual estimate
Data source: Ministry of Health, Labour and Welfare Diagram: Cabinet Office, Government Of Japan “Report on Aging Society, 2014”
Ultimate Goal: Create a new society where everyone can happily work/enjoy in good health until the end.
40
The Silver is beautiful:Big customers for new products / industries
• housing goods services entertainments tailored for the aged
• medical / nursing services• medical / nursing equipments• friendly and helpful robots• lifetime education• all kind of resorts / retirement villages••
Big customers for new products / industries• housing goods services entertainments tailored for the
aged• medical / nursing services• medical / nursing equipments• friendly and helpful robots• lifetime education• all kind of resorts / retirement villages••
Big resources• human resources for
workers / managers, skills / knowledge,innovation / creation / ventures
• financial resources
Big resources• human resources for
workers / managers, skills / knowledge,innovation / creation / ventures
• financial resources
Senior Citizen
Younger generations
Creating the best matching
Creating the most innovative silver society through international cooperation 41
Increasing share of consumption expenditure by
senior households
American labor force participation rate: aged 62‐74
42
Source: Nikkei Shimbun, May12, 2014 Source: The Economist, April 26, 2014
43
Irodori Project in Action (with All Smiles): Kamikatsu, Tokushima
44
Products of Irodori Project: Tsumamono for Japanese Dishes
Irodori (Color) Project in Kamikatsu Village, Tokushima
• Initiated in 1986 by Mr. Yokoishi (then 24 years old) of JA and four senior ladies
• Now 150 members (all farmers)average age: 67 (mostly females), the oldest: 94
• Average revenue per member: 1.7 million yen
45
Kamikatsu village today
• Irodori project + four similar projects (the third‐sector)• population: 2092 (U‐turn + I‐turn: 6.3%)• aged people over 65: 47% (the highest in Tokushima)• only two persons are bedridden• per capita medical expenditure (National Health Insurance):
260 thousand yen (vs. 460 thousand yen at the village with the second highest ratio of elderly)
1817
1415
11 11
9
7 7
3 3
8
4 4
23 3 3
4
6
43
5
89
12
15
1819 19
0th
5th
10th
15th
20th
rank
Source:OECD Factbook 2010: Economic, Environmental and Social Statistics,and http://www.esri.cao.go.jp/jp/sna/h20-kaku/percapita.pdf
rank Country 20081 Luxemburg 117,967
2 Norway 94,763
3 Switzerland 64,885
4 Denmark 62,054
5 Ireland 59,944
6 Netherlands 53,094
7 Iceland 52,568
8 Sweden 51,954
9 Finland 50,931
10 Austria 49,527
11 Australia 48,049
12 United States 47,186
13 Belgium 47,151
14 Canada 44,950
15 France 44,550
16 Germany 44,519
17 United Kingdom 43,237
18 Italy 38,455
19 Japan 38,371
20 Spain 34,971
Ranking of Japanese per capita GDP in OECD“Small and Creative” is beautiful.
46
The top 10 countries in the OECD in terms of per capita GDP (2008)
1. All small countries located in the northern part of Europe2. The total population of the 10 countries: 63 million (about ½ of Japan)
The average population: 6.3 million (vs. 5.5 million in Hokkaido)To achieve economic growth in a Brain Power Society, population size is not essential.
3. Most countries are already in the advanced “silver society”. (the share of people over 65 in 2010: Sweden 18%, Denmark 17%, Switzerland 17%, Finland 17%,…)
4. Each is an independent country, having its own language and culture, with a unique set of economic social educational policies.
5. Each spends a high proportion of GDP on education (Denmark 7.8%, Sweden 6.7%, Norway 6.7%, Finland 5.9%, vs. Japan 3.4%, in 2007)
6. Each is highly globalized with high GDP ratios of exports, out‐FDI and in‐FDI, and with a high proportion of immigrants
7. Most multi‐national firms are concentrated on knowledge‐intensive activities (e.g. HQ‐management, R&D, design) with high profit‐ratios, while all workers in each country get relatively high wages, (cf: Grossman and Ross‐Hansberg, 2008, AER 98)
8. The ten countries together form a Brain Power Society, rich in diversity47
Let Japan be a union of semi‐independent shining regions
TokyoTokyo
A
D
C
B
We Love Hokkaido
We Love Japan
We Love the World
We Love Kansai
We Love Japan
We Love the World
48
“Open and connected” is beautifulPromoting the Regional Integration of Asia‐PacificEurope
RCEP
FTAPP
TPP
NAFTA
China Korea Japan
ASEAN
49
Connect or Perish: International coauthorship
50Source: Nikkei Shimbun, May 12, 2014