Thirty years ago, Japanese companies dominated global market capitalization rankings. Today, Japan’s economic share has sharply declined. This essay examines the Heisei era as one of national decline and questions the causes behind Japan’s long economic stagnation.

January 2, 2019
Young people today can hardly imagine that thirty years ago, Japanese companies occupied thirty-two of the world’s top fifty firms by market capitalization.
For some reason, I felt no inclination at all to read newspapers on New Year’s Day this year.
So it was only on January 2 that I first opened the Sankei Shimbun. On the front page, editorial board chief Masato Inui had published a New Year essay titled “Farewell to the Era of Defeat,” and I was astonished to find that it said exactly what I myself had been writing for years. More precisely, its foundation lay in the perspective of a business leader he had visited at year’s end.
All emphasis in the text and the passages between … are mine.
Farewell to the “era of defeat.”
Masato Inui, Editorial Board Chief.
Heisei was an era of defeat.
The words of a certain business leader I visited at year’s end struck me like a hammer, as someone who had drifted through the thirty years of Heisei.
Although Japan suffered major calamities such as the Great East Japan Earthquake in Heisei 23, the Hanshin Earthquake and the subway sarin attacks in Heisei 7, the country was generally “peaceful,” and after the frenzy of the bubble era had become a “mature” society — or so I had complacently concluded.
However, the numbers coldly tell the story of Heisei Japan’s “defeat.”
In the first year of Heisei, Japan’s GDP accounted for 15 percent of the global total, second only to the United States at 28 percent. In the bubble era, intoxicated by prosperity, we were flattered with slogans such as “Japan as Number One” and “24-hour work warriors,” and it seemed as though we could see the back of the American giant ahead.
The U.S. government, sensing a crisis, pressured Japan through structural talks, and Junichiro Koizumi repeatedly pushed postal privatization — which not only did nothing to revitalize Japan but in fact weakened national strength — as if it were his only policy, wasting national governance… as I mentioned several times when I first began writing. The chairman of the deregulation and reform council he assembled with many private-sector figures was the very person responsible for throwing the North Yard project into confusion and delaying Osaka’s revival by more than a decade…
The United States rediscovered growth through IT and maintained 25 percent of global GDP.
Japan, after the bubble burst and amid political turmoil, saw its share of global GDP fall sharply to 6 percent.
Young people today can hardly imagine that thirty years ago, Japanese companies occupied thirty-two of the world’s top fifty firms by market capitalization.
Now, only Toyota remains among the top fifty.
The population has continued to decline since peaking a decade ago, and the only thing increasing is the mountain of debt known as government bonds.
This essay continues.