"Abenomics" is Progressing!
3. Fundamental Principles of the Third Arrow and its Strategies for the Future
Fundamental Principle of the Third Arrow (1)
1) Promotion of Investment
- Corporate investment is to be encouraged to maximize the potential of the private sector.
- Bold regulatory and institutional reform, bold tax incentives for capital investment.
- Major Key Performance Indicators (KPI)
- Return capital investment to the pre-global financial crisis level within three years (target: 70 trillion per year; FY2012: 63 trillion yen).
- Enhance the ratio of business startups to exceed the ratio of business closures and bring those ratios to a level comparable to the U.S. and UK, which is above 10% (current rate in Japan is around 5%).
2) Strengthen Utilization of Human Resource
- Increase workforce participation of women, youth and the elderly.
- Support the advancement of women's roles in the workforce and support youth in their search for employment.
- Major Key Performance Indicators (KPI)
- Improve female (25 to 44 years of age) participation in the workforce from the current rate of 68% to 73% by 2020.
- Reduce by 20% the number of long-term unemployed (more than 6 months) over the next five years and increase the rate of employment change and new hiring from 7.4% in 2011 to 9%.
- Double the number of international students by 2020 (university students and other students from 60,000 to 120,000).
Fundamental Principle of the Third Arrow (2)
3) Creation of New Markets
- Create new markets while also addressing common global challenges
- Streamline the approval process of leading edge medical equipment, and establish an institution that comprehensively manages leading-edge research and development comprehensively.
- Major Key Performance Indicators (KPI)
- >Expand the market size of health care, disease prevention and other life-related industry to 10 trillion yen in 2020 (currently 4 trillion yen).
- Expand the market size of pharmaceutical products, medical equipment, regenerative medicine and other medical-care-related industry to 16 trillion yen in 2020 (currently 12 trillion yen).
- Expand the size of PPP/PFI projects to 12 trillion yen over the next 10 years (currently 4.1 trillion yen).
4) Global Economic Integration
- Promote integration with the global economy through encouraging overseas expansion of Japanese companies and foreign direct investment.
- Promote economic cooperation such as TPP and the Japan-EU EPA, create the most business friendly environment through regulatory reform driven by the establishment of the National Strategic Special Zones, and enhance foreign direct investment.
- Major Key Performance Indicators (KPI)
- Increase the trade conducted under FTAs to 70% by 2018 (currently 19%).
- Double the amount of direct investment in Japan by foreign companies to 35 trillion yen by 2020.
- Attract 10 million international tourists annually in 2013 and 30 million in 2030.
Strengthening the Growth Strategy
- The Growth Strategy is not merely words on paper. It (1) places the highest priority on putting strategies into action and (2) continue to evolve to achieve further reforms.
- In December 2013, Prime Minister Abe gave the following two instructions in order to further strengthen the third arrow:
Development of an “Action plan for the implementation of Japan Revitalization Strategy”
- The action plan is to be developed by the end of January 2014 to facilitate steady implementation of Japan Revitalization Strategy policies.
- The action plan will outline implementation periods for major policies and the ministers responsible for the respective policies. Implementation of the policies will be managed through a PDCA cycle.
Development of a “Direction for consideration of further reforms”
- Pursuing further evolution of the Growth Strategy, an revised Growth Strategy will be developed in mid 2014.
- Leading up to that, the Industrial Competitiveness Council (chaired by Prime Minister Abe) will develop a “Direction for consideration of further reforms” that will focus on structural reforms in the fields such as employment, human resources, agriculture, health care and nursing care.
