The Competitiveness Strategies of Japanese Manufacturing Sectors since, Abenomics and their Implications

After the global financial crisis, significant signs of positive change appeared in paradigms of cooperation and competitiveness between the Korean and Japanese industries until 2012. The Korea-Japan intra-industry division of labor expanded to 59.8% in 2012 from 47.8% in 2000. While the vertical division of labor decreased, the horizontal division of labor during the same period increased from 14.4% to 28.8%.However, more than three years have passed since the Abenomics of the Japanese government. Abenomics mainly consists of three policies such as the expansion of government spending, rapid money supply expansion, and a growth strategy that has been configured with three arrows. The most interesting factors of Abenomics for us are the Japanese government’s policies to strengthen competitiveness of the manufacturing industry, such as the Industrial Competitiveness Enhancement Act and the weak Yen (JP￥) strategy. The exchange rate of the Yen on an annual average basis against the US dollar rose from 80 Yen in early 2013 to 121 Yen in 2015.The start of Abenomics, however, has begun to lower the value of the Yen against other currencies, greatly boosting the profitability of Japanese businesses and ushering in new changes in the competitive and cooperative relations between Korean and Japanese manufacturing industries. As much of the markets and products of the two countries’ manufacturing sectors overlap to a high degree, the changes made to the competitiveness of the Japanese manufacturing sector under Abenomics require serious attention and countermeasures from Korean policy and research communities.The objectives of this study include making an in-depth analysis and assessment of the Abenomics-induced changes in the competitiveness of Japan’s manufacturing sector, exploring the implications of such changes for Korea-Japan industrial relations, and identifying and advising possible countermeasures that the Korean government and industries may take in response