McKinsey & Company has presented 5 shifts for rebuilding the competitiveness of Japanese companies, along with approximately $1.7 trillion in growth potential through 2040. Against a backdrop of virtually zero productivity growth among Japanese companies, reallocating growth toward leading companies is identified as a key challenge.
McKinsey has published the Japanese version of its latest report, "Toward a New Era for Japan: Rebuilding Competitiveness for Dynamism and Growth," identifying higher per-capita productivity and a recovery in corporate dynamism as essential amid structural changes including geopolitical uncertainty, the transformation brought about by AI and population decline.
The number of Japanese companies on the Fortune Global 500 has fallen from 149 in 1995 to 38 today, while the net productivity growth rate for approximately 10,500 companies remained virtually zero from 2019 to 2023. The report says that achieving growth will require increasing the number of highly productive companies and reallocating talent and capital to growth areas.
The report presents 5 "shifts" for Japanese companies to regain growth and competitiveness in the new era, stating that implementing them is expected to strengthen their competitive foundations and support sustainable growth.
Growth areas cited include semiconductors, batteries, robotics/physical AI and nuclear power. Combined with capability-building in AI, cloud computing and cybersecurity, these areas could generate approximately $1.7 trillion in additional revenue by 2040.