Japan’s total GDP ranking has fallen to sixth, while the decline in GDP per capita has also progressed. The article describes the longstanding problems of Japanese companies’ operational capabilities and management inefficiency, as well as worsening income inequality and increasingly rigid organizational cultures.
Japan is expected to fall to 6th place globally in terms of GDP, while the decline in GDP per capita has become increasingly serious as an indicator of the public’s prosperity. Japan, once ranked first among the G7, fell to 6th place in 2015, and some observers say broad-based stagnation has continued since then compared with the rest of the world.
Comparative data show that while the US and Europe achieved substantial growth between 2015 and 2024, Japan remained at approximately 5% negative growth, highlighting its prolonged structural stagnation. Although operational capabilities remain high, factors dragging down Japan’s overall assessment include government efficiency and the speed of business decision-making.
According to the Statistical Survey of Actual Status for Private-Sector Salaries, average annual income is reported at ¥4.87 million, but in reality approximately 60% of all earn ¥5 million or less annually, with the largest group earning between ¥3 million and ¥4 million. Rather than wealth rising among Japan’s top tier, many people are said to be pushed into the low- to middle-income range.
The “world-class operations, third-rate management” structure is cited as a fundamental challenge facing Japanese companies. Low government efficiency and business efficiency are identified as factors directly contributing to the decline in overall scores. The influence of old boys’ networks (OBN) is seen as creating organizational rigidity, while precedent-based and doctrinaire thinking is said to obstruct reform.
A survey by PERSOL Research and Consulting found that more than 60% of respondents said that OBNs and the customs and organizational culture based on them exist, while 94% pointed to deep-rooted insularity. These internal structural barriers are positioned as factors preventing a shift toward a future for the Japanese economy.