If it is now the Chinese threat that makes European and American technologists nervous, At the end of the 20th century it was Japan that occupied his thoughts. Their advances in the innovations of the time, from video or optics to automotive, were the cause of debates and tariff threats everywhere. And even the most successful author of all time, Michael Crichton, dedicated a book –Rising Sun– to these tasks.
The truth is that Japan achieved something unusual, from the Meiji Restoration of 1868 until well into the 1970s: going from being a technological periphery to being, in terms of industrial production and total GDP, on the global podium.
In fact, By the early 1970s, Japan was already the third largest economy in the world.. And, although its per capita income was still somewhat below that of the great Western powers, the projection was clear: in five or six years it would be among the first countries in the world also in individual income. Finally, we have seen how geopolitical ups and downs have weighed down their relative position, but the Japanese continue to be a leading technological power.
It is worth remembering this because, when in Europe we talk about technological sovereignty, we fill our mouths with dithyrambs about “strategic autonomy”, “industrial champions”, “public-private alliances”, “European digitalization”, “European chips” and other rhetorical intricacies. But we almost always do it from a certain bureaucratic comfort, from a dunghill of committees and working groups trimmed with institutional color.
It is a textbook ‘want and not be able’. Of gossip and little action. Of not wanting to pay the price that comes with a real transformation of such magnitude.
El economista Miyohei Shinohara, in an analysis that today we should have pride in every ministry that pronounces the word “innovation”, launches a thesis that dismantles romantic readings about “Japanese culture”, that entelechy with which the matter is usually dismissed lightly.
The Japanese miracle was not the result of some kind of massive social commitment nor of, what do I know, a Zen discipline applied to the industrial environment. It was the very harsh – and much less poetic – consequence of three elements: brutal credit, aggressive investment and ruthless competition at homebut surgically protected from the outside.
The first thing is to understand that Japan does not grow just because it “rebuilds after the war,” like West Germany or Italy. That is the anodyne cliché that is repeated over and over again. Yes, there was rehabilitation, but the Asian country even surpassed the trajectory that would be expected if the war had not existed. Any other country would have entered a phase of tired, almost consumptive maturity. Japan went one more gear.
First used banking as a spur for growth. Shinohara describes a financial system that lends above what is prudent, at the limit of what today we would call systemic leverage. The Bank of Japan feeds big banks; big banking feeds industry; The industry invests far above what its retained profit would allow. This “over-loan”, which sounds like anathema in Brusselsbut in reality it acts as a cathartic, since it triggers productive capacity before the economy, under normal conditions, could allow it.
After turned business investment into civil religion. Japanese companies reinvest and reinvest. They did not wait to have eternal “regulatory certainty” or for each new project to go through ten months of public allegations and an environmental consultation that would lead to a judicial dispute. They invested before even having closed demand, and This initial overcapacity lowers future unit costs, allowing mass productionmakes the product cheaper… and that opens export markets.
Without ignoring well-understood protectionism. The Japanese state protected its nascent industries from outside assault in the early stages. Steel, automobile, oil refining, machine tools… All of this was, at the time, surrounded by tariffs, quotas or preferential tax treatment. Any European will hear this and, with a hieratic gesture, accuse: “protectionism! Opprobrium!” Yes. And yet, within Japan those same industries competed with each other viciously. Fierce intramural competition; extramural partial shield.
Of course, the dear reader will allude to monetary policy as a decisive factor. And it is partly true: Japan fixed the yen at 360 per dollarar. A deliberately undervalued yen acted as a cornucopia for exports: your products are cheap abroad, you earn foreign currency, you buy technology, you modernize the plant, you export again. Repeat and repeat ad nauseam.
So far, the industrial epic. But Japan also paid its price. And this is where Europe – and Spain by allusions – would do well to stop spreading grandiloquence and start taking notes in clear handwriting. Because this model has two internal costs that end up becoming imperative.
The first is work. Japan went, around 1960, from having an excess of cheap labor to having a shortage of labor. And when there are no longer armies of young people willing to work twelve hours for starvation wages, wages rise, union pressure grows, the country becomes inflationarylabor is no longer that seemingly inexhaustible resource. The economy is no longer insensitive to price.
The second cost concerns social and environmental elements. Shinohara himself states in his research that Japanese society began to demand less gross growth and more quality of life. The Japanese soon discovered that accelerated modernization leaves toxic exuviae, and that one cannot build eternally on a wasteland of well-being.
And all this led to the third tension: the geoeconomic one. When Japan stopped being a diligent student and became a competitor that threatened entire industries in the West, the rest of the world began to build walls, to hint at trade retaliation, to accuse Tokyo of dumping exchange. The game was no longer free. Success turns Japan into a systemic problem for others. And that success, paradoxically, forced Japan to change phase: liberalize more, revalue its currency, accept more external competition, act no longer as an emerging country that asks for indulgence, but as a power that must also offer handouts and open markets.
Japan allowed itself to make industrial policy without shame. It protected sectors and guided credit, forcing technological consolidation. It demanded, in practice, private investment discipline in certain directions. That, in Europe, tends to become an eternal diatribe about state aid, free competition, “not distorting the market,” etc. We get lost in the meanderings of the regulatory framework and end up building a bureaucracy that is expeditious in its language but very slow in its execution.. And while we break regulations, others build factories and replicate the Japanese model step by step.
In Europe we have a historical reluctance to do what Japan did: declare priority sectors and treat them as such for a decade, not during an election cycle. When we talk about chips, artificial intelligence, sovereign cloud… are we willing to shield these industries in their early phases from foreign giants that can crush them in two quarters? Or are we going to continue with half measures, with broad definitions of the same concept of sovereignty, so as not to hinder our agreements with the United States?
So, in the end, the question is much less academic than it seems and much more urgent, almost ominous: Are we in Europe, and in Spain, ready for a serious industrial policy?