POLICY & DIPLOMACYINVESTINGINPEOPLEFOR A NEW FORM OF
CAPITALISM

While capitalism’s advance has brought aboutsignificant growth for the global economy, it has also
created such problems as growing social disparities,
climate change, and issues of economic security. That
is why the Kishida administration considers a revisionof capitalism an urgent matter and has advocated a
new form of capitalism as a crucial, future-oriented
policy for Japan.
Concrete policy measures were announced in Junein the Grand Design and Action Plan for a New Formof Capitalism. Based on the concept of a virtuous
cycle of growth and distribution and the developmentof a new post-pandemic society, the document lays

In June, a grand design and action plan wascompiled to implement the new form of capitalism
advocated by Prime Minister KISHIDA Fumio.
“Two birds with one stone”—the plan, which seeks
to both solve social problems and achieve economic
growth, focuses on several investments, including
investments in people.
out the four pillars of priority investments. Aiming tosolve social problems and achieve economic growththrough new private-public cooperation, the fourpillars will realize a new form of capitalism for thesustainable well-being of all citizens. Those pillars are:investment in and distribution to people; targeted
investment in science, technology, and innovation;
accelerating establishment of startups and promoting
open innovation; and investment in GX (greentransformation) and DX (digital transformation).
Topping that list is investment in and distribution
to people. In order to exercise creativity in thismodern age, in which we experience huge waves ofINVESTMENT IN AND
DISTRIBUTION TO PEOPLE• Promoting wage increases• Facilitating labor mobility through skill increases• Moving from savings to investment: formulationof the “Doubling Asset-based Incomes Plan”• Supporting the efforts of all generations,
including children, working adults, and the elderly• Respect for diversity and flexibility of selection• Formulating guidelines and strengthening
disclosure to the stock market of non-financial
information, such as human capitaltransformation, people are becoming increasingly
important. It is people who will solve the issues
facing society, such as responding to climate change.
Increasing value by investing in people is therefore
becoming extremely important in the face of labor
shortages for Japan.
According to OKINA Yuri, chairperson of theJapan Research Institute and a member of theCouncil of the New Form of Capitalism Realizationthat formulated the policy plan, this investment inpeople represents the vision for the future to which
the new form of capitalism aspires. She said, “It isimportant to act in an integrated fashion. That means
raising wages to match productivity; facilitating labormobility through skill increases such as retraining;
promotion of working multiple jobs and assistancefor re-employment; and supporting the activitiesof all generations to enable them to thrive, as well
as shifting personal financial assets from savings toinvestment. This will lead to prosperous lives andwell-being for citizens and growth for the country.
Such a virtuous cycle is the key point to creating a
new form of capitalism.”
Okina has especially high hopes for creating asociety in which young adults and women can thrive
further. “Now is a time when the products andservices that will succeed are those with high added
value from the application of assets such as ideas,creativity, and data. At the same time, those are fields
in which young adults—the leaders of tomorrow—
can demonstrate their strengths. I expect positive
results from initiatives that further encourage

startups and side businesses from this generation,
known for giving considerable thought to addressing
social problems.”
Okina also talks about the grand design’s vision,
which perceives the problems facing society not as
hurdles, but as sources of energy, thereby becoming
new drivers of growth as they are solved. “Therapid spread of online meetings and remote work
during the pandemic has enabled flexible working
arrangements, and I’ve heard from many people that
their work-life balance has improved. In other words,
these individuals are demonstrating how to turnchallenges into positive change.” In the future, themarket and the state will work together in new formsof public and private cooperation that endeavor tosolve social problems.
Prime Minister Kishida’s belief that valuing people
will lead to growth is the foundation of the new formof capitalism. The aim of implementing the concept
is not limited to Japan’s development. It also involves
taking the lead in addressing issues affecting the global
economy and the international community. Now thatthe grand design and action plan have been compiled,
the world’s attention will be on Japan’s next steps.

OKINA Yuri is an economist, chairperson of the Japan Research Institute,and a member of the Council of the New Form of Capitalism Realization. She
explains how her career advancement was achieved by changing jobs. She also
points out that the pandemic has changed how people work and has provided
a good opportunity for progress toward better working arrangements.