They will be trying to cut costs by 30 to 40 percent between now and the mid-199Os. Putting these factors together, you will see a more concentrated, more rationalized, more cost-efficient Japanese economy at the end of the current transition. Japan will be an even tougher competitor than it has ever been in the past. The Japanese market is going to be tougher for U.S. exporters to penetrate since they will be up against still more competitive domestic companies. In addition, Japanese companies will be tougher competitors in the global marketplace because they will be competing from a bigger base and with lower costs.
Competitiveness is a relative thing.
It is not how fast you run that counts, but that you run faster than the others. Over the next three or four years if Japanese companies adjust more quickly than North American companies, they will increase their competitive advantage. It may well be that in 1995 or l996 the Japanese market will be even tougher to penetrate than in the past, not because of regulatory problems but because Japanese companies will be that much more competitive. The questions of regulation, business practices and government policies come after that. Japan today is on the defensive.