economic environment is deep - seated, many firms are actively engaging with the ageing population, treating it as a new business opportunity. for example, there are many cases where firms have targeted their marketing strategies at the elderly, and have succeeded in stimulating consumers'drive to spend, particularly among those with high levels of disposable financial assets. this success is seen in consumption of various goods and services, such as expensive digital appliances, particularly flat - panel tvs ; expensive package tours both within japan and overseas ; educational services promoting lifelong education and self - improvement ; and services related to well - being and sports. given that the ageing of the population may thus be seen to provide a wide range of business opportunities for firms, there still appear to be plenty of growth opportunities for nonmanufacturers and in sectors catering to domestic demand, even with a falling population. business opportunities are not restricted to the domestic arena, and japanese firms will of course always retain the option of extending their operations overseas. recently, japanese firms, not only manufacturers but also nonmanufacturers such as retailers, distributors, trading houses, and financial institutions, have been actively engaged in business in asia. this business includes not only relocating labor - intensive production but also increasing project variety by promoting technology transfer, opening up new markets, and enhancing local sales, all of which further the expansion of japanese firms'overseas business. those of you who live in oita and other parts of kyushu can experience the impact of globalization more directly due to your geographical proximity to other asian countries. dealing with changes in the economic environment requires a head - on and proactive approach from japanese firms rather than a " wait - and - see " attitude. the most effective prescription for survival is for firms to sharpen both their ability to respond incisively to changes and the creativity with which they provide attractive new products and services. from the viewpoint of the overall japanese economy, unless japanese firms succeed in developing business aggressively in global markets and expanding domestic income, then it becomes rather hard to envisage growth in domestic demand. the need for firms to respond proactively to changes in the environment does not apply only to demographic changes such as societal ageing and the declining birthrate, but is of more fundamental relevance. during past phases of high economic growth, economic recovery spread throughout the country via increases in public investment. however, this conventional mechanism of economic recovery is changing, and firms are seeking ways to revitalize regional

some light on why there has not been more widespread positive activity in the corporate sector and what measures should be taken to encourage its spread. ii. two types of structural adjustment pressure faced by the japanese economy the first type of structural adjustment pressure faced by the japanese economy in the 1990s was the pressure to change the industrial structure exerted by the expansion of supply capacity in asian countries. other asian countries have more abundant supplies of labor than japan, while japan has a comparative advantage in terms of capital stock and technology. economic theory suggests that the japanese manufacturing sector will focus less on labor - intensive manufacturing industries whose products can be substituted with imports from other asian countries and tend to specialize in capitalor technology - intensive industries. theory also suggests that, if growth in the nonmanufacturing sector can be realized, this will enable the surplus labor emerging as the share of labor - intensive industries declines to be successfully absorbed. the expansion of production capacity in asian economies was therefore expected, through the adjustment process detailed above, to shift the japanese economy's orientation from external demand to domestic demand. in the event, the manufacturing sector witnessed both increased specialization in capital - or technology - intensive industries and a decline in the share of labor - intensive industries. however, japanese firms'efforts to reallocate their business resources, concentrating on highly profitable markets and withdrawing from other areas, ended up being only moderately successful. they could not keep up with changes in business conditions that were remarkable for their extent and the speed with which they occurred. the profitability of individual firms thus dropped significantly. in addition, the poor performance of the manufacturing sector hindered growth in the nonmanufacturing sector : household income declined, and generation of corporate demand such as advertising activities and computer software development was weak. as japanese consumers became more sensitive about prices, especially the balance between price and quality, there was an unprecedented level of import penetration from other asian economies, and this was part of the reason why the nonmanufacturing sector, particularly the wholesale and retail industry, also ended up suffering from a significant drop in profits. in addition to adjustment pressure affecting the japanese industrial structure, another type of adjustment pressure is associated with the fall in land prices after the bursting of the economic bubble. this had a powerful negative impact, on the nonmanufacturing sector in particular. it is a well - known fact that the significant fall in land prices gave rise to a huge amount of nonperforming assets in the real estate,