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Motohisa Furukawa

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The Search for a New Growth Model

Posted: 01/27/2012 10:29 am

Leaders of industry and government from all over the world this week gather in Davos, Switzerland, for discussion on "The Great Transformation: Shaping New Models." The theme could not be more fitting. The model for future growth is an issue that calls for urgent debate.

There is no mistaking that 2012 is set to be a challenging year. The slowdown in global economic growth is expected to persist, while unemployment rates will remain high, creating difficulties for millions of households worldwide. At the same time, elections and political transition in key economies will lead to the sharpening of political debate and potentially also add further turbulence and instability.

The debt crisis in the Euro-zone is a pressing challenge and one that impacts the capacity for growth. While the Japanese and U.S. economies are forecast to see modest growth of around 2% during 2012 (IMF figures), the Euro-zone is projected to drop at -0.5%. It is the responsibility of our friends in Europe -- with the support of the international community -- to ensure that the challenges being faced in the region are managed and not allowed to result in a ripple-effect that threatens the global economy.

It is equally important, however, for us to recognize that the issues we face in 2012 are not limited to the debt crisis in the Euro-zone.

At the individual level we have seen unambiguous signs that the economic climate is contributing to discontent. Public sentiment has undergone a distinct shift, and we can be far less certain that a return to previous levels of economic growth can erase this dissatisfaction. Through the Occupy Wall Street movement and other demonstrations, we have heard not only a message of anger at the current situation, but the desire for something else; for something more. The search is underway, particularly among the young people of the world, for a new model of growth.

A fundamental assertion for any new growth model, that is, dynamic and inclusive growth, is that three basic elements -- the economy, society, and the environment -- are each integral and must all contribute to overall improvement. Such thinking is not superfluous or a luxury that can only be afforded during periods of strong economic performance. It is critical to recognize that we must seek to provide not only prosperity, but also leave behind a healthy social and natural environment for future generations.

The new growth model must, in other words, impart more than economic gain. In recent years governments around the world, including Japan, have quietly turned their attention to research into the question of happiness and quality of life. How do we measure, or even define, such a concept? What factors contribute? In an era when so many people face stark economic challenges, does it even matter? Fundamentally, how do we meet the needs of society, and of future generations?

Research and, one could argue, the message from demonstrations around the world, would indicate that the contribution made by society and the environment play an integral role in ensuring our citizens realize their personal goals. Such factors are therefore critical to both prosperity and sustainability; an important part of the new growth model.

Society is influenced, and can be strengthened, through a wide range of factors that directly impact people's lives. Through the sense of security that comes from living a healthy, sustainable life; by the knowledge that we are making a contribution to our community; in the ability to live a life free from the threat of crime; and by the sense of promise that results from a fair society that rewards personal success.

The bottom-line is that the equilibrium between the economy, society and the environment must be viewed as complementary rather than a trade-off. This is not a zero-sum game. Japan claims the world's lowest infant mortality rate, the highest life expectancy, the lowest crime rate and the lowest CO2 emissions to GDP among developed economies. Such gains, which have been driven by the Japanese economy and technological advancements, bring tangible benefits to the environment and society.

Our goal is to see Japanese expertise pave the way for new frontiers at the point of interaction and partnership between life sciences, environmental technologies, social entrepreneurs and other stakeholders globally. Such cooperation -- and the innovation that results -- will lead to the emergence of new global corporations and social entrepreneurs acting at an international level. It will also support improvements to quality of life by contributing not only to the economy, but to the environment and to society at multiple levels.

The way that individuals regard quality of life and happiness varies greatly in accordance with religion, culture and personal outlook; much as the demands of demonstrators we have seen around the world differ with politics, economy and society.

Certain fundamental truths, however, are common the world over. The desire for health, security, and prosperity are universal, and are central to personal satisfaction.

Research into concepts such as quality of life and happiness, and efforts to incorporate such thinking into new growth models, ought not to be done for research's sake, but for concrete, practical purposes. The discussion of new growth models is promoting a re-examination of economic, social, environmental and development policy.

In Japan, an outline of initiatives and commitments that are required for the country's revitalization has been formulated and is already starting to be implemented.

Our hope is that 2012 comes to be the turning point for global initiatives for the establishment of a new growth model. As an active participant in the international community, Japan is committed to playing a leading role in this process.