From Lost to Rise: Japan Aims for Economic Revival through Web3

As the world's third largest economy, Japan has faced numerous challenges in recent years. The repeated outbreaks of COVID-19, the worsening debt crisis, and an aging population have made Japan's economy struggle. In search of new growth points, Japan is looking towards the new generation of internet technologies represented by Web3, hoping to recreate the miracle of its past economic boom.

The Rise and Fall of Japan's Economic Development

Looking back at the economic development process of Japan, one can see a continuous cycle of fragmentation and reorganization. After World War II, the Japanese economy fell into chaos for a time, but with strong government intervention and the opportunities brought by the Korean War, Japan quickly rose and created a remarkable economic growth miracle. In the 1960s, Japan's economic growth rate once reached as high as 11.3%, ranking second among Western countries.

Subsequently, Japan began to implement an internationalization strategy, gradually shifting its industrial structure towards technology-intensive sectors. However, in the early 1990s, the bubble economy burst, and Japan fell into a prolonged stagnation. In response to the crisis, Japan accelerated its global expansion while increasing investment in basic research, focusing on supporting core technologies. After thirty years of development, although Japan has not been able to achieve high-speed growth again, it has become a mature open economy, maintaining a leading position in several high-end manufacturing sectors.

The Missing Development of the Internet

However, among the many advantageous industries in Japan, the internet sector appears to be quite weak. As a developed country, Japan has a highly prevalent internet infrastructure and a large population of internet users, yet its e-commerce penetration rate is only 8%, far lower than China's 37%. Among the global internet giants, it is even harder to find Japanese companies.

The reasons for this situation include: 1) the limited scale of the domestic market in Japan, which makes it difficult to support the growth of large internet companies; 2) a conservative culture that is not conducive to the rapid iteration and innovation of the internet industry; 3) a well-developed offline service system that weakens the demand for internet services; 4) an aging population that restricts the development of emerging industries; 5) excessive reliance on foreign technology, missing the golden period of internet development. Various factors have combined to result in Japan becoming a bystander in the mobile internet era.

Transforming Web3 in Search of Breakthroughs

In the face of the lagging development of the internet, the Japanese government has begun to turn its attention to the Web3 field, hoping to achieve a leapfrog development. In May of this year, Prime Minister Fumio Kishida publicly stated that he would vigorously promote the development of Web3 from a policy level. Since then, Japan has successively introduced a series of policy measures such as the stablecoin bill and the Web3 development plan, demonstrating a high level of importance attached to this field.

In fact, Japan has long been attentive to Web3. On one hand, the pandemic has exposed Japan's shortcomings in the digital economy, prompting it to accelerate its digital transformation. On the other hand, under the pressure of an aging population, the light-asset digital economy is seen as an important direction for Japan's economic transformation. At the same time, Japan's advantages in fields such as gaming and anime are highly aligned with Web3 concepts like the metaverse and NFTs.

In a relaxed regulatory environment, Japan's Web3 industry has shown certain potential. Currently, there are 30 licensed cryptocurrency exchanges in Japan, with over 6 million users having opened accounts. Some well-known companies such as Bandai Namco and Sega have also begun to venture into blockchain gaming. Venture capital institutions like SoftBank and SBI are also actively investing in Web3 projects.

Outlook

Despite Japan's ambitions in the Web3 field, it still faces many challenges in achieving a shortcut to success in the short term due to factors such as market size and innovation culture. However, looking back at Japan's economic development history, Japan has repeatedly revived from crises under the dual role of government policy promotion and corporate transformation. This time, whether Japan can rely on Web3 to recreate its glory remains to be seen. However, it is certain that Japan has regarded Web3 as an important engine for economic growth and will continue to make efforts in this field in the future.