ABSTRACT
Japan is losing its Inc. The interests of Japan and its giant corporations, for so long the same, are diverging. The Mitsubishis, Toyotas, and Matsushitas-the pride of Japan's postwar rebirth-are joining the great multinational diaspora. During the 1990S, the nation's best companies have been shifting production overseas faster than ever before. And the trend is likely to become more pronounced: capital investment abroad, a precursor of offshore production, has grown at a blistering pace over the decade. According to the Bank of Japan's semiannual survey of business, annual growth rates broke into double digits only in 1993, but probably topped 30 percent in 1996, while capital investment at home has lagged far behind. Pardy this is pure economics, a response to the high yen and the maturing of Japan's economy, as well as the ever stronger pull of the global marketplace. But the numbers also represent a stinging corporate rebuke to Tokyo. The message of the multinationals is this: The low productivity and growth of this over-
regulated marketplace no longer work for us. Japanese firms across the board have seen dramatic deterioration in the break-even points and efficiency of their Japan-based operations.
