The political- economic implications of de- industrialization with varieties of capitalism: an EU–Japan comparative analysis

Introduction De-­industrialization,­defined­as­the­relative­decline­in­output­and­employment­in­ the­manufacturing­industry,­has­occurred­not­only­in­European­economies­but­in­ all­advanced­economies­since­the­1970s.­In­the­Japanese­case,­in­particular,­de-­ industrialization­has­accelerated­very­rapidly,­faced­with­institutional­changes­in­ the­domestic­economy­and­changes­in­international­economic­relations.­Furthermore,­de-­industrialization­has­exhibited­different­patterns­with­different­varieties­ of­European­capitalism. ­ In­this­study­we­analyze­the­transformations­of­growth­regimes­and­changes­ in­industrial­and­employment­structures­to­understand­the­structural­characteristics­ of­ de-­industrialization­ in­ Japan­ and­ the­ following­ European­ countries:­ Germany,­France,­Italy,­and­the­UK.­We­attempt­to­extend­the­theoretical­framework­ of­ the­ growth­ regime­ in­ régulation­ theory,­ taking­ account­ of­ long-­term­ industrial­ structural­ changes.­ In­particular,­ changes­ in­macroeconomic­patterns­ and­ industrial­ structures­ are­ analyzed­ with­ the­World­ Input-Output­ Database­ (WIOD).1­ Furthermore,­ we­ discuss­ the­ political-­economic­ implication­ of­ de-­ industrialization­ in­ each­ country,­ investigating­ the­ transformation­ of­ dualistic­ social­structures. ­ In­our­analysis,­we­follow­three­specific­themes.­First,­we­analyze­the­growth­ processes­and­de-­industrialization­in­Germany,­France,­Italy,­the­UK,­and­Japan,­ focusing­especially­on­changes­in­institutional­forms­and­the­transformations­of­ growth­ regime­ from­ the­ viewpoint­ of­ régulation­ theory­ (Boyer­ 1988;­ Petit­ 1986).2­ Second,­ we­ analyze­ structural­ linkages­ between­ the­ manufacturing­ industry­ and­ the­ service­ industry­ to­ understand­ the­ characteristics­ of­ de-­ industrialization­ in­each­economy.­In­ this­ regard,­we­extend­ the­method­of­ the­ analysis­ of­ de-­industrialization­ based­ on­ input-output­ analysis­ that­ was­ developed­by­Franke­and­Kalmbach­(2005)­to­analyze­the­German­economy.­In­ particular,­we­ use­ the­WIOD­ in­ our­ structural­ analysis­ of­ de-­industrialization.­ Third,­we­consider­the­political-­economic­implication­of­de-­industrialization­and­ the­increase­in­various­service­activities­with­the­varieties­of­capitalism.­In­addition,­ we­investigate­shifts­in­income­distribution­and­the­transformations­of­dualistic­ structures­and­fragmentation­in­each­society­(Emmenegger­et al.­2012).