ABSTRACT
By 1945 many of the factories of Japan had been destroyed by bombing, as also had much of the urban housing. The natural resource base was very modest. A new approach to industrialisation was needed if Japan was to become a country with high levels of consumption. Development assistance from the USA following 1945, and the Korean War (1950-3), are considered to have had a major role in the initial revival of the Japanese economy. Subsequent development has been attributed to a number of indigenous features of the country. The state and the banking system of Japan have relied on the continuing patriotism of the population (in spite of defeat in the Second World War) to save, participate positively in the development of the companies employing them, work hard for limited remuneration and, with the help of a strong protectionist policy, to buy Japanese manufactures in preference to imported goods. Indeed, for many of its manufactured goods, the home market is the main market. As well as benefiting from state support and guidance, Japanese manufacturers, large and small, have themselves carefully watched trends in the world economy, switching emphasis from products that the country is not well suited to produce and export, such as silk fabrics and aluminium, to ones such as computers and robots, in the production of which it excels.
