The Democratic Party of Japan (DPJ) came to power in 2009 with a commanding majority, ending fifty years of almost uninterrupted Liberal Democratic Party (LDP) rule. Then, in 2012, just over three years later, the DPJ lost power in an equally stunning landslide loss to the LDP. This volume examines the DPJ’s remarkable ascendance, its policies once in power, and its dramatic fall.

What explains the DPJ’s rapid rise to power? Why was policy change under the DPJ limited, despite high expectations and promises of bold reform? Why has the party been paralyzed by internecine conflict?

Chapters in the volume cover: DPJ candidate recruitment; the influence of media coverage; nationalization of elections; electoral system constraints on policy change; the role of third parties; municipal mergers; the role of women; transportation policy; fiscal decentralization; information technology; response to the Fukushima nuclear disaster; security strategy; and foreign policy. Japan under the DPJ makes important contributions to the study of Japanese politics, while drawing upon and advancing scholarship on a wider range of issues of interest to political scientists.

Examination copies: Desk, examination, or review copies can be requested through Stanford University Press.

In our current era, the advent of digital technologies and accelerating globalization is driving ever-faster commoditization of firms and products.  With rapidly improving Information and Communications Technology (ICT) tools, manufacturing is decomposed with finer granularity, and corporate functions can be outsourced and offshored more than ever before.  Services can be unbundled into activities that can be taken apart, reconfigured, and transformed with the application of algorithms.  Overall, firms are experiencing accelerating shifts in the sweet-spot for markets and business models in their search for sustainable advantage.

As firms struggle to adjust in this global, digital world, governments are also under pressure to examine their options to retain value in their national contexts; wealthy nations face the challenge of how to remain wealthy.

Japan is no exception, and from this vantage it is worth reconsidering the potential role that industrial policy can play in its growth strategy.  We will proceed in three sections, each of which builds from our previous research (indicated below the title), towards a set of recommendations for thinking about industrial policy in this digital, global era.  Each point contributes something new to Japan’s discourse about a new growth strategy.

A fundamental transformation of services is underway, driven by developments in information and communications technology (ICT) tools, the uses to which they are being put, and the networks on which they run. Services were once considered a sinkhole of the economy, immune to significant technological or organizational productivity increases. Now, they are widely recognized as a source of productivity growth and dynamism in the economy that is changing the structure of employment, the division of labor, and the character of work and its location. Yet, the actual character of this transformation is often obscured by the increase in jobs labeled as services and by a focus on the digital technologies that, certainly, are facilitating this transformation. This transformation, central to the growth of productivity and competition in the economy, poses basic policy and business choices.

The core of our story of the services transformation is not about the growth in quantity or value of the activities labeled services, the conventional emphasis of much of the writing about services. Nor is it about the revolution in digital technology. Rather, it is about how the application of rule-based information technology tools to service activities transforms the services component of the economy, altering how activities are conducted and value is created.

There are significant implications for how firms compete. Services are increasingly the way that firms pursue value-added activities to avoid ever-faster commoditization of products, that is to avoid competition based solely on price when market offerings are relatively similar. However, the unbundling of services activities themselves accelerates this commodification, since competitors have the same efficiency-enhancing business process and infrastructure services available to them. Firms increasingly become bundles of services purchased on markets, and at the same time some of those in-house business functions that are maintained are then offered as services. A consequence is that the distinction between products and services blurs, as manufactured products are increasingly embedded within and recast as services offerings. Clearly, traditional sectoral boundaries break down, as information and services offerings bring previously unrelated firms into direct competition.

Likewise, the consequences for business organization, production, and work are profound, just as work was transformed by the evolution of manufacturing. The automation of basic activities both frees, but also requires, professionals to perform more advanced tasks. And the analytical tasks of managing information flows generated by ICT-enabled services often require a different set of skills than providing the service itself.

Capturing the possibilities from the services transformation presents new policy challenges for governments and regions. Services are deeply rooted in social rules, conventions, and regulations. Consequently, capturing the value possibilities inherently means recasting the rules, regulations, and conventions in which the services are embedded.

The development and deployment of ICT-enabled services should be considered a form of production. As ICT has become integral to the creation and delivery of services, ICT-enabled services have taken on the characteristics of production normally assigned solely to manufacturing. ICT systems that deliver the services have to be designed, developed, built, and implemented and they are very much open to innovation and productivity increases. Investments are often industrial in scale.

ICT-enabled services are the latest phase in a long history of production innovation. The history of manufacturing production progressed along distinct epochs, each with distinct manufacturing processes, management structures, labor practices, productivity, and outputs. The development of ICT tools and their application to services activities has driven a shift to the latest epoch.

The advent of Cloud Computing, emerging as the next dominant computing platform, accelerates the transformation of services. Cloud Computing, a distinct set of business models and performance attributes (not simply a code-word for everything online), enables new business models, transforms existing strategies, lowers the bar for new entrants, and raises a myriad of policy issues.

From a policy standpoint, the question is how to conceive, design, develop and build and deploy the new system. The “good” jobs, high value added functions, are in the innovative development and deployment of these systems. Policy makers need to employ strategies that will help communities and firms to develop the competencies required for this new form of production.

The continuing debate in political, economic and public policy circles about the relative value of manufacturing jobs and service-sector jobs is increasingly irrelevant to policy debates in the real economy. Just as it is inaccurate to assume that manufacturing jobs are secure and well paid, it is also inaccurate to consider service jobs to be dead-end, low-wage, unskilled positions.