Predictions for 2002
Although this is supposed to be a column about jobs, sometimes it's helpful to think about where the economy and macro-market trends are going. This can help you plan ahead for major job moves, education decisions, risk-taking, etc.
To consider the Japanese economy and the prospects here, one needs to remember that while only 10% of Japan's GDP is earned from exports, that 10% is crucial to the health of some major industries, and, most of which is consumed by the USA. Therefore, the condition of the US economy is quite important to the financial health of businesses here.
Just today, an economist at Morgan Stanley in the USA bucked the trend and said that the burgeoning US-led economic recovery this January may in fact be short-lived and that, indeed, we could be heading into a second leg of the recession. I don't want to be too pessimistic here, but I do think that he is right.Given that there are still lots of people being laid off, both here and in the USA, the impact of those reduced pay checks on families has to hit consumer spending soon.
Given this, things don't look good for Japan. I would not be surprised to see unemployment increase rapidly in the first half of this year, and many small to mid-sized companies hitting the wall financially. Unemployment will become a political hot potato, with the government continuing to struggle for solutions.
A very good book that I read back in the early nineties, written by US economist Ravi Batra, has a fundamental message about recessions that has stayed with me ever since. Batra posited that in times of recession, people get sick easier, they need education to improve their chances of getting a better job, and they want their current things fixed rather than going out and buying new stuff. In Japan, you could add that people also drink more and tend to pursue escapist activities. So according to the advice, the hot employment areas in a recession are likely to be health and medical, education and testing, repairs and support, and popular entertainment!
This may sound like a simplistic message, but using this very advice, I was able to turn a previous company of mine around despite the 1991-1995 recession. I moved the company to more of a service mix and away from a product sales focus. Batra was right, we not only survived, but we thrived. One friend of mine has taken the above advice even more literally and put his career on hold for a year and a half while doing an MBA at a local Japanese university. In his own words, "When I come out, not only will the recession be over, but I'll have an MBA to boot!" Sounds like a great strategy to me...