Let me make some predictions about Japan's economic performance in and after 2000. I believe that recovery in the next 12 to 18 months will be slow but robust expansion will take place after that. The boom will not benefit everyone, as did the past expansion, however. It will be accompanied by the polarization of the population between two classes of people -- one enjoying fast-rising income and another stuck with little growth in income. The gap between the two classes will widen while the recovery continues. This phenomenon will also occur among companies, industries and national organizations.

The economy is likely to boom as the information revolution makes inroads into Japan. Until this happens, the economy will be in an adjustment phase. In the runup to the scheduled introduction of a consolidated accounting system in corporate Japan in April 2001, companies saddled with surplus facilities and manpower in their business groups will be under intense pressure to restructure. Deflationary trends are likely to hit Japan in the interim.

Things will be totally different after April 2001, however. More Internet-based businesses will debut, and major companies will boost their information-related investment to shift to a new business model. Increasing utilization of information technology is likely to sharply increase corporate productivity, triggering Japan's first major economic recovery in a decade.