The continuing doldrums in the Japanese economy began with a slowdown more than 13 years ago -- in May 1991. The slump stems from sluggish consumer spending, which accounts for 60 percent of the gross national product, and bad loans plaguing Japanese commercial banks. Let's consider the reasons for sluggish consumption.
First, Japanese industries in the past decade have failed to develop revolutionary consumer products that create substantial new demand instead of merely replacing existing products. In the bubble years of 1987-90, revolutionary consumer products debuted one after another, including home-use fax machines, automobile phones, CD players and Japanese-language word processors. Real consumer spending during that period grew at an annualized 4.7 percent.
Popular consumer products introduced in the 1990s include notebook PCs, car navigation systems, viewcam-corders and cell phones. Among the new products marketed since 2000 are digital cameras, DVD systems and ultra-thin television sets.