Consequently, Japan's economy has fallen into a state of low growth, low inflation, and low wage growth. 5  The third characteristic that I think needs transforming is the response to changes in the economic environment. Since the 1985 Plaza Accord, in response to a rapidly appreciating yen, firms' efforts have been directed at building global supply chains.
The industrial structure has changed from that in the Showa Era when industrial clusters were formed in an exportoriented country. Meanwhile, small and medium-sized firms in industrial clusters that have benefited from overseas economic growth have been exposed to competition from overseas firms within Japan as global supply chains have taken shape.