Therefore, boosting the capital equipment ratio through labor-saving and efficiency-improving investment is likely to be a pressing issue. 6  The key to raising labor productivity is to generate new added value through innovation driven by various types of investment, including research and development (R&D) investment, or a combination of various investments.
Japanese firms have typically excelled at process innovation, under a product-oriented business model that centers on products and services they could bring to the market under their existing frameworks and on relevant pricing strategies. However, a different approach is called for in the so-called VUCA era,3 in which high value is generated by human resources and other intangible assets and growth entails risk.