Cost cutting efforts such as streamlining of business processes and efficient reallocation of human resources have their limitations. It will gradually become difficult for firms to absorb increases in labor costs even if they are reluctant to raise prices. In this situation, competing firms in the same environment are likely to be faced with similar limitations.
Japan is close to the vast emerging markets of Asia and has a leading edge in areas such as environmental technology. Furthermore, the issue of a low birth rate and population aging is not limited to advanced countries; China and many other countries around the world face the same problem.