Looking at trends in Japanese enterprises' labor productivity by size, that of large enterprises, after marking a significant decline due to the GFC, finally surpassed in fiscal 2018 the fiscal 2007 level. On the other hand, labor productivity of medium-sized enterprises and small and medium enterprises (SMEs) only showed a small decline at the time of the GFC.
However, the improvement observed thereafter for both types of enterprises has been only moderate, and thus not strong enough to drive the productivity growth of Japan's economy as a whole (Chart 9). B. Changes in Economic Conditions and the Need for Structural Reforms Japan faces major changes, such as digitalization and carbon reduction.