TOKYO -- Japan's manufacturing sector, once hailed as the world leader in productivity, has declined steadily against global peers during this century amid a weaker yen and the growth of technological advances in other countries.
Labor productivity, a measure of nominal added value per capita, totaled $95,063 for the nation's manufacturing sector in 2015, the Japan Productivity Center reported late this month in an industry analysis. The value declined about 10% from five years earlier, leaving Japan at roughly 70% of the U.S. figure of $139,686.
Japan stood 14th among members of the Organization for Economic Cooperation and Development, a ranking compiled once every five years. The nation ranked first in 1995 and 2000 but tumbled to No. 7 in 2005 and No. 10 in 2010. Germany, France and the U.K. overtook Japan as of 2015.
The weaker Japanese currency contributes heavily to the country's declining labor productivity, depressing the figure as measured in dollars. The accelerated shift in production processes from advanced to emerging economies in recent years also plays a part.
Switzerland, home to headquarters of global players in precision equipment and pharmaceuticals, has surged in recent years to take the lead in manufacturing labor productivity, at $185,906 for 2015. Denmark ranked second at $146,904, supported by advanced technologies in niches like wind power and hearing aids.
To boost Japan's productivity, the government intends to offer tax breaks and other rewards for companies that invest in innovative technologies.