Key points - Third Arrow of "Abenomics"

After two of the three planned arrows were fired in the last couple of years, Abenomics is now implementing the third part of the economic revival program commonly known as "Abenomics". The main focus of this part is structural reform of Japanese economy. 

Key Points;

- Corporate Tax reduction by 2.4% in 2014, plans to take it to 20s in several years.

- Make it mandatory to appoint outside directors- Comply or explain.

- Revamping the portfolio strategy of Government Pension Investment Fund

- Allowing start-ups to bid for government contracts, opening markets and promoting new entrants in energy, agriculture and medical services.

- Establishing National Strategic Special Zones facilitating one-window operation to set up entities.

- Select Japanese cities to be freed from building height limits.

- Womenomics encouraged with labor market reforms.

Article Review: Germany on Innovation

HBR recently published an article on the comparison between US and Germany on their approach to innovation. The link to the article is : http://blogs.hbr.org/2014/05/why-germany-dominates-the-u-s-in-innovation/

Key highlights are listed below;
- At the national level, Germany is better than US and China in innovation and growth.
- Leading in sustainable energy systems, molecular biotech, lasers and experimental software engineering.
- Fraunhofer Society, applied-science think tank established seven institutes across America.
- US leads in providing financial platform to fund innovative ideas however on radical inventions, Germany is as good as US.
- Germany enables workers to increase their productivity while US attempts to replace workers with technology.

Key Takeaways?
- Financial system is important to help commercialize any innovations.
- Encouraging initiatives to improve old business/manufacturing processes through new ideas and technologies.
- Instead of focusing on consumer sector, Germany has wisely chosen to concentrate on technologies that are used to manufacture end user products.
- A cross-over of different industries (e.g. integrating/employing technology/finance/arts related professionals with various business sectors) results in improved business processes.
- Business application of academic research helps innovation to spread across the economy.