The OECD Growth Project indicated that Japan’s economic performance sharply declined from the 1980s to the 1990s. Japan is categorised among those “countries where trend growth declined or stagnated”, and the decrease in the GDP per capita growth rate stands out from other countries that experienced decline or stagnation during these two decades (Figure 4.1) (OECD, 2001a). Other quantitative data also reflect Japan’s declining economic performance. Although annual Japanese GDP per capita in USD still exceeds the OECD average, the annual growth rate of GDP is the lowest of all, and the annual growth rate of multi-factor productivity (MFP) is far below OECD average (see Annex 2, Figure A2.3). On the other hand, Japan is ranked third among OECD countries in GERD as a percentage of GDP, and Japanese BERD as a percentage of GDP is the third highest. Also, in the data on R&D performed by the non-business sector as a percentage of GDP, Japan maintains a level exceeding the OECD average (Figure A2.3). Although it must be noted that there is some time lag between R&D investment and...