Abstract
Labor Productivity Growth in the United States economy has rapidly accelerated from the middle of 1990s. The average annual growth rate is higher than in the Japanese industry over the 1990-2004, especially the 1995-2004.
This article examines the productivity performance of the manufacturing and other industries in the two countries over the above periods. The higher productivity growth rate in the U. S. industries is due to the development of information technology innovation and expansion of IT investment. The lower growth rate in the Japanese industries is owing to the delay of business restructuring and IT investment.
In spite of the higher productivity growth rate in the U. S. economy and the lower rate in the Japan's economy, the two countries have its own comparative advantage and disadvantage industries. In conclusion, U. S. economy has the strong competitive power in the industries producing IT and using intensively IT, briefly “New Economy” industries, in the global market. In contrast with the U. S. advantage, the Japan's economy has the strong competitive power in the industries producing materials such as steel and chemicals, and machinery such as automobile and machine tool, in short “Old Economy” industries.
