A return to growth is increasingly urgent in Japan to facilitate dealing with the serious fiscal situation and the rapid ageing of the population. Maintaining living standards in the face of an ageing and shrinking population requires substantial increases in productivity per worker. But to underpin this, multi-factor productivity will need to accelerate, reversing a trend that has been in place since the first oil price shock of 1973. Labour and per capita productivity have been driven increasingly since that time by high rates of investment but the marginal returns have been declining. The problems essentially arise from the inability of the Japanese economic system to reallocate resources efficiently, be they human, entrepreneurial, intellectual and financial, thus requiring reforms in a wide range of areas...