EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: Japanese firms, with their strong technology base and high domestic factor costs, have the potential of teaming with India, with its more basic infrastructure and eight times the population. Japan's poorly-performing excess capital could fuel India's strongly-developing middle class and robust entrepreneurialism. Especially promising are collaborative information technology projects. What stands in the way of a greatly expanded relationship? Much of the blockage stems from Japan's insularism, an impetus here labeled tribalism. A hopeful dimension is that this tribalism can be clearly defined as archaic, recognized as detrimental, and then toned-down. Further points for development include an active campaign to encourage diversity in Japan, teaming up to provide alternatives to investment in neighboring China, and agitating for representation on the UN Security Council. India can help initiate all these processes, and can in turn benefit from a Japan reaching out for regional economic partnerships.

Keywords: homogeneity; tribalism; UN Security Council; partnership; immigration; trade; e-Japan strategy

JEL-codes: F20; H77; J61; L86; N45; Z13

17 pages, March 1, 2002

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