The rise to the top did not occur without a large struggle as many problems did occur after the Second World War left Japan economically devastated. Japan's journey has left them at the present with recession conditions. Following World War Two, Japan's economy was absolutely devastated. From 1937 to its defeat in 1945 Japan poured all of its strength into the war. The industrial sector was diverted into a swollen military production sector. The strongest and swiftest workers were placed in the military, and quite often sent to die on the front lines of the war. The citizens who stayed in Japan often worked in military factories, and faced the constant threat of air raids

In addition, Japan is one of the world's leading research platforms for new technologies in robotics and electronics, making Japan a self-sustained ever-expanding country. Japan has stayed on the leading edge of the world riding a wave of technology, which will definitely carry it into the next millennium. Broad-based technological firms combined with innovative, even unorthodox, business strategies are the supporting columns of this immense notion. It is very possible for the Japanese people to overcome the conditions brought upon by the recession through the policies they have adopted, different from our own, and become the number one leading country in Gross Domestic Product. This would put Japan in the spotlight of the rest of the world, and maybe then, we will begin to consider many of the different ways they do business.

However the investment boom, which was confined to a few machinery sectors, was short lived. Investments by construction and real estate firms continued to decrease, dragging down the economy. These private sector companies were increasingly investing their capital abroad in the form of direct investments which was leaving less and less money being inside Japan to stimulate production, increase jobs and therefore increase the money supply. To worsen the situation, a significant increase in import penetration observed from 1993 to 1995 was snuffing out domestic production. The decreasing amount of household consumption in the 90's reflected the weak state of the economy. Unemployment grew, which raised concerns about job security and reduced people's willingness to consume. Weak demands for goods and services began to affect employment. Employment in manufacturing started to fall; however the difference was absorbed by the construction industry that soon became overloaded. The construction industry soon followed suit. The unemployment rate reached high national levels. Due to corporate restructuring as well as other factors, male labor unemployment grew forcing the women of the households to try and find jobs, which was contrary to traditional values illustrating the severity of the situation. As the Japanese economy struggled to rise from the ashes, it built itself an economy based on technology, which is evident especially in the machinery, transportation and steel industries.

After nearly four years of expansion from1987 to 1991, the Japanese economy went through a recession starting in 1991 and lasting for thirty-two months. This recession ended in March of 1993. The recession of 1991 to 1993 was the second largest recession in the postwar period. The government made efforts to reactivate the economy and introduced seven fiscal stimulus packages in four years from 1992 to 1995. The Bank of Japan cut the bank rate to 0.5 percent in 1995 and has since kept it at this record low. The government undertook a major tax reform in 1994 and cut income taxes through the tax schedule and through increases in standard personal and employment income deductions. Therefore by decreasing revenues the government attempted to promote spending. As a result the national debt increased by about six percent of the Gross Domestic Product. Another reason for this increase in debt was that the private sector was unresponsive to the stimulus. One of the reasons for sluggish business investment within Japan was due to the unstable nature of the economy and a thus a flight of capital to the United States and other stable markets. Manufacturing industry investments increased during the 1995- 1996 period, which was a sign to economists that the economy was back on the path of self- sustaining expansion.

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