Just before the oil crisis of 1974, The Limits to Growth, a controversial report prepared for the Club of Rome, projected a very pessimistic scenario for the future of the global economy and industrialized nations in particular (Meadows et al., 1972). Given the atmosphere at that time—which included a general economic slowdown and the antipollution and antitechnology movement—the report had an enormous impact. It supported the theory, and more importantly the prevailing mood, that the global economy was headed for a period of decline. These influences contributed to a certain pessimism in many industrialized countries.

However, nations have demonstrated that they can cope with such conditions through the creativity of human beings. Faced with the oil crisis, Japan introduced innovative energy-saving technology into the steel industry, and today not a drop of oil is used in that sector. Japan has achieved an increase in its gross national product (GNP) of 2.7 times that at the time of the first oil crisis, while oil consumption has decreased to 80 percent of that in 1974.

Almost every industrialized nation instituted similar energy-saving measures. These efforts to eliminate energy losses in factories, automobiles, and elsewhere were successful in overcoming the energy price hikes. As a result of the new technology, decreased oil consumption has even forced oil producers to cut the price of oil.

Pollution in the industrialized areas of Japan, a by-product of the push for high economic growth, was another major problem in the 1970s. However, after a radical antiindustrialization movement became active, the Japanese government issued numerous antipollution laws. The strictest automobile emission regulations in the world were instituted in Japan in 1975, and cars that did not meet the emissions control specifications could not be sold in Japan. Such regulations were applied not only to automobiles but also in every factory. Consequently, the engineers working in the regulated sectors made great efforts to develop technologies within the framework of the new constraints.

As a result of those efforts, the air and water of Japan today have become clean again. It is said that half the budget to construct new ironworks plants was spent on energy-saving and antipollution devices. The average expenditure of the energy-saving/antipollution industry, which did not exist in Japan before the 1970s, is estimated to be $15 billion per year. Recently, these energy-saving and antipollution technologies have begun to be used all over the world, especially in Western Europe to eliminate pollution caused by acid rain.


The importance of a strong manufacturing base and the economic advantages of industrialization are well illustrated by Japan. Japan is one of the

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