5 facts about corporate change in Japan

For several decades, Japan's national identity has been inextricably tied to business. Today's changes in corporate philosophy carry profound consequences felt throughout its society. Below are five key facts related to the seismic shifts under way in the Japanese economy.

1. The keiretsu way is fading. Nearly 70 percent of Japanese contracts were given to related corporate subsidiaries in the keiretsu network five years ago. Today, it's about 20 percent, according to Naoyuki Haraoka, chief executive director of JETRO San Francisco.

2. A radical change for "salarymen." One controversial workplace experiment involves the Western-style concept of pay raises based on merit rather than on seniority.

3. Bigger is not always better. Some Japanese companies, such as Panasonic, employ nearly 300,000 people--triple the number at Intel and Dell--but experience much lower profits.

4. Falling behind in population. The country's population could drop from 127 million today to 100 million by 2050, exacerbating a labor shortage in the tech industry.

5. Lack of discipline blamed. Critics of Japan's education system say a shift in emphasis to creativity has dampened interest--and national strength--in hard sciences.