Question

why did Japan emerge as a developed country inspite of its poor natural resources

Answer 1

because Japan focus more on human capital formation

Answer 2

For centuries Japan has been an economic power, based on trade and fishing (a natural resource, by the way). After defeat in WWII, gradually Japan began rebuilding and focused on education and dedication to making better quality products.

In the fifties and sixties they were already quite good at innovation and made all kinds of novelty products. During that period they developed the electronics industries and were the first to make miniature radios, the kind you could fit in your pocket and take anywhere, for instance, while American and European brands viewed the radio as a household appliance that would be the size of a TV and sit in your living-room.

However, “made in Japan” was synonymous to “it’s cheap and breaks down easily.” So the Japanese began focusing on improving reliability, while continue to create innovative products.

In the seventies, the improved quality of Japanese products caught the attention of managers in the US & Europe. They flocked to Japan and discovered that they were using “Quality Circles” extensively. The irony was that the concept was an American one, created by W. Edwards Deming.

The Japanese appreciated his work more than the Americans had ever done, and that is because in the Japanese culture, the idea of gradual improvements and constant control could flourish in a systematic way.

Other countries copied the Japanese processes for quality control, but nowhere did it get as much traction as in Japan.

The most valuable natural resource in Japan still is, to this day, the culture of its people: their dedication to work, to self-discipline, to learning and to innovation.

The downside? They tend to work too hard, too long and hardly dedicate time to enjoying life with their families. Many are workaholics that make Americans and Germans seem to be lazy by comparison.