FACING chronic deflation, a twelfth year of stagnation, surging corporate bankruptcies and nearly half a trillion dollars of bad debts, the Japanese Government has set up a think-tank to study the magnitude of the economic failure.

The shippai-gaku, or “failure-ology”, institute, has received one billion yen (£5.4 million) in funding from the Ministry of Education to seek answers to the country’s most pressing question: “Where did it all go wrong?” The institute will examine company failures from the smallest noodle bars, at the micro-level, to the largest auto manufacturers. At the state level it will look at recent milk poisoning scares, Japan’s BSE crisis and safety scandals at atomic power stations. Japan’s railways, officially the most punctual in the world, will also come under the microscope.

As of today, the institute is launching a huge online database listing failures. It wants business leaders, workers, bureaucrats and politicians to contribute anecdotes and analysis to the central store of knowledge on firms’ failures.

Heading the research is Yotaro Hatamura, formerly of Tokyo University. He told The Times: “Japan has always been scared by the concept of failure. We didn’t see it, we didn’t watch for it and we didn’t catch it. In the 1980s we felt that because we invented the ‘total quality control’ movement that was enough. It wasn’t and it has now just become a nominal concept. The Japanese economic miracle was just us learning from other people’s failures. The time has come to learn from our own.”

The main problem his team faces is to get the Japanese to buck tradition and talk openly about failure. But he believes change is in the air. “Hitachi, Toyota and Komatsu are just a few giants that have started to co-operate,” he said.

He said that a large proportion of failure can be attributed to ignorance, fatigue, carelessness and poor planning. But he has also identified a number of specifically cultural traits, one of which is the inability of individuals to make decisions.