Economic and educational transformation

The Meiji government promoted industrialization through a "model industry" approach, building state-run pilot factories such as the Tomioka Silk Mill of 1872, built with French technology; the textile sector, cotton and silk, became the leading industry of the first phase of industrialization, and by the late nineteenth century Japan had become the world's largest exporter of raw silk. From the 1880s onward the government gradually privatized many state enterprises, selling them at favorable prices to business groups, a process that concentrated economic power in the hands of the future zaibatsu — Mitsui, Mitsubishi, Sumitomo, and Yasuda. The Bank of Japan was established in 1882 under the direction of Matsukata Masayoshi, whose fiscal reforms of the 1880s brought inflation under control through deflationary policy, and the yen was introduced as a unified national currency in 1871.