Memo #208
By Akira Yamasaki yama [at] tamacc.chuo-u.ac.jp
A characteristic of the Japanese “flexible production system” is vast networks of subcontractors. Recently, the overseas sourcing of parent companies’ manufacturing has led to reorganization of small business in Japan. Efforts to revitalize regional economies in response have focused on the creation of industrial clusters.
Government statistics put manufacturing establishments at 352,448 in 1950; by 1990, this number had risen to 728,853 before falling again to 448,147 in 2009. Smaller firms with less than 19 employees declined in particular during this period.
In response to these trends, in 2001 the Ministry of Economy, Trade and Industry (METI) started the Cluster Program (産業クラスター計画) to enhance innovation in small and medium firms. Twenty consortia were created. For example, the Kyushu regional consortium launched an initiative under which 23 semiconductor companies in Fukuoka launched joint research programs with Kyushu University funded by and the Knowledge Cluster Program（知的クラスター計画）of the Ministry of Education, Culture, Sports, Science. In 2007, 194 companies joined this program.
In 2005 METI’s Industrial Cluster Study Group（産業クラスター研究会) conducted a survey of consortium companies. The items most often cited as positive effects of the Industrial Cluster Program were: easier access to information on policy (77.2%): better understanding of industry trends (58.6%); and increased opportunities for collaboration with universities and research institutions (51.2%).
However, policies aimed at fostering industrial clusters have had only limited success. Despite the promotion of joint research and an increase in patent applications, the number of newly developed products and their sales are disappointing, especially in the Tohoku and Hokkaido regions. In these areas, few participants join cluster activities, aims are poorly coordinated and they have often failed in creating linkages between companies and research institutions. Smaller participating firms have been found to lack the resources to develop commercial products. To address these policy shortcomings, since last year METI has begun to subsidize the facilities for joint research and trial products, aiming to revive sluggish regional economies.
About the Author:
Akira Yamasaki is a Professor of Economics at Chuo University and Visiting Professor of UBC at Department of Geography.
Cluster Program and Regional Revitalization
Source: http://www.eu-japan.eu/img/programmes/industrial_cluster_program.jpg
Links:
- “Research for the evaluation of Industrial Cluster Programs” , The Final Report for Scientific Research fund by MEXT, No.17530216, 2008, in Japanese. (By Akira Yamasaki)
- “Japan’s Industrial Cluster Plan: Background and Characteristics”, Annals of the Japan Association of Economic Geographers, 51: 499-511, 2005. (By Akira Yamasaki)
- “Industrial Policy and the Cluster Programs” Journal of Political Economy, Kyushu University, 70(1): 43-53, 2003, in Japanese. (By Akira Yamasaki)
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- See our other memos on Japan
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