An asian perspective on hollowing out industries. Maybe it's time to learn a new lesson from the Japanese. Yes, its a rather old article, but an instructive one. ------lee
By Ian Rowley, with Hiroko Tashiro, in Tokyo
OCTOBER 11, 2004
Lying 800 kilometers south of Tokyo on the island of Kyushu, Oita prefecture is hardly the kind of place you would expect to find the trendsetting titans of Japan Inc. Until recently the biggest contributors to the economy in bucolic Oita were the hot spring resorts in the coastal town of Beppu.
But this year, Oita is flourishing as Japan's corporate giants invest billions in new manufacturing plants. Canon Inc. (CAJ ) is building a 29,000-square-meter digital camera facility near Beppu Bay. Down the road in Oaza Matsuoka , Toshiba Corp. (TOSBF ) in October plans to open a semiconductor plant that's part of a $1.8 billion, five-year investment in Oita. And auto producer Daihatsu Motor Co. is building a factory in nearby Nakatsu, which will gear up production of Hijet vans and Atrai miniwagons in December. "These companies are activating the economy," says Kazuhiro Nakao, who oversees the prefecture's efforts to attract investment.
It's not just Oita's economy that's being activated these days. After years of hand-wringing by authorities over the hollowing out of Japan's manufacturing industries, Corporate Japan is investing at home again. Expenditures on plants and equipment in Japan rose 10.3% during the first half over the same period of 2003, the Ministry of Finance reported in September. "These movements are very favorable for the Japanese economy," says Kenji Yumoto, chief economist at the Japan Research Institute. He expects capital expenditure to grow 10% in the current quarter and nearly 7% in the fourth.
Sure, Japan's recovery appears to be losing some steam. Gross domestic product growth slipped from an annual rate of 6.1% in the first quarter to just 1.3% in the second, and the stock market has come off its recent highs. But the Organization for Economic Cooperation & Development in September increased its forecast for annual growth for Japan from 3.0% to 4.4%, despite the weak numbers of late. And confidence in the recovery is strong in the business community.
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By Ian Rowley, with Hiroko Tashiro, in Tokyo
OCTOBER 11, 2004
Lying 800 kilometers south of Tokyo on the island of Kyushu, Oita prefecture is hardly the kind of place you would expect to find the trendsetting titans of Japan Inc. Until recently the biggest contributors to the economy in bucolic Oita were the hot spring resorts in the coastal town of Beppu.
But this year, Oita is flourishing as Japan's corporate giants invest billions in new manufacturing plants. Canon Inc. (CAJ ) is building a 29,000-square-meter digital camera facility near Beppu Bay. Down the road in Oaza Matsuoka , Toshiba Corp. (TOSBF ) in October plans to open a semiconductor plant that's part of a $1.8 billion, five-year investment in Oita. And auto producer Daihatsu Motor Co. is building a factory in nearby Nakatsu, which will gear up production of Hijet vans and Atrai miniwagons in December. "These companies are activating the economy," says Kazuhiro Nakao, who oversees the prefecture's efforts to attract investment.
It's not just Oita's economy that's being activated these days. After years of hand-wringing by authorities over the hollowing out of Japan's manufacturing industries, Corporate Japan is investing at home again. Expenditures on plants and equipment in Japan rose 10.3% during the first half over the same period of 2003, the Ministry of Finance reported in September. "These movements are very favorable for the Japanese economy," says Kenji Yumoto, chief economist at the Japan Research Institute. He expects capital expenditure to grow 10% in the current quarter and nearly 7% in the fourth.
Sure, Japan's recovery appears to be losing some steam. Gross domestic product growth slipped from an annual rate of 6.1% in the first quarter to just 1.3% in the second, and the stock market has come off its recent highs. But the Organization for Economic Cooperation & Development in September increased its forecast for annual growth for Japan from 3.0% to 4.4%, despite the weak numbers of late. And confidence in the recovery is strong in the business community.
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