The Industrial Transition In Japan

Most of Japan's leading textile firms date back to the turn of the century. Unlike many of their Western competitors, however, Japan's larger companies have survived the "decline" of a sector consumed by fierce international competition. Providing the fullest English-language account of Japanese textiles, Dennis L. McNamara explores the entire sweep of the industry, from factory to high-fashion brokerage to policymaking circle. Tracing the strategies by which the textile industry has survived, he provides a distinctive view of Japanese capitalism in a climate of change. McNamara reconstructs a world riven by the competing interests of state and capital, firm and industry, labor and management, mill and merchant. We encounter giant "mogul" companies and upstart independent "mavericks"—such firms as Toray, Toyobo, Itochu, Tsuzuki, Kondobo, Onward, and Renown—all hustling to restructure for survival. Drawing on extensive interview data as well as recent Japanese and English-language work in political economy and social anthropology, McNamara describes a dynamic of competition between moguls and mavericks in a turbulent business torn by divisions but bound together by compromise. He finds that, despite enormous international pressures, the industry has maintained much of its market share, largely because state bureaucrats and leaders of major firms have managed to create a cooperative politics of adjustment. A corporatist structuring of interests, he concludes, has helped to moderate decline and maintain stability, permitting survival among the moguls without preventing the successful participation of mavericks.

This book studies the industrial development of Japan since the mid-nineteenth century, with particular emphasis on how the various industries built technological capabilities. The Japanese were extraordinarily creative in searching out and learning to use modern technologies, and the authors investigate the emergence of entrepreneurs who began new and risky businesses, how the business organizations evolved to cope with changing technological conditions, and how the managers, engineers, and workers acquired organizational and technological skills through technology importation, learning-by-doing, and their own R & D activities. The book investigates the interaction between private entrepreneurial activities and public policy, through a general examination of economic and industrial development, a study of the evolution of management systems, and six industrial case studies: textile, iron and steel, electrical and communications equipment, automobiles, shipbuilding and aircraft, and pharmaceuticals. The authors show how the Japanese government has played an important supportive role in the continuing innovation, without being a substitute for aggressive business enterprise constantly venturing into unfamiliar terrains.

. . . the book reviewed here will trigger a further interest in this area of research, and will invite more researchers to seek empirical evidence in the study of post-war industrial growth in Japan. Hiroshi Ohashi, Journal of the Japanese and International Economies This book provides a theoretically informed and empirically illustrative account of modern Japanese industrialization. Ozawa s translation of classical political economy to the Japanese context is both original and accessible and is a welcome addition to the literature on the Japanese variety of capitalism. Tim Reiffenstein, Pacific Affairs Ozawa succeeds in extending, building up, and joining the Akamatsu Kojima lineage of this unique Japan-born theory of economic development from a fresh, unconventional, and discerning perspective. From the foreword by Kiyoshi Kojima Terutomo Ozawa examines Japan s once celebrated post-war economic success from a new perspective. He applies a flying geese model of industrial upgrading in a country that is still catching-up, to explore the rise, fall and rebound of Japanese industry with its evolving institutions and policies. The book brings together and expands upon theories developed in the author's work over many years, using them as building blocks for his flying geese model. Concepts explored include: economics of hierarchical concatenation, increasing factor incongruity, comparative advantage (or market) recycling the Ricardo Hicksian trap of industrial production, Smithian growth elan, triumvirate pro-trade structural transformation knowledge creation versus knowledge diversion, the price-knowledge/industry-flow mechanism a la David Hume the syndrome of institutional incongruity, and socially justifiable moral hazard versus degenerative moral hazard. The dynamic process of industrial upgrading is analysed in detail, and important lessons for both developing and transition economies are highlighted. This fascinating book will attract a wide-ranging readership, encompassing practitioners and academics interested in international business, economic development, trade, and political science. In addition, sociologists focussing on business and industry, and researchers on, and policymakers in, developing and transition economies will also find this book of immense interest.