OSAKA (Kyodo) The Osaka Prefectural Government’s handout in January of more than 1 billion yen in subsidies to businesses that base themselves in the prefecture did little to stem the flood of firms moving their headquarters to Tokyo.

Business sources say that firms like Tokyo because it is a huge market and home to the government ministries.

Many top executives can be seen rushing to catch Tokyo-bound planes Monday mornings from Osaka’s Itami airport.

Hatsuo Aoki, president of Fujisawa Pharmaceutical Co., is a regular air commuter; he goes to Tokyo at the beginning of the week and returns Friday.

“I often come face to face with top executives of other companies in the same trade,” he said.

Fujisawa, founded in Osaka in 1894, will move to Tokyo in April after merging with Yamanouchi Pharmaceutical Co. Aoki said none of the company’s executives has objected to the transfer.

He said that to get up-to-date information from the Health, Labor and Welfare Ministry, which holds permit and licensing rights for drugs, and about intellectual property and other ever-changing laws, personal relations with central governmental ministries and agencies are a must.

“There is no reason to remain in Kansai,” he said.

The number of companies based in Tokyo and capitalized at more than 100 million yen began increasing in the mid-1990s and accounted for 54 percent of the total in 2001. Kansai-based companies, which accounted for more than 20 percent in 1980, have since decreased to around 15 percent.

“The concentration in Tokyo has been accelerated by the traditional nature of ministries and agencies to monopolize information and call presidents to come in on short notice,” said Naosumi Atoda, a Keio University professor.

But Takeda Chemical Industries Co. has chosen a separate path. In the early 1990s, it was planning to transfer its headquarters to Tokyo.

But when Takeda Chairman Kunio Takeda became president in 1993, he asked executives and employees why the head office should be moved to Tokyo. Nobody could provide a clear answer.

The move also would have required a big outlay for company housing and some employees would have had to leave their families behind.

In reviewing the role of the head office in its global strategy, Takeda decided to keep its head office near its research institute in Osaka, while maintaining a Tokyo office as a window to the labor ministry.

Takeda’s consolidated sales in fiscal 2003 totaled about 1.086 trillion yen, compared with Fujisawa’s 395 billion yen.

Takeda’s drug sales overseas account for more than 70 percent of its total sales, and analysts say it is the only Japanese pharmaceutical company that can compete on the global stage.

It has also shifted its clinical testing to the U.S., where it has strong sales.

Toyota Motor Corp. has meanwhile transferred its overseas sales division to central Nagoya from the city of Toyota, Aichi Prefecture.

Business analysts say companies that only think about being close to central government offices and targeting the domestic market will not survive in the globalized world, where inward-looking firms have no chance of making it in much larger foreign markets.

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