The Noda Cabinet on June 5 endorsed a fiscal 2011 white book for promoting Japan’s core manufacturing technologies. The report, jointly compiled by the trade and industry ministry, the labor and welfare ministry, and the education ministry, expresses a sense of crisis over the fact that market shares for Japanese manufacturing companies operating abroad are rapidly falling despite their reputedly high technological levels.

The white book calls on firms making consumer products to seriously consider for whom they are making products. It will become important for them to correctly find out the needs of consumers and to send optimum products to markets.

If they think that because they are making products that are technologically advanced, consumers will buy them anyway, it is a sign of self-defeating complacence.

The white book stressed the importance of offering consumer products at low prices in overseas markets to take advantage of the rapid expansion of middle-income people in emerging economies. With their incomes rising, these people have become able to buy electronic appliances and other items they could not have afforded to buy in the past.

The situation is similar to the period when Japan started enjoying high economic growth. During that period, Japanese started to buy TV sets, washing machines, refrigerators, etc.

Manufacturing firms need to stop and think whether people of the new middle class in emerging economies will gladly buy high-priced products with advanced functions based on advanced technology. They need to remember that these people are like the Japanese at the early stage of high economic growth.

Therefore, it is imperative for manufacturers to develop and make products that meet the needs of people who buy TV sets, washing machines, refrigerators, etc. for the first time.

The white book also pointed out that manufacturers of emerging economies are rapidly catching up with Japanese rivals in such fields as solar batteries, thanks to the spread of advanced manufacturing facilities.

It called on Japanese firms to strengthen their planning, research and development capabilities so that they can turn out products with high added value.

The government, for its part, should pay attention to the tendency of manufacturers to move their production bases to foreign countries, since the traditional international division-of-labor pattern — in which Japan supplied advanced parts to factories in developing countries — does not work anymore.

The government needs to reconstruct its strategy to strengthen Japan’s manufacturing industry.

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