Made in Japan: the answer to the Japanese economic downturn?

News broke this weekend that Japan’s economy contracted in the July to September quarter, as a global economic slowdown and anti-Japan protests in China hurt its exports, while domestic consumption remained subdued. The country’s gross domestic product contracted 3.5% from a year earlier. All in all, Japan’s economic future has not been looking rosy. But, in the face of this economic downturn, many Japanese entrepreneurs are attempting to revive business by bringing the label ‘Made in Japan‘ back into fashion.

One such businessman, Mr. Kota Nezu, a former designer at Toyota, has recently created what he calls the vehicle of the future; that is, an electric motorbike with a strong emphasis on design. One of the motorbike’s main selling points is its focus on Japanese manufacturing, and it is made using the best components proudly made in the country. Mr Kezu says that it was the disastrous earthquake last year which prompted him to renew his national pride in Japanese production; “especially after the earthquake last March, I wanted to revive the Made in Japan spirit” he said.

However, the costs involved in being able to use the ‘Made in Japan‘ tag have proved problematic for some. Given the mass production used in neighbouring China, it is very difficult for Japan to compete. For niche sectors, such as that of Mr Nezu, this is a distinct advantage and his motorbikes have the ‘homemade’, ‘handcrafted’ edge which many buyers value more highly than the low price of mass-produced products. But it is not just niche businesses which are having to deal with rising costs, and the Japanese mass market itself is struggling to survive amidst rising labour costs. On top of this, the strong yen is proving challenging for companies trying to sell their exported products abroad at a competitive rate. The Japanese currency has risen more than 6% against the US dollar since April 2011.

Factory-owner Katsuyuki Kasahara has suffered from these issues. His factory is located in Tokyo, and makes all kinds of metallic components. “Most of our products are used in machineries that are exported so we are affected by the global downturn and the strong yen,” Mr Kasahara told the BBC. Some of his clients have even shifted their operations abroad to produce their machineries overseas, instead of exporting them from Japan. Following this, Mr Kasahara decided to move from mass-production into a more niche market, and created a new tiny palm-sized salad tong, which he intended to sell primarily at home rather than abroad. He has since been the subject of much Japanese media attention, as the owner of a small business which has found an innovative way of surviving the economic crisis.

It seems that in an economic downturn, in a climate where Japan is unable to compete in the mass market for both domestic and international consumers, the key to businesses’ survival is the creation of original products made locally. There are people who are still willing to spend money on hobbies and who are looking for something unique and quintessentially Japanese; that is, made using Japanese skills that are still hard to find abroad, and Made in Japan.

Sources include: BBC News

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