Japan and the political and economic essay

Japan’s economic successes can be explicated primarily as the result of a greater dispersion of flexible manufacturing strategies in the country than in other nations. In Japan a large number of manufacturing enterprises produced goods according to elastic principles. In the United States, a contrasting case, both customary industrial ideology and actual manufacturing practices have imitated a much deeper commitment to mass production as the base for organizing the economy. Several competitive advantages resulted from the wider acceptance of flexible production in Japan.

First, Japanese manufacturers could contend through product delineation as much as through price differentiations 1. They could offer goods that appealed to more specialized tastes, thus drawing demand ahead of the standardized products made by mass producers elsewhere. Such a strategy, as in the Japanese incursion into the U. S. auto market, is successful because mass producers cannot readily change products to meet new demand; their labor, machines, and organization become fixed on manufacturing one basic type of good.

The only response a mass producer can make to a product challenge—apart from likable to the state for trade sanctions against the flexible manufacturer—is to cut prices. But even if lowering prices is economically realistic, it does not guarantee success where flexible firms offer products so tempting that consumers distinguish standardized goods as inadequate. Japanese manufacturing was decentralized amongst many flexibly organized firms and so Japanese producers could change goods easily and struggle by offering new products.

The result was a partial breaking up of mass markets into specialized segments, which Japanese manufacturers could develop and to which mass producers were less able to adapt. The subsequent advantage was the capability to launch completely new products more easily than producers elsewhere and to form new markets from overlooked technology. The Japanese political economy developed a network of financial and organizational practices that supported the continuous creation of small, flexible firms throughout the high-growth period.

Compared to their competitors in other nations, particularly the United States, Japanese entrepreneurs faced low startup costs that made it easier for them to use unexploited technologies in the global marketplace. Hence skilled entrepreneurs with access to underutilized technology could quickly set up operations and enter the market. The system of small-firm support also affected product innovation in existing enterprises, as the diffusion of flexible firms in Japan made it less costly even for large and established manufacturers to accept new designs or ideas.

Most large firms spread production among smaller-scale suppliers, each of which was pursuing, to a greater or lesser extent, flexible production strategies. The overall costs of new product development were thus reduced as firms could adapt more readily to new parts designs or even generate such designs themselves. In contrast, the high startup costs and rigidities imposed by mass production in America cut against rapid accomplishment of new designs or technologies. More flexible startup or existing firms in Japan could handle products with originally unclear or apparently limited appeal.

The result was that Japanese manufacturers brought into the market opportunities overlooked or too costly to explore elsewhere, frequently generating enormous profits. Third, the flexible sector in Japan created demand for unique goods, consecutively promoting the continued development of flexible techniques while providing specialty firms with profitable markets. This effect was particularly pronounced in the machinery industries, where the growth of Japan’s smaller-scale manufacturers brought equipment makers to build such sole products as small computer controlled lathes, milling machines, and machining centers 2.

In some cases the new equipment itself became massively successful in international markets; unique Japanese demand led to the formation of valuable global markets. But an additional benefit was the advancement of the small-scale sector’s ability to comprehend its strategic objectives. Each time new machinery was tailored to meet the needs of Japan’s flexible users, the overall ability of domestic firms to persist to pursue product competition or to create new markets was enhanced.

And because particularly designed equipment made the flexible sector more competitive, it fostered the small firms’ capacity to pay for even more exotic and useful tools. Demand for better manufacturing products thus created a cycle in which the ability to use new equipment technology spurred the overall flexibility and strategic competitiveness of Japanese manufacturers. Fourth, the Japanese economy in general was enabled to regulate better to demand cycles and economic crises; responses were more stable and less publicly disruptive than elsewhere.

The expansion of small-scale flexible firms in Japan gave manufacturers a wide range of options for coping with the demand shifts, materials shortages, foreign competition, and other disruptions that unceasingly plague industry. Japanese firms could not only cut prices or restrain production but also shift production to sectors less affected by economic reversals or stimulate demand by forming new markets. And by relying on product design as well as price cutting to deal with crises, the more flexible firms could reduce their disclosure to wage pressure from lower-cost producers abroad.

Foreign manufacturers, even those that possessed cost advantages, could not take a cheaper, directly competitive product to market as designs were shifting continuously. In contrast, firms adapted to mass production were very rigid; they could react to economic disruptions only by lowering prices to try to stimulate sales, by reducing operations, resulting in layoffs and costly excess competence, or by cutting wages 3. Yet throughout the high-growth period the Japanese achieved much of their success in autos, electronics, and machinery, industries that most European and American producers thought of as “natural” mass markets.

Mass production techniques were first developed to produce goods for these markets in the United States and were later adopted, albeit with considerable modifications, by the Europeans. The Japanese economy developed in such a way as to preclude the ready implementation of mass production, even though a major object of the bureaucrats was to emulate the American model. Consequently, industries treated as mass markets in other countries preserved the flexible substitute in Japan.