During the early period of modernization, there was wider spread basic education, broader economic participation, high social mobility and high levels of motivation too. Some of these conditions are not easy to quantify but they played very subtle riles in the attainment of very rapid technology transfer. It should be recalled that Japan’s social system and value system had been transformed in the process of the restoration. The post restoration modified social and value system was favourable to technology transfer process as it aided the promotion of newly adopted methods and produced men of strong innovative temperament.
- Training and education system
Education of the workforce is crucial to the growth and development of an industry. Larger Japanese mills had research staffs, managers of the Japanese cotton spinning companies sent their engineers abroad to seek the latest developments, so that the company can benefit from their knowledge and experience gained from advanced countries.
Labour force is one of the most important forces behind the successes of the Japanese textile. With the growth of the ring machinery, which had a clear advantage over miles in requiring less skilled workers, mainly contained female labour force, drawn from the agricultural population mostly. Workers worked in poor conditions and for very low wages, they lived in dormitories at the factories. Furthermore, Japanese firms adopted the day and night double shift system, cheap labour force plus long working hours brought the Japanese cotton textile industry into the powerful position in the world stage. Textile industries became dominated by large scale production. In 1913 textiles was by far the most important sector of manufacturing. 60% of factory labour forces were working in textile sectors and these accounted for 45% of factory output.
The Japanese textile industry created a range of low quality cotton products, but which was well sited to East Asian market and to the demands of the lower income classes elsewhere. The Japanese were successful in profit abilities between varying grades of raw cotton and labour. They became capable of producing cotton cloth of a particular quality suing lower quality raw cotton and low quality labour then had preciously been thought possible.
Japanese export strategy for the international competitiveness
- Modernization of equipment and technological improvement
Japan made remarkable progress in modernization, industrialization and general economic development through success transfer of modern technology from the advanced western countries, especially UK, USA, France etc., particularly in the immediate years after the Meiji restoration. It approached the issue of technology transfer through initial consideration of its own needs and sought to indigenize imported technology through the acquisition of adaptive and innovative technical capabilities. In trying to adapt, organize and diffuse technology, Japan’s experience was influenced by many concomitant factors.
Successful technology transformation with efficient utilization is a key factor making Japanese modernization and industrialization a reality. This achievement was anchored on Japanese skilfulness in modifying the structure of imported technology and making it more relevant to Japan’s resource endowment mix. It was also aided by an environment which was helpful to the process of technology transfer. Technology was introduced after the Meiji restoration when the old value and social system had been transformed in Japan. The social and value system are related to technology transfer, and Japan adapted its own while bearing this interrelatedness in mind. Also important was the nationalistic spirit with science and technology transfer issues that Japan approached.. The Meiji leaders used the state funds in respect of Japan’s modernization, industrialization and technological development programs quite sensibly and were able to make the united, voluntary and enthusiastic efforts of the people directly concerned with technological transfer.
Japanese economists and the Japanese government, had long since realised that the adjustment would be necessary that Japan had to move out of mass volume cheap textiles. Domestic production has shifted up-market to more expensive, high quality textiles. The emphasis has gone from labour intensive sectors such as fabric weaving and clothing manufacture to high technology activities such as synthetic fibre development and production. Finally, these labour intensive parts of the industry have been transferred to neighbour countries such as South Korea and Taiwan.
- Enormous knowledge of the market
Japanese companies skilled at adapting to the needs of the market, and also due to their knowledge of domestic supply situation as well as their knowledge of international markets by carry out market research, and set up their market network in markets abroad, which able to assess the comparative advantage of Japanese producers. External market provided the large base for Japanese products and the encouragement towards further investment in innovative activities. Consequently, Japanese companies were well talented to develop new markets.
The contribution of textile industry to Japanese economic development
The contribution of textiles and clothing to Japan’s economy grew steadily during the period of industrialization in Japan from the 1870s to the 1930s. Around 1930, the textile industry was Japan's largest manufacturing industry, and the country's major source of export earnings. Table1 shows those manufacturing industries provided 1/10 of GDP and employment in Japan and 1/3 of the country’s total export earnings. Their importance within the rapidly expanding manufacturing sector had peaked a decade or so earlier, when they accounted for 30% of manufacturing value added and approximately 60% of both industrial employment and exports of manufactures, initially, half of all import expenditures was manufactured inputs for the textile sector, but as domestic production of yarns and fabrics expanded, imports of natural fibers were required instead.
Table1. Importance of textiles, clothing and fibers in production, employment and trade in Japan, 1874-1969 (% shares)
Sources: Michael Smitka, The Textile Industry and the Rise of the Japanese Economy, Garland Publishing, NY, 1998, p.170.
According to the development within Japan itself, the country’s role in international markets is also dramatically changed. Japan’s share of world exports of textiles and clothing rose and then fell. From table2 below, we can see that the importance of textiles in the Japanese economy grew steadily by the 1890s accounts for 2%. In the 1930s, Japan’s share in world exports of textile production peaked, which accounts for 20%. But because of the competitive pressures from the products of developing countries both in exports as well as imports markets, the share of export production in Japan started declining gradually in the 1950s and 1960s to less than 13%.
Table2. Major industrial countries’ share in world exports of textiles and clothing, 1899-1965(%)
Sources: United Nations, Yearbook of International Trade Statistics, New York; A.Maizels, Industrial Growth and World Trade, Cambridge, National Institute of Economic and Social Research, 1963.
Domestic adjustments in the Japanese industries
Associated with the substantial changing international competitiveness of Japanese industry since the mid 1960s, private sectors in the industry have adjusted several important production processes: Investment strategies and products to the changing conditions in domestic and foreign markets. The adjustments have included shedding of excess labour and capital equipment, demise of inefficiently small plants, investing in modern labour saving equipment, undertaking more research and development, specialising production in products with high value added per worker, and shifting production abroad.
Role of government
The government policies played key roles to create factorable climate through government’s efficient attitude to technology transfer, particularly during the Meiji period when Japan concentrated transfer resources of technology and science on the government sector as the central inlet of foreign technologies and as the domestic diffusion centre. The government assisted private sector by stressing infrastructure as well as subsidizing the dissemination of knowledge, both basic and applied. More critical was the attempt to influence the choice of technology by sending its nationals to select the most appropriate ones to Japan as well as reducing the level of reliance n foreign resources either in the form of foreign exchange for the procurement of foreign technology or foreign advisers or experts for the management, control and operation of imported technology.
Where the government has a direct investment, it was to demonstrate to the private sector, and whenever there have been investments which were neither strategic nor military, these were sold off to the private sector. Against this background of government involvement there has been continues to be a considerable degree of national consensus on what was appropriate to Japan.
Other area in which the Japanese government intervened to create better institutions in the modernization was in finance and international trade. In the financial sector, the Japanese experience is one of flexibility, by modifying the financial intermediation in order to create favourable climate for saving and investment.
The government direct intervention in the protection of its industry through tariffs was minimal as it had little tariff autonomy. This has meant that import substitution was exposed to the rigors of international markets as early as it was possible. This therefore meant that only the most efficient technologies were adopted and further developed. This is why the innovations undertaken on imported technologies in Japan were often aimed at cost reduction and quality improvement because a little margin of price below and little margin of quality above a competitor are all essential to successful marketing.
International competitiveness, industrial policy and research and development
Japanese textile industries have been relatively successful in retaining their international competitiveness and that the government has been keen to assist by implementing several policy measures which have helped rationalise the industry. Furthermore, the industry has invested in formal research and development activities to improve its efficiency.
Some interesting causal relationships are identified by that statistical analysis. First, the government appears to have reacted to the decline in export opportunities for textile producers by increasing government finances for rationalisation. Such policy measures have eventually contributed to improving the industry’s international competitiveness and thus increasing its exports. The research activity appears to have helped the industry increase its exports. In other words, the industry’s efforts to rationalise production, with the assistance of government finances, and to introduce new technology through augmented formal research efforts.
Conclusion
The rise of the Japanese textile industry is clear from a number of perspectives: the relative importance of these industries in Japan’s total and manufacturing value added, employment and exports, the importance of Japan in the world markets for textiles and clothing, and Japan’s importance in the international fiber market.
The Japanese textile industry has undergone significant structural changes in response to change in internal and external environment during the past three decades. Measures to reduce labour inputs, the use of synthetic raw materials, product differentiation, and the opening up of new markets were actively undertaken as domestic labour costs rose, the value of the yen appreciated, and competition was intensified with the products from developing countries.
Competitive pressure in the domestic and foreign markets was the main force inducing individual firms to carry adjustments actively. This began with competition against the products from developing countries in foreign markets spreading to competition with imports in the domestic market and finally to competition among domestically produced goods.
Textiles and industry transition in Japan, by Dennis L.Mc Namara, first published 1995 by Cornell University Press, Ithaca and London
International competition and domestic adjustments: the case of the Japanese textile industry, by Hiderki Yamawaki, Wissenschaftszentrum Berlin, November 1989, p17
The development of capitalism in Japan, by Andrew Flood 1993
Technology transfer and industrialization in the developing countries: some lessons from the Japanese experience in the textile sector, which presented at the 19/09/83 on industrial planning and development. By A. Fabayo and L.G.Gatuguta, p17
Technology transfer and industrialization in the developing countries: some lessons from the Japanese experience in the textile sector, which presented at the 19/09/83 on industrial planning and development. By A. Fabayo and L.G.Gatuguta, p31
Political Economy of East Asia No.1- Japan’s impact on the world’s textile market, by Tim Beal, June 1982, p3
International competition and domestic adjustments: the case of the Japanese textile industry, by Hiderki Yamawaki, Wissenschaftszentrum Berlin, November 1989, p20
Export strategy of the textile industry in the Japanese economic development, by Sagara H. P, Peththawadu.
International competition and domestic adjustments: the case of the Japanese textile industry, by Hiderki Yamawaki, Wissenschaftszentrum Berlin, November 1989, p18
Technology transfer and industrialization in the developing countries: some lessons from the Japanese experience in the textile sector, which presented at the 19/09/83 on industrial planning and development. By A. Fabayo and L.G.Gatuguta, p32
