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Friday, Jan. 7, 2011
Small Ota Ward firms look to exploit airport
By MIE SAKAMOTO
As Japan's big manufacturers shift output abroad, taking much of their business with them, small parts makers in Ota Ward, Tokyo, are starting to think they may need to cross the waters too if they're going to get any new orders.
In this, they may be greatly helped by Haneda airport, which sits on Ota Ward's waterfront. The ward government is seeking to take advantage of Haneda's foray into international operations to help small businesses, with cutting-edge technology and highly skilled workers, expand overseas.
Metal spinning company Kitajima Shibori Co. is one of some 4,000 such businesses in the area, which have had to suffer through a riptide of decreasing orders thanks to the slumping economy and strong yen.
"We are doing what others can't do," President Minoru Kitajima said.
Founded in 1947, Kitajima Shibori makes a wide range of products using lathes and paddles to shape metal plates into items like cooking pots as well as parts for aircraft and rockets. Everything is made to order by hand by some 15 artisans.
Though the company's outstanding reputation in Japan has helped it survive the economic downturn, Kitajima feels the need to find clients overseas amid the shrinking demand at home.
"Major Japanese companies are not only moving out but also procuring parts overseas. As we can't beat foreign companies in terms of personnel costs and product prices, we will compete by making high-quality products fast," he said.
Small factories in Ota Ward, many of which engage in mechanical and metal processing, have developed in a unique way to become what they are now — firms often touted as representing Japan's sophisticated manufacturing technology.
Back in the early 1900s to 1940s, major companies such as Tokyo Gas Co. built plants in the area because they found ample land with good accessibility to central Tokyo as well as Yokohama.
The plants were followed by waves of subcontractors in the 1960s and 1970s, coinciding with Japan's high-growth era.
Young people from rural areas flocked there to learn skills and became artisans. They spun off and ran their own small businesses with no more than two or three employees, boosting the number of businesses to more than 9,000 at their peak.
In the process of expansion, many of them refined their skills and developed expertise so they could stand on their own feet and not depend on orders from major companies. But those who remained dependent either left the area with the big firms or went out of business.
Among the roughly 4,000 businesses that have survived, roughly 80 percent have fewer than 10 employees and half have no more than three, according to the ward.
"In Ota, there are companies with cutting-edge technology that can be utilized only by themselves and those which can offer solutions to big companies by using the networks they have formed among themselves," said Yoshi Ishii, director of Ota Ward's economic development division.
If the domestic economy shrinks, they have to find new markets to make up for the loss, Ishii said. "We think that globalizing Haneda will be a chance to do that."
One way the ward wants to help is by finding means for companies to communicate with overseas clients. Many small companies in the area, whose business partners have always been Japanese companies, will have a rough time dealing with different languages.
The ward is also aiming to lure foreign companies to the area by emphasizing the proximity to Haneda, Ishii said.
"It could be a Taiwanese, Chinese or any other company that might build research and development facilities, for example," Ishii said. "That would facilitate collaboration with the existing industry."
Meanwhile, the Ota Tourist Association is conducting a joint study with universities to find ways to preserve the area, where many "machiya," or traditional buildings consisting of both living space and a workshop, are located.
"It is difficult to have visitors stop by and engage in hands-on opportunities to learn about manufacturing because each factory is small," said Yu Okamura, an assistant professor at Tokyo Metropolitan University. "There is a need to create an environment where visitors can have contact with manufacturing."
The important thing is how to get visitors to spend money, and one solution could be turning vacant factories into tourist guesthouses, Okamura said.
Through the study, the association and the universities aim to preserve the originality and creativity that the area has been nurturing. "We would like to hand down the soul of manufacturing," Okamura said.