Is “Made in Japan” a phrase of the past?
Major Japanese companies have experienced losses this year, so will the "Made in Japan" label also follow suit?
Japan has seen a decrease in manufacturing in recent years, and now some experts wonder about the Japanese economy's future. Sony reported notable losses for the first business quarter of 2012, and according to Goldman Sachs, the whole Japanese manufacturing industry has experienced negative growth over the same time period.
Yao Haitian, a Japanese economic researcher from the Chinese Academy of Arts and Sciences, said, "It would be premature to say that Japanese manufacturing has come to an end. Japanese MC (Materials and Components) are quite upscale, and the profit margin is high. Other countries either don't produce the same materials, or can't produce materials of the same quality."
Still, Japanese industries are falling behind other East Asian countries'. Japanese companies have been laying off workers and restructuring to counter losses. Some economists use electronics fair participation to measure countries' economic strengths. At the Hong Kong Elecontronics Fair earlier this year, most of the booths were from mainland China, South Korea, Taiwan, and Hong Kong.
Economist Joseph Chu Chi has said that Japan used to be very competitive when it came to end-product consumer devices, but those products are more expensive than their counterparts from China and South Korea.
"Japanese companies with terminal applications, such as cell phones, will continue to decline. Terminal digital, application, and intelligence software are not Japanese strengths," says Chu.
If Japanese companies were to become industry leaders again, they must become more innovative in their model designs and cut production costs.