Factors for Industrial Development in Japan

30 min

Let's begin

In 1945 Japan's cities and factories lay in ruins after the Second World War. Within thirty years it had become one of the world's leading industrial nations, a change often called the "Japanese economic miracle". It did this with almost no raw materials of its own: it imports nearly all its iron ore, coal and oil. So the factors behind Japan's success must be mostly human. What are they?

Definition

Factor of industrial location: anything that influences where industry grows, such as raw materials, power, labour, capital, transport, markets and government policy. Land reclamation: creating new land, here by filling shallow bays with rock and soil. Research and development (R&D): work by firms, universities and governments to invent new products and better methods.

Physical factors

Coastal location and deep natural harbours (Tokyo Bay, Osaka Bay, the Inland Sea) let ships bring in raw materials cheaply and take out finished goods.
Hydro-electric power from short, fast rivers in the mountains helped early industry; today Japan also imports oil, gas and coal and uses nuclear power.
Coastal plains, though small, give flat sites; where they are too small, land is reclaimed from the sea (Figure 1).
Some local resources: timber for paper, fish for food processing, limestone for cement.

Human factors

Skilled, educated and hard-working labour: high literacy, strong technical schools and loyalty to the company.
Capital: high savings by households, banks that lend to industry, and large business groups (keiretsu) that share finance and supplies.
Technology and research: Japan first copied and improved foreign technology, then invented its own (robots, electronics, hybrid cars); it spends heavily on R&D.
Government policy: the Ministry of International Trade and Industry (MITI, now METI) guided investment into steel, ships, cars and electronics, protected young industries and promoted exports.
Help after the war: American aid and orders for supplies during the Korean War (1950–1953) restarted factories.
Efficient management: quality control, "just-in-time" delivery of parts and constant small improvements (kaizen), pioneered by firms such as Toyota.
Transport and communication: ports, railways, expressways and the Shinkansen high-speed railway, opened between Tokyo and Osaka in 1964.
Large markets: a big, wealthy home market of over 120 million people and export markets in America, Europe and Asia.
Political stability since the war.

Definition

Keiretsu: a group of Japanese companies linked by shared shareholdings, banks and suppliers, such as the groups around Toyota or Mitsubishi. Just-in-time: a system in which parts arrive at the factory exactly when they are needed, so little money is tied up in stores. Kaizen: a Japanese management idea of continuous, small improvements made by all workers.

Worked example

Worked example 1: why build on the coast? A steelworks needs about 1.6 tonnes of iron ore and 0.8 tonnes of coal for every tonne of steel. If it makes 8 million tonnes of steel a year, how many tonnes of raw materials must it bring in? (Approximate ratios, illustrative.)

Iron ore: 1.6 × 8 = 12.8 million t. Coal: 0.8 × 8 = 6.4 million t. Total: 19.2 million t, more than twice the weight of the steel made. Since all of it arrives by sea, building beside a deep harbour saves an enormous amount of inland transport.

Worked example

Worked example 2: just-in-time. A car plant uses 4,000 seats a day. Under the old system it kept 20 days of stock; under just-in-time it keeps half a day. How many seats are no longer sitting in the store? (Illustrative figures.)

Old stock: 4,000 × 20 = 80,000 seats. New stock: 4,000 × 0.5 = 2,000 seats. Saving: 78,000 seats' worth of money and space. The risk: if a supplier stops, the line stops within hours.

Warning

Do not list "raw materials" as a factor for Japan. Japan's lack of raw materials is a problem it overcame, not a reason for its success. Explain instead how imports by sea and coastal sites solved the problem.

Tip

Rwanda has few minerals too. Japan's story shows that skills, capital, technology, good transport and policy can matter more than resources. Rwanda's own plans to grow industry, services and skills follow a similar idea.

Atlas Economy: how Japan became a global economic power without natural resources. As you watch, sort each reason into physical and human factors.

✦

Practice

Give three physical factors that helped industrial development in Japan.
Give six human factors, explaining one of them fully.
Explain what is meant by keiretsu, just-in-time and kaizen.
How did the government help Japanese industry after 1945?
Using Figure 1, explain why heavy industries in Japan are found on reclaimed coastal land.
A works makes 5 million tonnes of steel using 1.6 t of iron ore per tonne of steel. How much iron ore must it import?
Why is the Shinkansen important to Japanese industry?
"Japan proves that a country does not need natural resources to industrialise." Discuss.

Show answersHide answers

Any three: coastal location with deep harbours; HEP from fast rivers; coastal plains and reclaimed land; local timber, fish and limestone.
Any six: skilled labour; capital and keiretsu; technology and R&D; government policy (MITI); post-war American aid and Korean War orders; efficient management; transport; large markets; political stability. A full explanation says how the factor helped, with an example.
Keiretsu: groups of linked companies sharing finance and suppliers. Just-in-time: parts delivered exactly when needed, so little stock is kept. Kaizen: continuous small improvements by all workers.
MITI guided investment into key industries (steel, ships, cars, electronics), protected new industries from imports, gave loans and helped exporters.
Raw materials arrive by ship and finished goods leave by ship, so a quayside site saves transport costs; flat land is scarce, so it is made by filling shallow bays.
1.6 × 5 = 8 million tonnes.
It moves business people, engineers and workers quickly between the industrial cities of the Pacific Belt (Tokyo, Nagoya, Osaka, Fukuoka), linking firms, suppliers and markets.
For: Japan imports nearly all its raw materials yet became a major industrial power through skills, capital, technology and policy. Against: it still needs raw materials, bought with export earnings, and is vulnerable when import prices rise or supplies are cut. Reach a judgement.

Sources and credits

Japanese economic miracle, Keiretsu and Tokaido Shinkansen: Wikipedia contributors, Wikipedia, CC BY-SA 4.0, adapted by Ganzaa.
Photo: Mount Fuji and Shinkansen N700, Alpsdake, Wikimedia Commons, CC BY-SA 4.0.
Video: How Japan Became a Global Power Without Resources, Atlas Economy, embedded from YouTube.
Figure 1, worked examples (illustrative ratios) and exercises: written by Ganzaa.

This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.

1Physical factors

2Human factors

Physical factors

Human factors