Current Status and Issues Facing
Japanese Industries
February, 2010
Ministry of Economy, Trade and Industry
The Industrial Structure Vision (provisional name)
1. Establishment of the Industrial Competitiveness Committee
A new organization called the Industrial Competitiveness Committee will be established under the Industrial Structure Council,
to formulate a new, joint public-private strategy known as the “Industrial Structure Vision” (provisional name).
The Committee will discuss what will drive Japan’s revenues and employment in the future, taking into account the current
deadlock situation and serious business climate for Japanese industries.
2. Major subjects on the agenda (draft)
- Why can Japanese companies win through technology but cannot profit operationally?
- Can design, development and production be retained within the country?
- Can Japanese companies meet infrastructure demand and the so-called volume zone in growing and emerging markets?
- How can businesses capitalize on environmental needs?
- How can businesses capitalize on the needs in the medical care, nursing care, healthcare and childcare sectors?
- Are there industrial development models suited for regions?
- Proposals for new growth industries (strategic sectors)
- Future vision for major industries
- Directions of future industrial policies etc.
3. Schedule
The first meeting will be held in February, and in June, an interim report summarizing the results will be compiled.
The committee is to meet about 7 times during this period.
2
Issues Considered by the Industrial Competitiveness Committee
•
The Japanese economy is in a serious deadlock.
– Japan’s economic rank in the world as a whole is declining. Per capita wealth is stagnant as well.
•
This deadlock is not a transient one, but involves structural problems in three major areas.
1. Problems with the overall industrial structure
2. Problems with corporate business models
3. Problems with the business infrastructure surrounding corporations
• Overcoming these structural problems will require not mere stopgap
measures, but a comprehensive strategy pooling the collective wisdom of
government and industry.
• With these issues in mind, this Committee is to discuss and consider “what
will drive Japan’s revenues and employment in the future.”
3
1. THE DEADLOCKED JAPANESE ECONOMY
Japan’s economic rank in the world as a whole is declining.
Change in global ranking for per capita GDP
Change in share of global GDP
2000
2008
1990
2008
3rd
23rd
14.3%
8.9%
Source: IMF World Economic Outlook Database
Source: IMF World Economic Outlook Database
Change in IMD World Competitive Power Ranking
1990
2008
1st
22nd
Source: World Competitiveness Yearbook
5
Global market focus is shifting to emerging countries
•
From now on, markets will increasingly shift from Japanese domestic, European and
North American demand, to developing and emerging countries.
(billion dollars)
Scale of market expansion in various areas of the world
20,000
■2002－2008 market expansion
■2009－2014 market expansion
15,000
10,000
5,000
0
Developing and
emerging countries
Developed
countries
Japan
Source: World Economic Outlook Database, April 2010
6
Limitations of expansion of domestic demand through income distribution
• Japan already has one of the lowest savings rates
among developed countries. Boosting consumption
over the mid- to long-term is unviable.
• Labor’s share is higher in Japan than in other countries
International comparison of labor’s share
Change in household savings rate in major nations
25.0
UK
Japan
20.0
France
Germany
15.0
France
フランス
Italy
イタリア
Germany
ドイツ
10.0
Japan
日本
USA
アメリカ
Italy
5.0
France
USA
Germany
USA
Source: OECD Economic Outlook No86
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0.0
(Year)
Japan
Source: Prepared on the basis of Cabinet Office white paper on the economy and public finance (2008), OECD
“National Accounts”
Note: Labor’s share = Employee compensation/per capita income
= (per capita employee compensation × number of workers) / (Cost of living × real GDP)
= real wages/labor productivity
If Japan’s overall “pie” is not enlarged, domestic demand will not expand
7
Stagnant and declining wages
• Over the 2002 to 2007 period, wages were stagnant or declining despite economic growth
(Year 2005 = 100)
Change in per capita wages
110.0
107.0
104.0
101.0
98.0
95.0
Sluggish
economy
Strong
economy
Sluggish
economy
Strong
economy
Sluggish
economy
92.0
90
91
92
93
94
95
96
97
98
99
00
01
02
Sluggish
economy
Strong
economy
03
04
05
06
07
08
09
Source: Ministry of Health, Labor and Welfare (MHLW) “Monthly Labor Survey”
8
Overseas operations expand while domestic business activities stagnate
• Japanese corporations have been boosting overseas investment. Meanwhile, domestic investment is at a standstill.
(million yen)
Change in overseas direct investment (net)
Change in domestic capital expenditures (year on year)
All sizes /
All industries
down 37%
Source: Ministry of Finance (MOF) “Balance of Payments”
Source: MOF “Corporate Enterprise Quarterly Statistics”
9
Shift of focus to overseas will continue in the future (1)
Q. Will production , development, research and head office functions currently housed in
Japan shift overseas in the future?
(Unit: companies)
90
Production operations
companies
Development operations
Research operations
Head office operations
30 companies
8 companies
The number of corporations considering
shifting overseas, and those not
considering it, is almost equal.
4 companies
No shift of the above
functions
84
companies
No response 113companies
Shift some or all operations
Shifting of some or all operations currently under consideration
Source: METI “Survey of Japanese Industrial Competitive Power” (n = 283 companies)
Note: There is some doubling up of responses from corporations regarding production functions
10
The rural economy continues to decline
• The economic disparity between the Tokyo and Nagoya regions, and other regions of Japan, continues to widen.
• In particular, rural areas will see a steep decline in population from now on. Revival of the economy in rural areas
is a serious concern.
Change in GDP by region
(Growth rate from 1996 → 2006)
Change in population and population
growth rates by region
Population increase/decrease
増減数（千人）
(1,000
people)
8.00%
Population
Population
increase/decrease
increase/decrease
増減数
増減数
(2005 – 2020) (2005～2035）
(2005 – 2035)
(2005～2020）
Percentage of
増減率（％）
increase/decrease(%)
2,000
5.0
6.00%
0
Tokyo東京圏
region
4.00%
▲ 2,000
Kansai
region
Kansai大阪圏
region
Other
regions
地方圏
1.6
0.0
▲ 1.0
2.00%
▲ 4,000
0.00%
Tokyo
region
東京圏
-2.00%
Nagoya
region
名古屋圏
Nagoya
region
名古屋圏
Kansai
関西圏
region
Other
地方圏
regions
▲ 6,000
▲ 8,000
▲ 10,000
-4.00%
▲ 5.0
▲ 4.4
▲ 7.8
Percentage of
increase/decrease
増減率
▲ 5.0
▲ 7.1
(2005～2020）
▲ 10.0
Percentage of
increase/decrease
増減率
(2005～2035）
▲ 15.0
-6.00%
▲ 12,000
-8.00%
▲ 14,000
Source: Cabinet Office “Annual Report on Prefectural Accounts”
Tokyo region: Saitama, Chiba, Tokyo, Kanagawa, Nagoya region: Gifu,
Aichi, Mie, Kansai region: Kyoto, Osaka, Hyogo, Nara Rural regions: All
prefectures outside the three major urban areas
▲ 15.8
▲ 18.5
▲ 20.0
Source: Ministry of Internal Affairs and Communications (MIC) “Census“, National Institute of
Population and Social Security Research
Prepared by METI based on “Population Projections by Prefecture (May 2007 estimation)
Tokyo region: Saitama, Chiba, Tokyo, Kanagawa, Nagoya region: Gifu, Aichi, Mie, Kansai
region: Kyoto, Osaka, Hyogo, Nara Rural regions: All prefectures outside the three major
urban areas
11
In the short term, employment problems revolve around “quantity,” while in the mid- to long-term they
revolve around “quality.”
• Japan is facing a potentially severe unemployment
problem
In the short term, the issue is “quantity” of jobs
Change in the unemployment rate
10,000 people
Potential number of unemployed: 9.05
million people
(Potential unemployment rate: 13. 7%)
• The working-age population will drop sharply
toward 2020 (8.01 million lower than 2009)
In the mid to long term, the problem is not so
much “quantity” as “quality” of jobs
Projected working-age population of Japan
10,000 people
2009
81.64 million
people
2020
73.63 million
people
Labor hoarding population
Totally unemployed population
Unemployment rate: right axis
Potential unemployment rate: right axis
Source: Prepared on the basis of MIC “Labor Force Survey (Seasonally adjusted tabulation)" , Cabinet
Office “White paper on the economy and public finance"
Note 1: “The labor hoarding population” is calculated using the difference between the “actual
employed population” and the “optimum number of employees needed for production.” The
“optimum number of employees” is the number of employees needed to achieve appropriate labor
productivity with a normal number of working hours)
Note 2: For the “potential number of unemployed,” the sum of the number of totally unemployed people
and the “labor hoarding population” is used as a matter of convenience. The “potential
unemployment rate” is the “potential number of unemployed” divided by the working age
population.
Working age population (age 15-64)
Working age population ratio (right axis)
Source: Prepared on the basis of the National Institute of Population and Social
Security Research “Population Projections for Japan"
Note: Graph employs moderate predictions for the birth rate and death rate
12
2. OVERALL INDUSTRIAL
STRUCTURE ISSUES
13
Expansion of the “pie” (income) is dependent on global manufacturing, and particularly on the automotive industry
• Of the nominal GDP growth rate (2000 → 2007)
of 2. 5%, the automotive industry accounts for
nearly half (1.1%).
Growth in profits over the FY 2001 →
FY 2007 period
All industries
Contribution of auto industry to GDP growth rate
(2000 – 2007)
Automotive
contribution is
about 50%
¥25.2 trillion
Of this amount, the four major global
manufacturing industries account for
36% (¥9.1 trillion)
(Transport machinery: ¥2.1 trillion, electronics:
¥3.2 trillion, steel: ¥1.8 trillion, general
machinery: ¥1.9 trillion)
Source: Corporate Enterprise Statistics (annual survey)
Overall
(GDP growth rate)
Auto industry
share
Source: The GDP growth rate is based on the Cabinet Office “National Income Accounts.”
Degree of automotive industry contribution is prepared on the basis of METI “Extended
Input / Output Table”, MIC “Linked Input / Output Table”
Note: Figures for the automotive industry are calculated as induced values including added
value from spillover to other industries.
14
Labor productivity is increasing, but employee incomes remain flat
•
Japan and Germany, with export-based manufacturing-oriented growth patterns, have achieved
increases in labor productivity (approx. 25%). However, since 1990, worker incomes in real terms
have remained more or less flat.
G5 per capita employee compensation
Change
in G5 labor productivity
各国における労働生産性の推移
（1990年＝100）
(1990
level = 100)
UK
220
France
UK
Germany
200
Japan
USA
UK
USA
USA
180
France
160
France
フランス
Japan
ドイツ
140
日本
Germany
Germany
英国
米国
120
Japan
100
80
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: International Labor Productivity Comparison (Japan Productivity Center)
【出所】労働生産性の国際比較（財団法人社会経済生産性本部）
Note 1: Labor productivity = Real GDP (at constant prices adjusted for dollar inflation / deflation) / workforce population
（注）１．労働生産性＝実質ＧＤＰ（購買力平価換算ドル）／就業者数
Note２．グラフデータは、1990年平均＝100として指数化
2: Data on the graph is indexed with 1990 level equaling 100.
Export-based manufacturing economies are facing cost competition from emerging countries
15
The number of people employed is relatively low in global manufacturing. The number is declining in
all developed countries.
（％）
製造業のシェア（就業者）
Manufacturing
industry share (number of workers)
35
Japan approx. 17%
30
(four major global
manufacturing industries account
for approx. 7%)
Germany
25
Italy
20
* The four major global
manufacturing industries are
“primary metals,” “general
machinery,” “electronics,” and
“transport machinery.”
France
15
10
Canada
UK
USA
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
5
Source: OECD
High expectations cannot be placed on global manufacturing
industries in terms of quantity of employment.
16
Per capita value added for global corporations and for other industries are divergent
（百万円）Per
capita value added for global corporations and domestic corporations
グローバル企業とドメスティック企業の一人当り実質GDP（付加価値）
(million yen)
21.0
21. 0
Global (major)
グローバル企業
corporations
(大企業）
18.0
15.0
Peak
ピーク
(90/3Q)
（90/3Q）
12.0
9.0
6.0
Domestic
(small and
ドメスティック企業
medium)
corporations -29.2%
（中小企業）
3.0
0.0
55
59
63
67
71
75
79
83
87
91
95
99
03
07
（注）1．実質GDP=名目付加価値（人件費+営業利益）/産業別デフレータ
Source: Prepared by UFJ Securities from the Ministry of Finance “Corporate Enterprise Statistics (annual survey)”
2.グローバル化経済圏企業＝IT産業、鉄鋼、輸送用機械の大企業
3．IT産業＝非鉄、電気機械、精密機械、一般機械、情報通信
4．ドメスティック経済圏企業＝中小企業・非製造業（ただし、電力と情報通信を除く）
Boosting the value added for domestic corporations is key.
17
Japan has a low level of dependence on exports
250.0%
231.2%
＜各国輸出依存度の比較＞
Comparison
of export dependency in various countries
212.5%
200.0%
150.0%
109.6%
100.0%
77.7%
12.6%
USA
17. 4% 14.5%
Brazil
24.1%
Japan
26.6%
India
28.1%
France
36.6%
UK
40.2%
China
47.5%
EU27
South Korea
Vietnam
Malaysia
Hong Kong
0.0%
Singapore
50.0%
Germany
54.8%
Source: IMF, Cabinet Office “National Accounts”
It is important to connect industries other than specific global manufacturing
industries with overseas growth markets to boost value added.
18
Japanese corporations have slim profit margins
Profit margin comparison (5 industry categories)
Profit margin
Foreign
corporations
(6 companies)
Japanese
corporations
(3 corporations)
Foreign
corporations
(5 companies)
Japanese
corporations
(5 corporations)
Information and
Heavy electrical machinery
communications equipment
(FY 2007)
(FY 2007)
Foreign
Foreign
Japanese
Japanese
corporations
corporations
corporations
corporations
(4 companies) (2 corporations) (17 companies) (3 corporations)
Semiconductors
(FY 2007)
Chemicals
(FY 2006)
Foreign
corporations
(5 companies)
Japanese
corporations
(1 corporations)
Cement
(FY 2007)
Source: METI “2009 White Paper on Japanese Manufacturing Industry”
Note 1: Data for the information and communications equipment industry, heavy electrical equipment industry and semiconductor industry represents the global top
10 companies, data for the chemical industry represents the top 20 companies, and data for the cement industry represents the global top 6 companies
Note 2: Profit margin consists of the net average operating margin for each company (however, current profit margin is used for the information and
communications equipment industry only. Industries incurring losses are excluded from calculations)
19
Japanese industries are characterized by a large number of competing players
Overview of major players in each industry
Japan
North America
Europe
Asia, etc.
LCD ＴＶ
Sony, Sharp, Toshiba,
Panasonic, Funai
Vizio (USA)
Philips (Netherlands)
Samsung (South Korea),
LGE (South Korea), TCL
China)
Railways
Nippon Sharyo, Hitachi,
Kawasaki Heavy Industries, ,
Tokyu Car, Kinki Sharyo
Bombardier (Canada)
ALSTOM (France)
Siemens (Germany)
Hyundai Rotem (South
Korea)
Nuclear power
Toshiba (WH), Hitachi,
Mitsubishi Heavy
Industries
GE(USA), 〔WH〕
AREVA (France)
Doosan Heavy Industries
& Construction (South
Korea)
GE (USA), Nalco (USA)
Veolia (France)
Siemens (Germany)
Suez (France)
Thames Water (Australia)
GE (USA)
Philips (France)
Water business
(Drinking water
/ sewers)
Diagnostic
imaging equipment
Toray, Metawater, Ebara,
Kubota, etc.
*Major corporations include of
16 companies for equipment,
nine for plant construction, and
three for operations and
maintenance
Toshiba Medical, Hitachi
Medico, Shimadzu, Aloka
Source: prepared by METI on the basis of assorted materials
―
Comparison of Japan and South Korea
•
•
In comparison with South Korea, Japanese industry is characterized by a large number of companies fighting for
a share of the domestic market, and by domestic attrition.
South Korean corporations use the domestic market as a “home base” for bold and rapid strategic investment in
global markets.
Japan/South Korea size of
market comparison
Even with a smaller overall domestic market than Japan,
there are larger domestic markets available for each
individual South Korean company.
Japan
Note: as of 2008
Automobiles
Mobile phones
Electric power
Oil (primary
distribution)
Size of domestic
market
Size of
market/per
company
Size of market/per
company
1 company
1.02 million
vehicles
1.02 million
vehicles
1. 5: 1
58 million tons
29 million tons
1. 5: 1
22.5 million
handsets
11.25 million
handsets
2. 2: 1
350 billion ｋｗｈ
350 billion
kwh
3. 9: 1
2,291,000 b/d
573,000 b/d
1. 1: 1
Size of domestic
market
Size of
market/per
company
6 companies
4.23 million
vehicles
700,000
vehicles
(Nippon Steel,
etc.)
76 million tons
19 million tons
6 companies
31 million
handsets
5.16 million
handsets
(Samsung, etc.)
890 billion ｋｗｈ
89 billion
kwh
(Korea Electric Power)
4,845,000 b/d
538,000 b/d
4 companies
Steel
No. of major
corporations
No. of major
corporations
(Toyota, etc.)
(Sharp, etc.)
10 companies
(TEPCO, etc.)
9 companies
(Nippon Oil
Corp., etc.)
Japan/S.K.
comparison
South Korea
Note: Figures for mobile phones are projections for 2009, others are actual figures for 2008.
Major steel corporations = number of corporations in the global top 40 crude steel producers
Major auto corporations = number of corporation s with domestic sales of 200,000 or more vehicles
(Hyundai-Kia)
2 companies
(Posco, etc.)
2 companies
1 company
4 companies
(SK, etc.)
S.K.: Japan
Source: Prepared by Mizuho Corporate Bank Industry Research
Division based on assorted documentation
21
Big deals in South Korea
• In South Korea, since the 1997 currency crisis, the government has acted strongly to centralize industry to
prevent excessive diversification of conglomerates. (Supply-side measures)
• In Japan, since the strong yen crisis of 1985, the government has pushed for expansion of domestic demand
primarily through investment in the public sector (demand-side measures). This has bred a structure of
excessive supply.
Semiconductors
Automobiles
Progression
Framework
2-company system: Samsung Electronics +
company formed from merger of Hyundai
Electronics and LG Semiconductors
Even after absorbing LG Semiconductors, Hyundai
Electronics (Hynix) faced a crisis
Samsung
Electronics
Samsung
Electronics
Hyundai
Electronics
Hynix
Semiconductors
LG
Semiconductors
1999
Absorption /
merger
2001
Company name changed
*The TFT and LCD segments of LG Electronics, which
remained part of LG, were taken over by merged entity LG
Phillips TFT / LCD
Progression
Petrochemicals
Merger broke down after failure to attract foreign
investment, French company Total invested in
Framework
4-group system: Samsung General Chemicals and Samsung,
Hyundai Petrochemical acquired LG Chemical /
Hyundai Petrochemical attempted integration
Honam Petrochemical
with foreign investment
Samsung
General Chemicals
Hyundai
Petrochemical
Total made capital investment
Samsung Total
Merger
failed
LG Daesan Petrochemical division
absorbed
LG Chemical
Honam
Petrochemical
Source: Prepared by METI based on
Lotte Daesan
Petrochemical
division acquired
in merger
Framework
Hyundai Motors acquired Kia Motors
Daewoo Motors and Samsung Motors were
integrated into foreign corporations
Progression
Hyundai-Kia formed, Samsung Motors filed for
bankruptcy, causing a business exchange failure,
Daewoo Motors was purchased by GM, Samsung
Motors purchased by Renault
Hyundai Motors
Kia Motors
Hyundai Motors
Went bankrupt
in1998, became
a subsidiary of
Hyundai
Went bankrupt in 2000, became a
subsidiary of GM in 2002
Daewoo Motor
Samsung
Motors
Railroad cars
Framework
Merger of Hyundai Precision, Daewoo Heavy
Industries and Hanjin Heavy Industries
Hyundai
Precision
LG Chemical
Daewoo Heavy
Industries
Honam
Petrochemical
Hanjin Heavy
Industries
Business exchange
failure
Went bankrupt in 2000,
became a subsidiary of
Renault
Progression
1999 merger, became a group
company of Hyundai Group in 2001
Hyundai Rotem
1999 merger
Name changed in 2007
22
Corporate “aging society and low birthrate” (Stagnation in number of companies established,
growing number of companies going out of business)
○The rate of companies going out of business continues to exceed the rate of those going into business,
leading to an ongoing decline in the number of companies
Changes in rate of companies going into/out of
business (non-primary industry)
（％）
7.0
5.9
5.9
Going out of
開業率
business rate廃業率
6.0
（万社）
560
6.8
6.1
6.2
5.6
540
528 526
5.0
4.3
4.0
3.5
3.8
5.8
5.1
4.0
3.2
4.0
2.7
2.0
1.0
4.21 million
companies
523 520
510 507
500
485 484
470 469
480
3.6
3.5
535 533
Small and
medium
enterprises
520
3.0
5.28 million
companies
(10000 companies)
8.0
Change in number of
companies
3.5
460
Total no.
of companies
434 433
440
Going into
business rate
421 420
420
400
0.0
75～78
78～81
81～86　86～91
91～96
96～99
99～01
01～04
Source: The Small and Medium Enterprise Agency “2008 White
Paper on Small and Medium Enterprises”
04～06
（年）
(Year)
1981
1986
1991
1996
1999
2001
2004
2006
(Year)
（年）
Source: MIC “Establishment and Enterprise Census” (re-edited and rearranged)
Note 1: Conducted as the “Establishment and Enterprise Census” through 1991, and in 1994 as the “Enterprise List Update Survey.”
2: The criteria for designation as a “small or medium enterprise” are as follows.
• Until 1996, the standard was 300 or fewer employees (100 or fewer for wholesalers, 50 or fewer for retail, food and drink or service industries), or ¥100 million or
less in capital (¥30 million or less for wholesalers, ¥10 million or less for retail, food and drink or service industries)
• Since 1999, the standard is 300 or fewer regular employees (100 or fewer for wholesalers, 50 or fewer for retail, food and drink or service industries), or ¥300 million
or less in capital (¥100 million or less for wholesalers, ¥50 million or less for retail, food and drink or service industries)
23
Growing disparity in performance of regional small and medium
manufacturing enterprises
• The inability of the few major corporations at the top
of the pyramid to compete globally has had a severe
effect on a large number of small and medium
enterprises.
Withdrawal /
Movement
overseas
Need for direct action to
open up new markets
• On the other hand, there are some small and
medium enterprises that have exploited the benefits
of small and medium enterprise integration and
acquired new domestic and international business
partners.
Example: A Corp., a total inspection manufacturer of highperformance screws, employs foreign personnel and
directly develops overseas markets.
Example: Small to medium enterprise B Corp. has large-scale
lightning arrester testing facilities, and is contracted by
major corporation for safety testing of aircraft.
Example: Small to medium enterprise C Corp., capable of
mass production of high-quality chrome, provides a stable
supply and expands its volume of orders as major
corporations streamline their range of contractors.
Loss of work
Threat of going out of
business
Change in number of business locations
Ota Ward (Tokyo)
Higashi-Osaka
area
1983
2008
Approx. 9,000
Approx. 4,000
1997
2007
Approx. 12,000
Approx. 8,000
Example: Very small company D Corp., a manufacturer of
molds, eliminates an intermediary design firm to conclude
a contract directly with an end user, a major corporation. D
Corp. improves its business performance.
Source: Industrial Statistics
24
3. CORPORATE BUSINESS
MODEL ISSUES
25
As global markets grow overall, Japan’s share is shrinking rapidly
The problem is not with specific industries or products, but with the Japanese corporate
business model
Japan’s global market share
Growth in world markets
(Where 2001 level = 100)
Lithium ion
batteries
500
100
450
90
350
300
Lithium ion
batteries
Global share( )
400
DVD players
250
％
200
150
DRAM
memory
100
50
Car navigation
systems
0
Car navigation
systems
80
70
60
DVD
players
LCD
panels
50
40
30
1988: 74%
20
10
DRAM
memory
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source:
DVD recorders: JEITA “World-wide Production of Major Electronics”
DRAM memory: WSTS
Mobile phones: JEITA “World-wide Production of Major Electronics”
Lithium ion batteries: derived from IT Research Institute documents
Car navigation systems: JEITA “World-wide Production of Major Electronics”
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source:
Koichi Ogawa “From Product Innovation to Business Innovation”
(IAM Discussion Paper Series #1)
JEITA “World-wide Production of Major Electronics”
and derived from IT Research Institute documents
26
Changes in value-added acquisition strategies
1970s
Late 1980s
Vertical integration /
Self-determination,
Strong yen
Japan
A global-scale economic
Miracle thanks to
positive “friendly
competition” among
competitors
1990s
Expansion of domestic
demand through profit
reduction
Collapse
of bubble
(1991)
Early 2000s
Hollowing out
of industry
Domestic recovery
through high-level
integration
approach
Today
Loss of
global share
Three excesses
(Debt / Facilities / Employment)
Bubble
Compe
-tition
Restrictions on
foreign investment
enterprises,
Policies to bring in foreign
investment (China)
Digital
technology
USA
Vertical integration
model leads to
loss of global share
Europe
Change of
strategy to open
approach /
division of
industry
Support for joint
research under the
EC
Concentrated
investment in
certain
areas(EMS, etc.)
Movement toward
modular and open
approach
・Pro-patent
・Joint research in an
open environment
Pro-innovation
・Highly skilled professionals attracted
Young Report(1985)
・Increasing competition to
attract companies(cutting
corporate tax etc.)
・BRICs markets brought in
through open/closed
strategy
from around the world
・Increase in risky investment
・Strong intellectual property rights,
specifications and standards
・IT-centered innovation
・Regional integration centered
on finance and
infrastructure
Europe/N. America cooperate in
Asian division of industry
Asia
Asian currency crisis(1997)
⇒ Major industrial realignment
Low labor costs
(South Korea)
Bold tax reductions on
investments
Reform of state-owned
Expansion into fields in
which Japan specializes
(manufacturing
equipment, materials)
Reclamation
of global
share through
the modular
model
Investment focused on
strategic areas(clean
energy, next-generation
vehicles, health IT)
Strategic investment
plan for a competitive
green economy
Lisbon strategy (2000)
27
Structural problems contributing to Japan’s industrial deadlock
• Limitations of the outdated conventional model (Vertical integration / selfdetermination, product improvement / cost-reduction model)
Past
Pyramidal ,vertical integration / self-determination model
[Manufacturers of assembled products]: Integration approach, increased
productivity, friendly competition among competitors in the same field.
[Manufacturers of components and manufacturing equipment]:
Performance honed by partnership with strong manufacturers of assembled
products, simultaneous development.
Present
Manufacturers
of assembled
products
Components, equipment
and related industries
(1) Changes in world business models
(2) Inability to deal with growing and emerging
economies, loss of global market share
Exhausting, never-ending fight to compete with
companies in emerging countries over production
costs. Stagnant and declining wages. If makers of
assembled products fail, there is a possible collapse
of related industries as a delayed reaction.
28
Cases where Japan manages to maintain share despite growth in global market
Successful closed / open strategy
(Digital cameras)
(1,000 units)
Maintenance of integration approach
(Automobiles)
25.00%
Number of units produced worldwide (excluding
世界生産台数（商用車除く）
commercial vehicles)
53,000,000
140,000
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Japanese vehicles’ share
日本車シェア
120,000
51,000,000
20.00%
100,000
80,000
49,000,000
15.00%
Digital cameras Number of
units produced worldwide
デジタルカメラ 世界生産台数
Digital cameras Percentage
produced by Japanese
corporations
デジタルカメラ 日系企業生産割合
60,000
47,000,000
40,000
45,000,000
10.00%
20,000
0
43,000,000
5.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(projected)
41,000,000
39,000,000
0.00%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: OICA “World Motor Vehicle Production by country”
→ If electric vehicles go mainstream and
modularization progresses, will Japan be able to
keep up?
Source: JEITA “World-wide Production of Major Electronics”
→ Can this recipe for success be applied to new
technologies in the future?
29
Digital camera closed / open success strategy
Like the Japanese auto industry, this is an integrationapproach field with a very high degree of interdependence
MCU
Fourier
Transformation
A/D
CDS
CCD
Shutter
Apertures
AF+
Lenses
DSP
image
processing
Controllers
Concentration and encapsulation
of integration know-how
AF and other lenses,
shutters, sensors
Applications
M/W
OS
Drivers
Image
compression
and
expansion
LCD
Video
Memory
cards
USB
Internal structure is a complete “black box” Only external
Source: materials from Univ. of Tokyo Professor Koichi Ogawa
interface of digital
camera adheres to
global standard
Increase in mass
production by
other companies
30
Overseas corporations have gained a competitive advantage by pursuing a strategy of standardization
•
Major overseas players have gained a competitive advantage by pursuing a strategy of
standardization integrating the “black box” with “open” paradigm
Interface standardization
(In the PC field, Intel)
Foreign
corporations’
strategies
Motherboard
Standardization of specifications
(In the router field, Cisco)
Companies protect their
Network
own domain with
intellectual property rights
and monopolize the right
to update technologies
Use of open
●MPU
Router
protocol*
All other areas are
thoroughly standardized and
opened, encouraging entry
into the field by Taiwanese
manufacturers, etc.
● PCI buses
● Motherboards
Opening of peripheral field encouraged entry
by emerging countries, escalating cost war
Events
so far
While Intel maintains high profits with nonstandardized technology, Japanese corporations
involved in open fields (memory, HDD, etc.) are
squeezed by escalating competition
(IOS**)
Engagement with growing black box approach to
infrastructure side
(Nokia and Motorola in the mobile phone field)
“Black box”
approach, protected
by intellectual
property rights
Base station control system
The right to update
technology is kept and
licenses provided to
other companies
Growing
black box
approach to
infrastructure
side
Interdependency
Open
standardization
Network
Mobile phone handsets
Licensed corporations engage in
worldwide sales, Cisco routers become
the default option
Japanese corporations had the world’s
most advanced mobile phone
infrastructure and handsets, but…
Japanese corporations withdraw from
router field as a result
Inability to reduce costs and respond in a
timely fashion to technological advances in
an increasingly “black box” oriented
infrastructure field leads to inability to
expand overseas
*IP protocol used
**System “black boxed” by Cisco. IOS stands for Internetworking Operating System. Uses proprietary protocol IGRP (Interia Gateway Routing Protocol)
Source: Prepared by DI based on Koichi Ogawa “International Standardization and Business Strategy”
Source: Prepared by METI on the basis of DI “Survey of International Expansion of IT Industry in the Societal Infrastructure Field” (ordered by JIPDEC)
4. ISSUES WITH THE BUSINESS INFRASTRUCTURE
SURROUNDING CORPORATIONS
(COMPETITIVENESS FOR INDUSTRY ESTABLISHMENT)
32
Foreign-affiliated companies’ assessment of location suitability by category (Japan’s rank is declining)
• Compared with just two years ago, Japan has lost a huge amount of ground to other Asian
countries in terms of perceived suitability as a base for Asian operations of all categories.
Most desirable country in the Asian region as a base for operations in various categories
(Figures extracted for six major countries only, first and second-place choices marked for each category)
FY 2007 survey
Japan
China
India
FY 2009 survey
South
Korea
Hong
Kong
Singapore
Japan
Central headquarters
for Asia region
Central headquarters
for Asia region
Manufacturing base
Manufacturing base
R&D base
R&D base
Back office
Back office
Distribution base
Distribution base
Financial base
Financial base
Sales base
Sales base
*One country/region selected for each category
*Percentage out of 209 companies (including 51 with presence in Japan), excluding
companies that did not respond to the survey
China
India
South
Korea
Hong
Kong
Singapore
*One country/region selected for each category
*Percentage out of 180 companies (including 30 with presence in Japan), excluding
companies that did not respond to the survey
Source Survey on Attitudes of Foreign-Affiliated Companies toward Direct Investment in Japan (METI: 2009, 2007)
33
Business costs are high in Japan (1)
Japanese companies’ actual corporate tax burden (based on financial statements after adjustment to
subtract tax incentives, etc. from the nominal tax rate) is high by international standards (approx.
10% higher).
→ Reason: (1) Along with the USA, one of the world’s highest nominal effective tax rates
(2) Smaller-scale tax incentives in comparison with other countries
Actual burden of corporate taxation (*) (average over fiscal 2006 to 2008/consolidated basis)
Actual burden of corporate taxation for major corporations in Japan, South Korea, USA, China, Taiwan & Singapore
(*) Actual burden of corporate taxation = Corporate tax (after application of tax effect accounting)/current earnings
(average over fiscal 2006 to 2008/consolidated basis)
before tax and other adjustments
Japan
GE
(Nominal
Sharp Canon Toyota tax rate)
Singapore
Taiwan
Netherlands
South Korea
Sweden
Germany
UK
France
USA
Japan
China
Note: Data presented here is for corporations for which financial data is available and which are included in the
Nikkei 225 (Nikkei Average), S&P 500 (corporations making up the Standard & Poor’s stock price index,
not including those headquartered outside the USA), Europe 350, and S&P Asia Pacific 100. (Excludes
financial and insurance industries as well as business years in which corporations had negative current
earnings before tax and other adjustments)
Source: Actual tax burden data is obtained from the Nikkei 225 and S&P Compustat (database of corporate
financial disclosures)
PetroChina
(Nominal
tax rate)
USA
South Korea
Taiwan
Intel
(Nominal
tax rate)
Singapore
Singapore
Telecom
(Nominal
tax rate)
Note 1: Excludes business years in which corporations had negative current earnings before tax and other
adjustments)(LG Electronics, Ford: FY 2006)
Note 2: Ford’s FY 2005 corporate taxes were negative due to deeply negative tax effect accounting (income
taxes deferred).
Source: Data obtained from S&P Compustat (Pretax profits are given in yen values converted from dollar
indications.)
34
Business costs are high in Japan (2)
Japan is suffering from declining competitive power of port infrastructure.
■Number of containers passing through major ports [1994/2008 comparison]
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
Port name
Hong Kong
Singapore
Gaoxiong
Rotterdam
Busan
Kobe
Hamburg
Long Beach
Los Angeles
Yokohama
15th
24th
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
Port name
Singapore
Shanghai
Hong Kong
Shenzhen
Busan
Dubai
Ningbo-Zhoushan
Guangzhou
Rotterdam
Tsingtao
Tokyo
24th
Tokyo
Nagoya
29th
Yokohama (*)
Million TEU (*2)
1st
■International
comparison of total costs for containers passing through ports
(Costs for one 40-foot container, with Port of Tokyo designated as 100)
Million TEU
(*Estimate)
■International comparison of port lead times
0 days
USA
Germany
Singapore
Japan
(Mar. 2001)
(Mar. 2006)
Port of Tokyo
Vessel-related
expenses
Port of Gaoxiong
Handling
charges
Port of Busan
Terminal
charge
Target in accordance
with the super hub port
concept
1 day
2 days
3 days
1 or 2 days
Approx. 2 days
Under 24 hours
3.1 days
2.1 days
Shortened to approx. 1 day
Source: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) Kanto Regional Development
Bureau”Decline in the International competitive power of Japanese Ports" (2008)
35
Business costs are high in Japan (3)
Narita Airport is descending in global rank in terms of air freight handled.
Ranking of world airports by volume of air freight handled
2000 ranking
2008 ranking
Airport
Volume
(1000 tons)
Airport
Volume
(1000 tons)
Memphis (USA)
2,489
Memphis (USA)
3,695
Hong Kong (China)
2,267
Hong Kong (China)
3,661
Los Angeles (USA)
2,038
Shanghai (China)
2,603
Narita (Japan)
1,932
Incheon (South Korea)
2,424
Seoul (South Korea)
1,874
Anchorage (USA)
2,340
New York (USA)
1,817
Paris (France)
2,280
Anchorage (USA)
1,804
Frankfurt (Germany)
2,111
Frankfurt (Germany)
1,709
Narita (Japan)
2,100
Singapore
1,705
Louisville (USA)
1,974
Miami (USA)
1,642
Singapore
1,884
Source: Airports Council International web site
36
Competitive power of Japanese human resources (1)
• The number of Japanese with doctorates in science and engineering is low, one fourth that
of the USA and lower than the UK and Germany, which have smaller populations.
International comparison of the number of people earning
Ph.D.s in science and engineering (1985 – 2005)
1,000 people
Japan
USA
Germany
USA 28. 0
UK
China
South Korea
China 14.9
(2004)
Germany12. 2
UK 9. 4
Japan 7.7
South Korea 3.5
(2004)
37
Source: NSF “Science and Engineering Indicators 2008” Appendix table 2-42, 2-43
Competitive power of Japanese human resources (2)
Japan has by far the smallest number of highly educated foreign workers entering the domestic labor
market of any developed country.
Percentage of those completing higher education who
were born in foreign countries
イギリス
UK
15.9％
Percentage of
foreign-born residents
ドイツ
Germany
11.4％
カナダ
Canada
Canada
25.8％
フランス
France
12.4％
米国
USA
13.4％
日本
Japan
0.7％
・・・10% or more
・・・Between 1%
and 10%
・・・Less than 1%
豪州
Australia
28.9％
Source: Based on Trade White Paper 2008
38
Competitive power of Japanese human resources (3)
Compared to other major countries, Japan admits an overwhelmingly low number of foreign exchange
students and highly skilled foreign workers.
・Japan admits the lowest number of exchange
students of any major country.
Number of students
currently enrolled at
institutions of higher
learning
(1,000 people)
Number of exchange
students admitted
annually (1,000
people)
Number of exchange
students admitted
÷Number of
students currently
enrolled at
institutions of higher
learning
USA
UK
Germany
France
Australia
Japan
10,797
1,513
1,979
2,217
1,029
3,516
623
(2007)
389
(2007)
246
(2007)
260
(2007)
294
(2007)
123
(2009)
5. 8%
25. 7%
12. 4%
11. 7%
28. 6%
3. 5%
Source: Japan Student Services Organization “Number of Foreign Students – 2009 Survey”
39
International competitive power of Japan’s financial markets
Major stock exchanges such as New York or London have more international appeal than Japan’s exchanges.
In Asia as well, Japan is being overtaken by emerging exchanges such as Singapore.
Change各国証券取引所における外国会社上場数の推移
in number of foreign companies listed on various global stock exchanges
800
700
600
500
400
300
200
100
0
NASDAQ
NASDAQOMX
NYSE
Euronext
New York
Stock
(US)
Exchange
1996
Source: World Federation of Exchanges “Annual Report”
Tokyo
Group
Tokyo &SEOsaka
＋Osaka
SE
Stock
Exchanges
2002
London
Stock
London
SE
Exchange
Singapore
Stock
Singapore
Exchange
Exchange
2008
40
5. INCREASINGLY AGGRESSIVE
INDUSTRIAL POLICIES ADOPTED
BY OTHER COUNTRIES
(1) Policies focusing on specific strategic areas
(2) Competition to provide support for
establishment of corporations
(3) Joint public-private initiatives aimed at
attracting large-scale infrastructure projects
41
Increasingly aggressive industrial policies adopted by other countries 1. Policies focusing on specific strategic areas
○ In the USA, investment is being concentrated on areas where future growth is expected, such as the environment and life sciences.
→ $2.4 billion has been set aside to subsidize 50% of the cost of establishing plants for batteries, components etc. for next-generation
vehicles (EV)
→ The Department of Energy (DOE) has allocated $3.4 billion for the Smart Grid Grant Program. $3 billion of this is set aside for
installation of smart meters.
○ South Korea is accelerating concentrated investment in areas that will drive future economic growth
→ Over the next five years, 97 trillion won is earmarked for investment in 17 business areas (green technology, advanced fusion, high
value-added services)
→ Support for technological development is provided for 107 “strategic products” in eight areas including semiconductors, displays,
LEDs etc.
→ 60 billion won in subsidies over a three-year period have been announced for the purpose of shifting to domestic manufacture of
semiconductor manufacturing equipment.
→ A content promotion fund (equal to about ¥50 billion) has been established based on the Cultural Presidential Declaration.
○ The UK is aggressively promoting the support of specific industries with the goal of diversifying the economy away from overreliance on the financial industry.
→ A fund (approx. 750 million pounds) has been established to subsidize low-carbon technology and state-of-the-art manufacturing in
strategically important advanced industrial projects (aerospace, offshore wind power generation, communications, etc.)
○France has designated about ¥50 billion a year to provide support for content development, cultivation of human resources, etc.
○ Germany is accelerating concentrated investment in environmental and energy fields, notably solar power.
→ 46.5 million euros has been earmarked to subsidize 22 projects including research and development aimed at improving the
reliability of lithium ion batteries for electric vehicles (EV). Germany has set the target of having one million EV on German roads
by 2020.
○ China is providing concentrated support for industrial progress in ten industrial areas (automobiles, steel, spinning, equipment
manufacturing, shipbuilding, electronics / IT, petrochemicals, light industry, non-ferrous metals, distribution) as well as the culture
industry.
→ China Culture Industry Investment Fund (approx. 10 billion yuan) scheduled for establishment
42
Increasingly aggressive industrial policies adopted by other countries 2. Competition to provide support for establishment of corporations
○ Over the past decade, developed nations have
reduced corporate tax rates approximately 10%
with the goal of attracting global corporations.
Asian countries have reduced rates about 3% as
well.
Corporate tax
rate
2000
2009
OECD
Approx. 34%
Approx. 26%
Asia
Approx. 28%
Approx. 25%
Japan
USA
(New York)
EU
OECD
Asia (NIEｓ＋ASEAN4＋China)
○ Meanwhile, the Japanese rate remains high at
around 40%.
Jan.
2000
Jan.
2001
Jan.
2002
Jan.
2003
Jan.
2004
Jan.
2005
Jan.
2006
Jan.
2007
Jan.
2008
Jan.
2009
Source: Prepared by METI on the basis of KPMG Tax Corporation materials, etc.
Note: Simple averages are given for the EU (15 countries as of 1998), OECD, and Asia (however, of the OECD countries, the tax
rate as of Jan. 2008 is used for Switzerland only)
○ As previously stated, the USA will subsidize the cost of establishing plants for batteries, components etc. for
next-generation vehicles.
○ In the UK, in the field of low-carbon vehicles, a “Low Carbon Economic Area (LCEA)” has been designated in
northeast England, and future investment incentives (subsidies, etc.) for construction of R&D centers, etc. are
being considered.
○ Germany subsidizes the costs of construction and introduction of equipment for newly established companies in
almost all areas of manufacturing and service industry (up to 500,000 euros or 50% of the total cost)
43
Increasingly aggressive industrial policies adopted by other countries
3. Joint public-private initiatives aimed at attracting large-scale infrastructure projects
Reasons for South Korea’s winning bid for the UAE nuclear power project
2. Cost
1. Manner of handling order
• Korea Electric Power (state-owned enterprise) is in
charge of handling the order
• Supply of long-term, comprehensive know-how
support for operation and maintenance, cultivation of
human resources, etc.)
• Speedy decision-making and response
3. Top-level diplomacy
• Offer was approximately 20% lower than that of Japan/US or
France
• Comprehensive coverage of risks related to construction delays,
etc.
(1) Stable domestic management base
(2) Backup from South Korean government (state-owned
enterprise)
• Six direct telephone conferences between
President Lee himself and Crown Prince
Mohammed
• Project “HQ” set up in the President’s
Office, response to all kinds of UAE needs
outside the nuclear energy arena at the
government level
Reference: Team composition for Japan/US, France, and South Korea
● France and Korea’s bids were governmentally led, based around state-owned enterprises of which the government is the primary
shareholder. ● Japan/US bids were led by a private consortium of separate but equal corporations.
France
South
Korea
EDF (public energy
company)
Suez Corp.
Korea Electric
Power
Japan /
USA
Hitachi,
Exelon Corp.
JGC, Kajima,
Marubeni
Tokyo Electric Power
Plant construction
(US energy company)
Support for operations
GE
Areva
Support for operations
Fuel supply
(Public nuclear
energy company)
Plant construction
Fuel supply
Support for operations
Fuel supply
Doosan Heavy
Industries, Hyundai
Engineering &
Construction, etc.
44
Plant construction
6. DIRECTION OF JAPAN’S
INDUSTRIAL STRUCTURE
45
Directions for the industrial structure conceivable from the macro demand side
Direction 1. Global manufacturing industry boosts profits by competing in global markets,
enlarging Japan’s overall “pie.”
(Change in business model, strengthened ability to attract corporations, centralization of industry)
Direction 2. Industries other than specific global manufacturing industries gain a share of
growing emerging-nation markets.
Increases in demand foreseeable in emerging nations
(1) Infrastructure demand = Electric power, railways, water, energy conservation, urban
development, etc.
(2) Demand for food, clothing, shelter and cultural consumption
“Emotive / cultural industry”: fashion, food, tourism, animation, etc. incorporating
Japan’s culture, sensibilities and reliability
(3) Volume zone / Next volume zone
Direction 3. Increase in industries and investments that take a forward looking approach to
social issues.
→ Environment, energy, measures to deal with low birthrate and aging society
46
Current industrial structure
[Current]
Global market
［Manufacturing］
Overseas markets
Domestic market
• Struggling due to stagnant domestic demand
• Unable to meet latent demand such as services
for the elderly
Global
manufacturing
[Transport machinery, electrical equipment,
steel, general machinery]
Manufacturers with
specialized techniques
• Loss of share
• Production and
materials
procurement have
shifted overseas
• Struggling due to
collapse of pyramidal
structure
［Service industry］
Industries
meeting
regional
demand
System
infrastructure
[Electric power, railways, water,
energy conservation,
urban development]
Emotive /
Cultural industry
[Fashion, food,
tourism, animation]
Both have latent potential but lacking connection with overseas markets
47
Desirable direction for industrial structure to take
1. Expand the presence in overseas markets of industries other than conventional global manufacturing
2. Bridge the gap between manufacturing and service industries so as to meet market needs.
• Maintain competitive power
in overseas markets
• Forge direct connections with
overseas markets
• Turn measures to deal with
social issues into business
opportunities (environment /
energy, services for the elderly)
Overseas markets
Environmental and
energy
measures
Manufacturers with
specialized techniques
Global
manufacturing
[Transport machinery,
electrical equipment,
steel, general machinery]
System
infrastructure
[Electric power, railways, water,
energy conservation,
urban development]
Needs of the
elderly
Industries
meeting
regional
demand
Emotive /
Cultural industry
[Fashion, food,
tourism, animation]
48
Three areas for future acquisition of value added
Value
added
Keeping the fully assembled product in mind,
(1) Maintain hold on essential technologies
(integration / black box approach), and
(2) Standardize and open interfaces
(3) Make inroads into the network of global
players
Shift from sales of single units to:
(1) Export of systems needed in emerging
countries
(2) Supply solutions for issues such as the
environment, energy and aging society
(70s / 80s)
Grapple directly with the market needs of growing and
emerging economies, turn sensibilities, culture and reliability
into a “product”
Materials
Components
Fully assembled
products
After-sales Management
service
Supply of systems
and solutions
49
Strategic areas to focus on for Japan’s future
Strategic areas to focus on from now on:
I. Areas capitalizing on Asian income elasticity (infrastructure, volume-zone food, clothing & shelter)
II. High carbon turnover areas
III. Areas growing due to low birthrate and aging society
For the following areas , we will outline (1) current situation and issues to address, (2) trends of global
markets and major players, (3) trends of major countries, (4) trends and strategies of Japanese major
players, (5) future direction / vision and action.
(1) Infrastructure in
emerging countries
• Energy generation, transmission and distribution
networks
• Water business
• Information and communications
• Urban development / Industrial complexes
• Railways
• Nuclear power
• Waste management and recycling, etc.
(2) Next-generation energy solutions
(3) Services addressing social
• Smart grids, smart communities, smart houses issues
• Storage batteries, next-generation vehicles
• Solar power
• Green IT (LED, organic EL) etc.
(4) Japan as an emotive and cultural industry capital
(Introduce regional sensibilities and culture to new
emerging markets)
• Content
• Agriculture and food
• Fashion, design
• Overseas expansion of small and medium enterprises
• Overseas expansion of distribution industry
• Tourism / Medical tourism
• Daily necessities (including traditional handicrafts)
• Health-related (health care, medical equipment,
pharmaceuticals, nursing care)
• Child-rearing
• Lifestyle infrastructure service (shopping support,
security services)
• e-government
• Cyclical industries (urban mining) etc.
(5) Cutting-edge technologies
• Space
• Nanotechnology
• Aeronautics
• Superconductivity
• Rare metals
• Robotics
• Advanced IT (cloud computing, etc.)
• Functional chemistry
50