![]() Materials costs have soared since then, but he is hesitant to raise prices again, worried that he may lose longtime customers. That provides a crucial support network, but also makes it difficult to pass along higher costs. That mishmash of production has given rise to human connections and a sense of community, said Hirotomi Kojima, chief executive of Katsui Kogyo, the air drill company. The city still has industrial enclaves where tiny factories are wedged between houses, hammering, sawing and shaping metal from early morning to dusk. The region around Higashiosaka has a history as a manufacturing hub dating back hundreds of years. But these same companies represent only 52.9% of the economy, according to a 2016 government survey, the most recent data available. Small- and medium-sized enterprises account for 99.7% of companies and 68.8% of employment in Japan. The pain of COVID lingers as well: 67% of the small firms in Higashiosaka say they are still hurting from the pandemic, according to a survey conducted in April by the local chamber of commerce.įor these companies, weathering the economic storm isn't just about surviving, but preserving the industrial ecosystem. Although a weak currency boosts export profits, past a certain point it makes materials cost so much they wipe out that benefit. In the past six months, the value of the Japanese yen has plummeted from about 115 yen to the dollar in early March to more than 130 yen in August. ![]() "We all believed that the big brands would always protect us, but that's just not the case anymore." HUMAN CONNECTION "It's like being the frog being slowly boiled alive," said Hiroko Kusaba, CEO of Seiko SCM. Lampshade company Seiko SCM scaled back its production and is seeking to revive Higashiosaka's manufacturing industry by converting part of its headquarters to shared working space. Another, air drill parts maker Katsui Kogyo, raised prices for the first time since it started business in 1967. One factory in the city, aircraft component manufacturer Aoki, is pivoting to the food industry after being hit hard by the pandemic. The amalgam of issues that Higashiosaka faces – an ageing population, offshoring, and a sagging currency - mirrors the problems that have been chewing at the foundation of the world’s third-largest economy and its global exports, which hit 83.1 trillion yen ($610.54 billion) last year. Work in general has dried up in recent years in the face of competition with South Korea and China when Taiwan's Foxconn acquired Sharp in 2016, it moved much of the company's manufacturing out of Japan. Now Sanyo is gone, acquired by Panasonic. Register now for FREE unlimited access to Register
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