Tomoko Hashino

Hand Looms, Power Looms, and Changing Production Organizations: The Case of the Kiryū Weaving District in Early Twentieth‐Century Japan

This study finds that the development process of the Kiryu silk weaving district in Japan from 1895 to 1930 can be divided at least into the two phases, i.e., Smithian growth based on the inter-firm division of labor using hand looms and Schumpeterian development based on factory system using power looms. Weaving manufacturers-cum-contractors led Smithian growth by organizing sub-contracts with out-weavers in rural villages and grew faster than factory production systems. Newly emerged joint stock firms played a role of genuine entrepreneurs by realizing significant scale economies. During this new phase, weaving manufacturers-cum-contractors survived and also introduced new production system.

Beyond Marshallian Agglomeration Economies: The Roles of Trade Associations in Meiji Japan

In both developed Western nations and developing countries, economic growth was based on the development of industrial districts, which were much more organized and institutionalized in modern Japan than economist Alfred Marshall had described. Local trade associations played an important role in enhancing Marshallian externalities, arising from the ease of imitating improved ideas and transacting unfinished products among clustered enterprises by facilitating joint actions in the supply of public goods, such as through the creation of local district brands and through the efficient provision of business information. These activities were clearly beyond the scope of agglomeration economies. This article examines the case of Kiryu, one of the best-known silk weaving districts in Japan.

From the Non-European Tradition to a Variation on the Japanese Competitiveness Model: The Modern Japanese Paper Industry Since the 1870s

In this chapter we focus on the development of the “modern” Japanese paper industry, which was introduced from the West to produce yoshi (Western machine-made paper) in the 1870s. Japan’s traditional papermaking (or washi) culture, introduced from the East, has a long history. In the beginning, the central government’s demand for paper supported the development of the modern paper industry, as it needed yoshi for the announcement and documentation of its modernization policy. Subsequently, the private sector promoted industrial development over the following 130 years, except during the wartime economy. The modern paper industry in Japan has always been characterized by rapid growth, low import dependency, and cartelization. The “Big Three” dominated the market after their merger in the 1930s, but the GHQ’s democratization policy welcomed new industry entrants after the Second World War. Various innovations, including the vertical integration of pulp and papermaking processes and the establishment of coastal manufacturing bases to utilize imported material, were the sources of growth after the Second World War. Japan became the second largest papermaking country in the world for almost three decades beginning in the 1970s, but globalization, the emergence of new developing countries, and the tide of M&A has transformed this industry.

Toward a New Paradigm of the Long-Term Development of Industrial Districts

While the model of long-term development of industrial districts proposed by Sonobe and Otsuka (Cluster-based industrial development: an East Asian model. Palgrave Macmillan, Basingstoke 2006; Cluster-based industrial development: a comparative study of Asia and Africa. Palgrave Macmillan, Basingstoke, 2011) is useful for understanding the economic forces that lead to the formation of an industrial district, the low and declining profitability of continuing production of low-quality products and the inducement to innovation for quality improvement by innovative entrepreneurs, it is not sufficient to explain the diverse development paths of industrial districts throughout history and across the developing world. This chapter attempts to extend and elaborate the Sonobe-Otsuka model in the light of a variety of empirical findings reported in various chapters in this volume. A new comprehensive model, which may be termed the SOH (Sonobe-Otsuka-Hashino) model, takes into account the roles of technology transfer, producer cooperatives or trade associations, and governments in transforming “survival” clusters into “dynamic” ones by facilitating and sustaining “multi-faceted” innovations.

Beyond Marshallian Agglomeration Economies

Most, if not all, industrial development in the history of advanced countries and in the developing world is based on the development of industrial districts. A unique feature of this edited volume is to compare the development of industrial districts in the history of Japan, Spain, France, other European countries as well as contemporary developing countries, including China, Bangladesh, and Tanzania. More similarities than dissimilarities are found in the role played by international technology transfer in stimulating innovation, which is an engine of development for industrial districts across a large number of cases. Also commonly found are critical roles played by producer cooperatives and local as well as central governments in internalizing benefits of Marshallian agglomeration economies. After all, this volume demonstrates the importance of collaboration between economic historians and development economists for a deeper understanding of the development process of industrial districts.

Contrasting Development Paths of Silk-Weaving Districts in Modern Japan

Many traditional industries prospered through the introduction of western technologies in the modernization process of Japanese economy. Nishijin, which was the most advanced silk-weaving district in Japan, played a leading role in technology transfer from the West in the silk-weaving industry. Kiryu District has been an ‘imitator’ of Nishijin, which developed by continuously introducing advanced technologies from Nishijin. Another imitating district was Fukui, which developed extremely rapidly after an engineer from Kiryu provided a 3-week training program. The development paths of the three major silk-weaving districts were contrasting: Nishijin was characterized by small-scale production organizations, use of hand looms, and production of traditional kimono for domestic markets, whereas Fukui was characterized by large-scale production organizations, more active adoption of power looms, and production of simple products for export. Kiryu lay in between. We argue that such contrasting patterns can be understood by differential endowment of skilled workers among the three districts.

Promotion of the Weaving Districts in Modern Japan

In the case of the silk-weaving industry in modern Japan, local producers attempted to improve the quality of their products and to achieve a good reputation for their district brand for survival and sustainable growth. Such attempts often failed, however, due to the existence of free riders who did not care about the quality of products or did not possess proper knowledge of advanced technologies. Export of inferior-quality product from Japan led to heavy criticisms against Japanese products. Facing such a critical situation, not only producer cooperatives but also central and local governments introduced the quality inspection system and supported the quality-improvement activities of local producers to sustain the development of industrial districts. Policies of both local and central governments enabled the shift from the quantitative expansion phase of the industrial districts to the qualitative improvement phase, in which a limited number of innovative firms produced high-quality products with their established district brands.