Edited by Roger Sugden, Rita Hartung Cheng and G. Richard Meadows
Chapter 2: The problem of regional 'hollowing out' in Japan: lessons for regional industrial policy
2. The problem of regional Ôhollowing outÕ in Japan: lessons for regional industrial policy Keith Cowling and Philip R. Tomlinson* 1. INTRODUCTION The machinery sector plays a significant role at the centre of the Japanese industrial economy,1 as it does in other parts of the world, for example in Wisconsin and the US Midwest. In the post-war period, the sector was regarded as being at the forefront of JapanÕs international success in manufacturing (see Johnson, 1982). However, while the machinery sector in Wisconsin and the Midwest has recently enjoyed something of a renaissance (see Nichols in Chapter 10 of this volume), JapanÕs industrial regions have experienced a long period of serious economic stagnation. During the 1990s, JapanÕs large transnational corporations continued to pursue strategies towards a greater globalisation of their production. Over the same period, JapanÕs domestic machinery sector lost in excess of three-quarters of a million manufacturing jobs and over 12 per cent of its business establishments. Real output also fell by approximately 8.3 per cent (Japanese Statistics Bureau, 2001). As the decade came to a close, both JapanÕs Ministry of International Trade and Industry (MITI) and economic commentators were seriously concerned that Japanese industry and the machinery sector, in particular, were in a phase of ku doka or Ôhollowing outÕ (see Cowling and Tomlinson, 2000, 2002). ø It is useful to consider JapanÕs recent experiences as a discourse on regional industrial policy, not least because of more general lessons for regional development...
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