Japanese Investment in the World Economy A Study of Strategic Themes in the Internationalisation of Japanese Industry
A Study of Strategic Themes in the Internationalisation of Japanese Industry
- New Horizons in International Business series
Chapter 11: The Shifting Textiles Industry
11. The shifting textiles industry INTRODUCTION The textiles industry broadly includes the manufacture of natural and artiﬁcial ﬁbres and textiles, apparel and other ﬁnished products made from fabric and natural and chemical ﬁbres. In Japan, the textiles industry was an important part of the national economy in the late nineteenth century, the early twentieth century and post-war period. During the 1950s, the textiles industry received government support and was designated as a key industry to earn foreign exchange for economic recovery. As Japanese industrial structure switched away from a dependence upon light industry, the textiles industry was one of the earliest industries to internationalise. To retain competitiveness, textiles ﬁrms used foreign direct investment to relocate their production processes to lower-cost countries, while retaining higher-value added processes in Japan. Larger ﬁrms such as Toray, retained capital-intensive production at home and used overseas aﬃliates to handle more labour-intensive processes. Since the 1960s, the Japanese textiles industry has moved into the highly capital-intensive production of synthetic ﬁbres, where it retained international competitiveness. In other parts of the industry however there was a steady decline in industry and output and increasing imports as excess labour was shed. From the 1960s to the mid-1980s, the textiles industry lost 400,000 workers as Japanese ﬁrms ceased production or relocated oﬀshore. This trend accelerated in following decades, with domestic employment of textile mills falling from 780,000 in 1985 to only 245,000 in 2001. Notably, employment in the apparel sector decreased from 730,...
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