The Power of Japanese SMEs

Find innovative and reliable partners at the foundations of Japan’s success

Recently the Japanese economy and its big players get not much good press. The focus of decision makers all over the world switches to their low cost competition in Asia’s emerging markets. However, what is often overlooked are the many successful and innovative small and medium enterprises who keep Japan’s economy alive and thriving. While the tree of Japan’s growth might show some brown leaves and broken branches, the roots go deep and are still strong.

Especially Japan’s manufacturing industry, which was the stage for fierce competition in the wild years of the high growth era and the following decades of economic stagnation. Only the strongest, most innovative, and adaptive companies could survive in this environment and fulfill the needs of their demanding Japanese corporate clients.


The “Hidden Champions” of Japanese manufacturing are waiting to team up with you

The under-appreciated small and medium sized companies are a critical factor when it comes to the ongoing success and competitiveness of Japanese manufacturing. Tiny, secretive firms often consisting of less than a handful of workers, who understand themselves as craftsmen, are sometimes working on high-tech projects in places that look like dark, old, and over-sized warehouses, filled with worn machines and piles of scrap metal.

However, if you approach them without bias and take a closer look, they will reveal themselves as hidden gems in their fields. Industrial champions who can create parts of almost anything that are in high demand on the global markets, from ballpoint pens and toys, to mobile-phones, and even satellite parts.

Their work is extremely specialized. Many of the engineers and craftsmen, who are now in their 50’s and 60’s, started learning their trade when they were teenagers or even children.

Many of the best firms in their field of manufacturing cluster around certain areas of the big cities or in the countryside of Japan’s prefectures. These small firms are all well connected with each other and their corporate customers.

They supply parts or even prototypes to the top international names in cars and consumer-electronics and even for NASA or the European space agency. Their technology and craftsmanship lies at the base of all manufacturing in Japan.

The big brands of Japanese manufacturing really excel at products whose functions require many components that are mutually adjusted. The ability to meld different skills and technologies is a common feature among top Japanese manufacturers in several sectors. But this approach stands and falls with the quality of the component manufacturers at the lower end of their supply chains.

These suppliers are now looking for new markets and to team up with western companies to contribute with their unique technology in a more global context.


Galapagos meets Globalia

However, this distinctly Japanese environment, which is often compared to the very exotic ecosystem of the remote Galapagos islands also contributed to unique developments that are not necessarily compatible with demands of global markets. The ways in which products are marketed, sold and developed are very different from the international standards you might be used to.

If you contact a Japanese small or medium sized manufacturing company, the communication might be difficult and their product portfolio might be overwhelming or confusing. It can take some time and effort to build a meaningful relationship and to really understand what the potential supplier is capable of.

You might also be surprised by the lack of marketing and promotion, the still existing language barrier and the outdated appearance of production sites. The websites might also be on the level of the early 2000’s. But don’t let these details mislead you.

Some of the most cutting edge medical device components or industry leading technological innovations might be developed and manufactured behind the doors of a warehouse that looks like it has seen better days. They might be presented in broken English on a website that was not updated for years, but they are delivered to global brands like Honda, Toyota, Hitachi, Canon or Sony.

The manufacturers featured in Protechnology Japan reach out from Galapagos to enter the global marketplace with their technologies and their appearance in this magazine as their first step to bridge the gap. They invest in international expansion for the first time and present their products according to global standards. This can be your chance to tap into the power of what made Japan strong in the first place and Protechnology Japan’s dedicated bilingual team is here to make it a smooth ride for both sides.