Business and Trading

Industry accounts for much of Japan's national income and for a large proportion of the country's jobs. The growth of Japan's industry, and manufacturing in particular, has been a key element in its economic success. Today Japan's industries face growing competition from other countries such as South Korea. Many products once made in Japan that require large quantities of raw materials or unskilled workers are now being made in Japanese-owned factories elsewhere in Asia.

Manufacturing

Japan remains among the world leaders in several categories of manufactured goods. Shipbuilding and iron and steel production are declining in importance, but Japan and the United States are the world's two largest manufacturers of motor vehicles. Some other important Japanese manufactured products include electrical machinery, chemicals, textiles, television sets, cameras, and videocassette recorders. Japan is a major manufacturer of such high-technology products as computers, microchips, and electron microscopes. It is also moving rapidly to leadership in the field of biotechnology, which involves the design and manufacture of artificial body parts and the creation, in the laboratory, of new genetic materials and methods of fighting disease.

Fishing

Japan is one of the world's foremost fishing nations. Fish and shellfish are a basic food of the Japanese, and one of the first impressions a newcomer has of the country is the smell of fish in marketplaces, at small fish stalls, and even in the food sections of modern department stores. The waters surrounding Japan are rich in a variety of fish, including sardines, mackerel, and yellowfin tuna. Octopus, cuttlefish, and eels are other delicacies. Seaweed is also harvested for food. Japanese fishing fleets also regularly travel the waters of the world, with factory ships equipped to process the catch at sea.

Cultured Pearls

The cultured-pearl industry is distinctive to Japan. In the late 19th century the Japanese Mikimoto Kokichi created the modern cultured-pearl industry when he devised a practical method of producing pearls artificially by injecting an irritant into the oyster. Some of the largest pearl farms are located at Pearl Island in Ago Bay, where the water temperature and other conditions are ideal for the oysters.

Foreign Trade

Japan is by necessity a trading nation. In addition to much of its food, it must import almost all the raw materials needed for industry because it has so few mineral resources of its own. In return, Japan exports manufactured products around the world. Its chief exports, by category, are machinery, transportation equipment, chemicals, scientific and optical equipment, metals and metal products, and textiles.

Japan exports many more manufactured goods than it imports, a fact that has often been criticized by such trading partners as the United States. Its recent economic problems contributed to the recession that engulfed much of Asia in the late 1990's.

More Industries

Manufacturing. Japan's manufactured products range from tiny computer components to giant oceangoing ships. The most important manufactured products are cars and trucks, electronic products, and communications and data processing equipment. Other products include cement, ceramics, clothing, fabricated metal products, food products, plastics, textiles, steel, tires, and watches and other precision instruments. Japan's manufacturing sector (portion of the economy) plays a major role in the Japanese economy. Manufacturing industries have consistently employed over 20 percent of the Japanese labor force and generated about 25 percent of the country's gross domestic product. An especially important part of Japan's manufacturing sector is known as the large-firm sector. It includes such well-known companies as NEC Corporation, Nissan Motor Company, Sony Corporation, Toshiba Corporation, and Toyota Motor Corporation. Most of the large manufacturing firms assemble parts and components into a finished product such as a car, computer, or television set. The large firms then sell the product at a significantly higher price than the cost of the components. Another part of the manufacturing sector consists of tens of thousands of small factories. Most of these companies make the parts or components that large firms assemble into finished products. A core group of Japanese managers and skilled workers in the large-firm sector have secure jobs, earn high wages, and enjoy generous benefits. But some workers in the large-firm sector and many in the small factories have less job security, lower wages, and fewer benefits. Manufacturing in Japan is concentrated in five main regions. For the location of each region and a listing of its main products, see the map titled Economy of Japan in this section of the article. Construction. The construction sector consists of several giant national firms, hundreds of medium-sized regional firms, and thousands of small local firms. The sector employs about 10 percent of Japan's labor force and generates about 10 percent of the GDP. The industry grew dramatically after World War II, when construction firms were needed to rebuild Japan's ruined cities and demolished factories. Later, the nation's growing economy brought a constant demand for new shops, offices, factories, roads, harbors, airports, houses, apartments, and condominiums. In the 1990's, most of the largest firms began to expand internationally. Today, Japanese construction firms build such large projects as hotels and office buildings throughout the world. They handle many projects in other parts of Asia, the United Kingdom, and the United States. Mining. Japan has a wide variety of minerals, but supplies of most are too small to satisfy the nation's needs. The chief mining products are coal, copper, lead, limestone, manganese, silver, tin, and zinc. Agriculture. Throughout much of Japan's history, agriculture was the mainstay of the Japanese economy. As late as 1950, the agricultural sector employed 45 percent of the labor force. But as Japan's industries grew, the economic importance of agriculture declined. By the end of the 1900's, farmworkers made up less than 6 percent of the labor force, and they produced less than 2 percent of the GDP. Because Japan is mountainous, only about 15 percent of the land can be cultivated. To make their farmland as productive as possible, Japanese farmers use irrigation, improved seed varieties, fertilizers, and modern machinery. Farmers grow some crops on terraced fields—that is, on level strips of land cut out of hillsides. Japan's farmers are able to produce almost all the eggs, potatoes, rice, and fresh vegetables eaten in Japan. They also produce 50 to 80 percent of the dairy products, fruit, and meat. However, they raise only a tiny share of the animal feed, beans, and wheat that Japan needs. The nation must import the agricultural products that its farmers cannot supply. For decades, government policies have kept crop prices high, especially for rice. Those policies help ensure that Japan has an adequate supply of food, and they protect rural communities from the sudden loss of income. But most Japanese consumers want to reduce the government subsidies so that food becomes less expensive. Other nations want Japan to stop protecting its agricultural sector, so that foreigners can sell rice and other farm products to the Japanese. Unloading tuna Fishing industry. Japan is one of the most important fishing nations in the world. Japanese fishing crews catch large amounts of bonito, carp, eel, mackerel, pollock, sardines, trout, and tuna. Other products of Japan's fishing industry include crabs and other shellfish and squid. Workers also harvest oysters and edible seaweed from "farms" in coastal waters. The fishing industry began to decline in the 1950's. Pollution and international restrictions on ocean catches have reduced the quantity and value of the Japanese catch. Today, few young people enter the industry. Service industries. Taken altogether, service industries generate over 60 percent of Japan's GDP and employ more than 60 percent of the labor force. Japan's leading service industries include community, social, and personal services; finance, insurance, and real estate; and wholesale and retail trade. Other service industries that contribute to Japan's economy are government, utilities, and transportation and communication. Many of the workers in the service industries are highly educated and well-paid. They hold such positions as bankers, financial analysts, civil servants, engineers, teachers, accountants, doctors, and lawyers. Most of these workers are men, and they—as well as managers in the manufacturing industry—are known as sarariman (salarymen). In general, salarymen receive generous incomes and benefits, and they enjoy good job security until they retire in their late 50's or early 60's. However, a number of other workers in the service industries earn lower salaries and have fewer benefits and little job security. They work in such businesses as department stores, movie theaters, restaurants, and the small retail establishments often called "Mom-and-Pop shops." Such shops sell food, clothing, household necessities, and a variety of other goods. The little shops are far more numerous in Japan than in the United States or Western Europe. But they are disappearing as giant discount stores force them out of business.