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Local Development in the Higashi Osaka Industrial District＊

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Local Development in the Higashi Osaka Industrial District＊ Japanese Journal of Human Geography 63―6（2011） ＊ Local Development in the Higashi Osaka Industrial District David W. EDGINGTON The University of British Columbia NAGAO Kenkichi Osaka City University Abstract In this paper we address changes in the Higashi Osaka industrial district, part of metropolitan Osaka, western Japan. Higashi Osaka is distinctive due to its very high density of factories and its wide variety of consumer and industrial products. After clarifying the city’s manufacturing structure, history and spatial development, we explain the contemporary challenges facing industrial development. Along with slower economic growth in Japan commencing during the 1990s, Higashi Osaka has experienced declines in production output, employment and the number of establishments. Recent problems include competition with lower ―cost East Asian countries as well as stricter regulations on local industries due to their incompatibility with nearby residential uses. To illustrate these general trends we undertook a limited number of in― depth interviews with four firms that produce industrial bolts, screws and associated machinery. The results indicate that these firms have responded by a variety of business policies, including working more closely with their customers and producing innovative machinery. This suggests that it is unlikely that Higashi Osaka will face terminal decline in the foreseeable future as these firms have upgraded their production and associated activities rather than abandoning the district. The paper concludes by illustrating how public policy has played a role in supporting new technologies and innovative small firms in this industrial district. Key words : industrial district, small―and medium―sized firms, local economic development, Higashi Osaka, Japan. I Introduction This paper illustrates some of the key concerns facing Japanese manufacturing by focusing on 1 Higashi Osaka, a prominent industrial district in the Kansai region. With a population of around 513,000 persons, （year 2005 population census） Higashi Osaka is a city of small―scale factories, principally in the metal and machine sectors, crowded at extremely high densities and lying in the eastern part of the Osaka metropolitan region. Our research methodology involves an analysis of the Japanese census of manufacturing, detailed land use surveys, and results from establishment level surveys. We also draw from interviews with factory managers and owners, city officials and the local chamber of commerce and industry, carried out between 1999 and 2011. Our aim is to first describe the city’s historical and spatial development and then examine the challenges currently facing all its firms. Following a general account of the city’s industrial profile, we examine the growth of Higashi Osaka in the pre ―and post―1945 period, and comment ― 25 ― 508 Japanese Journal of Human Geography 63―6（2011） on its fortunes during the last 20 years or so, a period characterized by economic recession. Besides encountering greater international competition due to higher costs of production there are unique local factors at work leading to increasing conflicts between industrial activities and nearby residential areas, We then report on an empirical investigation of a selected number of local companies, focusing upon the problems involved in sustaining manufacturing within a dense urban neighborhood, together with the strategies taken by these firms to remain competitive in the face of international competition and strict environmental regulations. The paper argues that Japan’s economic slowdown has impacted on local work and job creation, yet many firms in Higashi Osaka have responded, restructured, and “fought back”. Instead of developing strategies associated with cost cutting or abandonment, local firms in our survey focused on making major investments, innovative products and general upgrading. The final section presents some concluding remarks and highlights recent public policy that has supported industry in the city. II Industrial Development in Higashi Osaka Industrial Characteristics In year 2008, Higashi Osaka hosted around 6,000 industrial plants and workshops, and ranked fourth among Japanese cities by its overall number of factories （see Table 1）. It also recorded a very high density of factories at 116.3 manufacturing establishments and workshops per square kilometer, which was third only to the much smaller Sumida ―and Taito―wards in metropolitan Tokyo. In terms of total production value the city ranked fourth in Osaka prefecture behind the cities of Osaka, Sakai and Yao（ Census of Manufactures）. Higashi Osaka itself is dominated by firms in the fabricated metals sector （29.1 per cent of total establishments）, followed by the general, Table 1. Ranking of Japanese cities by number of manufacturing establishment, 2008 City Prefecture Establishment Employment Density 1 Osaka Osaka 15,778 162,075 70.9 2 Nagoya Aichi 9,950 127,846 31.7 3 Kyoto Kyoto 6,594 78,543 30.4 4 Higashi Osaka Osaka 6,016 58,681 116.3 5 Yokohama Kanagawa 5,491 115,995 13.8 6 Hamamatsu Shizuoka 4,600 91,996 9.5 7 Ota ―ward Tokyo 4,362 35,741 73.4 8 Kawaguchi Saitama 3,667 31,127 66.7 9 Kobe Hyogo 3,620 75,401 11.3 10 Sumida ―ward Tokyo 3,391 21,303 246.6 11 Shizuoka Shizuoka 3,293 51,689 10.0 12 Katsushika ―ward Tokyo 3,139 17,445 90.2 13 Adachi―ward Tokyo 3,094 21,464 58.2 13 Yao Osaka 3,094 36,842 83.9 15 Kawasaki Kanagawa 2,968 59,129 22.0 16 Ichinomiya Aichi 2,795 27,647 24.5 17 Sakai Osaka 2,762 55,260 19.0 18 Edogawa ―ward Tokyo 2,614 17,078 52.5 19 Fukuyama Hiroshima 2,495 45,354 9.8 20 Taito ―ward Tokyo 2,290 10,153 227.2 ２ Note : Density is establishments per km of inhabitable land Source : Census of Manufacturing ― 26 ― Local Development in the Higashi Osaka Industrial District（EDGINGTON and NAGAO） 509 Table 2. Industrial Structure of Higashi Osaka in 2008 Production Processing Industry Establishments ％ Employment ％ （Yen ‘0,000） ％ （Yen ‘0,000） Ratio （A） （B） （B/A） Food 86 1.4 2,753 4.7 5,355,529 4.2 25,993 0.5 Beverages 7 0.1 65 0.1 351,078 0.3 377 0.1 Textile 179 3.0 1,129 1.9 1,359,103 1.1 337,224 24.8 Lumber 39 0.6 159 0.3 202,147 0.2 12,696 6.3 Furniture 162 2.7 1,450 2.5 3,845,778 3.0 234,447 6.1 Paper & pulp 219 3.6 2,747 4.7 5,719,283 4.4 499,034 8.7 Printing 385 6. 4 4,825 8.2 8,955,297 6.9 1,758,747 19.6 Chemical 79 1.3 1,637 2.8 4,247,597 3.3 115,165 2.7 Petroleum 3 0.0 11 0.0 26,073 0.0 350 1.3 Plastic 621 10.3 6,647 11.3 12,546,060 9.7 1,017,757 8.1 Rubber 82 1.4 590 1.0 922,763 0.7 73,718 8.0 Leather 81 1.3 408 0.7 546,855 0.4 25,707 4.7 Ceramic 47 0.8 626 1.1 1,629,638 1.3 81,159 5.0 Iron & steel 166 2.8 2,169 3.7 11,868,306 9.2 327,560 2.8 Non ―ferrous metals 105 1.7 1,358 2.3 6,418,948 5.0 236,745 3.7 Fabricated metals 1,751 29.1 12,735 21.7 22,121,979 17.2 4,664,244 21.1 General machinery 287 4.8 2,465 4.2 4,743,114 3.7 479,701 10.1 Production machinery 931 15.5 8,209 14.0 18,889,849 14.6 1,556,651 8.2 Business machinery 78 1.3 914 1.6 1,558,401 1.2 114,590 7.4 Electronics parts 30 0.5 535 0.9 968,956 0.8 147,731 15.2 Electrical machinery 256 4.3 2,619 4.5 5,233,252 4.1 343,973 6.6 Information machinery 15 0.2 225 0.4 1,041,083 0.8 43,162 4.1 Transporataion equipment 147 2.4 2,299 3.9 7 ,222,612 5.6 382,930 5.3 Miscellaneous 260 4.3 2,106 3.6 3,205,854 2.5 130,807 4.1 Total 6,016 100.0 58,681 100.0 128,979,555 100.0 18,744,368 14.5 Source : Census of Manufactures production and business machinery industries （comprising 21.6 per cent）, and together these accounted for about half of total factories and workshops（ see Table 2）. Overall, the city has a wide variety of manufacturing business. Production is particularly high in a range of metal parts and industrial equipment, as well as specialized consumer and household items （Research and Statistics Department, 2002）. For instance, there are factories that make vacuum flasks, artificial pearls, special lenses, fountain pens and umbrellas. Also produced are high quality screws and bolts to fasten the supports in Japanese bridges, as well industrial tools and factories that make use of specialized wire drawing technology（ Higashi Osaka City/Higashi Osaka Chamber of Commerce, 1998a）. Its narrow but regular streets often hum with the sound of machinery together with the noise of small trucks delivering raw materials, parts and components. Together with factory complexes in the adjoining Higashinari and Ikuno wards of the City of Osaka, Higashi Osaka has been regarded as a typical cluster of “medium and small size enterprises, where dwellings and factories are mixed”（ Fujimori, 1980, 86）. In reality, the scale of its factories is extremely small and there are numerous firms occupying tiny sites（ see Figure 1）.
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