If someone tells you that business is booming in Japan, chances are they’re talking about the region of Nagoya. While this manufacturing center had its roots of success firmly planted as early as the 17th Century, today it’s the talk of business consultants the world over.
What companies are based in Nagoya, you ask?
Toyota, Makita, Daido Steel, Brother Industries, Yamaha Corp., Mitsubishi Heavy Industries…
These companies and others like them in Nagoya, Japan are the driving force behind the country finally lifting its head out of a decade-long cloud, with GDP up 3.3% in the first quarter.
Japan isn’t known for low-cost manufacturing — it has rather the opposite reputation, high quality work for top dollar. That said, Nagoya executives sure know how to make low-cost manufacturing work in their favor — and they’re some of the thriftiest executives out there.
In the Western world, when low-cost manufacturing centers began popping up all over the world, domestic companies jumped quickly to unload high-cost, high-end product manufacturing to cheaper workers in cheaper locations. In Nagoya, however, companies chose to outsource the production of its low-end products, while keeping its high-tech, high-end manufacturing to itself.
The result is that while other parts of the world have become the hubs of quick, cheap production, Nagoya is an epicenter of research and development, technology, and expertise.
Today, with the demand for high-end, high-quality goods exploding, Nagoya is reaping the rewards of its manufacturing strategy. Exports from the region are up 10%, and the companies listed on the Nagoya Stock Exchange are up a remarkable 71%.
The “Nagoya boom” has inspired books and seminars, and executives and CEOs all over the world are gobbling up the “secrets to Nagoya’s success.”
And what about the area’s residents? They spend less on entertainment and frivolities than the typical Japanese consumer, and they boast the highest savings rate in the nation. Clearly we have a lot to learn from this region!