High Technology Manufacturing Investments in East Asia: The Case of the Japanese Photography Industry

Abstract

Critics claim that Japan is creating a regional production network to head off US complaints of Japan's persistent bilateral trade surpluses. An analysis of the photography industry reveals that these claims are difficult to substantiate. Simpler goods and parts have been manufactured in East Asia since the 1970s, and after 1985, high-technology investment also went there. Today, only prototype production of many photographic goods remains in Japan; they are then mass produced in East Asian plants and exported to, among others, Japan. Corporate R&D and production of many higher-technology products is concentrated in Japan and to a lesser extent in Europe and North America. This paper shows that the Japanese state is not orchestrating an industrial policy for East Asia. Instead, the region is a major recipient of Japanese FDI due to the economic realities, e.g. cost and price pressures. Whether the 1997-98 financial troubles in East Asia will undermine firm strategies remains to be seen.

Keywords: regional production network, outward FDI, high technology, photography industry, Japan, East Asia