Event name: Regional Economic Report by Osaka Prefecture and City of Osaka Date: July 22, 2011 Venue: Osaka Sangyo Sozokan Co-organizers: Osaka Prefectural Government City of Osaka Number of participants: about 100 people. Seminar Program:
1. Recent economic situation of Osaka :
Mr. Toshiaki Amano, Senior Researcher, Osaka Pref. Industry Economic Research Center
Mr. Yuhei Tokuda, Economic Research Chief, City of Osaka Unban Industry Promotion Center
2. Report on Globalization of middle ranking companies and SMEs
Mr. Sojiro Koshimura, Senior Researcher, Osaka Pref. Industry Economic Research Center
3. Report on Research of Eco mobility related industry Promotion.
Mr. Yuhei Tokuda, Economic Research Chief, City of Osaka Unban Industry Promotion Center
1. Recent Economic Situation in Osaka
Diffusion Index (DI) of Osaka Prefecture had shown consecutive increase for 6 month; however, DI of April 2011 was down 0.9 point from previous month. For Kinki region, DI was down 1.3 point in April 2011 from March 11. Production Index of Osaka Pref. 87.8 point in April 2011, 1.5%down from March; it was consecutive months decrease. Shipping Index of Osaka Pref. was 91.0 point in April, 10.7% down from March. Kinki's unemployment rate in May was 5.3% and the rate improved 0.3 point from previous month and has been improving last 2 months. Although unemployment rate shows improvement, the number of new employment is decreasing. In terms of trade, export was -3.0% in May and it was first time decrease in 18 months. On the other hand, import was 16.3% increase from previous year.
Diffusion Index's decrease ratio worsened due to Eastern Japan earthquake. Especially, shipping, sales, operating profit index ratio had large decrease. However, perspective of next quarter is better than this quarter and more recovery is expected. In terms of type of industry, manufacturing DI was -29.6 (dropped 20) and non-manufacturing DI was -40.9 (Dropped 17.5). Among non-manufacturing business retail, food and travel service had increase in bankruptcy. In shipping and sales DI, SME and non manufacturing (construction, sales, food service, and hotel service) had more decrease. As to influence of earthquake, major issue were demand decrease, procurement difficulties and large increase of purchasing cost. About 30% of companies consider there is no influence. On the other hand, 92.2% of food service and hotel was influenced by the earthquake.
For last 12 months, economic situation has shown recovery. Due to earthquake, the recovery was stalled once but the recovery was sustained. Although Industry sector and export still have influence from earthquake, it is considered that economy of Osaka is keeping trend of recovery in general. There were some surveys conducted to research on influence by shortage of electricity in the Kansai. If nuclear power plant would not resume operation, Kansai's GDP grows ratio may down from 0.9% to be 0.6% (down -0.3%) (by The Japan Research Institute). Kansai's 15% power saving may lower Kansai GDP about -0.1% (Risona Research Institute). To achieve 15% power saving, large majority of companies will try to adjust lighting and air conditioning, and only 10% will try to introduce summer time or change of weekly schedule (Osaka Chamber of Commerce). 56.5% companies said there will be no influence on company management by power saving. And larger companies have less influence. (Kansai Economic Federation).
2. Report on Globalization of middle ranking companies and SMEs
Osaka Pref. Industry and Economic Research Center conducted survey on Globalization of middle ranking companies and SMEs.
As background, export by mid. ranking and SMEs are increasing but lower than large corporations'. Also ratio of having overseas subsidiaries is increasing but still lower than large corporations. Due to strong yen, Eastern Japan earthquake, sluggish domestic market, expansion of emerging countries in Asia, there are urgent necessity of globalization of mid. ranking companies and SMEs. The survey was conducted in summer 2010, and 705 replies were received. They also conducted company interview with 40 companies.
Large majority of companies' customers are in same prefectures or neighboring area or other cities in Japan. Among construction and manufacturing, 29.9% has customers in Asia (13.5% in US, EU). Also only 27.5% has procurement destination in Asia (7.7% in US, EU). Only 21.7% has their overseas office and 21.7% of those offices are located in Asia. Number of outbound investment is increasing. Among 705 companies, 63.7% are purely domestic companies and they do not have trade with overseas, 20.5% are companies has trade with overseas (About 55% are with Asia), and 15.8% have their own subsidiaries in overseas (21.7% of manufacturing companies have their office in Asia). The number of companies have own overseas subsidiaries are still small but it is increasing. Those who invested overseas have better business results. Even if companies have international business, vast majority of their sales customer are located in Japan. There is tendency that procurement destination has been shifted to Asian countries. There are strategies for companies to be successful under global business environment: 1. by finding niche market, company put their best effort to have highly value added products and service. 2. by having trade with overseas companies, company try to enter overseas market, and by challenging to establish overseas office to achieve higher profit.
3. Report on Research of Eco mobility related industry Promotion
Osaka City conducted research to seek Eco-friendly mobility related industry potential to establish Smart City. Osaka is aiming to improve mobility environment for citizen especially elderly, and they think it may promote other citizens and visitors activity. The promotion involves industries manufacturing equipment for elderly, road and street improvement, ICT industry including contents. Osaka City has done research among about 1000 elderly (age over 60 years old) in Tokyo and Osaka by internet. According to the result, about 20% of elderly spend time outside of their home, people go to hospital or clinic once a week in average but older (over 70) they will go more often. For other purpose of going out are daily shopping, exercise, meeting friends, etc. Women are much more active than men in terms of going out. Means of transport, many walk, or take bicycle, train, or car depend upon destination and purpose. If they get older, more elderly walk or take public transportation rather than bicycle or car.
For elderly who have difficulties to walk, senior car (a small motored car can be driven with out driver's license) or tricycle may be helpful. Also utilizing internet and smart phone, dissemination of useful information will be helpful since they can get information at home. Maintenance and development of street and road to help elderly will be inevitable. If companies wish to enter business to promote mobility of elderly, they should develop products suites elderly women's taste and function since more women are active. For information contents, public sector is better to provide platform (information site) and private sector should provide contents suitable for target group.
Reported by Yasuko Seta, Thai Trade Center, Osaka
Source : http://www.depthai.go.th