Classic Computer Magazine Archive CREATIVE COMPUTING VOL. 10, NO. 8 / AUGUST 1984 / PAGE 170

Japan: a major industrial power. David H. Ahl.

Of the world's 50 largest industrial corporation in 1982, 21 were headquartered in the U.S., 7 in Germany, 6 in Japan, and 3 each in the U.K., France, and Italy. No other country had more than two companies on the top 50. Looking at the top 500 corporations outside of the U.S., more, 134, are based in Japan than in any other country. Britain, with 87 companies on the list is a distant second, and Germany is third with 59.

In the U.S., oil companies and automobile manufacturers are among the largest; whereas in Japan, automobile and electronics companies are at the top of the list. In Japan in 1982, Nissan Motor and Toyota were numbers 1 and 3 respectively, while Hitachi and Matsushita were numbers 2 and 4. However, in 1983 Matsushita's 9.3 percent growth rate propelled it slightly ahead of Hitachi in bot sales and profits. Looking down the list, eight other electronics companies are in the top 50 in Japan: Toshiba (8), Mitsubishi Electric (13), NEC (17), Sony (24), Sanyo (26), Fujitsu (30), Sharp (34), and Canon (50).

For the most part, the after tax profits of a typical Japanese firm are lower than those of a similar U.S. firm. The median return on sales for office equipment (including computer) manufacturers in the U.S. has been running around 6 percent and for electronic and appliance manufacturers, around 4.5 percent. In Japan, only IBM, Matsushita, Fujitsu, Canon, and Sord were able to achieve rates fo return in this range. For the largest 20 electronics and computer manufacturers, the median was a dismal 3.1 percent. Of course, the taxation rate for corporations is much higher in Japan than in the U.S. Nevertheless, the Japanese seem satisfied with a lower profitability level, perhaps reflecting the view of Yoshimo Shinji (of the Ministry of Commerce and Industry, MITI's predecessor) who said, "The purpose of business activity should be the attempt to lower costs, not make profits."

Most of the manufacturers of computers in Japan are highly diversified high technology firms. In most cases, computers and peripherals account for less than 20 percent of sales. Indeed, on our list of 20 firms, only Epson and Sord (numbers 19 and 20 on the list) are in the computer business exclusively. This diversification has mixed results. It prevents companies from concentrating all their resources on computers and maximizing their R&D and marketing efforts. On the other hand, the diversification tends to reduce the sharp peaks and valleys resulting from changing market conditions in a single industry.