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  1. What Kinds of Work Do People Do in Japan?
  2. Where Men and Women Work in Japan
  3. Reviving Basic Industries in Postwar Japan
  4. Japan’s Shipbuilding Industry
  5. Mining: An Industry in Decline
  6. Industrial Policy and Depressed Industries
  7. Consumer Goods Industries
  8. Small Firms in the Japanese Economy
  9. Links Between Large and Small Firms
  10. The Japanese Electronics Industry
  11. Beginning of the Japanese Automobile Industry
  12. The Rise of the Japanese Auto Industry and Auto Exports
  13. The Mobile Telephone Industry
  14. The Computer Game Industry
  15. Shopping Habits and Retail Stores
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A worker in a small machinery factory.
Photo from Mainichi Shimbun.
Links Between Large and Small Firms
One reason that the Japanese economy continues to have so many small manufacturing firms is because large and small firms are linked and interdependent. Large manufacturing firms develop long-term subcontracting and distribution relationships with smaller firms. This allows the large firms to obtain parts and components at lower cost. They can also manage economic fluctuations by reducing subcontracts rather than by laying off their own employees. When business is good, the small firms benefit from their relations with large firms and share in the general prosperity. They may also benefit from the large firm’s technology and expertise
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