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Corporate Attitudes toward Performance Outlook for 2017

April 18, 2017

Moderate recovery trends with 27.6% of companies anticipating “increase in income and profit”

 

- Companies evaluate Abenomics at 63.1 points, 2.8 points up from a year ago -

 

The domestic economy has been recovering mainly in the service and manufacturing industries, despite companies’ increased cost burden including a rise in the crude oil price.  However, there are concerns that loss of opportunities to secure orders as a result of labor shortages may inhibit economic growth.  Also, the effect that business trends have on performance varies depending on the region, industry and size.

Based on these development, Teikoku Databank has conducted a survey on corporate attitudes toward the performance outlook for 2017.  This survey was conducted in conjunction with the March 2017 TDB Trends Research.

*Survey period: March 17 – 31, 2017; Companies Surveyed: 23,929; Valid Responses: 10,305 (Response Rate: 43.1%).

The survey for the performance outlook has been conducted every year since March 2009, and this is the 9th survey.

*Details of this survey can be found on the dedicated Economic Trend Survey HP. (http://www.tdb-di.com/)

 

Survey results (Summary)

1. 27.6 % of companies anticipate “increase in income and profit” in the performance outlook for 2017.  While this is up 1.7 points from the 2016 outlook, those anticipating “decrease in income and profit” fell by 3.0 points.  Many companies anticipate improved performance in 2017, and a recovery of performance is gradually spreading to SMEs.

 

2. With respect to downside factors in the performance outlook for 2017, “further downturn in consumer spending” at 35.5% ranked top, followed by “labor shortage” and “income decrease.”  In particular, “labor shortage” increased by 6.1 points from the previous survey (March 2016), which suggests that companies are strongly concerned about securing and retaining their labor force.  Conversely, “recovery in consumer spending” was ranked top at 36.8% for upside factors, for the sixth year in a row, followed by “increase in public works” and “Increase in income.”

 

3. Companies evaluate the achievements of the economic policies of the Abe Administration (Abenomics) at 63.1 out of 100 points.  Although SMEs continue to more harshly view Abenomics over four years, companies’ evaluations have improved from a year ago, and on the whole gave an evaluation of more than 60 points.

 

Appendix

1.Research Subjects(Companies Researched 23,929; Valid responses: 10,305; Response rate: 43.1%)

Research Subjects

Research Subjects

 

 

2.Research Items

*Business Confidence (current, in 3 months, in 6 months, in 1 year)

*Business Conditions (sales, purchasing and selling unit price, inventory, capacity utilization ratio, number of employees, overtime work hours)

 

3.Research Period and Methodology

Internet-based survey conducted March 17 – 31 2017

The explanation of the Economic Diffusion Index

Research Purpose/Researched Terms

TDB Economic Trend Research (started from May 2002) is a monthly statistical survey conducted for over 20,000 nationwide corporations on their general business activities including the current condition and future outlook of the industry business performance and operating climate.  The primary purpose of such a survey is to assess the current state of Japan’s economy.

Selection of the Subject Corporations

Companies of all sizes in all domestic industries are eligible to participate in the survey.

DI Formula

The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in the diagram below) to each of seven possible responses.  Then multiplying the percentage of each response by the appropriate number, and adding the results.

g2

A DI over 50 is in the range of “Good.” A score under 50 is “Bad.”  The number 50 is the dividing point (“Neither Good or Bad”).  All numbers are rounded off to the hundredth.  It should be noted that no weight is given to a company’s responses based on its size.  Calculations are made according to a “one company, one vote” rule.

For example, all corporations rated ‘Very Good’.

DI=6/6×100(%)=100

All corporations rated ‘Neither Good nor Bad’.

DI=3/6×100(%)=50

Size Classification

g3

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Japan Economic Trend Research March 2017

April 7, 2017

Recovery tailwinded by automobile manufacture and labor shortage measures

 

- Increased capital investment demand intended for labor-saving -

 

 

< Overview of March 2017: Recovery trend continue >

The economic diffusion index (DI) in March was 46.2, up 0.8 points from the previous month, and an improvement for two consecutive months. The domestic economy continued to show recovery trends, tailwinded by favorable automobile-related performance and increased demand in labor shortage measures.

 

< Future Outlook: Mild recovery continues >

Mild recovery in economic conditions is expected to continue against the background of strong export and full-scale construction investment for the Olympics

 

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Teikoku Databank America Join U.S. Career Forum in New York 2017

March 10, 2017

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U.S. Career Forum | New York 2017

 

Event Description

Come join us at U.S. Career Forum.

Experience our culture, hear what we do, and learn about the opportunities at Teikoku Databank America, Inc.

We are looking for candidates; Researcher, Marketer, Operator and Web designer.

Address

Javits Center, Hall 1E

655 W 34th Street, New York, NY 10001

Date

Saturday, March 25th, 2017

10:00AM – 6:00PM (Check-in closes at 5:00PM)


Please register your attendance through Here

You can find our company listing Here

For more information please visit to Career Forum.Net

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Japan Economic Trend Research February 2017

March 7, 2017

Improved manufacturing industry performance

creates a boost in domestic economy

- Mild recovery continues despite being exposed to overseas risks -

 

< Overview of February 2017: Upward trend continues >

The economic diffusion index (DI) in February 2017 was 45.4, up 0.2 points from the previous month, and improved for the first time in two months. The domestic economy continued to recover due to an improvement in the performance of the manufacturing industry brought about by the strong performance of automotive and machinery manufacturing businesses.

 

< Future Outlook: Mild recovery continues >

Gradual recovery of economic conditions is expected to continue, despite having a large exposure to overseas risks, including those associated with the U.S.

 

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Corporate Attitudes toward Wage Trends in FY2017

February 27, 2017

Corporate Attitudes toward Wage Trends in FY2017

Record high 51.2% of companies anticipate wage improvement

-       Employees’ salaries and bonuses in FY 2017 are estimated to increase by approximately 3.5 trillion yen through an improvement effect.-

The economy in 2017 is difficult to forecast with a decrease in the number of companies, considering the economy in 2017 will “worsen” and “be in a lull” since last year and a record high rate of those that answered “do not know” (in the “Corporate Attitudes toward Economic Outlook for 2017″).  On the other hand, the government is demanding wage increases through public-private dialogues, etc.  Therefore, attention has focused on the trends for wage improvement, such as across-the-board pay and bonus pay (lump-sum pay) increases, along with securing employment as elements that determine the success or failure of Abenomics.

Under such circumstances, Teikoku Databank conducted a survey on corporate attitudes toward wage trends in FY 2017.  This survey was conducted in conjunction with the January 2017 TDB Trends Research.

 

*Survey period: January 18, 2017 – January 31, 2017; Companies Surveyed: 23,796; Valid Responses: 10,195 (Response Rate: 42.8%).  The survey on wages has beenconducted in January every year since January 2006, and this is the 12th survey.

 

*Details of this survey can be found on the dedicated Economic Trend Survey HP (http://www.tdb-di.com/).

 

*Wage improvement is an improvement (increase) in wages by across-the-board pay and bonus pay increases, and does not include annual pay raises.

 

Survey Results (Summary)

 

1. 51.2% of the companies anticipate wage improvement in FY 2017, an increase of 4.9% points from the previous survey (of forecast for 2016, conducted in January 2016).  It is the first time it has exceeded 50% since the start of the survey, and it is a record-high.

 

2. Details for wage improvement are an across-the-board pay increase, 40.3% (an increase of 4.8% points over last year), and bonus pay (lump-sum pay), 28.8% (an increase of 2.8%points over last year).  Both across-the-board pay and bonus pay increases marked record-highs.

 

3. With respect to the reasons for improving wages, “securing and retention of the labor force’” was at a record-high of 76.2%, an increase for three consecutive years.  “Wage trends of other companies in the same industry” also showed a record-high, but “expanded performance of one’s company” decreased for the fourth consecutive year.  With respect to the reasons for not improving, “sluggish performance of one’s company” was at 60.0%, but on the decline, yet it remained in the 60% range for the third consecutive year.  “Wage trends of other companies in the same industry” exceeded 20% for two consecutive years, and companies that watch the trends of other companies have increased.

 

4. The total labor cost for FY 2017 is expected to increase 2.61% on average.  Employees’ salaries and bonuses are estimated to increase by approximately 3.5 trillion yen, compared to last year.

 

1.Research Subjects(Companies Researched 23,796; Valid responses: 10,195; Response rate: 42.8%)

 

 

graph 1

2.Research Items

*Business Confidence (current, in 3 months, in 6 months, in 1 year)

*Business Conditions (sales, purchasing and selling unit price, inventory, capacity utilization ratio, number of employees, overtime work hours)

 

3.Research Period and Methodology

 Internet-based survey conducted January 18 – 31 2017

 

The explanation of the Economic Diffusion Index

Research Purpose/Researched Terms

TDB Economic Trend Research (started from May 2002) is a monthly statistical survey conducted for over 20,000 nationwide corporations on their general business activities including the current condition and future outlook of the industry business performance and operating climate.  The primary purpose of such a survey is to assess the current state of Japan’s economy.

Selection of the Subject Corporations

Companies of all sizes in all domestic industries are eligible to participate in the survey.

DI Formula

The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in the diagram below) to each of seven possible responses.  Then multiplying the percentage of each response by the appropriate number, and adding the results.

 

g2

A DI over 50 is in the range of “Good.” A score under 50 is “Bad.”  The number 50 is the dividing point (“Neither Good or Bad”).  All numbers are rounded off to the hundredth.  It should be noted that no weight is given to a company’s responses based on its size.  Calculations are made according to a “one company, one vote” rule.

.

For example, all corporations rated ‘Very Good’.

DI=6/6×100(%)=100

All corporations rated ‘Neither Good nor Bad’.

DI=3/6×100(%)=5

Size Classification

g3

 

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Japan Economic Trends Research January 2017

February 3, 2017

Trump shock holds up recovery trends

 

- US policy intensifies feeling of uncertainty about the world economy -

 

< Overview of January 2017: Break in the recovery trend >

The economic diffusion index (DI) in January was 45.2, down 0.2 points from the previous month, and worsened for the first time in five months. Since an increase in the cost of fuel and unstable weather put downward pressure on the domestic economy, and a negative effect that originated in the U.S. was also added, recovery trends were held up.

 

< Future outlook: Gradual recovery continues >

Gradual recovery of economic conditions is expected to continue, but it will be necessary to pay close attention to U.S. policy.

 

By industry:  Four industries have worsened, with a heavy cost burden.

By size: All sizes have worsened for the first time in seven months, although only slightly.

 By region: Out of the ten regions, six have worsened due to the negative influence of grounds for concern that originated in the U.S., in addition to heavy snow.

 

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Survey of Corporate Attitudes toward Activation of Consumer Spending

January 31, 2017

A majority of companies regard the current consumer

 spending sentiment as “bad” 

 

-       Less than 10% anticipate an early recovery, suggesting the necessity of satisfying the eight requirements for the revitalization of consumer spending step by step. -

Corporate Attitudes toward the Economic Outlook for 2017, which was conducted by Teikoku Databank in November 2016, reveals that the “personal consumption expansion measure” has been regarded as the top prioritized economic recovery measure for five consecutive years. The expansion of personal consumption, which accounts for about 60% of GDP, has become an essential factor for the full-scale economic recovery.

Based on these developments, Teikoku Databank conducted a survey on corporate attitudes toward the revitalization of personal consumption. This research was conducted in conjunction with the December 2016 TDB Trends Research.

 

*Survey period: December 15, 2016 – January 5, 2017; Companies Surveyed: 23,804; Valid Responses: 10,033 (Response Rate: 42.1%).

*Details of this survey can be found on the dedicated Economic Trend Survey HP. (http://www.tdb-di.com/)

 

Survey Results (Summary)

 

1. More than half of the companies consider that the consumer spending sentiment is currently “bad” (including “very bad,” “bad” and “slightly bad”). On the other hand, just 8.7% consider the sentiment as “good,” in particular, no companies feel the sentiment as “very good,” hinting at a very tough view of the consumer spending sentiment.

 

2. “Income tax cut measure” (43.9%) has been deemed as the most effective measure to boost the economy in the past, then followed by “eco-car tax cut / subsidy” (40.9%) and “mortgage tax cut” (37.3%). Thus, the tax cut measures are expected to ease the burden of consumers. Other high percentage replies include “eco point systems” (23.1%) and “issuance of premium gift certificates,” characterized as measures to promote additional services.

 

3. “Increase in wages” is by far the largest (74.3%) for revitalizing consumer spending. Other high percentage replies include “elimination of future uncertainty (e.g. pension),” “tax reduction on personal income tax” (40% or more) and “improvement of corporate performance” (30% or more).

 

4. The requirements to be satisfied for the revitalization of consumer spending are: 1) creating consumption opportunities; 2) increasing free time; 3) providing support to young people, 4) providing support to the elderly; 5) improving the macro environment; 6) removing anxieties in the future; 7) reducing household burdens; and 8) improving corporate activities.

 

5. As to when the economy will recover, 28.8% have “no prospect of recovery over the long term.” Nearly a quarter of companies expect the recovery will be at least two years later, specifically “two years later” (13.3%) and “three years later” (12.8%). Less than 10% anticipate the recovery will come within one year.

 

Appendix

1.Research Subjects(Companies Researched 23,804; Valid responses: 10,033; Response rate: 42.1%)

 

 Survey of Corporate Attitudes toward Activation of Consumer Spending

 

 

2.Research Items

*Business Confidence (current, in 3 months, in 6 months, in 1 year)

*Business Conditions (sales, purchasing and selling unit price, inventory, capacity utilization ratio, number of employees, overtime work hours)

 

3.Research Period and Methodology

Internet-based survey conducted December 15 2016– January 5 2017

 

The explanation of the Economic Diffusion Index

Research Purpose/Researched Terms

TDB Economic Trend Research (started from May 2002) is a monthly statistical survey conducted for over 20,000 nationwide corporations on their general business activities including the current condition and future outlook of the industry business performance and operating climate.  The primary purpose of such a survey is to assess the current state of Japan’s economy.

Selection of the Subject Corporations

Companies of all sizes in all domestic industries are eligible to participate in the survey.

DI Formula

The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in the diagram below) to each of seven possible responses.  Then multiplying the percentage of each response by the appropriate number, and adding the results.

グラフ

A DI over 50 is in the range of “Good.” A score under 50 is “Bad.”  The number 50 is the dividing point (“Neither Good or Bad”).  All numbers are rounded off to the hundredth.  It should be noted that no weight is given to a company’s responses based on its size.  Calculations are made according to a “one company, one vote” rule.

 

For example, all corporations rated ‘Very Good’.

DI=6/6×100(%)=100

All corporations rated ‘Neither Good nor Bad’.

DI=3/6×100(%)=50

 Size Classification

3グラフ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Struggling small and medium-sized productions in the shadow of hits such as “Your Name”

January 27, 2017

Business Performance and Bankruptcy Trends Research for Film and Imaging Companies

 

Despite good business performance, bankruptcies increased 

 

- Struggling small and medium-sized productions in the shadow of hits such as “Your Name” -

 

 

The film industry had many highly acclaimed works in 2016, such as “Your Name,” and “Shin Godzilla.” According to the Motion Picture Producers Association of Japan, domestic film box office receipts have increased consecutively since 2014, and are in good condition.

On the other hand, companies that engaged in the production of hit films in the past went bankrupt.  In addition, quite a few film production companies have been forced to experience a severe business environment due to recent drastic changes in the media environment and the stagnant economy.

 

1. Performance trends – Market expansion through increase in revenue and profit -

Film and imaging companies achieved growth in revenues and profits, with sales for 2015 totaling 1,901,087,000,000 yen, a 6.9% increase from the previous year, and current net profit or loss totaling 82,471,000,000 yen, a 16.5% increase from the previous year.

 

2. Bankruptcy trends – Increased in “Production” from the previous year -

The number of bankruptcies of film and imaging companies for 2016 was 27, an increase of 12.5% from the previous year. Total liabilities decreased 34.6% from the previous year, to 2,561,000,000 yen.

 

3. Future outlook – Good performance will be maintained, but pay attention to bankruptcy trends in production companies -

While being led by the film industry, whose box office receipts have been growing, existing mass media are losing their former strength due to changes in the media environment. In a situation in which production companies’ order receipts are affected, it is necessary to pay attention to the change in bankruptcy trends in “film and imaging companies.”

 

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Takata Group Subcontractors Factual Study

January 23, 2017

The number of Takata subcontractors does not exceed 570 in Japan.

The management reconstruction has reached the final stage in Takata, which has been rocked by the large-scale recall problem for its defective airbags. Takata is currently selecting sponsor companies under the leadership of the external expert committee that was established for the purpose of developing a comprehensive restructuring plan. While the company aims to reconstruct the management through private liquidation, a major sponsor candidate has advised the company to conduct legal liquidation, according to some news reports. The company’s reconstruction scenario is still in a state of flux, yet there is a concern that the legal liquidation, should it be performed, may impact the stability of the product supply.

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Status survey of companies operating in the USA

December 22, 2016

 

 

 

 

6,814 Japanese companies operating in the USA

    – Many of them operating in “California” and “New York” -

 

 

Introduction

Over a month has passed since the victory of the Presidential candidate, Donald Trump, in the United States’ (hereinafter called “US”) Presidential election on November 9. In his protectionist trade policies, including spelling out the US’s exit from the Trans-Pacific Partnership (TPP) trade deal based on his “America First,” there is a concern about friction in trade and diplomacy with neighboring countries. Among Japanese companies, including manufacturers of finished cars and electric devices, many place importance on the North American market, and there is a good chance that many of those operating in the US will be affected by the trade policies of the incoming Trump administration.

 

Teikoku Databank extracted Japanese companies whose operation in the US has been determined through investment in a local company, founding of and financial contribution to a local subsidiary, an affiliated or associated company, establishment of a substation and/or office, etc., based on the company profile database “COSMOS2″ (approx. 1,460,000 companies) as of November 2016, Comprehensive Company Research (CCR) File Report (approx. 1,700,000 companies), and public information, and compiled and analyzed data by industry sector, by prefecture, by annual turnover, and by host state.

 

Survey results (Summary)

1.     6,814 Japanese companies were determined to be operating in the US at the end of November 2016. By industry sector, the largest number was in “Manufacturing,” with 2,649 companies (composition rate, 38.9%). By industry subsector, many automobile-related and pharmaceutical industry companies have been operating, in addition to those in the IT-related industry, such as software.

2.     By prefecture, “Tokyo” was ranked top with 3,179 companies (composition rate, 46.7%), followed by “Osaka” (659 companies, 9.7%), and “Aichi” (500 companies, 7.3%).

3.     By host state, “California” has the largest number, with 1,517 companies (composition rate, 40.1%), followed by “New York” with 626 companies (16.6%). The top 2 states account for the majority in terms of composition rate.

4.     In the top 5 states in which many Japanese companies operate, many companies in the manufacturing industry operate in Illinois, etc., while many in the financial industry, such as investment, and services industries, operate in California, etc. The industrial sector in which companies operate varies from place to place.


 

1. By industry sector

By industry subsector – “Manufacturing” industry has largest number; IT-related industry ranked top by industry subsector

6,814 Japanese companies were determined to be operating in the US at the end of November 2016.

By industry sector, the largest number of companies operating was in the “Manufacturing” industry, with 2,649 (composition rate, 38.9%), followed by “Wholesale trade” with 1,618 companies (23.7%), and “Services” with 1,317 companies (19.3%). The top 3 industry sectors comprise 5,584 companies, which account for 81.9% of the total. By industry subsector, “Customized development software” was ranked top, with 229 companies (3.4%). Moreover, the 20 top-ranked subsectors were occupied by the IT-related industry, such as “Packaged software” (122 companies, 1.8%) and “Information services” (44 companies, 0.6%). The reason for this is considered to be that the IT-related industry, including Apple, Google, Amazon, and other major IT companies at the head of the list, has been active in the US.

It was also clear that many automobile-related industry companies have been operating, such as for “Manufacture of automobile parts and accessories” (122 companies, 1.8%), “Manufacture of automobile driving, steering, and braking control devices” (63 companies, 0.9%), and “Manufacture of internal combustion engines for automobiles” (42 companies, 0.6%). The reason behind this is considered to be that many automobile parts suppliers have entered to accompany manufacturers of finished cars, which have a local production base. Also, on the basis that the US is a country with major pharmaceutical companies, such as Pfizer, and Eli Lilly and Company, many companies engaging in the “Manufacture of medical supplies and drugs” (54 companies, 0.8 %) were seen.

g1

 

By sales volume – “Services” industry ranked top only in “less than one billion yen”

According to sales volume by industry sector, the “Services” industry (composition rate, 33.3%) was ranked top in “less than one billion yen.” Small-sized software and consulting industries comprised the majority. However, the “Manufacturing” industry was at the top for all of “one billion to less than 10 billion yen,” “10 billion to less than 100 billion yen,” and “100 billion yen or more.”

By sales volume

g2

 

2. By prefecture – “Tokyo” alone accounts for half

By prefecture in which headquarters of companies operating in the US are located, “Tokyo” was ranked top with 3,179 companies (composition rate, 46.7%), followed by “Osaka” ranked second (659 companies, 9.7%) and “Aichi” ranked third (500 companies, 7.3%). These top 3 prefectures account for 63.7% of the total, and companies operating in the US are concentrated in prefectures with large companies and a metropolitan area. Among them, “Aichi” can be counted as one of the prefectures with active entries into the US market at the national level, with Toyota Motor, manufacturer of finished cars, and manufacturers of automobile parts.

graph

3. By host region

By host state

By host state based on the 3,779 companies whose region of business operation was identified, “California,” including San Francisco and Los Angeles, has the largest number, with 1,517 companies (composition rate, 40.1%), followed by “New York” with 626 companies (16.6 %). The top 2 states constitute the majority in terms of composition rate. Also ranked highly were “Illinois,” including Chicago (345 companies, 9.1%), “Hawaii,” famous as a tourism destination, and “Michigan,” where major US manufacturers of finished cars such as Ford and Chrysler have their headquarters.

g4

usmap

g5

 

By industry subsector

The top 5 states in which Japanese companies operate were analyzed by industry subsector.

 

 ①California (West Coast)

Software-related businesses such as “Customized development software,” and “Packaged software,” ranked highly partly because of IT industrial clusters centered on Silicon Valley.

 

②‚ New York (East Coast)

Many operating holding companies engaging in “Investment,” and financial institutions such as “Ordinary banks,” have entered, given that New York is a top, world-class financial center.

 

ƒ③ Illinois (Midwest)

The top industry in Illinois is “Manufacture of metal cutting machine tools,” with 18 companies (composition rate, 5.2%). In addition, many operating holding companies engaging in “Investment,” and trading companies engaging in “Wholesale trade of general merchandise,” operate in the said state, the largest in the US Midwest, and that with the third largest US city, Chicago.

 

„ ④Hawaii (Pacific)

In Hawaii where many Japanese tourists visit, “Rental office,” “Building trade,” etc. ranked highly, as did “General travel,” such as major travel agencies, on the basis of there being plenty of resorts and commercial properties that can be an investment destination for Japanese companies.

 

… ⑤Michigan (Midwest)

The top industry in Michigan was “Manufacture of automobile parts and accessories,” with 22 companies (composition rate, 9.7%). Many companies from the automobile-related industry operate in the said state with US automobile industrial clusters, including Detroit.

By industry subsector (by state)

g6


4. Conclusion

As a result of the survey, 6,814 Japanese companies were determined to be operating in the US. Many of them are in the manufacturing industry, such as automobile-related and pharmaceutical companies. By host state, many Japanese companies in the manufacturing industry operate in Illinois, etc., while many in the financial industry, such as investment, and services industries, operate in California, etc. It is also evident that even among the top 5 states, the industry sector in which companies operate varies from place to place. However, operating companies are concentrating on the US West and East Coasts, and there are states with hardly any operating Japanese companies.

Since the November 9 victory of presidential candidate Trump, the foreign exchange and stock prices that initially nosedived have performed steadily, with a weaker yen and higher stock prices, respectively. “Trump Shock” has lessened recently. However, depending on the policies of the incoming Trump administration, chaos in stock prices and on the foreign exchange is quite likely to happen again. Under the same administration that has promised anti-free trade, a return to the Japan-US trade friction of the past, and a growing rise of pressure against Japan in the US market are assumed. Interference in the progress of globalization of these operating companies could ensue. Specifically, there is concern that trade policies such as US exits from TPP and the North American Free Trade Agreement (NAFTA) will broadly affect Japanese companies that develop strategies for the US market, including trade and market entry.

 

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60% of Companies “Feel No” Monetary Easing Effects

December 8, 2016

Survey of Corporate Attitudes with respect to Monetary Easing Policy

 

 

60% of Companies “Feel No” Monetary Easing Effects

-Average inflation rate expected to be 1.29% in 5 years-

 

The Bank of Japan continues the monetary easing policy it started in April of 2013, and implemented a policy for “Quantitative and Qualitative Monetary Easing with Yield Curve Control” as a new policy framework on September 21. Furthermore, as the economy continues to be sluggish, the government is introducing and shifting financial and fiscal policies, which form the two wheels of its economic stimulus measures, through its cabinet level decision on an economic measure having a business scale of 28 trillion yen in August, and by establishing a secondary supplementary budget for FY 2016 on October 11, etc.

 

Therefore, Teikoku Databank has conducted a survey of corporate opinions with respect to the effects of monetary easing policies and government economic measures. Note that this survey was conducted in conjunction with the October 2016 TDB Trends Research.

 

*Survey period: October 18 – October 31, 2016; Companies Surveyed: 23,779; Valid Responses: 10,243 (Response Rate: 43.1%).

 

*Details of this survey can be found on the dedicated Economic Trend Survey HP (http://www.tdb-di.com/)

 

 

 

Survey Results (Summary)

 

 

1.            59.7% of companies said they “feel no” effects of the monetary easing policy, while only 12.9% said they “feel” said effects. The “finance” (24.8%) and “real estate” (22.0%) sectors exceeded 20%. Most companies have not felt the effects of the monetary easing in a realistic way.

 

2.             51.8%, or over half, of companies said the sales prices of their main products and services have “not changed” compared to a year ago. Only 17.7% said prices had “risen,” which is 6.3 points less than the 24.0% that said prices have “fallen.” On average, sales prices decreased 0.48%. By industry, “real estate” prices rose 0.81%, while “retail” prices fell 0.92%.

 

3. Perspectives on government economic measures were dispersed, with            24.5% of companies saying they are “optimistic” with regard to government economic measures, 29.6% saying they are “pessimistic”, and 32.3% saying they are “neither optimistic nor pessimistic”. Of the economic measures to be hoped for, the largest percentage, or 39.7%, expressed that optimism with regard to “plans for increasing personal income,” while 30% expressed optimism with regard to “support for increasing the management capabilities and productivity of small and mid-sized companies” and “policies for dealing with the lack of manpower.”

 

4.             Prices are expected to rise by 0.44% on average next year (FY2017), and by 1.29% in 5 years (FY2021). Thus, while prices are expected to be higher in 5 years than they will be next year, it appears that they will still be below the Bank of Japan’s target of 2%.

 

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48.9% of “Retail” to Revise Payroll Systems

October 26, 2016

Corporate Attitudes with regard to Minimum Wage Revisions

48.9% of “Retail” to Revise Payroll Systems

- Recognize that Minimum Wage Revisions are not sufficient to fuel Consumption Recovery-

 

 

Between October 1 and October 20, 2016, the national minimum wage will be revised. Based on the government’s “Nippon 100 Million Total Activation Plan,” “2016 Basic Policy for Economic and Fiscal Management and Reform” (basic policy), and “Japan Revival Strategy of 2016,” and the like, the FY 2016 revision of the minimum wage raised the maximum amount for the first time since it was decided in 2002 that the minimum wage would be determined based on hourly wages, such that this amount now exceeds 700 yen in all prefectures in Japan. Therefore, while income increases are expected due to more active consumption, there are also concerns that corporate earnings will be hurt due to increased labor costs.

Therefore, Teikoku Databank conducted a survey on corporate attitudes with regard to the rise in the minimum wage. This survey was conducted in conjunction with the September 2016 TDB Trends Research.

 

*Survey period: September 15 – 30, 2016; Companies Surveyed: 23,710; Valid Responses: 10,292 (Response Rate: 43.4%).

*Details of this survey can be found on the dedicated Economic Trend Survey HP (http://www.tdb-di.com/)

 

The minimum wage system establishes a lower limit for wages in Japan and requires employers to pay employees wages that are equal to or exceed the minimum wage. After the revision, the minimum wage will be increased an average of 25 yen nationwide, rising 21 to 25 yen in each prefecture in Japan on a regional basis, thus increasing the hourly wage to 714 to 932 yen (industry specific minimum wages are determined separately).

 

 

Survey Results (Summary)

 

1.             35.0% of companies “have revised (are considering revising)” their payroll systems as a result of the minimum wage revision. In particular, the percentage exceeds 40% among “retail,” “transportation and warehousing,” and “manufacturing” businesses, which hire a large number of non-permanent employees. On the other hand, 49.1% of companies “have not revised (are not considering revising)” their payroll systems. This number topped 40% regionally, with “Hokkaido” recording the highest percentage (43.4%), followed by “Kyushu” (40.7%) and “Chugoku” (40.2%).

 

2.           The minimum hourly wage paid when employees are actually hired was about 958 yen on average overall. This exceeds the minimum wage (823 yen) by 135 yen. While the difference between the minimum wage and the minimum hourly wage at hire was largest in “Tokyo,” on a regional basis, this difference was largest in “West Japan.”

 

3.           40.5% of companies felt the increase was “reasonable.” Companies that felt it was “reasonable” far outnumbered companies that felt it was “high” (11.6%) or “low” (18.1%), suggesting that the increase has generally been accepted by companies.

 

4.           Most of companies (57.9%) said the increase would have “no effect” on their performance. However, while only 1.7% of companies felt the increase would have a “positive effect,” over 20% felt the increase would have a “negative effect” (21.7%).

 

5.            Only 10.2% of companies felt the increase “would be” effective in recovering consumption, on the other hand, most companies were skeptical about the effect of the increase, with 53.7% indicating it “would not be” effective in recovering consumption.

 

 

 

 

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51.3% of Companies see “Negative” Impact on Japan’s Economy

October 26, 2016

Corporate Impact Survey with respect to Britain’s Exit from the EU

51.3% of Companies see “Negative” Impact on Japan’s Economy

— Companies with direct investments in Britain to move to Asia, but also considering north and central America —

 

 

Through a national referendum, Britain chose to exit (Brexit) the European Union (EU) on June 24, 2016 (Japan Time). It is believed that the impact of Brexit will not be limited to companies with investments in Britain and within the EU. Furthermore, the confusion in the EU will surely cause delays in reaching agreement on the “Economic Partnership Agreement between Japan and the EU” currently being negotiated, which raises concerns about wide-ranging impacts on Japanese companies with respect to trade with the EU and Japan’s participation in the EU market.

Therefore, Teikoku Databank has conducted a survey of the impacts Britain’s exit from the EU will have on companies. Note that this survey was conducted in conjunction with the August 2016 TDB Trends Research.

 

*Note: The survey period was August 18 – August 31, 2016; Companies Surveyed: 23,700; Valid Responses: 10,508 (Response Rate: 44.3%).

*Note: Details of this survey can be found on the dedicated Economic Trend Survey HP (http://www.tdb-di.com/).

 

 

Survey Results (Summary)

 

1.             9.2% of the companies currently have investments in Britain or other EU member countries. 1.9% of the companies have direct investments in the form of established sales offices or local subsidiaries, while 7.5% have indirect investments in the form of business alliances and importing and exporting. In terms of scale, large companies have a higher propensity for direct investments. In terms of industry, while “manufacturing” and “wholesaling” hold the top positions, the “financial” industry holds the top position in terms of indirect investment.

 

2.             In terms of investment destinations, “Germany” is top (35.9%), followed by “Britain” at 31.5%, “France” (23.3%), and “Italy” (21.4%). The most common relocation destination listed by investing companies was the “Asian Region” at 2.9%. After that came destinations “Within the EU (Specific Relocation Destination TBD)” at 1.6%, and “Italy” at 1.5%. Notably, among companies currently having direct investments in Britain, a total of 12.8% are considering or planning on relocating “Within the EU,” with the highest percentage, 7.7%, indicating locations “Within the EU (Specific Relocation Destination TBD),” followed by “Germany,” “France,” the “Asian Region,” and the “North and Central American Region” at 3.8% each.

 

3.             51.3% of the companies recognize that Britain’s exit from the EU “will have a negative impact” on Japan’s economy. Most (62.6%) of the companies said that the exit would have “no impact” on their business activities while only 9.4% said it would have a “negative impact,” however, 46.2% of the companies having direct investments in Britain said that they had concerns the exit would have a negative impact.

 

 

 

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Average percentage of managerial positions appointed to women stands at 6.6%, a 0.2 point increase over the previous year

October 25, 2016

Survey of Corporate Attitudes with respect to Promoting Women

Average percentage of managerial positions appointed to women stands at 6.6%, a 0.2 point increase over the previous year

-With regard to the status of utilizing and promoting women, over 10% of companies have their eye on external human resources-

 

 

As the working-age population decreases and double-income households increase, thus heightening the presence of women in the workplace, the government has made the active promotion of women a key strategy for growth. Furthermore, companies are ever more aware that the utilization women is essential to growth and are thus positioning said utilization to incorporate new perspectives and to reform the working styles of men, not just as a measure for securing a labor force in the face of labor shortages.

Therefore, Teikoku Databank has conducted a survey of corporate opinions with respect to the utilization and promotion of women. Note that this survey was conducted in conjunction with the July 2016 TDB Trends Research. The survey with respect to the promotion of women is the fourth such survey following the July 2013 survey, the July 2014 survey, and the July 2015 survey.

 

* Survey Period: July 15 – 31, 2016; Companies Surveyed: 23,639; Valid Responses: 10,285 (Response Rate: 43.5%).

* Details of this survey can be found on the dedicated Economic Trend Survey webpage (http://www.tdb-di.com/)

 

 

Survey Results (Summary)

 

1. 50.0%, or fully half, of the companies had no women managers, on the other hand, the percentages of companies having “10% or more but less than 20%” or “20% or more but less than 30%” women managers increased, and thus an average of 6.6% of managers were women, which is a 0.2 point increase over the previous year. On the other hand, while an average of 24.2% of all employees were women, which is the same level as the previous year, an average of 8.7% of officers were women, which is a 0.3 point increase over the previous year.

 

2. 23.5% of the companies expected the percentage of women managers to increase going forward.

 

3. 42.5%, or more than four out of ten, of the companies were “promoting the utilization and promotion of in-house human resources” to utilize and promote women, while 11.1% of the companies were “promoting the utilization and promotion of external human resources.” As a result, over 70% of the companies were “able to leverage the talents of both men and women.”

 

4. 81.7% of companies with 301 or more employees, which are required to develop action plans for promoting female employees, had already completed action plans while 43.1% of the companies were making specific “efforts with respect to the aggressive hiring of women,” which is the highest percentage ever. Even 49.1%, or about half, of companies with 300 or fewer employees, which are required to make efforts toward developing such plans, have formulated plans.

 

 

 

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Only 15.5% of businesses have formulated BCPs

October 25, 2016

Corporate Attitudes towards Business Continuation Planning (BCP)

Only 15.5% of businesses have formulated BCPs

- Over half of all businesses are cognizant of earthquakes. This percentage is higher in regions where large-scale earthquakes are expected –

 

In recent years, increasing emphasis has been placed on the importance of forming pre-disaster prevention and mitigation and response measures, etc., to be implemented during and after disasters so that business activities can either continue unabated or be restored quickly, by anticipating how business activities will be affected when businesses encounter states of emergency such as natural disasters like earthquakes, typhoons, and torrential rains, etc.

Therefore, Teikoku Databank conducted a survey on corporate attitudes towards Business Continuation Planning (BCP). This survey was performed in conjunction with the June 2016 TDB Trends Research.

 

*Survey Period: June 17th – 30th, 2016; Companies Researched: 23,606; Valid Responses: 10,417 (Response Rate: 44.4%)

*Details of this survey can be found on the dedicated Economic Trend Survey HP (http://www.tdb-di.com/).

 

 

Survey Results (Summary)

 

1. 51.8% of the companies view that “earthquakes” are the disasters they are conscious of the most during the work. Furthermore, 19.5% of the companies cited “fires” and 7.7% of the companies cited “floods,” – more than 80% of the companies cited natural disasters.  A large numbers of companies cited “earthquakes” especially in regions where large-scale earthquakes are predicted, such as “Kochi Prefecture,” “Shizuoka Prefecture,” “Wakayama Prefecture,” “Ehime Prefecture,” and the “Tokyo Metropolitan Area.”

 

2. Only 15.5% of the companies indicate that they are “taking measures” with respect to Business Continuation Planning (BCP). Even when companies that indicated they are “currently taking measures” and are “considering measures” were both included, the total was still less than half of all businesses. Businesses with fewer employees have made less progress in taking measures, with companies having “no more than 5 employees” being 10 times less likely than companies having “over 1,000 employees” to take any measures.

 

3. With regard to measures relating to human resources at disasters, 63.7% of companies indicted that they themselves “employed” persons who could act in place of managers (representatives) when such managers were in short supply.  However, this number was only 42.9% among companies having “no more than 5 employees,” such that said companies would have trouble staying in business in cases where managers were in short supply.

 

4. Most companies (82.7%) indicated that they use “mobile phones and mobile e-mail” to confirm the safety of their employees when states of emergency occur in their companies. This was followed by “landline telephones (include public telephones), and FAX,” and “IP phones and PC e-mail.” The most common measures against earthquakes were “measures to prevent equipment from falling (such as securing said equipment, etc.)” with 33.7% of the companies taking such measures, followed by “stockpiles of food,” and “subscriptions to property and casualty insurance policies.” Over 40% of the large companies indicated measures such as “evacuation drills,” and “stockpiles of food.”

 

5. 39.4% of the companies indicated that they keep cash and deposits equivalent to at least 1 months’ worth of sales in case of disaster, which they would need in order to sustain cash flow after emergencies occur. However, many companies had less than 1 months’ worth of cash and deposits, which means they may lack the funds they would need during disaster recovery and emergencies.

 

 

 

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34.9% of Companies say Tokyo Olympics will have a “Positive Impact”

October 25, 2016
Corporate Attitudes towards the Rio and Tokyo Olympics

34.9% of Companies say Tokyo Olympics will have a “Positive Impact”

- 1 in 7 of the companies surveyed anticipate sales of their products and supplies in conjunction with the Tokyo Olympics -

 

 

 The Rio Olympics is going to be held from August through September 2016, and the Tokyo Olympics is going to be held in 2020. Mega sporting events like the Olympics are sometimes the birthplaces of unexpected hit products and can thus have an impact on the business performance of related companies and industries.

Therefore, Teikoku Databank conducted a survey on corporate attitudes on impact the Rio and Tokyo Olympics will have on companies. This survey was conducted in conjunction with the May 2016 TDB Trends Research.

 

* Survey Period: May 18 – 31, 2016; Companies Researched: 23,586; Valid Responses: 10,588 (Response Rate: 44.9%)

* Details of this survey can be found on the dedicated Economic Trend Survey HP (http://www.tdb-di.com/)

 

 

 Survey Results (Summary)

  1. 33.3% of the companies were “interested” in the Rio Olympics while 52.6% were “not interested.” 66.9% of the companies said they were “interested” in the Tokyo Olympics. The interest was particularly high among “large companies,” with over 10% of them being interested when compared to “small companies.” The total percentage of the companies “interested” in both the Rio and Tokyo Olympics was 32.8%
  2. 3.2% of the companies said that the Rio Olympics would have a “positive impact” on their businesses, while 34.9% said that the Tokyo Olympics would have a positive impact. However, there were big differences in the sizes, industries, locations, and numbers of employees among the companies indicating a positive impact, and thus the attributes of the companies that will receive benefits from the Olympics are very different.
  3. 2.5% of the companies said their sales would “increase” in conjunction with the Rio Olympics, while 0.8% of the companies said their sales would “decrease.” It is estimated that company sales will increase an average of 0.07% in conjunction with the Rio Olympics. 32.4% of the companies said their sales would “increase” in conjunction with the Tokyo Olympics, while 3.3% of the companies said their sales would “decrease.” It is estimated that company sales will increase an average of 1.84% in conjunction with the Tokyo Olympics.
  4. 1.5% of the companies said they “did” anticipate sales of their products and services in conjunction with the Rio Olympics, while 81.4% said they “did not.” The companies had low expectations for their products in conjunction with the Rio Olympics. 14.7%, or 1 company in 7, of the companies said they “did” anticipate sales in conjunction with the Tokyo Olympic. However, it was also revealed that 60% of the companies are taking a careful look at Olympics-related demand.

 

 

 

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TDB Business Trends Research (Nationwide Research & Summary for June 2016) : Worsening domestic economy, a spate of domestic and overseas negative shocks

July 27, 2016

 TDB Business Trends Research (Nationwide Research & Summary for June 2016)

 

Worsening domestic economy,

a spate of domestic and overseas negative shocks

-Impact of Brexit lingers and downward swing continues-

Companies researched: 23,606; Valid responses: 10,471; Response rate: 44.4%; Survey start date: May 2002

 

 

[Overview of June 2016: Shift to decline]  

The economic diffusion index (DI) in June was 41.3, down 0.5 points from the previous month. This reflects a declining trend for three consecutive months. Japan’s economy has been on a downward trend due to a spate of domestic and overseas bad news, such as the Kumamoto Earthquake, falsified fuel economy data, and the Britain’s decision to leave the EU.

 

[Future Outlook: Remain with an enhanced downward trend]

Brexit is likely to continue to shock for a while, and economic conditions are expected to remain with an enhanced downward trend amid concern over the impact on corporate performances.

 

 

By industry: Of the 12 sectors in the “Manufacturing” industry, 10 sectors deteriorate.   

 

By size:           The economy worsened “nationwide” for three consecutive months.

 

By region:        Seven regions deteriorate.  In the “Tokai” region, automobile-related business is sluggish. 

 

 

 

 

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25% of businesses see the impact of the policy

June 24, 2016
Special Project: Survey on impact of BOJ’s negative-interest-rate policy on business

25% of businesses see the impact of the policy

- 10% of businesses indicated that the policy triggered new demand for funding, of which 64.2%for “capital investments” -

 

On 29 January 2016, the Bank of Japan (BOJ) decided to implement the “Quantitative/Qualitative Monetary Easing Policy with Negative Interest Rates.” The BOJ intends to maintain this policy as long as may be necessary to maintain the increase rate in consumer prices at 2% over the previous year to stabilize price increases. The BOJ began implementing this policy on February 16. However, the impact of Japan’s first negative-interest-rate policy is not yet clearly understood by either businesses or government authorities.

 

Accordingly, Teikoku Data Bank conducted a survey to measure the impact of the negative-interest-rate policy on businesses.

*Survey period: April 15-30, 2016; Companies researched: 23,432; Valid responses: 10,246 (response rate: 43.7%).

*Details of this survey can be found on the dedicated Economic Trend Survey website (http://www.tdb-di.com/).

 

Survey Results (Summary)

    1. As for the negative-interest-rate impact, 10.9% of respondents said it was “positive,” while 10.5% felt it was “negative.” Financial institutions primarily engaged in the loan business tended to express concerns about this policy, while real estate businesses especially welcomed this policy. However, only about 20% of the respondents had such definitive opinions. Approximately 80% answered either “no impact” or “not sure.” The negative-interest-rate policy has not yet fully penetrated into the business sector.
    2. The percentage of respondents with lowered borrowing rates was 23.3%. Many of them are major companies. Before lowering the borrowing rates, companies “received an offer from a financial institution” (57.4%) or “asked for it” (30.4%). Over 30% of the companies negotiated for a borrowing rate reduction.
    3. Implementation of the negative-interest-rate policy triggered new demand for funding (11.1%). The fund usage includes “capital investment” (64.2%), “operating fund” (39.2%) and “business expansion” (23.9%).
    4. While 85.2% of respondents indicated “no change” in the relationship with their banks after implementation of the negative interest rate, some companies “had more business with other banks than their main banking institution” (5.0%) and “began business with new financial institutions” (2.9%)
    5. Some companies took out loans after the negative-interest-rate policy became effective (37.9%). Many of them believe that their “financial soundness” or “overall trading conditions” were considered for the evaluation. Only 11.6% believed that their “business growth potential” was evaluated.

 

 

 

 

 

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2014 National Female President Analysis

May 15, 2015

 

7.4% of All Presidents Are Women

One in 13.5 Companies Has Female President

~ Majority of Female Presidents “Succeeded to Family Business” ~

 

Introduction

One of the KPIs (Key Performance Indicators) listed under the Abe administration’s “Strategy to Rebuild Japan” is putting “Women in 30% of All Leadership Positions by 2020.” The idea is to tap into the women’s power, described as Japan’s greatest hidden potential, to stimulate and grow the economy. “Leadership positions” refer to managers and officers, among others. Needless to say, it is hoped that more women will become “presidents”–leaders at the very top of organizations.

Teikoku Databank extracted the data of total 1,175,505 presidents representing “corporations” and “limited companies” as well as the business data of these companies, from the credit check report database “CCR” and corporate profile database “COSMOS2” effective as of June 30, 2014. The data was tabulated and analyzed by the background of appointment, age and alma mater of the female president and by the business condition and category of the company. This is the first survey of its kind ever conducted by TDB.

 

Findings

1. Female presidents accounted for 7.4% of all presidents, revealing that about one in 13.5 companies had a female president.

2. The majority of female presidents (50.9%) “Succeeded to family business.” Only 34.7% of them were the “Founder” of their own business.

3. Japan University produced the largest number of female presidents totaling 230. Among the women’s universities and women’s junior colleges, Japan Women’s University came in first as the alma mater of 184 female presidents.

Chart 1

 

1. By Background of Appointment to President

  ~ Majority of Female Presidents “Succeeded to Family Business” ~

Looking at the backgrounds of appointment of the female presidents (ratio of each circumstance), the largest percentage, or 50.9%, of female presidents “succeeded to their family business.” Only 34.7%, or around one third, of them were the “Founder” of their own business. Among the male presidents, the “Founder” group was the largest, accounting for 43.1%. This was followed by “Succeeded to family business” (36.6%) and “Promoted internally” (11.5%).

Behind the high percentage of female presidents who “Succeeded to family business” is the gender gap in average life expectancy. According to “2013 Simple Life Table,” announced by the Ministry of Health, Labour and Welfare on July 31, the average life expectancy of women was 86.61 years, 6.40 years longer than 80.21 years of average life expectancy of men. Inevitably, there are an increasing number of cases where the wife succeeds to the business started by her husband.

  

Background id Appointment to President

 

chart 2

 

    

2. By Age of President in Revenue-growing Company

  ~ Clear Revenue Growth Trend of Companies with Male Presidents ~

The percentage of companies experiencing revenue growth in the most recent fiscal year compared to the previous one (companies whose business is stable) was 29.4% (18,463 companies) in the case of businesses with female presidents, and 35.9% (342,017 companies) for businesses with a male presidents. As much as 6.5 percent more companies had a male president instead of a female president.

* Companies whose business results in the most recent fiscal year and the fiscal year before, and whose president’s age, are available as public record.

A breakdown by age revealed that the largest percentage of female presidents (42.8%) and also of male presidents (46.8%), of revenue-growing companies, were in their 30s. In addition, there were more revenue-growing companies with male presidents than those with female presidents in all president’s age groups.

 

table 4

table 5

 

 

3. By Alma Mater of Female President

  ~ Japan Women’s University Tops Other Women’s Universities/Junior Colleges ~

Looking at the alma maters of the female presidents, Japan University produced the largest number of female presidents totaling 230. It was followed by well-known private universities in the Kanto region such as Keio University (206), Waseda University (192) and Aoyama Gakuin University (184). Following the private universities at the top was Ochanomizu Women’s University being the largest producer of female presidents among the national universities (40). Tokyo University, which is considered “the best university,” produced 38 female presidents. In the Kansai region, Doshisha University is home to the largest number of female presidents totaling 127.

Focusing only on the women’s universities and women’s junior colleges, Japan Women’s University came in first as the alma mater of 184 female presidents. It was followed by Kyoritsu Women’s University (123), Sacred Heart Women’s University (99), Kyoto Women’s University (76) and Mukogawa Women’s University (76). Among the women’s junior colleges, Kyoritsu Women’s Junior College produced the most female presidents totaling 70. The fact that Japan Women’s University and Aoyama Gakuin University produced the same number of female presidents reveals that many female presidents come from women’s universities and women’s junior colleges, as well.

 

chart 4 (1)

table (5)

 

 

4. By Business Category

  ~ Beauty Business Boasts Highest Percentage of Female Presidents ~

A look at the percentage of female presidents to all presidents in the industry, by industry category, found that the beauty industry had the highest percentage of 35.1% (1,407 female presidents). The cosmetic retail industry in the second place also had a high percentage exceeding one-third (34.4%, 478 female presidents). It is interesting that the top two industries in this ranking both relate to “beauty.”

The third place went to the welfare service business for the elderly, where 2,039 female presidents accounted for 29.9% of all presidents. Greater promotion of women in this sector than in other industries is understandable as nearly 80% of those who pass the national examination each year and become welfare caretakers (Ministry of Health, Labour and Welfare)–leading positions in aged care–are women.

The housing lease industry in the fifth place consists of so-called incorporated “landlords” who lease apartments and other housing units for business. Many of the 2,270 female presidents registered in this sector “Succeeded to family business.”

 

table 8

 

 

5. Summary

The idea of “Utilizing talented personnel regardless of sex” is by no means denied, but the reality is that oftentimes women are forced to leave the workforce to give birth to and raise children, etc. The bias toward female presidents who “Succeeded to family business” (50.9%) highlights this problem (sufficient environment is not available for women to succeed in companies). As clearly stated in the growth strategy, the government will take the lead in putting in place an environment where women can succeed, such as implementing the “Zero Childcare Waiting List Acceleration Project.” Currently only one in 13.5 companies has a female president. With the progress of these environment improving measures, however, the number of female presidents will likely increase, particularly in those industries where more women work. It is hoped that, with an increase in the number of female presidents, women will play active roles in businesses in the future.

 

 

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Fact-Finding Survey of Japanese Companies in Brazil

August 26, 2014

PDF Full Report

Summary Report in JP

 

There Are 443 Japanese Companies in Brazil

~ Small and Medium-Sized Companies Account for Just One-Third ~

 

 

Introduction:

As a member of BRICs, Brazil has experienced high economic growth over the early years of the second millennium. Besides the 2014 FIFA World Cup™ that kicked off today, Brazil will host the Rio De Janeiro Olympics in 2016. These two major sporting events are expected to bring more economic benefits to the country and spur its further growth.

 

Teikoku Databank has identified/counted Japanese companies operating in Brazil as of the end of April 2014 in the form of investment in a local company, the establishment of a local subsidiary or representative office, etc., based on its “CCR” credit check report file (containing records of 1.6 million companies), public information and other sources.

 

 

Findings (Summary):

 

  1. We found 443 Japanese companies in Brazil. According to an industry breakdown, the largest number of them, or 263 companies, were in “manufacturing,” accounting for approximately 60% (59.4%) of the total. This was followed by “investment” companies (28 companies, or 6.3%), inclusive of holding companies.

 

  1. The analysis of these companies based on annual sales found that more companies had greater annual sales, with 178 companies (40.2%) generating “100 billion yen or more.” Additionally, more than half the companies–247 companies (55.8%)–were listed, including top-ranking companies in the industrial sector. However, small and medium-sized companies accounted for just a third (33.9%) of the total; 150 companies.

 

  1. By prefecture, “Tokyo” was the number-one head-office location for 214 companies (48.3%). Many of the Japanese companies in Brazil are headquartered in metropolitan areas where many listed companies and large companies are concentrated.

 

Brazil 1

 

 1.    By Industry: “Manufacturing” Companies Account for 60%

We found 443 Japanese companies in Brazil. According to an industry breakdown, the largest number of them, or 263 companies were in “manufacturing,” accounting for approximately 60% (59.4%) of the total. This was followed by “wholesale” (61 companies, 13.8%) and “service” (40 companies, 9.0%).

 

A further industry segmentation found that the largest segment of Japanese companies was “investment” (28 companies, 6.3%), a group that includes companies such as Oji Holdings. Other key segments include automobile, electrical and other related segments, where Toyota Motor and Panasonic are two representative companies. Another top-ranking industry is “various product wholesale” (13 companies, 2.9%), a category that includes trading concerns such as Mitsubishi and Itochu.

 

Brazil 2               Brazil 3

 

2.    By Size: Small and Medium-Sized Companies Account for Just One-Third

An analysis of these companies by annual sales found that more companies had larger annual sales, with 178 companies (40.2%) generating “100 billion yen or more.” Additionally, more than half the companies, or 247 companies (55.8%) out of total 443 companies, were listed.

 

However, a breakdown by company size based on the Small and Medium Enterprise Basic Law round that there were only 150 “Small and medium-size companies” accounting for just a third (33.9%) of the total, suggesting a limited penetration of small and medium-sized Japanese companies in Brazil despite the conspicuous presence of top-ranking companies in Japanese industrial rankings.

 

  Brazil 4   Brazil 5   Brazil 6

 

 

3.    By Prefecture: Concentrating in Metropolitan Areas Where There Are Many Listed Companies

When the head-office locations of Japanese companies in Brazil were analyzed by prefecture, “Tokyo” was the number-one head-office location for 214 companies (48.3%). “Osaka” ranks second (47 companies, 10.6%) and “Aichi,” third (41 companies, 9.3%). These are followed by “Kanagawa,” being the home of 26 companies (5.9%), and “Kyoto,” where 19 companies (4.3%) are headquartered.

Generally, the head offices of Japanese companies in Brazil are concentrated in metropolitan areas where listed and large companies are found, as well as in regions where many large manufacturers are headquartered.

 

 Brazil 7

 

 

4.    Summary:

Given the backdrop of such positive factors as having the largest Japanese community in the world (outside Japan), rich natural resources and vibrant agricultural/stock farm industries, Brazil has been a popular destination of Japanese companies since the 1960s. After the initial waves of entrants, however, the economic relationship between Japan and Brazil cooled as Brazil faced the debt crisis and hyper-inflation and Japan saw its economy slow. During this period known as the “two lost decades,” many established and small/medium-sized companies withdrew from Brazil, due partly to the complicated, high local tax system and partly to the geographical distance between Japan and Brazil. The exodus left mostly large Japanese companies there.

 

However, Brazil is an attractive consumer market with a population of approximately 200 million people–the fifth largest in the world–and is a convenient export gateway to MERCOSUR (Southern Common market). As a result, Brazil is still an unmistakably important global hub, despite facing many challenges such as poor infrastructure and an expanding income gap resulting from rapid economic growth. This survey found a limited presence of Japanese companies in the “retail” and “service” industries there, so we hope to see these industries grow to capitalize on the domestic demand in Brazil.

 

 

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