MITI and the Japanese miracle

Page 157

Five

From the Ministry of Munitions to MITI

As Japan entered the Pacific War, the Ministry of Commerce and Industry could look back on a decade of considerable accomplishment in terms of planned industrial expansion. Between 1930 and 1940 Japan's mining and manufacturing production had more than doubled, and, equally important, the composition of manufacturing had changed drastically from light industries (primarily textiles) to heavy industries (metals, machines, and chemicals). In 1930 heavy industries accounted for approximately 35 percent of all manufacturing, but by 1940 this proportion had grown to 63 percent. Another way to visualize this shift of industrial structure is to look at the top ten companies in terms of their capital assets in 1929 and 1940 (see Table 10). Whereas at the end of the 1920's three of Japan's ten largest enterprises were textile companies, a decade later only one was. Interestingly enough, the top ten of 1940 bear a much greater resemblance to the top ten of 1972 than they do to the top ten of 1929 (Japan Steel, Mitsubishi Heavy Industries, Hitachi, and Toshiba * were ranked first, second, fourth, and eighth respectively in both 1940 and 1972, whereas only Mitsubishi was even on the list in 1929).

Not much further expansion of total output occurred during the Pacific War, but the shift from textiles and food products to mining, nonferrous metals, and machines continued and accelerated. The war caused a change of industrial structure almost as profound as Japan's original industrialization, and it decimated Japan's medium and smaller enterprises as well as its previously dominant textile industry. The immediate cause of this shift was the enterprise readjustment (kigyo* seibi) movement, a set of government policies that came to be