Japanese companies are building and enlarging their factories in Japan, and companies that had moved operations overseas are returning. According to a recent survey 120 Japanese manufacturing firms by the Nihon Keizai Shimbun, close to 60 percent have plans to build new plants in Japan. It makes you envious, and you also worry about how that compares to Korea, where there has not been any real progress in investment. Improved Japanese competitiveness inevitably means a relative decline in ours.
The Japanese national government, local governments, and companies are each playing a role in the return of investment. The national government is supporting investment with new legislation on "structural reform," and local governments are vying to have companies come and build their factories with various incentive plans. Companies are changing how they think, and are taking the approach that they can make up for the difference in pay between Japanese and overseas workers by increasing productivity and make higher value-added products.
How about Korea? Companies blame the slow pace of facilities investment on regulations and the government says it is because companies are not finding new places to invest their money. Then there is how the politicians fight over everything, beginning with the same old redbaiting, which leads to uncertainties about the investment climate.
Time must not be wasted on the blame game and infighting. The government needs to stop assuming that companies are grumbling and give another detailed look at what it is that is keeping them from building factories, then quickly fix whatever problems there are. They complain that it takes 4 to 5 years to build industrial complexes, that it takes 500 approval stamps to get things done, and that public servants have to work in private companies to get a sense of what the regulations are like. Companies, in turn, will not benefit by blaming inactivity in the area of investment on regulations that are necessary for social and economic reasons. All too often they say they are going to move operations overseas, but they need to take note of what Japanese companies are up to.
The Hankyoreh, 24 October 2005.
[Translations by Seoul Selection]
[Editorial] Japanese Companies Building Plants at Home |
