Industrial subcontracting and structure in Japan: evolution and recent trends

Abstract

Purpose – This paper aims to trace the evolution of industrial subcontracting in Japan, over a period of time. Subsequently, the transition in the spread and depth of subcontracting along with relative performance of small and medium enterprises (SMEs) in Japanese industry over a period of time are to be analyzed.Design/methodology/approach – First, a historical over view of the evolution of industrial subcontracting in Japan is discussed based on literature and discussion with experts. Secondly, based on secondary data, the industry‐wise trends of subcontracting and performance of small, medium and large enterprises are analyzed.Findings – Japanese industrial subcontracting and structure evolved over the period, particularly after World War II, represents integration and mutual coordination among small, medium and large enterprises across industries. Along with the growth of multi‐layered subcontracting, labour productivities of SMEs have improved as that of large though value added/value of output has r...