Earthquake Disaster Reconstruction Technical Assistance Forum
The Great East Japan Earthquake which brought unprecedented damages centering on Tohoku-district on March 11, 2011. Since then, the national and local governments have implemented various initiatives for reconstruction. Tokyo Metropolitan Industrial Technology Institute (TIRI), a local independent administrative institution that provides technical assistances to small and medium enterprises, or SMEs, in Tokyo, recognizes that it is inevitable for the industries to regain their energy. Above all, revitalization of SMEs is necessary because they are the basis of industries in Japan.
Since June 2011, TIRI has held Earthquake Disaster Reconstruction Technical Assistance Forums, and we have discussed on "Saving Electricity" "Risk Management" "Radiation Protection" and many other issues with people involved with Monozukuri (manufacturing). On February 2, 2012, we held an Earthquake Disaster Reconstruction Support Forum by joint sponsorship with ShinGinko Tokyo, Limited.
Some 160 participants attended the 5th Forum, and they eagerly listened to the lectures by Yasuo Suzuki, Director of Industrial Technology Institute of Miyagi Prefectural Government; Hirotaka Terai, President of ShinGinko Tokyo; Katsumi Yamamoto, Chief Director of TIRI; and Saburo Kobayashi, a former management planning manager of Honda Motor Co., Ltd. and a Visiting Professor of Chuo Graduate School of Strategic Management.
Below is a summary of each lecture.
(The Editorial Department takes full responsibility for the wording and content of this article.)
TIRI where the forum was held
Yasuo Suzuki, Director of Industrial Technology Institute, Miyagi Prefectural Government.
After the earthquake, we investigated: “What is desired by enterprises in the disaster area?" and "What are their troubles?" Firstly, a problem of "factory reconstruction and construction restrictions." Miyagi Prefectural Government formulated a construction restriction regulation to prevent unregulated developments, which was, however, released in November of last year for problem solving. Secondly, a problem of "facilities/equipment." It's possible for big companies to shift their production sites to factories in other victimless regions, but local SMEs cannot do so.
Particularly enterprises near the coast, where damages were enormous, received severe damages. They have no choice but to move into inland areas, which is a big trend. Thirdly, a problem of "employment." In fact, the jobs-to-applicants ratio is equal to that of bubble economy. However, the ratios are disproportionately high in the fields of security guards, construction workers, construction/civil engineering-related engineers, and pharmacists, while less job opportunity in other occupations, especially in factory engineers.
So we, Industrial Technology Institute, Miyagi Prefectural Government, implement initiatives under the “New Plan” which is a revised version of former “Business Promotion Plan.”
One initiative is providing supports for "grouping enterprises". For example, we achieved a grouping between an enterprise in Kesennuma which took pride in its high share for seats used at otolaryngology departments, and a factory that had received relatively small damage. Other than that, we achieved a grouping of alumite-related companies. Nine companies in Iwanuma area near the Sendai Airport, where they suffered from severe damages, were grouped.
As a basis of the New Plan, we hold a concept of "Reconstruction with no innovation will fade out someday." There is an enterprise, indeed, that achieves not only grouping, but commencing production with new technologies. We’d ask the enterprises in Tokyo to extend their financial aids and/or collaborations to the enterprises in the disaster area.
Terai Hirotaka, President of ShinGinko Tokyo, Limited
ShinGinko, Limited was established to finance mainly small and medium enterprises, or SMEs, in 2005. The bank, however, ate up its capital of \100 billion in 3 years and fell in the management state in which a public fund of \40 billion had to be poured. In 2009 I assumed the president of the bank under such conditions. Today I'd like to talk about various initiatives how our bank could recover to profitable operations.
We verified the reasons why we had failed thoroughly. First, there was a failure in risk management, which caused a bad debt of \50 billion in 3 years. This was because we piled up debts by running a scoring model which judged the propriety of financing just with entering corporate data. Next, we had a structure with higher costs. Without fixing any business models, we had the scale of 10 stores and 750 bank clerks.
It was a supreme proposition in 2008 and onward never to repeat these failures. Sales people of financial institutions with clients of SMEs tended to meet frequently presidents and grasp each enterprise status through face-to-face contacts. So I initiated a new accounting system, not depending on the scoring model, but on traditional examination method. Risk management could also be improved fairly by holding monitoring meetings by executive officers every month. We carried out every cost management without any exception. Only one outlet was left, the main office, and bank clerks were reduced to 180 plus. Extra expenses for office supplies and equipment were excluded thoroughly, too.
We posted a deficit of \10.6 billion still in 2008, however, we turned to positive in 2009. In 2010 and 2011, we posted positive net incomes of \1.3 billion and \1.1 billion, respectively. And in the first half of 2012 the net income was \100 million. Now our bank can stand by ourselves, however, we’re still in a critical status. We'd like to pay full attentions to risk and cost managements from now on and be useful to every SME client as much as possible.
Katsumi Yamamoto, Manager of Management Planning Department of a local independent administrative agency, Tokyo Metropolitan Industrial Technology Institute
I'll introduce about the reconstruction aid initiatives on which TIRI has worked since March 11. Firstly we decided to reduce fees for using TIRI facilities by 50 % for SMEs in Tokyo and enterprises in the earthquake disaster area which suffered from the disaster. In parallel, we planned 5 times of Earthquake Disaster Reconstruction Technical Assistance Forums to deliver proper information on electricity/energy savings and radiation. Today is the 5th Forum.
We offer a support for visualization of electric power and advices on energy saving for free in terms of technical supports. "Visualization of electric power" is to achieve energy saving through illuminance measurements of lighting apparatus, electric power measurements, and maintaining necessary illuminance, but not through saving electricity at random.
At factories you measure electric power consumption of each apparatus first, and you can achieve energy saving by putting a priority.
Radioactivity pollution is an issue of great interest, in addition to the electricity saving issue. TIRI conducts radiation dose measurement tests of industrial goods, and SMEs in Tokyo can utilize the service by free, or enterprises in the disaster area at half price of fee. 60% of requests so far were for export goods, and we therefore issue result certificates translated in English.
Since March last year, we have conducted radioactivity checks of agriculture and livestock products based on requests from Tokyo Metropolitan Government. In the disaster area, we conducted radiation dose measurement tests in Fukushima Prefecture, and energy conservation measurements for factories and others in Iwate Prefecture and Miyagi Prefecture.
Lastly, I’d like to mention “future” reconstruction assistances. First of all, we will hold Earthquake Disaster Reconstruction Technical Assistance Forum in the next fiscal year. In the disaster area, we will conduct property measurements for noise barrier performance of temporary housing, which we will use to enhance our knowledge on future sound businesses.
Saburo Koyayashi, a former management planning manager of Honda Motor Co., Ltd. and a Visiting Professor of Chuo Graduate School of Strategic Management
After the earthquake disaster, many people have talked about risk countermeasures. Without any innovations any organization cannot sustain well. I worked for Honda R&D Co., Ltd. over 30 years and got to know how important "operations" and "innovations" are for organizations. Operations are the tasks pursuing answers logically, while innovations are the tasks finding unique and essential stuff. Interestingly we cannot carry out operations without knowledge on business administration, while the knowledge annoys achieving innovations. If you are above 40 years old, please ask younger people “What are essential properties,” but not implementing innovations by yourself.
Essential properties and concepts are pursued all the time at sites of innovations of Honda Motor Co., Ltd. The essential purpose of an enterprise is to create new values. “Research institutes are not for researching technologies. Technologies are means to create new values,” Soichiro Honda, the founder of Honda Motor kept saying. By the way, can you describe the purpose of your company in a word? What you cannot explain so that anyone can understand it easily, you cannot digest it in yourself. I recommend you to train your ability to think repeatedly so that you can express your own purpose of living, on top of your company’s purpose and philosophy.
Concepts are essential properties of stuff grasped by unique viewpoints. To refine concepts we have no choice but to see a lot of sites. One example should be the Sugamojizou-Dori Shopping Center, which is called as Harajuku for Obachans, or Grannies. Or the housemaid cafes which became a social phenomenon. I went to the both places. After having accumulated high quality live experiences, please exchange essential debates with aliens. And you make challenges without fearing failures.
In 16 years, I continued researches against many opposite opinions, which led to the commercialization of Japan’s first air bag product. I think it's important, above all, to have rigid essential properties and concepts to achieve innovations.
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institution, Tokyo Metropolitan Industrial Technology Institute (TIRI)
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