On Track For Steady Recovery

Japan continues to demonstrate economic resilience.

Japan’s economy is poised for continued moderate recovery, fueled by increasing private consumption, favorable financial conditions and the government’s economic measures. Despite global economic challenges in 2023, exports and industrial production have remained relatively stable due to a reduction in supply-side constraints. Corporate profits have remained high, reflecting an overall improvement in business sentiment. Japan’s stock market made historic gains in 2023.

The tourism sector in Japan has been a standout performer, demonstrating steady growth in 2023. The country welcomed around 22.3 million visitors from January to November 2023, according to Japan National Tourism Organization. The boost in tourist arrivals was supported by a resumption in international flights to 80% of pre-pandemic levels, as demand from Southeast Asia, North America, Europe and Australia grew.

Looking into 2024, Japan’s economy is expected to sustain growth, primarily driven by robust domestic demand. The yen, having weakened in 2023, may strengthen against the US dollar if the Bank of Japan rapidly normalizes its monetary policy, according to financial services group Nomura. Promising sectors include semiconductor production equipment exports, benefiting from the bottoming of the inventory cycle and peaking U.S. interest rates. Domestically, growth opportunities are evident in sectors such as systems and applications, real estate and food, says Nomura.

While the positive trajectory is encouraging, the Japanese economy faces headwinds from the slowdown in foreign economies, global monetary tightening and concerns about the Chinese economy. Additionally, geopolitical tensions and market volatility continue to be downside risks.

In navigating uncertainties, corporate leaders are adopting innovative strategies to sustain growth. Akihiro Teramachi, Chairman and CEO of THK, emphasizes the importance of flexibility and having the right mindset in capitalizing on business opportunities amid the ongoing wave of change. THK’s approach involves integrating hardware and digital technologies into manufacturing processes and end-products, particularly for the automotive, robotics, semiconductor and electronic component sectors. The company’s linear motion components, for example, can be incorporated into electric cars, making them energy-saving, energy-efficient, compact and powerful. Such solutions could have a substantial impact on the growth of Japan’s automotive industry.

Beyond profits, businesses are recognizing the significance of corporate social responsibility. Soy sauce maker Kikkoman, with a history spanning over 300 years, is committed to being a good corporate citizen. Honorary CEO and Chairman of the Board Yuzaburo Mogi highlights the company’s dedication to working with local communities for the long term. Kikkoman has pledged a total of US$5 million to the University of Wisconsin to advance research into sustainable crop cultivation and the environmental conditions of the Great Lakes water system.

Seiko Epson is also making headway in realizing its Environmental Vision 2050, staying true to the spirit of its founders in protecting the local environment. The company aims to become carbon negative and eliminate the use of non-renewable underground resources such as petroleum and metal ores by 2050. As a global printing leader, Epson came up with the Dry Fiber Technology, a paper recycling process that preserves water and wood resources and reduces carbon dioxide. Epson’s long-standing dedication to efficient, compact and precise innovation is ingrained in its DNA, reflecting both technological prowess and a strong commitment to reducing environmental impact.

In the face of global challenges, Japan’s economy remains resilient, fortified by the dynamism of its corporations and a sustained commitment to innovation.

Kikkoman’s Enduring Legacy

With his upright stance and his trademark double-breasted pinstripe suit, Yuzaburo Mogi, Honorary CEO and Chairman of the Board of Kikkoman Corporation exudes the confidence of a successful corporate warrior. He has fought long and hard to bring soy sauce to dinner tables around the world but shows no signs of slowing down. He is a work-in-progress.

Mogi leveraged his 1961 MBA from Columbia University—the first earned by a Japanese—to play a pivotal role in Kikkoman’s overseas expansion, including the launch of shipments from Kikkoman’s pioneering U.S. plant in 1973. Today, Kikkoman operates eight overseas soy sauce production plants, selling the popular condiment in over 100 countries.

But while other 80-odd-year-olds may be content to sit on their laurels, Mogi wants to make companies more socially responsible, nudge corporate leaders to take on more calculated risk and bring the people of the world together to enjoy soy sauce.

Social Responsibility and Sustainability

The Kikkoman tradition of working closely with society can be traced back to its origins over 300 years ago, and the commitment to maintaining socially and environmentally friendly relationships was formalized as a basic management principle in 1928.

“Companies cannot just pursue profits,” Mogi says. “They must contribute to society.”

Kikkoman selected Walworth, Wisconsin to set up its production facility in the early 1970s—the first U.S.-based food production plant run by a Japanese company—based on its access to high-quality water, soybeans, wheat and the presence of a diligent local workforce.

“We are committed to doing our utmost to ensure these resources are used responsibly and sustainably,” Mogi said during a ceremony marking the 50th anniversary of the soy sauce plant in June 2023.

Mogi also announced that Kikkoman would donate a total of US$5 million to the University of Wisconsin to fund environmental research.

“This is based on the principle that Kikkoman, having deeply engaged with nature and continuously grown with local communities, should invest in the future of those communities. Kikkoman will continue to be a good corporate citizen and work together with the local communities for the long term,” he said.

The company pledged US$3 million to the University of Wisconsin-Madison College of Agriculture and Life Sciences to aid research into sustainable crop cultivation, including soybeans and wheat.

A further US$2 million was awarded to the School of Fresh Water Sciences at University of Wisconsin-Milwaukee for the construction of a research vessel to advance studies on the environmental conditions of the Great Lakes water system.

“Companies cannot just pursue profits. They must contribute to society. We have been putting this idea into practice for over 100 years since the 1917 establishment of the company that became the modern-day Kikkoman.”

Take on More Calculated Risk

The entrepreneurial spirit that led Kikkoman’s overseas expansion is not as strong in present day Japan. During the period of asset-inflation in the mid-1980s to the early 1990s, known as Japan’s “bubble economy,” several Japanese companies made unwise investments that later collapsed.

Some companies have never recovered, and Mogi laments that this has led to an insular stance among some firms. “Japan hasn’t seen real growth since the collapse of ‘the bubble’ because managers will no longer take on risk. They remain afraid in the wake of a series of unwise investments. There is now a tendency to avoid taking on risk, and this has impeded corporate growth,” he says.

Mogi urges younger Japanese managers to be bold and plan a way forward for their companies, while avoiding the mistakes of the past. “Managers should have a clear outlook and actively invest in the future based on a calculated risk, without engaging in speculative ventures. They need to make proper forecasts, come up with growth strategies that match those forecasts and manage their businesses wisely,” he says.

Yuzaburo Mogi
Honorary CEO and Chairman of the Board of Kikkoman Corporation
Yuzaburo Mogi is a descendant of one of the founding families of Kikkoman, which is among the oldest continually running businesses in Japan. Mogi was the first Japanese student to receive an MBA from Columbia University.

The Exchange of Food Culture

Perhaps in his most ambitious move, Mogi wants to promote the international exchange of food culture through soy sauce.

“In Japan we have the saying, ‘Onaji kama no meshi wo kuu.’ The literal meaning is ‘to eat from the same pot,’ but the implication is that if we share the same food, we can all get along,” Mogi says.

It is no exaggeration to say that Mogi has spent his life preparing the table for the people of the world to enjoy Kikkoman soy sauce, and remains a work-in-progress while steering his company into the future.

Navigating Uncertainty And Sustaining Growth In A Rapidly Changing World

THK is opening new frontiers and expanding its global reach as it strides toward a sustainable future.In a world rife with geopolitical risks, inflation and uncertainty, businesses must adopt innovative strategies to thrive. Akihiro Teramachi, Chairman and CEO of THK, a global leader in manufacturing, shares his insights into how the company perceives and creates value-driven narratives amidst these challenges. THK aims to meet its management goals by 2026, achieving consolidated revenue of JPY500 billion (US$3.3 billion), operating profit of JPY100 billion (US$662.2 million), return on equity (ROE) of 17% and earnings per share (EPS) of JPY590 (US$3.9).

Wave of Opportunity

“We are in the midst of a big wave, and there are many business opportunities for us,” Teramachi says. “It is important to be flexible in adapting to changes and to have the right mindset.” THK’s approach involves integrating its hardware and digital technologies into manufacturing processes and end-products. This includes the creation of a “manufacturing service” that utilizes digital technologies to visualize products. The company’s OMNIedge, an Internet of Things (IoT) service, collects data from sensors attached to machine parts, digitizes it and transmits the data through a secure network to make distributed manufacturing—or Manufacturing-as-a- Service—practical. “This approach is crucial for the stable operation of facilities in a digitalized society,” Teramachi says. “Our Omni THK service leverages remote operations and digital transformation to streamline information sharing and enhance operational efficiency.”

THK’s next-generation robots and linear-related products aligned with IoT will also ride the wave. Teramachi predicts a future where each person will need a robot. These robots will be more versatile, bridging the gap between single-task devices and the multitasking requirements of modern life. THK’s role in this evolution extends beyond automotive and robotic applications to supporting semiconductor and electronic component manufacturing. “The semiconductor industry’s demand is on the rise and is expected to grow significantly, driven by emerging technologies such as big data and digital currencies,” Teramachi says.

“We are in the midst of a big wave, and there are many business opportunities for us.”

Bringing Linear Motion to Mobility

The revolutionary synergy of AI, ICT and robotics has ushered in a digital society where hardware products closely tied to digital cars, such as THK’s linear motion components, come to the forefront. “Our linear motion products will be incorporated into these vehicles, making them energy-saving, energy-efficient, compact and powerful,” Teramachi says.

The company developed its own prototype electric car for demonstration purposes that incorporates innovations that contribute to energy conservation, such as a variable flux in-wheel motor, active suspension, MR fluid active damper tube, electric brakes, non-contact power supply systems and user-friendly features like a stealth seat sliding mechanism. “With the automotive industry aiming to double its size by 2030, it’s evident that such solutions could have a substantial impact,” Teramachi adds.

Local Procurement for Global Expansion

THK is further driving change through its strategy of expanding globally based on local procurement. Manufacturing products in proximity to where they are needed allows the company to eliminate lengthy shipping times and the accompanying environmental costs, providing its products on a block-by-block or regional basis.

Akihiro Teramachi
Chairman and CEO, THK
Akihiro Teramachi graduated from Keio University in 1974 and joined THK Co., Ltd. in 1975. He became a Director in 1982, Vice President in 1994, President in 1997 and Chairman in 2024.

The standardization of quality control is critical as automation takes center stage. To achieve this, THK is leveraging digital technology to facilitate technology sharing.  It is also bolstering automation, not confined solely to the company’s operations but expanding across new sectors. “In this landscape, the importance of quality becomes paramount,” says Teramachi. THK’s OMNIedge predictive maintenance service is creating value while also reducing energy consumption, minimizing wasteful materials and components, and fostering the company’s Green Transformation (GX).

Internally, THK is digitalizing to drive transformation that involves narrowing down human tasks, emphasizing digital-centric manufacturing, and advancing human resource development in a way that is anticipated not only to impact the company but also to bring about substantial societal changes.

As manufacturing continues to evolve and intersect with a digital world, Teramachi and THK are not only navigating challenges; they are spearheading the transformation toward a more sustainable, interconnected and dynamic future. The company’s commitment to manufacturing excellence, production in local regions, Manufacturing-as-a-Service, sustainability, and innovative service models position THK as a leader in the ever-changing landscape of global business.


Epson’s Path To Community Enrichment And Sustainability Through Efficient, Compact And Precise Innovation

The company is making clear progress in realizing its Environmental Vision 2050.

Seiko Epson (“Epson“) formulated its environmental management plan Environmental Vision 2050 in 2008. In 2021, the company revised the plan and announced its goals of becoming carbon negative and eliminating the use of non-renewable underground resources like petroleum or metal ores by 2050. Then, in 2023, it succeeded in converting all its worldwide operations to 100% renewable electricity. Epson was also the first Japanese manufacturer in the RE100 initiative to achieve zero CO2 emissions from energy sources. These successes are impressive, but how did the global printing leader achieve them?

One way was focusing on local characteristics. “We optimized our plans to adopt renewable electricity according to local conditions. For example, in Indonesia, we use biomass generators powered by waste from ethically sourced palm oil, while in the Philippines, we generate our own electricity using mega-solar plants,” says Epson’s Global President Yasunori Ogawa.

Although these mark only a few steps on the long path to the goals set out in Environmental Vision 2050, Epson remains committed to success and to maintaining the spirit of its founders and protecting the local environment.

Why a Global Company Keeps its Head Office Near Lake Suwa

The United Nations Environment Programme released a pessimistic analysis report on progress toward achieving the Paris Agreement environmental goals in the run-up to COP28, showing that the barriers to reducing greenhouse gas emissions remain high. Epson, though, has become one of Japan’s leading companies in addressing climate issues by facing and overcoming those barriers. What is the driving force behind this activity? To answer, we need to look back some 80 years.

Epson was founded in 1942 on the shores of Lake Suwa in Nagano Prefecture, and even as it has grown to be the global company it is today, its culture is still rooted in the Nagano countryside. The region’s history and culture of living in harmony with its natural surroundings continues to this day. Founder Hisao Yamazaki’s convictions that “We must never contaminate Lake Suwa” and “We must become a factory that the community will accept” have fostered a spirit of coexistence with the local community that Ogawa feels has been passed down in Epson’s DNA to this day.

“When the CFC (chlorofluorocarbon) greenhouse gas issue arose in the 1980s, Epson became the first company in the world to pledge to go CFC-free and made it its mission to see to their elimination, rather than just reduction,” Ogawa explains. “We achieved CFC-free technology in 1993 and succeeded in eliminating designated CFCs from cleaning processes. We made that technology public and helped eliminate CFCs for business partners and unrelated companies alike. This is a clear example of communicating the founders’ spirit to future generations.”

He goes on, “Epson’s long-standing dedication to efficient, compact and precise innovation is at the heart of the technology and the spirit that lead to the reduction of environmental impact. Constant pursuit of these ideals has been an advantage for Epson in contributing to the environment without forcing a change in direction.”

Epson has built a unique corporate culture of developing new directions for the efficient, compact and precise technologies cultivated from its days creating high-precision watches. It has gone on to apply those technological developments to a diverse range of products. For example, robots first built to assemble wristwatches went on to become today’s lineup of industrial robots, and the LCD panels originally created for digital watches provided the basic technology for 3 LCD projectors. However, Epson’s approach to closing the resource loop as expressed in Environmental Vision 2050 required a different perspective on developing environmental technologies.

Toward a Future of Reusable Office Paper

As a global printing leader, Epson cannot overlook the issue of recycling printer paper. Paper recycling generally uses a great deal of energy, and that in turn contributes to CO2 emissions. Disposing of confidential documents can also be quite costly and risky.

“Epson’s pursuit of ‘efficient, compact and precise’ is in its DNA and brings both technology and a strong desire to reduce environmental impact.”

Seeing this as a social issue to which its own products have contributed, the company undertook original research and development towards finding a solution. The result is Dry Fiber Technology. This technique uses mechanical force to reduce paper into fibers and then processes these into new paper. PaperLab, Epson’s dry process office papermaking system, recycles wastepaper into new paper using hardly any water, right inside the office, meaning there is less water needed, as well as reduced impact through transporting waste. The on-premises processing and extra-fine fibers also help information security.

“Dry Fiber Technology is not only a form of paper recycling. It can also fibrate clothing and wood fragments, so it offers the opportunity to turn waste material into products with new value,“ says Ogawa.

Part of the challenge of becoming underground resource free will require transitioning from resources that are mining- or petroleum-based to above-ground sources. Group company Epson Atmix began building a new refinery in October 2023 that will produce raw metal powder material from metal waste rather than depend on mining underground resources, with plans to start operating in 2025. This marks a bold new step on Epson’s path to becoming underground resource free.

Epson has also worked on mitigating environmental impact at customer locations by shifting their products from laser printing to inkjet, which brings a major reduction in energy use and waste production in a direct contribution to more sustainable office work.

One new field for Epson that leverages its advantage in novel ways is textile printing. The industry remains highly analog, with printing often done using etched metal plates and a complex process of mixing ink and various chemicals for single batches.

“Analog printing requires a printing plate, which becomes waste after printing is done. On the other hand, with inkjets the process is simpler and there is hardly anything to throw away,“ explains Ogawa.

Yasunori Ogawa
Epson’s Global President
Ogawa joined Seiko Epson in 1988 after finishing a degree at the Graduate School of Engineering at Tohoku University. He worked on Epson’s first business projector as an engineer. He assumed his current role as President and Representative Director in 2020.

Digitalizing the process and using inkjet printing reduces more than the physical waste of those plates and leftover mixed inks: it reduces the labor involved in their preparation and printing time as well. At the same time, by printing only to meet real demand, it helps reduce the waste of unnecessary print samples and unsold stock disposal.

This extends beyond the fashion industry to other fields, bringing color and beauty to daily life. Adopting digital printing on demand for advertising, wallpaper production and architectural uses can bring the advantages of flexibility and sustainability to a diverse customer base.

Ogawa feels that on-demand printing— printing only what is needed, when it is needed—can then help contribute to a more aesthetically enriched society through its beautiful expressive power.

Epson is making clear progress in realizing its environmental vision for 2050, while adding color to our lives, recycling precious resources, preserving the environment and creating new value through its diverse range of efficient, compact and
precise technologies.


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