Saturday, February 14, 2009

Small-Scale Manufacturing - The Japanese Example, And A Few Last Comments

The issues now being faced by the members of our modern society are so serious that a proper discussion of these issues must include a healthy discussion of practical answers to practical problems. Mere theorizing or philosophizing won't do – although it certainly is entertaining sometimes. The search for practical examples has led me to study case histories of the use of small-scale manufacturing in various countries. Japan is one such country, and it was the subject of a report titled, The Japanese Experience In Technology, authored by Takeshi Hayashi of the United Nations University, and published in 1990. (The entire report can be found here:

The Japanese Experience report shares a motivation and point of view typical of many reports written over the years on appropriate technology and small-scale industry deployment in the developing world. That point of view is the study of appropriate technology and small-scale industry in helping Third World nations achieve a higher level of “development,” i.e., similarity to modern First World society. In other words, the goal of such studies is to help devise strategies for “modernizing” these nations. Thus the citizens of these nations are judged according to how receptive they are to complex First World technology, how adaptible their indigenous small-scale technologies are to First World economic goals, and the ability of small-scale manufacturers in these countries to participate in and compete in a modern, interconnected, global economy. This First World bias is also seen in the way these studies judge indigenous small-scale enterprise according to the First World criterion of “efficiency” – maximum production with maximum profits and minimum cost per unit of production.

It is all but certain that we in the First World are facing a future of economic contraction, of simplification, of a return to a lower standard of living, due to economic collapse, resource shortages and environmental degradation. The studies mentioned above regarding small-scale industry might not therefore seem obviously useful in showing members of an advanced society the strategies and paths for preparing for the future we now face. Yet by reading between the lines and looking at the data in some unexpected ways, we can learn much.

First, the good news: According to the Japanese Experience report, small-scale industries assumed an increasingly prominent role in Japanese gross domestic product after the oil shocks of the 1970's. These oil shocks, along with increasing competition between producers, drove a number of large-scale factories out of business, and “...transformed the mass production system into a system producing high-quality goods in small quantities to meet market needs and to diversify risks.” Secondly, Japanese small-scale factories (with 20 or fewer workers) accounted for 87.3 percent of all Japanese factories in 1980. They employed 20.1 percent of all workers and contributed 12.6 percent of the total national output. Factories with fewer than 100 workers made up 98 percent of all Japanese factories, and employed 58 percent of all workers.

Small-scale industries in Japan also rapidly adopted modern urban industrial technology, aiding their competitiveness in international markets. Workers who mastered key components of an industrial process employed by a large manufacturer were in many cases able to go into business for themselves as subcontractors to their former employers, providing the materials or semi-finished goods produced by the process component they mastered. As the technical understanding of these workers increased and they were able to afford more complex technology, so the range of parts and base components that they could offer to larger manufacturers also increased.

In short, Japan had a long tradition of traditional, small-scale craft industry, which became the small-scale industrial foundation of Japan's 20th Century modernization. Japanese small-scale manufacturing has been proven to be a most fitting means of providing desired goods to customers without overproduction and waste – a very important characteristic in an era like the one we are now facing, an era of scarce resources and high costs. Moreover, Japan retained its small-scale manufacturing tradition and culture until 1990 at the very least.

But now for the not-so-good news. Japan's culture of small-scale manufacturing has not been immune to the effects of globalism. The removal of trade barriers and the global spread of neoliberal economics has meant the outsourcing and shrinkage of Japan's manufacturing base. In much the same way that cities like Detroit are typical of American deindustrialization, Japanese cities that were manufacturing powerhouses are now shrinking, as noted in a paper titled, “City Shrinkage Issues In Japan” by Yasuyuki Fujii. (Source: And according to the 2009 online edition of the CIA World Factbook, only 27.9 percent of Japan's labor force works in industry at present.

Japan is thus losing a key component of self-sufficiency. As with other First World nations, the largest sector of the labor force is now the service sector. As the global economy continues to collapse, the value of the “service industry” will diminish in a very obvious way, and the demand for necessary, useful, “made-at-home” physical goods will rebound. Hopefully, the Japanese will have retained enough knowledge of their small-scale craft-industry tradition to revive that tradition when it becomes needed again.

And now for a few last comments on small-scale manufacturing and appropriate technology. I think it's fairly obvious to most people by now that the First World is facing a drastic change of lifestyle due to economic shrinkage and resource depletion. It's also becoming obvious to many that we can't “fix” the global economy so that it starts growing again, nor can we invent some technological fix that will enable us to enjoy lifestyles of continually increasing consumption. Small-scale industry and appropriate technology should be viewed as aids in adapting gracefully to a poorer future, and not as a means of escaping that future.

But there has been a great deal of talk in the blogosphere lately concerning the miniaturization of complex industrial processes. In an earlier post I mentioned the Fab@Home wiki (, a site dedicated to development of desktop-sized computer-aided manufacturing devices (“fabs”) that can “print” 3-dimensional objects. These devices can be built from scratch for as little as $300, and there are those who say that such devices can be set up to reproduce themselves – even down to the level of reproducing the computer circuitry (CPU) that guides the workings of a fab. Alternatively, there are those (like this source: who predict the development of desktop-sized semiconductor foundries as early as 2010. This is important, because of the major role that microelectronics plays in everyday life in our society. Those who talk of these things speak excitedly of how such devices will allow communities in First World cities to become resilient and self-reliant once again by manufacturing their own goods, and how this will aid us in our quest for an ever-rising standard of living, even as we face issues like declining resources.

I have a different view. I see an upcoming limit to human advancement in microelectronics, a limit dictated by declining energy supplies. For while it is true that final fabrication of highly complex, miniature integrated circuits can be shrunk to a process that fits on a desktop, it is also true that producing the blank silicon wafers that are the feedstock of such a fabrication still requires enormous amounts of energy. Silicon is derived from sand, which is silicon dioxide. The silicon and oxygen atoms in silicon dioxide are held together by very energetic bonds which require a lot of energy to break if one wants to obtain pure silicon. The first step therefore is to melt sand by heating to a temperature of over 3000 degrees F in the presence of carbon. Then the resulting silicon is refined further. Among the processes for this second-stage refining is the Siemens process, which requires heating silicon to a temperature of 2102 degrees F, although newer processes have been invented which run at lower temperature. Still, the refining of electronics-grade silicon is very energy-intensive.

If ready availability of complex microelectronic devices is an indicator of a society's level of technological advancement, I see a time in which our advancement will go into reverse. For as fossil-fuel availability declines, so will the energy available for manufacture of energy-intensive products such as ultrapure silicon. This means a decline of availability of devices that are controlled by complex microelectronics, such as...desktop fabs. Either such devices will become increasingly unavailable to the general public as time passes, or they will become rapidly more expensive, or both. A time may come in which only a select few have access to the latest and greatest computerized manufacturing technology. Those of us without access to the most advanced microelectronics will be forced to rely on our wits and our skills to make things of value.

But this is just my “two cents.” If any readers have alternative insights or arguments, feel free to comment.


Kiashu said...

Going from your previous post, you've already had a look at the open source farm. They're all into small-scale open-source manufacturing, and it's something that can be done in villages around the world - or that's what they're working towards, anyway.

Now, this is not going to lead to villages making their own desktop PCs. But they can make their own bricks and tractors. They'll still need raw materials (iron, clay, etc), but if the Soviet experience is anything to go by, in the event of a collapse of the systems supporting us, lots of stuff ends up being recycled anyway.

Should there be no collapse, then this sort of thing just won't happen. As we've seen with things like local currencies, the central authority does its best to get in the way of this sort of bottom-up approach. But "collapse" is a big word with a lot of shades to it.

We can think for example of the Depression - people wanted to work, they wanted to buy things, but the traditional economy just couldn't bring together supply and demand, it'd broken down. There were quite a lot of grassroots things happening to keep production going despite the incompetence of traditional capitalists. So I can imagine something similar again.

Elisha Brewster said...

Helpful blog! Thanks for this article about Japanese manufacturing companies.