But perhaps the most outstanding example of the beyond-Tokyo phenomenon can be seen in Shizuoka Prefecture. In this century alone, Shizuoka has produced a prodigious number of remarkable companies. Among the local heroes of this relatively quiet region are motorcycle-and automakers Honda, Suzuki, and Toyota; musical-instrument manufacturers Yamaha and Kawai; and Hamamatsu Photonics, Japan's top optical-electronics company.
Shizuoka's strengths lie largely in its location, which made it a natural conduit for ideas and products flowing between Osaka and Tokyo. More recently it has been helped by the enormous inflation in land values in both those major centers, particularly in Tokyo -- where land prices, the world's highest, are as much as seven times those in Shizuoka. In addition, the area -- home to Mount Fuji and many of Japan's most scenic settings -- seems more hospitable to the traditional Japanese values of hard work and craftsmanship than does bureaucracy-dominated, Westernized Tokyo. In Shizuoka it is easy to find entrepreneurialism and innovation quite unlike the fast-growth, venture capital backed superstars across the Pacific. Here most companies tend to be older, family-owned operations whose pattern of development reflects a slow but steady evolution toward higher-value-added products.
Take, for instance, Suzuki Sogyo Co., a growing technology company located in Shizuoka. Like many Japanese companies, Suzuki's origins lie in the wreckage of World War II. Company founder Tamotsu Suzuki, an army captain trained at the elite Japanese military training academy, returned from war nearly penniless, his training without obvious commercial value.
But Suzuki's military background provided intangible advantages, including a penchant for organization. His background also earned him the widespread respect of his neighbors. Using his connections and good credit, he was able to procure rubber boots to sell along the bombed streets of the town. Later he branched out into other areas involving rubber and plastic, even developing a system for washing and canning the area's renowned orange crop.
"He took his skills from the military," recalls his son and the company president, Tsuyoshi Suzuki. "At the bottom line, whether it's the army or business, it's all leadership, management, and strategy. In the army, you didn't organize like a battleship with centralized command, but depended on separate and decentralized organizations going after different goals."
As a largely self-financed family-business operator, the elder Suzuki carefully avoided direct confrontation with larger, well-heeled competitors -- instead he seized opportunistically on promising market niches. The yawning lack of storage facilities in bombed-out Japan, for instance, prompted him to move into the business of building canvas warehouses, which were half as expensive as and much more quickly built than conventional structures.
But by the mid-1960s the company faced growing competition from larger companies crowding the field. So while maintaining a division devoted to the canvas business -- which still accounts for roughly one-quarter of company sales -- the Suzukis shifted their attention toward other, more defensible niches. Most promising to them, the younger Suzuki remembers, were fields in which patents could provide some protection from the depredations of larger companies.
So the company set out to develop a series of small, dedicated units, each concentrating on new and promising technologies. But rather than try to beat the larger companies at manufacturing, the company sought to develop unique products, secure patent protection and customers, and then approach larger companies and universities as partners and licensees.
"I save myself by originality, by a patent strategy, because that's all a small company can do," says Suzuki, 41. "We take advantage of the big companies, instead of their using us. We can use their money while we offer them the technology we already have. And we are careful not to try competing with them at mass production."
Suzuki's approach rests on a basic assumption of the new Japan Inc.: that smaller, tightly focused teams can outdesign, outinvent and outpace larger organizations in bringing new products to market. Critical to his own success, he believes, has been his company's decentralized structure -- which divides the business's 150 employees into five separate units, each with broad autonomy to identify promising niches and market its own products.
Similarly, Suzuki also offers considerable freedom to his 20-member R&D staff. This has been particularly important in the case of a single technologist, Motoyasu Nakanishi, a little-known engineer recruited from his own company back in 1974. Today holder of more than 400 original patents, Nakanishi's inventions have provided the basis for most of Suzuki's key business units -- including absorbent materials called the alpha gel series, which are marketed by Geltec Inc., one of the five units; a technology that enables fine images to be printed on curved metallic surfaces; and a whole new line of deodorizing agents.
So far the approach has worked brilliantly. Sales of new technologies, largely in the form of licensing agreements, now account for the majority of the company's 1990 sales of nearly $60 million, almost double the total of five years earlier. Its licensees make up a veritable who's who of the old Japan Inc. -- Hitachi, Toshiba, Nissan, and Toyota.
"The laboratories of the big companies, with all their doctorates, can't invent and develop commercially attractive goods as quickly as we can," Suzuki says confidently. "My idea of research and development is that quantity is not so important. If you have one Edison in your group, you can conquer the world."
Suzuki's emphasis on individuals contradicts yet another of the commonly held assumptions about Japan -- that its people prefer blind obedience to organizations over personal development. Like other shibboleths, this perception ignores not only the important role played by individual inventors for centuries, but the rapidly changing dynamics of modern Japanese society.
