Japan is the world's third-largest economy, and the country's industries play an indispensable role in the world's supply chain. Following the 9.0 magnitude earthquake and subsequent tsunami that hit Japan in March, many economists predicted a "ripple effect" that could continue for years to come.
Yesterday, the Chamber's International Business Council hosted a discussion with national experts discussing the impact of the disaster on the global economy. Panelists included Kiichiro Sato, president of the Japan External Trade Organization in New York; Hiroshi Sato, consul-general of Japan in Nashville; and Keisuke Honda, general manager, Mitsui Corporate Planning, New York.
In addition to thousands of citizens dead or missing, the earthquake and tsunami caused more than $200 billion in damage to the island nation. (By comparison, Hurricane Katrina caused an estimated $97 billion of damage.) Manufacturing, specifically in the automotive and food segments of the industry, was seriously disrupted.
Thanks in part to worldwide support of Japan, however, the Japanese economy has been recovering at a faster-than-expected pace. A survey as of April 2011 revealed that more than 60 percent of disaster-affected production bases in the manufacturing industry had been completely restored. The remaining bases (a little less than 30 percent) were projected to be fully restored by this summer.
Despite these companies' quick bounceback, our panelists noted that Japan still faces some economic challenges as the long-term recovery process continues. Even before the disaster, Japan faced a declining and aging population, slower economic growth, a high national debt, deindustrialization and limited natural resources.
The good news for our state's economic development is that Japanese companies are continuing to bring new business and create jobs here. According to Consul-General Sato, at least 10 new Japanese companies have invested in Tennessee in the last year due to our state's favorable economic climate, friendly people and logistically convenient geographical location. The automotive industry has the largest Japanese presence in Tennessee, but our region and state are also starting to emerge as a haven for companies in the renewable-energy industry.
Consul-General Hiroshi Sato addresses the audience at the International Business Council Breakfast. To view more photos from the event, click here. View a portion of the panel discussion from the presentation, including a question-and-answer with the panelists moderated by IBC Board Chair Eduardo Minardi of Bridgestone.