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■ RONALD KALAFSKY SustainableManufacturing inNagoya E X P L O R I N G T H E D Y N A M I C S O F J A PA N ’ S C O M P E T I T I V E A D VA N TA G E As evidenced by the research presented throughout this book, metropolitan areas are viewed widely and justifiably as engines of economic development. Recent work also suggests that for well into the foreseeable future, cities will remain crucial to sustainable national and global economic growth.1 There are many reasons for this relationship between urban growth and economic sustainability, but, in particular, it is because urbanized areas are centers of innovation and creativity, enduring as cores of economic dynamism. Findings from researchers as varied as Michael Porter, Edward Glaeser, Allen Scott, and Michael Storper have clearly demonstrated the importance of cities to economic sustainability.2 The seminal research of these scholars has also shown that economically dynamic cities are intimately tied to wider domestic activity and global trade flows. This chapter will examine the case of the extended Nagoya region and its main economic growth engine, the manufacturing sector. Nagoya, Japan’s fourth largest city, has long been a focal point of the country’s still-sizable secondary economic sector, particularly in such key industries as motor vehicles and machinery. Interestingly, this dynamic area is not immediately recognized by many observers located outside of Japan. Unlike most metropolitan areas in industrialized countries, the manufacturing sector continues to play a vital part in the economic growth across the Greater Nagoya region and, indeed, in much of Japan. This chapter, accordingly, will examine manufacturing activity in the extended Nagoya region, in terms of its impacts, competitive challenges , and, finally, its pivotal role in sustainable economic growth for this metropolitan area and Japan at large. In addition to looking at overall manufacturing activities in Greater Nagoya, the machine tool sector will be used as a prime example of an advanced manufacturing industry that continues to be an indispensable element in the region’s economic vitality and its continued development of 102 ■ RONALD KALAFSKY human capital. The chapter concludes with a discussion of current and pending concerns about sustainable growth across the Nagoya metropolitan region and its globally dominant machine tool industry as both enter the second decade of the twenty-first century. Nagoya’s success fits within the context of Japan’s economic achievements over the past half-century. In many ways, Japan’s economic growth has been exceptional among advanced market economies, in terms of rather low disparities in income distribution. The continued emphasis on advanced manufacturing in Japan is also emblematic of a type of economic growth that has been comparatively equitable and in some estimations has contributed to wide-ranging social stability by creating and sustaining a broad middle class. Economic Development, Regulatory Environments, and Sustainability Economic Development and Industrial Agglomeration For decades there have been numerous discussions and analyses on the linkages between cities , regional economic development, and same-industry agglomerations of economic activity. Seminal works by Michael Porter, for example, have examined the factors that contribute to the growth and maintenance of a region’s competitiveness.3 The original framework envisioned by Porter can be illustrated as an interlinked group of elements that contribute to both industrial and regional growth, including firm strategies, factor conditions, related and supporting industries, and demand conditions.4 Factor conditions include a skilled, educated workforce and physical infrastructure such as roads and seaports. Other elements, no less important, are the roles of government and chance in competitiveness and economic growth. In most urban economies there are significant linkages between government and the factor conditions mentioned here. These linkages are manifested in physical infrastructure and institutions such as educational systems. Researchers extending as far back as Marshall and, more recently, Scott, Paul Krugman, and others have illustrated the benefits of similar industries or firms locating in close proximity to one another.5 Positive externalities include shared skilled labor pools, innovation resulting from competition, and similar supplier bases. In essence, much of this research demonstrated that a number of interlinked factors are pivotal to maintaining viable economic growth. And, moreover, these conditions must be in place to enable firms and even entire industries to remain economically practicable in the long term. There is also extensive work on the city itself as an economic unit. Glaeser, for example, demonstrated that while same-sector agglomerations are not...

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