The Social Significance of Doing Business in Saitama
Moriya After a change in its major shareholder, Calsonic Kansei has embarked on a new course as an independent monozukuri company, a manufacturer of automotive components and creator of innovation to support the global automotive industry. Next year, 2018, we will mark the 80th anniversary of our foundation. It will also be ten years since we relocated our headquarters to Saitama Prefecture. Positioning these milestones as the company’s “second foundation,” we hope to give fresh thought to what we should do for society.
Governor Ueda, you have been actively pursuing economic policies for some time, including attracting companies to the prefecture, haven’t you?
Governor Saitama Prefecture has great momentum at the moment. We now have the third fastest population growth after Okinawa and Tokyo, and our nominal GDP in 2014 was \20,914.4 billion. In terms of GDP growth between 2003 and 2013, we were second only to Aichi Prefecture. I believe that this is the result of the efforts we have put into attracting companies to the prefecture, nurturing cutting-edge industries, and supporting companies.
The Saitama Prefectural Government has a budget of \1.86 trillion, about half of which is for personnel and social security expenses. We have \150 billion in investment expenses, and spend \80 billion on public works. We have been attracting companies since 2005, and the most recent figures for total investment in the prefecture to date is \1,366 billion. This means that average investment per year is about the same as the Prefectural Government’s annual investment expenses. Companies located in the prefecture pay business tax, corporate tax and fixed asset tax, their employees pay consumption tax, and their consumer behavior creates added value, all of which is contributing to Saitama Prefecture’s economy. I believe that one of the greatest challenges for the prefecture has been to find ways to avoid relying on public works and to create an environment in which private-sector companies find it easy to do business.
Calsonic Kansei has located its headquarters in Saitama Prefecture, from which you are conducting business on a global scale, but what is your view of your relationship with the local community?
Moriya Our R&D Center and corporate headquarters are located in Saitama City, our advanced electronic components plant is in Kodama-cho, and our Production Engineering Center and interior components plant are in Yoshimi-cho. All of our global head-office functions related to monozukuri are here in Saitama Prefecture. Many of our employees also live in the prefecture, and they are a major vital force for the company. The kinds of CSR initiatives we are placing our greatest efforts into are contributions to the local community and the environment. We currently have 79 locations in 15 countries around the world, each of which has close relationships with its local community. We want to build good relationships with the local community and government, which are our important stakeholders in Saitama Prefecture, and become a model for our colleagues around the world. We hope to continue to cooperate with the local community even more going forward.
Governor Yes, I agree. I think there are many ways in which the public and private sectors can cooperate, creating a win-win situation for both sides. The “tree-planting with commemorative plate” initiative is a good example of this. Individuals and organizations that donate a certain amount or more to the Sainokuni Green Fund can have a tree planted in their name, with a commemorative plate attached.
This has become a popular way to commemorate occasions such as weddings and birthdays. These kinds of initiatives make it possible to make the prefecture greener without using taxpayers’ money. Also, depending on what kind of private-sector energy and ideas are introduced, there are still dynamic things we can do even if tax revenue declines. I think it would be good if we could come up with ideas like this together.
Aiming for co-existence and co-prosperity with the local community
Governor What thoughts do you have about solving social issues in the region?
Moriya One of the most important social issues that the Calsonic Kansei Group needs to address is the environment. In our Mid-Term Management Plan that started in 2011, we set a target of creating ten eco-friendly products, and we have achieved that target. Our sites in Saitama have obtained ISO 14000 certification and are conducting appropriate environmental management. Going forward, we will continue our efforts to contribute to the creation of a “clean society” through our business.
The residents of this region are very important stakeholders for our company. With our aim of co-existence and co-prosperity with the local community, in addition to the “local clean-up” initiatives conducted at each location, at corporate headquarters, we hold “environmental communication” meetings, and have opened up our electric vehicle charging stations to the general public free of charge and installed groundwater filtering systems. This latter move is so we can provide drinking water to local residents in the event of a disaster. We also want to actively encourage our employees even further to participate in volunteer activities in the prefecture.
As you say, Governor, it is precisely because Saitama Prefecture is placing so much effort into harnessing the dynamism of the private sector that new business opportunities will emerge. If the prefectural government, companies, and the local community can come up with and implement ideas, it will create a win-win situation for everyone involved.
Expectations for Calsonic Kansei
Moriya Tell me what expectations you have, if any, of companies in the prefecture.
Governor I would like to see them hold more factory tours, as it would be very educational for social studies. Consumers seem to be much more familiar with the companies that deal with the consumer end product, such as the car companies, but I would like to see Calsonic Kansei, which manufactures important components for those end products, promoting itself more.
Moriya We want to convey the fun of monozukuri to children, who will be responsible for the future. Since 2012, we have conducted a “Supporting What You Want to Do Project.” This consists of traveling classrooms, in which our employees visit elementary schools to teach them about the enjoyment of monozukuri. Last year, we also held factory tours for elementary schoolchildren and their caregivers. In addition to nurturing the next generation, another area we are focusing on is diversity initiatives. With the aim of realizing a society in which all people can work with vitality, at Calsonic Kansei, we strive to engage a diverse range of personnel.
Governor, could I ask you what your thoughts are on employee welfare, parenting support, diversity, and other similar issues?
Governor The prefectural government does provide some assistance in those areas, but I would like to see efforts to retain employees for longer through workplace-based childcare. At hospitals and the like, it is apparently easier for nurses to keep working when they have access to childcare in the hospital. Even if it is difficult for a single company to do it alone, one solution may be for multiple companies to fund and co-manage childcare facilities for their employees. Having said that, unless one company becomes the “flag-bearer” and plays a core role, it may be difficult to pursue this, so I would like to see Calsonic Kansei, which is undisputedly a leading company, pull others along in this regard.
Moriya Thank you. We are moving into an era in which it will become more and more difficult to secure personnel, so we do want to become an attractive company that our employees will want to work at for a long time.
Governor If multiple companies were to get together, there would be potential not just in the area of parenting, but also for new businesses and innovations to emerge.
Towards further public-private sector cooperation
Governor As a company located in Saitama, what expectations do you have of the prefectural government?
Moriya We would like to collaborate in the area of monozukuri. We want to pursue the dissemination and interaction of our monozukuri technologies, which we hope will lead to the invigoration of the local economy.
Governor The Prefectural Government has designated 563 manufacturing plants that have solid technological capabilities as Sai no Kuni (Land of Color and Splendor) Factories. We are pleased to have designated first Calsonic Kansei’s Kodama Plant, followed by your Yoshimi Plant in 2016. Kawaguchi was originally the site of many casting foundries and metal factories, so as an extension of that, the area now has many companies that supply components for aircraft and automobiles and the like. We think it would be a good idea if these designated factories were to form some kind of group that could hold networking events and the like.
Moriya You mentioned the growth in Saitama’s GDP. I look forward to new business opportunities emerging in Saitama Prefecture as a result of collaboration between companies in the prefecture. There are many monozukuri companies gathered in the prefecture, after all.
Governor In a breakdown of the value of manufactured goods shipped from Saitama Prefecture, transport equipment accounts for 17.9%, and food products for 12.9%.
Moriya Calsonic Kansei is as an automotive components company, but I think it would be quite stimulating to exchange opinions with food companies or similar and to tour each other’s factories. In the production of automotive components, “Safety First” is our prime policy, and our electronics plant and plastics plant have stringent controls regarding contaminants, so we may be able to collaborate in common initiatives in the area of hygiene management. We would like to deepen our learning through collaboration with other companies.
Governor Saitama Prefecture is one of the top prefectures in Japan in terms of the value of production of pharmaceuticals and cosmetic products. Pharmaceutical production has extremely stringent safety and quality controls. I would think that networking with different industries would be very inspiring for both sides. Saitama is achieving growth through the good balance of a diverse range of industry types located in the prefecture. This is probably because Saitama has favorable conditions for corporate activity, including its convenient access to the Tokyo metropolitan area. Our support measures for companies are also proving effective.
Moriya To put this another way, this is the “sustainable growth” that is Calsonic Kansei’s ideal. Even in times of economic downturn, pharmaceuticals are essential, and people still want to wear cosmetics, don’t they? Collaboration in the area of monozukuri will also, I believe, lead to the cultivation of monozukuri personnel for the next generation. I would like to see our industry as a whole driving a wedge into the trend for young people to drift away from technology, by strengthening its collaborations with junior high schools, industrial high schools, and technical colleges.
Building Personnel Employment Models as Joint Public-Private Sector Initiatives
Governor We have established the Saitama Prefecture Global Fund for the active participation of global human resources, to assist people who want to study abroad, and we are engaged in cultivating global human resources as a public-private sector co-operative initiative. For our new “From Saitama to the World” scholarship program, we have decided to give naming rights to companies and individuals who donate to the scholarship fund. I would like to thank Calsonic Kansei for being one of the first companies to make a donation. It would be wonderful if the students who received these scholarships were to join companies in Saitama Prefecture on their return from their study abroad, wouldn’t it?
Moriya We were happy to cooperate with this initiative in the form of the “Calsonic Kansei Next Generation Scholarship,” from our desire to produce people from Saitama Prefecture who have a global perspective and who will be able to participate actively in the world.
Calsonic Kansei has also been involved in the Saitama Prefecture Overseas Internship Programs since 2011. Every year, university students from Saitama Prefecture are offered the opportunity to intern at our overseas locations for two to three weeks.
We also accept students from industrial high schools and technical colleges for internships. While it would be ideal if they ultimately ended up working for us, even if that does not happen, we want them to learn about monozukuri. We have a number of unique, leading technologies, but there is a limit to what private-sector companies can do to disseminate those technologies. Going forward, we hope to continue to pursue collaboration with government in initiatives such as technology exchanges with students and internships, to give these young people the opportunity to experience first-hand the enjoyment of monozukuri.
Governor Something else we want to put efforts into is harnessing our more elderly residents as a workforce and developing products that will stimulate demand among the older generation. According to Cabinet Office data, the so-called dankai sedai, Japan’s baby boomer generation, which experienced Japan’s period of rapid economic growth, has a higher level of consumer confidence than other generations. Fifty years ago, when the population surpassed 100 million, those aged 65 years and over accounted for just 7% of the population. Japan’s population is projected to fall below 100 million 30 years from now, and in 2060, the 65-years-and-over age group will account for 40% of the population, or some 40 million people. There may even come a time when the elderly outnumber people of working-age. I believe we need systems that will extend Japan’s healthy longevity, so that people aged 65 years and over who want to continue working will be able to do so.
Moriya You mean seeing our aging society not as a risk but as a business opportunity?
Governor The working-age population in 1995 accounted for 70% of the entire population, but by 2040, that will have fallen to 54%, which will be the smallest of the major nations. However, if people were to keep working until the age of 74, the working-age population in 2040 would be 66%, making it the highest in the world. Subsequently, we would be vying with the United States for first place. If we think in these terms, we need to create the environment in which people could keep working healthily until the age of 74. It would be good if we could come up with ways of enabling people to work no matter what their age, by using experience to compensate for declining muscle strength, and introducing AI and equipment.
Moriya I agree completely. Moreover, the active participation of women in the workforce will also be essential. We are seeing increases in the number of women working in our plants, and I would like to cultivate female plant managers.
To create an environment in which diverse personnel can work, we will need to actively incorporate technology such as automation and IoT, and think of ways in which anyone can be involved in monozukuri.
Governor For Japan to compete in the world, I imagine that these kinds of innovations will be indispensable. Consumption would also be encouraged, and everyone will be happy.
Moriya This is one perspective for achieving growth.
Governor I look forward to cooperation between the private and public sectors to boost Saitama Prefecture further.
Moriya I realize you are probably very busy, but please do come and visit our corporate headquarters. Thank you very much for your time today.