From the early 1990'' s, the deindustrialization of Japanese local industry is becoming more serious. “The overwhelming majority of local industry is small and medium-sized enterprises. When not too many resources are being making use of, how shuould the Japanese local industry be adapted to globalizing economic activity?” Under this consciousness of the problem, the author looks back on the history of Japanese local industry, trying to find out when Japanese local industry faced threats, how it has conformed to the tendency. In this way, it is possible to explain why the local industry develops continuously.
This research relies mainly on literature review. Through “2005 The survey of the profile of local industry（＝2005年產地概況調查）” that Small and Medium Enterprise Agency conducted, the status of Japanese local industry is explored. Furthermore, by the application of statistical data from “1975-2000 Industrial Census（＝工業統計調查）”, the research is aimed at investigating the creation of the innovative agglomeration of the metallic goods manufacturing that was in Sanjo City（＝三条市） and Tsubame city（＝燕市） in Niigata Prefecture（＝新潟縣）.
1. The agglomeration in a high-cost region is supposed to transform into innovative agglomeration. “Flexible specialization”, “social capital” and “local milieu” are its important concept.
2. From 1980’s, Japanese government gradually regards small and medium-sized enterprises as the standard-bearers who revitalize local economy. However, the principal characteristic of Japanese local industry is “the agglomeration of local industry has repeatedly engaged in low-added-valued mass production, which manufactures homogenous, ordinary consumer goods”. In addition, the other defects simultaneously are unfavorable to competition. Therefore, “agglomeration” and “innovation” both becomes the center of policy after 2000.
1. The elements that revitalize the local industry can be concluded as by “Pay attention to the network for knowledge creation”, “The network diversification represents the possibility of soft conversion”, “Pluralism which is integrated and adjusted is better than the one that is in disorder”, “Talents are more important than the hardware”, “To unite betters to struggle alone”, “Regional brand”, “To exploit private sales channels and to build up a turnkey system of R&D, production, marketing.
2. The study has yielded the following two suggestions:
(1) From the viewpoint of milieu, research on the topic of “how is it possible to foster the private-sector vitality to replace the government authorities’ role in the process of invigorating local economy”.
(2) Analyze “the links between the agglomerations of local industry” in order to accelerate the construction of innovative agglomeration’s inner and outer networks.