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Japan’s Manufacturing and Service Industries

Industry Sector



29 March 2012


Matt Bodimeade

Type of News


Analytical instruments play a vital role in a variety of applications in key elements of Japan's core manufacturing and service industries, including R&D, production, inspection and monitoring processes. Domestic demand accounts for 45% of Japanese production, with the remainder (55%) exported worldwide. Imported analytical instruments account for approximately 20% of the domestic market. The majority of American analytical instrument manufacturers are well established in Japan and they have steadily expanded their share of the overall market. In fiscal year 2010 Japan's analytical instruments industry managed to recover half of the losses experienced in the preceding fiscal year after the global financial crisis. The accident at the Fukushima Dai-ichi Nuclear Power Plant in the after effects of the March 2011 earthquake and tsunami prompted a rise in demand for radiation detection and monitoring devices including dosimeters and survey meters. This demand appears to have reached a plateau, but is likely to remain strong. While several American firms with an extensive history in the market have built up their own sales offices in Japan, younger American firms are advised to start by partnering with local companies with industry knowledge and sales networks to market their technology and products to possible end-users in Japan.

Market Demand
According to the Japanese Analytical Instruments Manufacturers' Association (JAIMA), the annual production of some 200 member firms in fiscal year 2010 (April 2010 - March 2011) amounted to 394.2 billion yen ($4,490 million), a rise of 7.7% from the previous year. Japan's analytical instruments industry managed to recover half of the losses experienced in the preceding fiscal year after the global financial crisis. However, the disruptions in supply chains caused by the earthquake-related disaster in March 2011 are expected to have a harmful effect on the industry's expansion.

Domestic demand covers 45% of Japanese production, while the remaining 55% is exported worldwide. In fiscal year 2010, domestic demand levelled off from the previous year, while exports increased by 16% after two previous years of decline. By application, analytical instruments for laboratory use, including x-ray analysers, electron microscopes, chromatographs, mass spectrometers, spectrophotometers and thermal analyzers accounted for 51.2% of total production. Analytical instruments designed for medical use, including haematologica analysers and laboratory automation systems accounted for 37.4% of production, and analytical instruments for environmental monitoring, 4.5%. The first market recovery in three years in fiscal 2010 was led by the 12.4% increase in laboratory-use instruments, of which separation analysis apparatus increased by 17.3%, electromagnetic analyzers 13.8%, thermal analysers and thermal measuring instruments 4.1%, electrochemical analysers 2.1%, and related parts and accessories 31.6%.

Imported analytical instruments have remained constant over the past few years and now account for approximately 20% of the domestic market. In 2010, total imports amounted to 46,539.7 million yen ($530.2 million), an increase of 12.9% (20.4%) since 2009. Made in the United States analytical instruments have continued to expand their share of the overall market from 7.4% in 2008, to 8.0% in 2009, and a further increase to 8.5% in 2010.

The aftermath of the March 2011 earthquake and tsunami that provoked the accident at the Fukushima Dai-ichi Nuclear Power Plant, prompted an escalation in demand for radiation detection and monitoring devices including dosimeters and survey meters from government agencies, industrial users and concerned consumers. For that reason, three Japanese makers, Hitachi Aloka Medical, Fuji Electric, and Horiba, as well as distributors of imported brands and new Japanese makers, scrambled to meet this sudden jump in demand. As of this writing, demand appears to have levelled off. However, given the long-running effects of radioactive dispersion in and around Fukushima, demand is expected to remain strong for a number of years.

Best Prospects
On August 19, 2011, Japan's government approved the Fourth Science and Technology Basic Plan for the next five-year period, after taking into account the effects of the March 2011 earthquake, tsunami and nuclear accident. Under this Basic Plan Japan's overall R&D spending, is targeted at over four percent of GDP, and the government R&D budget was set at approximately 25 trillion yen ($284.8 billion), or one percent of GDP. Under this Basic Plan Japanese science and technology policies focus on four key areas:

- Recovery and restoration from the March 2011 disasters (recovery of damaged industries; infrastructure development; disaster-free safe living environment)
- Promotion of green innovation (stable energy supply; low-carbon society; higher efficiency in use of energy; smart meters; higher energy efficiency of infrastructure)
- Life innovation (innovative preventive medicine; early diagnostic detection; safe and effective medical treatment; improvement of qualify of life for the elderly, the handicapped and medical patients)

According to the Japanese Statistics Bureau's 2010 Survey of Research and Development, released on December 10, 2010, Japan's total expenditure on R&D during fiscal year 2009 (April 2009 to March 2010) amounted to 17.25 trillion yen ($196.5 billion), accounting for 3.62% of GDP. By sector, business enterprises spent 11.98 trillion yen ($136.5 billion), accounting for 69.5%; universities and colleges 3.55 trillion yen ($40.4 billion), 20.6%; and non-profit institutions and public organizations 1.71 trillion yen ($19.5 billion), 9.9%. By source of funds, the non-government sector including private business was the biggest contributor at 13.68 trillion yen ($155.8 billion), accounting for 79.3%, and the central and local government sector supplied a further 3.5 trillion yen ($39.9 billion), 20.3%.

See details for the latest Japanese industrial market research

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