While the shortage of successors at highly skilled small factories has long been identified as an issue, there are cases in the US where plumbing and HVAC repair businesses are acquired by private equity funds, allowing their owners to gain substantial assets. The article contrasts trends in Japan and overseas and portrays the realities of the succession problem.
Many small factories across Japan possess advanced technical expertise, but in some cases business succession has not progressed because no successor has been decided. While managers are aging, the current difficulty of securing the next generation to carry on the business is becoming increasingly apparent.
At one harness assembly company visited during a tour, on-site efficiency had improved through innovative jigs and business ties with a major automotive parts manufacturer. However, the next manager had not been decided, and the family's intentions were identified as another obstacle to continuity.
In the US, by contrast, plumbing and HVAC repair businesses are acquisition targets for private equity funds, and there are cases in which owners obtain substantial assets. The challenge of a shortage of successors is emerging in different forms in Japan and the US.
Based on a work by Takanori Sakaguchi (坂口孝則), the article compares the current state of technically capable Japanese small factories with trends overseas and offers hints for considering future responses.