The Industrial Revolution in the Meiji and Taisho Periods

Building the Foundation for Japan to be a “Nation Based on Trade”

Through the Sino-Japanese and the Russo-Japanese Wars, Japan shifted its industrial structure from light industry to heavy and chemical industries. Although Europe had played an important role as the “factory of the world,” up until then, the region became a battlefield when World War I broke out in 1914 and their supply of commodities declined. In the meantime, Japan was flooded by a large amount of orders that spurred the industrial revolution of the country to progress at a rapid rate. Japan became a net creditor during the war, and established itself as a nation based on trade.

Japan Cotton Trading Co., Ltd. procured cotton from India, Egypt, China and the United States after it was founded, providing raw materials to the cotton spinning industry. This increased cotton yarn exports and cotton cloth products, eventually making cotton spinning one of Japan’s largest industries.  During World War I, supplies from Great Britain, the largest cotton producer at that time, decreased, dramatically increasing Japan’s export of cotton products and catapulting Japan to become the world’s top cotton spinning country. Japan expanded their sources　of  cotton to include Burma and eastern Africa. The company diversified its business to include wool procurement and the export of raw silk. In addition, the company established Asahi Fabric Co., Ltd. (currently, Asahi Kasei Corporation), a competitor with the coalition of Suzuki & Co., Ltd. and Teikoku Rayon Co., Ltd. (currently, Teijin Limited) in the rayon market.

Iwai & Co. Ltd.’s first entry into the manufacturing business was with knit goods (a business which would go on to become Toabo Corporation). However, the import of steel materials proved to be a strong segment for Iwai & Co., prompting them to move into the galvanized sheet iron business (currently, Nippon Steel Co., Ltd.). The company in partnership with Suzuki & Co., Ltd. also started a business (currently, Daicel Corporation) producing celluloid, the world’s first plastic. When World War I broke out and the import of goods from Europe stopped, Katsujiro Iwai came to believe that they could no longer depend on foreign countries for imports. He drew up a plan to produce items domestically which had previously been imported, as well as founded both Kansai Paint Co., Ltd. and what later became the Tokuyama Corporation. After the war, he established what is now the Japan Bridge Corporation. The manufacturing companies Iwai founded later came together to create “Saishokai,” a group named after his posthumous Buddhist name. These companies still maintain a close relationship with each other to this day.

Suzuki & Co., Ltd. started out in light industries, such as sugar, camphor, and mint, and around World War I, advanced into the heavy and chemical industries, such as steel, metal, ship-building and chemicals. In addition, the company diversified into the petroleum, oil and fat, beer, and flour milling industries. What now exist as Kobe Steel, Ltd., Teijin Limited, IHI Corporation, Nippon Flour Mills Co., Ltd., Showa Shell Sekiyu KK, Sapporo Breweries Ltd., The Nikka Whiskey Distilling Co., Ltd., J-OIL MILLS, Inc., NOF Corporation, Mitsui Chemicals, Inc., Mitsubishi Rayon Co. Ltd., J-OIL MILLS, Inc., NOF CORPORATION, Mitsui Chemicals, Inc., NICHIEN, TAIYO KOKO Co., Ltd., NICHIEN, Nippon Fine Chemical Co., Ltd., NICHIRIN CO., LTD., Toho Metal Co., Ltd., and the Suzuki Menthol Co., Ltd. are all associated with Suzuki & Co., Ltd. When World War I broke out, Naokichi Kaneko made a large fortune through speculation. In London, Seiichi Takahata (one of the founders of Nissho Co., Ltd.) launched a number of aggressive business ventures targeting the Allied Powers. Suzuki & Co., Ltd. provided a large amount of supplies to the Allies and it was said that 10% of the ships that crossed the Suez Canal at the time were Suzuki’s. The company recorded sales worth 10% of Japan’s GNP in 1917 and became the number one sogo shosha in Japan.