Die Geschichte des japanischen Wirtschaftsstandortes Düsseldorf [The History of Düsseldorf as a Business Location for Japanese Companies]

Konstantin Plett’s study traces the history of Düsseldorf as a Japanese business hub, drawing on the author’s PhD thesis at the University of Düsseldorf. It explores why, after World War II, Düsseldorf became the primary location for Japanese companies in the Federal Republic of Germany. Plett answers this question in eight substantive chapters, dividing it into two sub-questions. Firstly, he explores the initial motivations driving the first Japanese companies to establish themselves in Düsseldorf in the 1950s. Secondly, he examines the factors that favored Düsseldorf’s growth as a Japanese business hub after the first companies had settled there.

In Chapter 1, Plett synthesizes published sources to outline the common view of the location factors that attracted Japanese companies, emphasizing geographical factors such as proximity to the Ruhr area with its heavy industry and, from the 1960s, the presence of Japanese corporate networks and institutional infrastructure. Chapter 2, distinguished by its length, stands as a central piece of the study. Here, Plett answers the first sub-question regarding the factors that led the first Japanese firms to settle in Düsseldorf. He argues that the Japanese trading companies which were the first to settle there were influenced by the Ministry of International Trade and Industry (MITI)’s industrial policy, which aimed at transitioning the country from light to heavy industry. Known as the “desk of the Ruhr area” (Schreibtisch des Ruhrgebiets, p. 52), Düsseldorf was attractive because numerous German steel and mechanical engineering firms had their administrative centers there. Thus, a presence in Düsseldorf meant that Japanese trading companies had access to German machinery and technology, whose import was considered important for structural change in Japan.

In Chapters 3 and 4, Plett argues that the organization of Japanese industry into corporate groups known as keiretsu attracted additional Japanese firms to settle in Düsseldorf. These included not only keiretsu member firms from the manufacturing industry but also banks, insurance companies, and logistics service providers. Furthermore, self-organization, such as in the Japanese Chamber of Commerce and Industry in Düsseldorf, and political support in the 1960s, such as from former Prime Minister Kishi Nobusuke, strengthened the business hub. The resulting Japanese infrastructure on-site attracted more and more Japanese firms over time.

In Chapters 5 and 6, Plett shifts his analytical perspective, demonstrating that the City of Düsseldorf’s Office for Economic Development (Wirtschaftsförderungsbüro) was more proactive in attracting Japanese firms than its competitors in other cities, particularly Hamburg and Cologne. In Chapter 7, Plett argues that the competition between the various German cities was finally decided by the establishment of a Japanese day school, which opened in 1973. This school solved a central problem for Japanese expatriates settling in Düsseldorf with their families: their children no longer missed significant amounts of the standard Japanese school curriculum during their stays in Germany. This was crucial as foreign education was generally viewed unfavorably in Japanese public opinion at the time. Hence, German education was not an attractive alternative for Japanese parents. In the final chapter, Plett shows that Düsseldorf’s significance as a Japanese business hub has been declining since the early 1990s. He attributes this to economic changes, new forms of migration, and a cultural shift in Japanese thinking about education, in which foreign education has gained greater importance.

In his study, Plett convincingly traces how various pull and push factors favored the growth of Düsseldorf as the central Japanese business hub in Germany. He relies on no less than 25 interviews including former Japanese managers and employees of Düsseldorf’s Office for Economic Development. He also derives detailed insights from his research in various archives, such as the archives of the city of Düsseldorf and the corporate archives of consumer chemical manufacturer Henkel and systems engineering company SMS Group. The structure of the study, where various push and pull factors are addressed in separate chapters, allows for a clear presentation with minimal redundancies.

Particularly notable are Chapters 5 to 7. Here, the author traces the role of Düsseldorf’s Office for Economic Development, describing the challenges of aligning the various interests of the City of Düsseldorf, the Rhenish heavy industry, the Japanese diaspora, and Japanese politics. He shows how the Office, particularly through its support for the construction of the Japanese day school, managed to balance these diverse interests in favor of the Japanese expatriates (and, ultimately, the city of Düsseldorf itself). These chapters are based on thorough archival research and interviews with key figures. They provide a fascinating and convincing account of the negotiation processes that led to the emergence of Düsseldorf as the central hub of Japanese business in Germany.

While Plett’s analysis of the pull and push factors in Chapters 3 to 8 is persuasive, his examination of the initial location decisions in Chapter 2 is less precise. Plett does not clearly articulate the nature of MITI’s influence on the decisions of Japanese companies in the early 1950s. For instance, he mentions that MITI “prescribed” (vorgeschrieben, p. 58) Düsseldorf as a location for Japanese companies to maintain contacts with German heavy industry. He also notes that industrial policy “implied” (nahegelegt, p. 49) that Japanese companies should go to Düsseldorf, which seems to suggest that the location decision was not prescribed by MITI directly but that it was logical given the broader framework of industrial policy. At another point, he indicates that MITI “induced” (veranlasst[e], p. 196) Japanese firms to seek technology abroad, with Düsseldorf emerging as a focal point due to its industrial policy’s focus on heavy industry. Regrettably, Plett does not specify whether he believes the initial location decisions of Japanese firms were directly or indirectly influenced by industrial policy. This ambiguity touches on a central question in the study of Japan’s postwar industrial policy: to what extent were private Japanese firms autonomous in making specific business decisions.

This ambiguity is exacerbated by Plett’s reference to the Japanese post-war economy as a “planned economy” (Planwirtschaft, pp. 41, 45, 54, 64), drawing on Chalmers Johnson’s concept of “plan rationality.” By using the term “planned economy,” Plett might unintentionally imply a more direct influence of industrial policy on Japanese companies’ location decisions than his analysis appears to support. Johnson’s term does not refer to Soviet-style centrally planned economies where planning is done according to ideological principles, but rather market economies where planning is conducted in a “rational” manner. Contrary to Plett’s maybe unintentional implication, the Japanese economy in the post-war period was not a planned economy. Instead, it was characterized by private property and market competition, though enterprises were more significantly constrained by the government’s industrial policy than in the third type of economic systems in Johnson’s typology, namely, market-rational economies such as the U.S.A. (Johnson 1982, 19, 28).

Moreover, the book contains several inaccuracies regarding Japan’s economic history and policy. For instance, it mentions that Japan joined the IMF in 1964 (pp. 36, 45), when, in fact, it became a member in 1952 (Asai 2015, 249). Additionally, the claim that, starting in 1949, subsidies were to be exclusively “enabled” (ermöglicht) through taxes and loans from the Bank of Japan (p. 37) does not capture the policy shift at the time. Its purpose was to reduce inflation by moving away from the practice of direct borrowing from the Bank of Japan, which was believed to exacerbate inflationary pressures (Flath 2005, 83). Overall, Chapter 2 would have benefitted from a more detailed analysis of the connection between industrial policy and location decisions, and a deeper engagement with Japanese economic history.

Despite these critiques from the viewpoint of economic history, the study’s comprehensive examination of location factors within their historical context significantly contributes to our understanding of Düsseldorf’s development as the central location of Japanese business in Germany. In this way, it goes beyond previous research by providing the first book-length depiction of the history of Düsseldorf as a Japanese business hub.

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Jonathan Krautter

Jonathan Krautter is a Research Fellow and PhD student at the Chair of Social and Economic History of Humboldt University in Berlin. His research focuses on Japanese industrial policy and German-Japanese technology transfer and business relations. He is also a member of a research team studying the history of recreational facilities for children in the Federal Republic of Germany between 1945 and 1989.