A summary of the survey results is as follows.
(1) Japanese manufacturers are under logistic/semiconductor disruption, and the impact is likely to be prolonged
This year's survey was conducted during several difficulties, such as a semiconductor shortage and tight logistics, in addition to the worldwide COVID-19 pandemic waves. The overseas production ratio in FY2020 remained low at 33%, and the medium-term prospects are staying at the same level at 35%, meaning the recovery to the pre-COVID-19 level seems to be postponed. Unlike the financial crisis of 2008, the survey indicates that the impact of COVID-19 and its aftermath are beginning to show prolonged effects.
(2) Promising countries/regions: China remains at the top, and the U.S. rises to third for the first time in almost 20 years
China remained the top as a promising destination country for the next three years. India and ASEAN, which had been severely affected by restrictions due to COVID-19 at the time of the survey, lost votes. In the meantime, the U.S. rose to third place with votes from a wide range of industries, and Taiwan also ranked among the top 10 countries for the first time in a decade. Given that India has the lowest share since 2005 and that the U.S. moved upwards to third, whether the U.S. will overtake India will draw attention in the next survey.
(3) Supply chains: Logistic disruption is the biggest risk, and semiconductor shortage affects all industries
In terms of external shocks to supply chains, "disruption and pressure on logistics" had the most votes, followed by "diseases (including the COVID-19 pandemic)." Regarding the global semiconductor shortage, it has a negative impact on all industries, but a small number from a wide range of industries received a positive impact on their businesses, indicating the broad base of the Japanese semiconductor manufacturing industry. As for the decoupling between the U.S. and China, many of the companies are trying to balance between both countries, as was the case last year.
(4) DX: Half of the companies are working on and expanding the scope of their collaboration to overseas
Regarding digital transformation (DX), half of the companies is advancing in their adoption and the other half has not yet started, and none was retreating from DX. The leading areas of DX adoption by advanced companies are the manufacturing and development sectors, including remote control of manufacturing equipment and robots, 3D printers, and the use of virtual space in R&D. In addition, advanced companies are likely to collaborate outside to promote transformation, especially with overseas companies and research institutions including startups, and some are importing overseas best practices back into Japan.
(5) Decarbonization: Companies are aware of their business impact and focusing on emissions in supply chains
Regarding the climate change issue, approximately 80% of the respondents expect decarbonization to have an impact on their businesses. The impact includes not only negative aspects such as higher manufacturing costs, but also positive aspects such as the development of new products and increased demand for their products. As for the emission sources, it is also found that many companies consider not only their own factories but also other sources of emissions in the supply chains to be important. The manufacturing industry has detailed data and an understanding of the processes from procurement to delivery through cost reduction efforts, which is an advantage to tackle the difficulty of identifying and measuring emission sources in their supply chains.
