A resilient structure as a survival strategy for Japan’s chemical industry amidst megacompetition

Japan’s chemical industry is currently amidst mega-competition in the paradigm shift from an industrial society to an information society that emerged in the 1990s and consequent globalizing economy. The checkered development trajectory of Japan’s chemical industry has resulted in a fragile structure with increasing geographical constraints and excessive competition in certain markets among a number of small-scale firms. A simultaneous solution to divergent activities for diversified customer requirements as well as dynamically changing external circumstances and convergence for improving competitiveness in core competent fields is thus essential. This paper attempts to identify an optimal trajectory for Japan’s chemical industry by providing a simultaneous solution to the above contradicting demands. A resilient structure that incorporates an optimal level of diversification based on a specific reinforced core competent field is postulated as a survival strategy in a business environment characterized by mega-competition. Aiming at demonstrating the significance of a resilience structure, an empirical analysis focusing on Japan’s 28 leading chemical firms was conducted. An optimal level of technological diversification for Japan’s chemical industry firms was thereby identified, thus leading to construction of a resilient structure.