Dynamics of Adjustment and the Social Division of Labor in the Tsubame Cutlery Industry

This paper examines the Tsubame cutlery industry as an example of one of Japan's community‐based industries (CBI's). CBI's are localized, closely inter‐linked concentrations of small businesses which manufacture and export a distinctive product on the basis of a social division of labor. To demonstrate the dynamic nature of the social division of labor in CBI's we outline the origins and evolution of the cutlery industry in Tsubame and then we analyze in more detail how the industry has adjusted to deteriorating cost conditions since 1970, especially during the late 1980s. The discussion is based on published studies and on field work which investigated the strategies and operations of entrepreneurs as summarized in terms of employment, subcontracting and product trends. We find that the Tsubame cutlery industry has successfully adapted its social division of labor to changing circumstances and that it appears to be in another transition stage at the present time.