In the fall of 2008, a severe economic downturn impacted the world including Japan and the United States. The 2008 survey of Japanese direct investment in ten Midwest States, conducted by the Consulate General of Japan at Chicago, is based upon data as of October 1, 2008 before the downturn became widespread. The results are as follows:

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(1) Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin. Beginning in 2005, the study includes six new states (Iowa, Kansas, Missouri, Nebraska, North Dakota, and South Dakota), which were added to the Consulate’s jurisdiction in January of that year. Japanese-owned retail locations are excluded.

Business Facilities and Employment

Note: Japanese business facilities include those which are ultimately 10% or more owned by a Japanese company or national.

Key results for the 10-state area are as follows:

1) Business Facility Number
In 2008, 1,202 Japanese business facilities were located in the 10-state area. The 1.1% decline was due mainly to company mergers and relocation outside the Midwest. Illinois ranked first with 54% of the business facilities, followed by Indiana with 18%.

2) Total Employment
Total employment declined 4.0% to 102,170 positions. Indiana ranked first with 42% of the total employment, followed by Illinois with 36%.

3) Actual Manufacturing Employment
The 341 actual manufacturers accounted for nearly 30% of the total business facilities. They provided 55,790 high skilled, high paying jobs, or more than one-half of the total employment.

4) Share By Sector
Manufacturing continued to be the leading sector with 68% of the business facilities and 93% of the total employment. In manufacturing, the motor vehicles and parts sector accounted for 16% of the business facilities and 49% of the total employment.

                                                Business Facility Number By Sector Share


                                                    Total Employment By Sector Share

5) Japanese Companies Embrace the Midwest’s Strengths
This year’s study does not fully reflect the economic slowdown as noted above. Anecdotal evidence suggests that Japanese companies in the 10-state region have been impacted. Our study next year will provide a clearer picture.

From a long-term perspective, the Midwest remains particularly attractive to Japanese direct investment due to its central location, top quality workforce, strong transportation network, and favorable business environment. In return, Japanese business facilities provide jobs in both urban and rural areas, source components from U.S. companies, facilitate technology transfer, and furnish new revenue sources that help boost state and local economies.