Sogoshosha: Engines of Export-Based Growth

Paul E. Blower was Assistant Head, Adult Services Department, Sault Ste. Marie Public Library, Ontario.

Canada is the second highest exporting country in the world based on percentage of gross national product, but fewer than five per cent of Canadian businesses are exporters. What’s more, Canada’s share of international markets has slipped in the last fifteen or twenty years, so if the two million Canadian jobs that depend on trade are to be preserved, steps must be taken to make Canadian exports both more numerous and more competitive.

Yoshi Tsurumi’s book on sogoshosha, a Japanese term referring to large general trading companies like Mitsui and Mitsubishi, is offered as one direction in which Canada might proceed to strengthen itself as an exporting nation. The author, professor of marketing and international business at the City University of New York, has written extensively on sogoshosha and on Japanese business generally.

The present volume is an updated version of a book originally written in 1980. Produced under the aegis of the Institute for Research on Public Policy, the book outlines the past, present, and probable future development of Japanese sogoshosha (“engines of economic growth”) and suggests ways in which sogoshosha are being and ought to be set up in other parts of the world.

After a short introductory chapter, profiles of sogoshosha are used to illustrate the four primary functions they provide for their clients: 1) a vast network of foreign and domestic market intelligence; 2) economies of scale; 3) a large internal market that permits them to barter goods and services among themselves; and 4) the ability to borrow money from the most advantageous sources in the international capital markets.

Succeeding chapters trace the evolution of Japanese sogoshosha from their origins in the 1870s to the present, in particular the post-World War II period when sogoshosha began to define themselves in their present shape; discuss how Japanese-style management aids in the attainment of organizational goals and contrasts that approach with American-style management; and indicate how Japanese sogoshosha are responding to problems that may affect future growth (one solution is to become investment rather than trading firms).

The two concluding chapters describe how, with government aid, sogoshosha have grown up in Brazil and Korea and make the case for sogoshosha in the United States and Canada. Tsurumi suggests that Canada follow the lead of Brazil and create two large competing general trading firms that would incorporate features of four different types of sogoshosha.

Despite a writing style that at times can be described in no terms other than execrable, this book is recommended to academics and government policy-makers in the export field.