This paper aims to clear the condition of location prerequisite to the growth of rental factories evaluated to be the lowest stratum among small and medium sized enterprises, dealing particularly with the case of Higashi-Osaka which has had a remarkable increase of these factories. Built both sides of a four-meters-wide road, these rental factories, when viewed from outside, are like one-storied apartment houses, partitioned in from five to ten apartments, each of which has no more than a one-car garage space in size. The rent for these garage type factories averages 30, 000 yen (approximately US _??_ 114) a month. Land-holders find it more lucrative to build rental factories than apartment houses. The reasons More profit accrues and less building cost is needed per unit of land.
Higashi-Osaka, a combined city of former three cities, Fuse, Kawachi, and Hiraoka in 1967, situated on a low, wet area of the old Yamato River except the parts on the foot of Ikoma Mountain range, has been suffering from extraordinary land subsidence since around 1962 due to the enormous use of underground water for the industrial purposes.
The rental factories are concentrated in Higashi-Osaka, occupying 43.2% of the whole factories with less than three factory workers in this city. Their number has been on a notable increase especially since around 1965. Previously, the ordinary rental houses or apartments were remodelled into factories, which are called old rental factories. New rental factories, however, have been built, as was already mentioned, for factory use only from the beginning. New factories are being built around small and medium sized enterprises decentralized according to the city planning from the eastern part of Osaka City.
Research for factors of rental factory location has proved the following facts: The lessors of these factories are owners of the farmland assigned not for farming zone but for semi-industrial or residential zone by the local government's zone planning. The lessees of these factories are the laborers who have worked so far in Osaka City. The rental factories have started their business with receiving orders from their parent companies. Desiring to be independent factory owners, the lessees, with little fund and no employee, are well prepared to work by manipulating several machines by themselves. Namely, the lessees themselves are also laborers. The rental factories manufacture parts and accessories of various machines.
Extremely low profit is compensated with lessees' overwork with utter negligence of labor regulation.
The problematical points on the rental factories are as follows:
1. They are far from modern management with capital and management being unseparated.
2. Poorly equipped and dangerously operated with no labor control, the rental factories find it difficult to secure factory hands.
3. They are much involved with public hazards noise, offensive smell, industrial waste water, and industrial refuse.
4. They are subject to the economical fluctuations.
5. While small and medium sized enterprises recently have a tendency to be reorganized, some of them having moved out to industrial complex located in suburbia and designated by the local government for their industrial activities known as
kogyo danchi, the rental factories are outside the scope of application to the industrial reorganization program, too many in number and lack in fund making it impossible to move into
kogyo danchi.
6. The rental factories have the following influences over the neighboring district.
(a) Concentration of these rental factories has resulted in changing adjacent farming community into the slums.
(b) The rental factories cause the environmental destruction.
In order to prevent from their expansion, appropriate means and measures of the local government are essential,
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