Chapter 4
Designing and Managing
Supporting Industry Databases†
Junichi Mori*

1. Introduction
It is generally agreed that local procurement of parts and components
benefits both FDI assemblers and local parts suppliers. With more locallysourced parts, FDI assemblers are able to reduce transportation cost associatedwith imports, while local suppliers can increase business volume and absorb upto-date technology through business relations with FDI assemblers. Thus, promoting local procurement is a key to FDI-led industrial growth in developing
countries.
However, in Vietnam, most FDI assemblers do not have sufficient
information on where good Vietnamese parts suppliers are located, despite thefact that they desperately seek locally procured parts for cost competitiveness.
Many Japanese firms use very primitive methods such as telephone directories
and workers’ personal connections to look for potential suppliers. This information gap impedes fruitful business cooperation between Vietnamese suppliersand FDI assemblers. To bridge this gap, establishment of a supporting industry
database has long been requested by Japanese FDI assemblers. However, nosignificant progress has been made, in part because the Vietnamese side does
not know the precise requirements of an effective supporting industry database.
This paper explores the desirable features of the supporting industry
database and considers various issues in its operation. For this, existing databas-

Research and surveys for this paper were conducted from July to August 2006, when the author
was affiliated with the Vietnam Development Forum (VDF) and the National Graduate Institutefor Policy Studies (GRIPS). He would like to thank the officials, experts and enterprise managers
who provided valuable information.
∗
United Nations Industrial Development Organization (UNIDO), Vietnam.
†

65

Junichi Mori

es in Japan, Malaysia, Thailand, and Vietnam have been examined. In particular, local officials and chambers of commerce of six Japanese cities which havesuccessfully established supporting industry databases were visited and interviewed1. Their experiences offer important lessons for Vietnam, not only fordesigning databases but also for operating and maintaining them. With proper
design, operation, and maintenance, supporting industry databases can contribute to expanding business between FDI assemblers and local suppliers.

2. Why supporting industry databases are necessary
Rising demand for supporting industry databases is closely linked
with the development of supply chain management (SCM). The idea of SCM
has been practiced for a long time by advanced firms such as Toyota, but theconcept became particularly popular in the 1990s. From the viewpoint of building SCM, as more parts are locally sourced, greater reductions can be made inlogistics costs and production lead time. For this reason, FDI assemblers in East
Asia began to make great efforts in increasing locally sourced parts. The average local procurement ratio of Japanese manufacturers in ASEAN4 (Malaysia,
Thailand, Indonesia, Philippines) rose from 41.9% in 1998 to 51.8% in 2003.
The same ratio in China also rose from 46.8% in 1998 to 55.9% in 2003 (Minitry of Economy, Trade and Industry [METI], 2006).
This trend is also observable in Vietnam. Although most FDI assemblers initially came to Vietnam for the low-wage and high-quality labor force,
they are now trying to strengthen cost competitiveness by increasing local partsprocurement. According to a JETRO survey in 2004, 72.9% of Japanese manufacturers in Vietnam said that they planned to increase local procurement ofparts (Figure 1).
In Vietnam, however, FDI assemblers face serious difficulty in promoting parts localization. According to the same survey, the average ratio of
local parts procurement in all manufacturing sectors remained at 22.6% at the1

These six cities are Sumida-ku (Tokyo Metropolitan Area), Kawasaki City and Sagamihara City
(Kanagawa Prefecture), Hamamatsu City (Shizuoka Prefecture), and Okaya City and Chino City
(Nagano Prefecture). See Appendix A for the locations of these cities.

66

Designing and Managing Supporting Industry Databases

Figure 1. Procurement strategy of Japanese manufacturers in Vietnam

  

72.9




























Source: Japan External Trade Organization (2005).

value base, which was much lower than in other ASEAN countries2. The survey
also pointed out the problem of insufficient product quality of local suppliers.
However, a more fundamental problem in Vietnam seems to be the information
gap described above, which impedes business interaction between FDI assemblers and local suppliers in the first place. One Japanese firm noted that it had tovisit approximately 100 firms to find one good supplier (Vietnam Development
Forum [VDF], 2006). Because this is too costly and time-consuming for private
firms, FDI assemblers do not have sufficient incentives to replace parts importwith local procurement. Thus, it is essential to establish an effective supporting
industry database, which will reduce the cost of finding potential suppliers.
Development of the supporting industry database will shorten theprocess FDI assemblers must go through to select suppliers; the process consists of preliminary search, factory inspection, and sample evaluation. An effective supporting industry database can drastically reduce the time needed for preliminary search, in which company profiles, production facilities, quality level,and so forth, are reviewed. In addition, it can also reduce the time needed forfactory inspection and sample evaluation, by allowing FDI assemblers to screen
low potential suppliers and focus on only high potential suppliers.

2

Local procurement of all Japanese manufacturing sector in 2004 was 47.9% in Thailand, 45.0% in
Malaysia, 38.3% in Indonesia, and 28.3% in the Philippines.

67

Junichi Mori

3. Desirable characteristics of the database
The Vietnamese government and the Japanese government officiallyagreed on the importance of a supporting industry database in the VietnamJapan Joint Initiative Phase 1 (2003–2005), but such a database has not been
constructed3. It is likely that the Vietnamese side does not have sufficient information on the difference between supporting industry databases and businessdirectories.
In Vietnam, a number of yellow-page-type business directories
already exist, operated by joint-stock companies, public organizations, andbusiness associations. For example, Vietnam Yellow Pages4 is one of the mostpopular directories, which contains data of 60,000 companies. This directoryoffers free access through the Internet. Printed and CD-ROM versions are alsoavailable. The Vietnam Chamber of Commerce and Industry (VCCI) also manages the web-based Vietnam Business Directory 5, which includes data of
20,000 firms. This is also available in printed and CD-ROM versions. Moreover, several business associations such as the Vietnam Saigon Plastic Association publish sectoral business directories.
These business directories may help FDI assemblers to find contact
addresses of local suppliers by specific company names and main products.
However, that is not enough for FDI assemblers to shorten the preliminary
search period. For effective search, more details of local suppliers are needed.
The main difference between supporting industry databases and business directories is the depth of firm-level data. Business directories tend to cover a large
number of firms in many business sectors, but data of individual firms are basic
and limited. In contrast, supporting industry databases cover a relatively small
number of firms in a specified business sector, but they contain detailed data ofeach company. This will enable FDI assemblers to narrow down targeted suppliers based on suitable technology and production facility. In this way, FDI
assemblers will not waste time by avoiding suppliers with no potential, and can

See MOFA (2003, p. xii).
Vietnam Yellow Pages: http://www.yellowpages.com.vn/
5Vietnam Business Directory (VCCI): http://www.vidc.com.vn/Default1.htm
3
4

68

Designing and Managing Supporting Industry Databases

minimize the search cost of replacing imported parts by locally sourced parts,
especially in the preliminary search.
The content of the supporting industry database should closely matchthe supplier selection criteria of FDI assemblers. In addition to main products,
which are covered by most business directories, Japanese manufacturers usuallychoose suppliers by the following criteria: (i) general director’s attitude, (ii)quality, (iii) cost, (iv) capability of on-time delivery, and (v) production scale6.
As a prerequisite to starting a business partnership, FDI assemblers want to see
the seriousness of the general director in improving his or her business. Several
local suppliers that have successful relationship with Japanese firms say thatJapanese firms helped them even if their initial ability was low, as long as thegeneral director made a serious effort to meet the high requirements set by theJapanese side (VDF, 2006). After the seriousness of the general director is confirmed, the core criteria of supplier selection are quality, cost, and delivery(QCD). Furthermore, information on production scale is necessary to infer the
maximum production capacity of suppliers.
To satisfy these criteria, supporting industry databases should provide
information on the above five items, either explicitly or implicitly, in addition
to basic information such as company name, contact address and main products(Figure 2).
First, a well-written self-introduction can express the general director’s sincere attitude. This is not a perfect indicator, however, because how well
it is written depends on the drafter’s ability. Nevertheless, it can still be usefulin eliminating low potential suppliers who do not have ability to express theirstrength plainly. In addition, suppliers may indicate the experience of Just-InTime delivery in this column, because there is no other way to quantitatively
measure delivery accuracy.
Second, detailed information on production facilities (machine andequipment) will help FDI assemblers to infer the quality and scale of production. With a list of machines including manufacturers’ names, FDI assemblers
are able to guess the level of product quality. The number of machines can also

6

These criteria are identified through a large number of interviews the author conducted from 2004
to 2006. See VDF (2006).

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Junichi Mori

Figure 2. Information required in supporting industry databases
Criteria of Supplier
Selection

Required Items in SI Databases--Company policy

Introduction

General
Director’sAttitude--JIT experience

Production Facility

List of machines,name of maker

Processing Accuracy

Processing range inmillimeter

Quality Certification

ISO 9000,
ISO 14000

Quality

Cost--Specialized skills

Main Customers
On-time Delivery
Annual Sales
Production Scale

Capital
Number of Employees

tell the maximum production capacity.
Third, processing accuracy expressed in millimeters can be an indicator of product quality, in particular when FDI assemblers need high-precision
products such as mold and die. Suppliers may also emphasize the high ability ofengineers and technicians in this column, even if the factory has only relatively
old machines.
Fourth, relevant quality certifications such as ISO 9000 and ISO
14000 are a good reference for general operation quality. They do not show
capability in any specific technology, but they are still useful to screen out low
potential suppliers.
Fifth, a list of main customers is an implicit indicator of QCD. If suppliers have consistent business relations with other FDI assemblers, there ishigh possibility that their QCD levels meet high requirements for competition.
In addition, with such a list, FDI assemblers can exchange information on certain suppliers with each other.
Finally, information about annual sales, capital, and labor force isuseful in measuring the production scale.

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Designing and Managing Supporting Industry Databases

4. Supporting industry databases in Japan
Gathering detailed firm-level data is not easy. Even more advanced
ASEAN countries, such as Malaysia and Thailand, have not succeeded in establishing a good supporting industry database. However, some Japanese localities
operate high-quality supporting industry databases (see Appendix B for a list).
Japan has an agglomeration of highly competitive supporting industries, which consist mostly of small and medium enterprises (SMEs). Our
research has confirmed that some Japanese local governments and local chambers of commerce (henceforth “local public organizations”) have well-designed
supporting industry databases, which carry almost all of the information proposed in Section 2. These databases were established as a business matchingtool between assemblers and suppliers. Since SMEs with excellent manufacturing skills are not necessarily good at public relations and marketing, local public organizations need to help them link with potential buyers.
Furthermore, in the 1980s and 1990s, many large Japanese assemblers transferred their manufacturing bases overseas, under the pressure of the
sharp appreciation of Japanese yen after the Plaza Accord in 1985. Consequently, many SME suppliers which were located near large assemblers lost longstanding domestic customers. In order to revitalize these SMEs, local publicorganizations began to assist them to explore new business opportunities inother areas of Japan through supporting industry databases.
4.1. Okaya City database
For example, the municipal government of Okaya, which is a part of
the Suwa Lake Region in Nagano Prefecture, created a high-quality supporting
industry database7. Okaya has a concentration of various types of parts suppliers
which receive a large volume of orders from Seiko Epson, Olympus, andKyocera. There are approximately 700 to 800 SMEs in Okaya, of which 80%
are small enterprises with four or fewer employees. Most have produced metal
precision parts for cameras and watches, but some companies are gradually

7

Okaya City’s Enterprise Database: http://www.tech-okaya.jp/top.html

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Junichi Mori

shifting to the production of automobile parts8.
Okaya City’s database contains very detailed information on eachregistered company (Appendix C). In the self-introduction column, firms can
showcase their company policy and specialized skills. Potential buyers canassess product quality and production scale of registered companies fromdetailed lists of machines with makers, model names, and stock. The section for
production processing technology states the range of processing accuracy in theunit of millimeters to show production quality. Another indicator of quality is
the acquirement of quality certifications such as ISO, which is found in the column of international standards. Furthermore, potential buyers can evaluate thelevel of QCD from the list of main customers. Finally, production capacity canbe inferred from capital and the number of employees.
Moreover, another feature of Okaya City’s database is ease of search.
Potential buyers can quickly narrow down the targeted group of suppliers bymultiple choices, which include business category, business sector, and specialized skills.
4.2. Monozukuri-net
Another good database is Monozukuri-net, an inter-city project byfour chambers of commerce in Hamamatsu City 9 in Shizuoka Prefecture,
Sagamihara City and Fujisawa City in Kanagawa Prefecture, and Ogaki City in
Gifu Prefecture. Monozukuri-net was initiated by the Chamber of Commerce ofHamamatsu City, where Yamaha Motor Co., Ltd. and Suzuki Motor Co., Ltd.
are located. In 2003, at the invitation of Hamamatsu, the Sagamihara Chamberof Commerce joined Momozukuri-net, and the Fujisawa Chamber of Commerce and the Ogaki Chamber of Commerce also joined in 2004. Member cities
are expected to increase further in the future.
In addition to its sophisticated database design, this inter-city project
has the mechanism of cost reduction and information sharing in managing the

One of the companies, Okaya Seiken Co., Ltd., which produces both automotive and electronics
parts, has established a subsidiary in Ho Chi Minh City, with the name Okaya Vietnam Co., Ltd.
See http://www.okaya-seiken.co.jp/
9Monozukuri-net of Hamamatsu: http://www.monodukuri.net/hamamatsu/
872Designing and Managing Supporting Industry Databases

databases. The Hamamatsu Chamber of Commerce is recovering initial investment cost by collecting monthly user fees from the other three cities. On theother hand, the other three chambers of commerce can save initial investment
cost by participating in the existing database and paying relatively small monthly user fees. Moreover, by sharing inter-regional information, it is expected thatinter-city business deals will increase, taking advantage of each city’s comparative advantage.

5. Motivating SMEs to participate in the database
Many Japanese local public organizations have established sophisticated supporting industry databases with considerable effort. However, effective operation of databases is often more difficult than designing them. Japanese
local public organizations have operated the databases by trial and error. The
major common problem is that SMEs do not participate actively in the databases. A supporting industry database will not function well without proper operation and regular maintenance, no matter how elaborately it is designed.
In Japan, data registration is normally conducted as follows. First, thelocal public organization distributes registration forms to local SMEs by post.
Local officials usually interact with SMEs through paper-based communication,
because most SMEs are unfamiliar with information technology (IT). Second,
SMEs fill in the form and send it back to the local public organization. Third,
the local public organization checks the information filled in by local SMEs andkey all the data into the database. Finally, for updating, some local publicorganizations issue passwords and ask registered firms to update the data bythemselves through the Internet. Others periodically send registration forms to
SMEs by post and ask them to report updated information.
In order to have an active database, it is essential to attract a sufficientnumber of registrants. However, not many SMEs send back registration forms,
despite earnest requests from local public organizations. For example, one public organization in Japan reported that they sent out registration forms to about
1,000 firms, but only eight responded. Small enterprises with ten employees orless often do not reply because they lack time and human resources to fill in theform. In addition, most SMEs are unfamiliar with IT and do not recognize the73Junichi Moribenefit of registering with a web-based database. Similar problems also occur inthe data updating process. SMEs often do not update information such as newinvestment in the production facility. Even though a password is issued for selfupdating through the Internet, few SMEs revise company data by themselves.
To resolve these problems, local public organizations with successful
databases have utilized three measures: (i) designing the database in public-private partnership, (ii) conducting intensive company visits, and (iii) providing
business matching services. Each is explained in detail below.
5.1. Designing the database in public-private partnership
Most local public organizations design supporting industry databasesin cooperation with local IT venture firms specializing in web services. However, if targeted SMEs are also involved in designing the database, they will be
more willing to participate in it. For example, Chino City in Nagano Prefecture
designed the database called Monozukuri-net Chino10 in public-private partnership. The municipal government of Chino organized a database committee,
which consisted of local government officials, representatives from the SME
business association, and a professor of Suwa Tokyo University of Science.
This partnership obliged SMEs to participate actively in the database. As aresult, about 80% of local manufacturing firms in Chino City have participatedin the database from the very beginning. This registration ratio is extremely
high in comparison to those of other cities. Another reason for the high registration ratio may be that SMEs in Chino City are medium-size firms with 100–200
employees rather than micro or small firms.
In addition, public-private partnership can make the database format
more user-friendly, which promotes participation of SMEs in the database. For
further development, it will be beneficial to involve targeted buyers in thedesigning process. In the case of Vietnam, such buyers are mainly FDI assemblers. Listening to their opinions will also improve the database design, which
will contribute to business expansion between FDI firms and local suppliers.

10

Monozukuri-net Chino: http://kougyou.chinoshi.jp/

74Designing and Managing Supporting Industry Databases

5.2. Intensive company visits
The supporting industry database is a sophisticated IT product, but its
operation requires labor-intensive, face-to-face service. Local public organizations which achieve high registration ratios of local SMEs often employ senior
experts with experiences working in manufacturing firms as managers or engineers. These senior experts visit SMEs one by one to help them fill in registration forms, and at the same time they provide technical or managerial advice forthese SMEs. Similarly, one local public organization combines database creation with IT training service. When IT instructors visit SMEs for employee
training, they also teach how to fill in the registration form and explain the benefits of participating in the database.
Intensive company visits may take several years before they succeed.
In the meantime, great patience is required from database builders. For example, the municipal government of Okaya started to gather detailed firm data in
2003. It mailed out registration forms to about 800 firms, but only 116 firms
replied. To increase registration, two senior experts were hired by the municipal
government to visit local firms one by one and gather the required data. After
three years of continued effort, they had collected data from 600 firms, or 75%
of all firms in Okaya City.
Intensive company visits also strengthen mutual trust between SMEs
and local public organizations through face-to-face interaction. Trust is an
important factor to increase SMEs’ participation in the database. One local public organization stated that SMEs often hesitated to disclose company data
because they did not know how local public organizations would use it. Another organization reported that some SMEs did not want to submit data to a private survey company which had a contract with the local authority. Therefore,
intensive company visits with face-to-face conversation can reduce SMEs’ psychological barriers to participate in the database. Another point is that local
public organizations can ensure the credibility of database information because
experts can check consistency between submitted data and actual conditions of
the factory and machines in company visits.
5.3. Providing business matching services
Business matching services, which provide more business activities

75

Junichi Mori

for SMEs, can attract more companies to participate in the supporting industry
database. In order to execute these services, it is necessary to establish a service
window at the local public organization, which receive inquires from buyers
and recommends suitable local suppliers.
Buyers may directly contact suppliers if they are large firms with acompetent procurement team or if they have already found very specific information in the database. On the other hand, if buyers are small and need more
information or recommendation from local public organizations, or if they cannot get sufficient information from the database, a service window will play animportant role in linking buyers with potential suppliers. For example, the Sumida SME Center in Tokyo has a supplier discovery service which is operated bysenior experts in management and engineering11. At buyers’ requests, they
search databases, select several suppliers as candidates, telephone them to see ifthey are interested in new business, and send the short list of potential firms tothe buyers. Other databases such as Okaya City’s database and Monozukuri-net
also have similar business matching services.

6. Issues surrounding performance indicators
The rest of this paper examines three issues related to the management of supporting industry databases: (i) performance indicators, (ii) choice
between national and local databases, and (iii) disclosure versus confidentialityof company data.
In addition to the three supplementary activities explained in the previous section, statistical evidence of expanded business opportunities provides
an important incentive for SMEs to participate in the databases. However, few
Japanese local public organizations accurately grasp the increase of businessvolume due to the existence of a database. For one thing, most of the databases
were established after 2000 and have not yet reached the evaluation stage. More
importantly, however, there is no established methodology to measure theimpact of databases. Local public organizations often count indirect inquires, in

11

Sumida Enterprise Guide: http://www.techno-city.sumida.tokyo.jp/sumida/index.htm

76Designing and Managing Supporting Industry Databases

which buyers ask for the recommendation of suitable suppliers through service
windows. However, they do not have information on the increase of direct
inquires, in which buyers contact local SMEs directly after looking at the database. For example, the Sumida SME Center received 130 indirect inquires in2006, of which 40 led to actual business, but they do not have a systematic way
to count the number and results of direct inquires. Ironically, direct inquires arelikely to increase as the database becomes more sophisticated and user-friendly.
If buyers can find sufficient information in the database, they do not need additional support from local public organizations.
Performance indicators are also necessary for local public organizations to prove the usefulness of the database and secure the budget for its operation. In fact, some local public organizations are facing difficulty in obtaining
additional budget to hire experts for intensive company visits because they cannot produce clear evidence of effectiveness. As a result, registration of targetedcompanies may remain low despite the fact that the database is constructed in a
sophisticated way.
Ideally, this problem will be solved if there is a mechanism in which
SMEs periodically report the number of all incoming business inquiries and theamount of actual business increase thanks to the database. Also, several local
public organizations plan to conduct surveys on the performance of the database. But gathering of precise data on a continuous basis may be costly andtime-consuming to both SMEs and local public organizations.

7. National versus local databases
Some argue that the national government should establish a nationwide supporting industry database because standardizing the format improves
operation efficiency. However, in general and in light of the Japanese experience, local public organizations are in a better position than the national government to operate databases efficiently.
First, it is unnecessary and even undesirable to completely standardize the database across all areas in the country. Instead, database format should
be customized to reflect regional features and priorities. In addition, interregional competition for providing good database service is healthy and can77Junichi Mori

improve the quality of databases.
Second, database size will become unmanageable at the national
level. A nationwide database would require operators to control an immense
volume of company data. Practically speaking, it is impossible to visit and gather detailed data from a very large number of firms. In Japan, where 489,115
SMEs exist in the manufacturing sector12, no successful supporting industry
database has been constructed at the national level. Although Vietnam has amuch smaller number of manufacturing firms, it would be equally difficult tocompile a nationwide database because of the undeveloped data collecting system13. In contrast, at the local level, registrants of a database are limited to thosein relatively small administrative areas. This is why successful databases inJapan are operated by city- or ward-level public organizations14.
The proper role of the national government is to indirectly facilitate
the development of local-level databases in each region. First, the national government can set the guidelines for minimum data requirements or provide subsidies and technical assistance to reduce entry or maintenance cost of databases.
Second, it would be beneficial if the national government initiated a pilot project to develop a model database, as local public organizations often lack sufficient administrative capacity. In such a database, the targeted sector should benarrow and the number of firms to be included should be kept small to matchthe operation capacity of most local public organizations. At the initial stage,
the database may contain very detailed data of a very small number of firms,
say 10 to 20. In this regard, one good example in Vietnam is the businessmatching program organized by the Technical Assistance Center (TAC), which
belongs to the Agency for SME Development (ASMED) under the Ministry ofData for 2004 as cited in Small and Medium Enterprise Agency (2006). In Japan, an SME is
defined as a company with a capital of less than JPY300 million (about US$2.6 million) or whose
employees are fewer than 300.
13
According to the General Statistics Office (GSO, 2006), 20,531 manufacturing firms operate
nationwide. Decree 90/2001/ND-CP defines that an SME is a company with a capital of less than
VND10 billion (about US$0.6 million) or whose employees are fewer than 300. With this definition, 76.1% of Vietnam’s manufacturing firms are SMEs. However, almost all firms in Vietnam
are considered as SMEs by the Japanese standard. For example, in 2003, about 90% of the firms
had capital of less than VND50 billion (about US$3 million) according to GSO (2005).
14
The ward (ku) is an administrative unit within a large city such as Tokyo, Yokohama, and Osaka,corresponding to quan in Vietnam.
1278

Designing and Managing Supporting Industry Databases

Figure 3. Information categories in Japanese databases
Group 1: To be Disclosed

Group 2: To be Confidential

Company Name

Main Products

Profit & Loss

Contact Address

Introduction

Age of General
Director

Availability of
Successor

Group 3: Up to Registrants

Annual Sales

Production Facility

Main Customers

CapitalProcessing Accuracy

Number of
Employees

Quality Certification

Planning and Investment (MPI). This program has collected relatively detailed
information on ten high-potential suppliers in selected sectors, and distributed
the list to Japanese assemblers through the Japan Business Association. Ideally,
interested provincial governments should learn database methodology from thispilot project and initiate their own databases, which also include unique regional features.

8. Disclosure versus confidentiality of company information
In principle, firms are not obliged to disclose all company information in the supporting industry database; participation in databases is voluntary.
Firms should have the right to selectively provide information that can be published. In Japan, registration forms usually consist of three groups of information: (i) information that must be disclosed for all firms, (ii) information thatmust remain confidential for all firms, and (iii) information whose status can bechosen by individual registrants (Figure 3).
The first category of information usually contains company name,contact address, main products, and self-introduction. The second category of
information includes profit and loss, age of general director, and availability ofsuccessor. It is not posted in the database but is used as confidential inputs forpolicy formulation.

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Junichi Mori

The third category of information constitutes the core of the supporting industry database. It includes many items directly related to the supplierselection criteria explained above (Figure 2), such as annual sales, capital size,
production facility, processing accuracy, main customers, number of employees, and quality certifications. Although these data are less sensitive than thosein the second group, it is appropriate to allow registered companies to decide
which information is to be disclosed and which information is to be confidential. If database operators require firms to disclose all data in the third group,
some of them may opt out of the database altogether. For example, one Japanese local public organization asked firms to choose whether to disclose or hide
all data in this category without permitting them to select item-by-item. As aresult, more than half of the registered firms decided to keep all the data secret.
Although allowing companies choices about disclosure is important,the database will not function well if firms withhold too many items in the thirdgroup. Without disclosing them, a supporting industry database becomes a business directory. To avoid this situation, database operators should patiently persuade firms to disclose these data. In Okaya City, only 520 firms agreed to fully
disclose their data in the database among the 600 firms that submitted data. The
remaining 80 firms filled in all required information in the registration form,
but did not want to show it in the web. Some of them are afraid that the webbased database may allow anyone, even unwelcome people or companies, toaccess company information freely. For example, several firms in Okaya City
expressed their concern that releasing company information would increase
junk mail and random sales calls rather than serious business inquiries. The
municipal government of Okaya is now trying to convince them that the benefits of disclosing information should outweigh the demerits. Another solution
may be to limit database access to selected potential buyers screened in advanceby database operators, until the time when registered firms fully recognize thebenefits of data disclosure. In Vietnam, this may be an option in particular forpilot projects, but such screening will inevitably increase the administrative
load of database operators.

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Designing and Managing Supporting Industry Databases

9. Concluding remarks
Several years ago, few FDI assemblers were interested in increasing
local procurement in Vietnam because most of them were busy stabilizing their
daily operations. In the initial stage of operation, FDI assemblers have todepend on imported parts. However, an increasing number of FDI assemblers
are now eager to move local procurement to the next stage, in which they must
improve cost competitiveness for survival. Vietnam’s integration into the global
and regional free-trade systems such as World Trade Organization (WTO) and
ASEAN Free Trade Area (AFTA) also accelerates this movement, because FDI
assemblers, even when they mainly target the domestic market, must competewith imports after tariff protection is removed.
In order to catch this wave of local procurement, effective supporting
industry databases are urgently required. Databases will assist FDI assemblers
to increase local procurement and allow local suppliers to establish business
relations with FDI assemblers. Some are concerned that, because FDI assemblers will trade only with FDI suppliers, local suppliers will not be able toexpand business even if supporting industry databases are constructed. However, this view is myopic and unwarranted. Although FDI assemblers buy parts
mainly from FDI suppliers at first, they will gradually be forced to seek local
suppliers if they hope to reduce procurement cost. Moreover, parts industries
are multi-layered, and FDI suppliers also need to buy parts from local suppliers.
Supporting industry databases can increase business not only between FDI
assemblers and local suppliers but also between FDI suppliers and local suppliers. For these reasons, supporting industry databases are a necessary lubricant
in promoting the strategy of FDI-led industrial development as well as providing benefits to local firms.

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General Statistics Office (GSO). (2005). The real situation of enterprises: Through theresults of surveys conducted in 2002, 2003, 2004. Hanoi: Statistical Publishing
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Junichi Mori_________. (2006). Statistical yearbook of Vietnam. Hanoi: Statistical Publishing
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Japan External Trade Organization (JETRO). (2005). Japanese-affiliated manufacturers
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Vietnam Development Forum (VDF). (June 2006). Supporting industries in Vietnam:
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Tokyo: VDF.
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82

Appendix A
Six Cities Visited by the Author, Map of Okaya City and Vicinity

Designing and Managing Supporting Industry Databases

83

31

Ogaki Chamber ofCommerce

Techno Plaza Okaya

Kawasaki-city Industrial
Kawasaki Database
Development Foundation

Sumida SME Center

Ota-ku Industrial
OTA-TECH.NET
Development Association

4

5

6

7

8

○
○

20,000?
?

ASEAN Supporting
Industry Database

VCCI

BOI, Thailand

SMIDEC, Malaysia

2

1

3

Enterprise 50○

60,000Vietnam Yellow Pages

Vietnam BusinessDirectory

Yellow Pages JSC

1
○

○

?

Chino-city

Suwa-city Industry
Guide

9

10 Suwa-city

○

○

○

?

2,500

○

○

○

○

○

○

Contact
Address

Monozukuri-net Chino about 400

Enterprise Database

1,300

600

194

Hamamatsu Chamber ofCommerce3

Okaya-city Enterprise
Database

54

Monozukuri-net

Fujisawa Chamber ofCommerce2

Registerd
Firm

98

Name

Sagamihara Chamber ofCommerce

Administrator

1

Cou
No.
ntry

Japan

Vietnam84

Others

○

−

−

−

○

○

−

○

○

○

○

○

○

○

Year ofFoundation

−

○

−

−

○

○

○

−

○

○

○

○

○

○

Capital

−

○

−

−

−

−

−

−

−

−

○

○

○

○

Annual
Sales

−

○

−

−

○

○

○

○

○

○

○

○

○

○

−

−

−

−

○

○

○

○

○

○

○

○

○

○

No. ofIntroduction
Employees

Registered Information

○

○

○

○

○

○

○

○

○

○

○

○

○

○

Main
Product

−

−

−

−

−

−

−

○

−

○

○

○

○

○

−

−

−

−

○

○

−

△

○

○

○

○

○

○

Main
Production
Customers
Facility

Appendix B
Comparison of Supporting Industry Databases in Japan, Malaysia, Thailand, and Vietnam

−

−

−

−

−

−

−

−

−

○

○

○

○

○

ISO

Junichi Mori

Designing and Managing Supporting Industry Databases

Appendix C
Sample Company Data of Okaya City’s Enterprise Database   ";   84.   2 2. 8   ,   ;(;   , 2    2. ! , !    ,  ;      

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       !
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/ !   . * 
. *% / 180  1
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1  A  14 / !
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!/  8,,  ?( *&@ 5&("%"
  !   !
1!  .
1,  /  8,,   !   !
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8 
5 . / . 0

01  !!  

/. !     

4  -,  )   / 
!. )/ 2 !  85

Junichi Mori

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,13 7 
1" !  8 09 /  8
209
0 # " ):
  
023 & ##
9;%(2  08"" *"" 5 1
  0#
9,27<"
,
0 " 
0)3 &1"
0
3 &3 03 22

 4 $",  2
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$ 
9

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(


2
 
:
2
%

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8

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6  3 &

9" ! 8

1"3  >8)*+)
″" > 84
% ,+$

1"3  >8  
#  " > 84  

$%

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 )*+) 1"

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1
   *< 
″″,8
0 " 8# 3#< !
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5
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

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,8  !"&'(&Note: Confidential information is blocked out with xxx.
Source: Okaya City’s Enterprise Database, available at http://www.tech-okaya.jp/top.html, as translated by the author.

86