Message from the President Jan.2009

I’d like to take this opportunity to extend to all of you my sincere wishes for a Happy New Year.

It’s currently impossible to predict exactly what kind of year 2009 will be. It’s common knowledge that the environment surrounding companies and individuals will become much harsher than last year, but how severe the situation could become, or how long it will last, defies prediction. Meitec’s corporate clients are currently preparing their budgets for the next term. Work has been delayed in comparison with conventional years, primarily because trends over the next term in a large number of industries cannot be foreseen. Some people have expressed optimism that the global financial turmoil will subside by around the autumn of this year, and will be followed by a gradual economic recovery. Others take a pessimistic view that because the world is now experiencing what the Japanese economy went through years ago after the bursting of the economic bubble, we must resign ourselves to continuing in the present situation for up to five years. Under such completely unpredictable circumstances, companies and individuals have begun the new year. One thing, however, can be said with certainty: we must make 2009 the year of doing what needs to be done.

Naturally, this raises the question: what genuinely needs to be done? In my view, there are two things: what needs to be done continuously whether in normal times or in emergencies, and what needs to be done precisely because we’re in an emergency situation. In the case of Meitec’s business, the Company’s required to implement measures designed to make its individual employees grow as a team of professional engineers to boost customer satisfaction on an ongoing basis in both normal times and in times of emergency. That’s why Meitec, which is currently in the midst of preparing its budget for the next term, is considering increasing, rather than reducing, the budget for investment in employee education.

I think that all companies today are sorting out what should be done and what shouldn’t be done. We may view this sorting as balancing a short-term strategy against a medium- and long-term one. In the case of manufacturers, for instance, to sustain growth over the medium and long term, they must continue investing in technological development, even if doing so would put them in a very challenging situation in the short run. In unforeseeable circumstances, however, a so-called “select-and-focus” approach will naturally come into prominence. An example of this is a decision to stick to a certain theme, no matter how difficult its pursuit proves to be, and to withdraw from other themes, if a review in terms of the three elements of competitive advantage—cost, quality and speed—indicates that companies can survive in the global market in that theme. The decision that companies have made traditionally—to remain in a field as long as there’s a possibility of making it into the top three in their industry—may be replaced by a decision to enter only those areas that offer the opportunity of becoming No. 1 in the industry.

Such rigorous scrutiny by manufacturers, in an effort to narrow down development themes, is expected to have a detrimental effect on Meitec. Nevertheless, a macro point of view suggests that manufacturers will never forsake technological development investment. So there are always areas where engineers will be needed, no matter how severe the situation. For example, prices of crude oil and other natural resources, which had risen sharply, are now falling, but real demand will increase inevitably so long as the world economy expands as a whole. Thus, prices are expected to skyrocket again when the economy enters a recovery stage, which means that in the next economic recovery phase, demand for energy-efficient and resource-saving products and services will be bigger than ever before. Also expected is a rise in demand in developing nations not for high-performance, high-priced products but for low-priced products offering reasonable functions. At the same time, in the face of environmental concerns—foremost among them the problem with carbon dioxide—there will be greater calls for production activity that minimizes the burden on the earth’s environment. This suggests that technological development which stays in step with such major trends will certainly continue to be pursued by some companies, no matter how severe the situation may become. What all Meitec employees must do before anything else, therefore, is to not lose the opportunity presented by these circumstances.

In 2009, I aim to carry out all activities while keeping in mind the old saying, “Hope for the best, but prepare for the worst.”