Report Highlights Japanese Businesses’ Contributions to Southern California Economy

usa_japan_ca_flagsSouthern California is one of the leading global hubs for Japanese companies, according to a recent survey by the Japan External Trade Organization (JETRO) Los Angeles and the Japan Business Association of Southern California (JBA).

The “2014 Survey of Japanese Companies in Southern California,” the 11th of its type, went to 673 of the 1,000 Japanese companies in Southern California; 70% responded.

Based in Southern California

Japanese companies’ investment in the regional economy comes through incorporating in the United States, not by acquisitions or capital participation, the survey reported. Los Angeles County was home for approximately 70% of the companies surveyed, followed by Orange County and San Diego County. Home for many well-established Japanese companies is the City of Torrance, location for 192 companies. The city of Los Angeles has the second highest number with 96 companies, followed by 54 in Irvine and 36 in Gardena.

Nearly half of the companies surveyed are planning to expand existing facilities/branches or add a new facility/branch in Southern California over the next year or two.

The survey also revealed improved revenues for Japanese companies in the region. Compared to the previous survey in 2012, the number of companies reporting increased sales from the previous year and increased profits was several percentage points higher. The percentage of companies expecting an upswing in operating profit in the next couple of years also has increased.

Industry Distribution

More than half of the Japanese businesses come from the manufacturing (29.9%) and services (27.1%) industries, while wholesale/retail accounts for 15.5%, trading 12.8% and transportation, 7.9%.

Ready access to the Los Angeles and Long Beach ports, as well as the Los Angeles International Airport are significant factors leading to the concentration of these industries in Southern California, which serves as both a major logistics hub in the U.S. and a major trade gateway to Asia.

Job Creation

Japanese firms have more than 57,000 employees in California, nearly 97% of whom are hired locally. The average salary for employees in Japanese firms is $84,000, which totals nearly $8 billion in annual payroll.  Nearly 90% of Japanese companies provide health care insurance for their employees, the survey found.


The sustainability of California’s economic recovery remains a significant concern for Japanese investors, according to the JETRO/JBA survey. The economic slowdown was cited as a business challenge by 75.9% of those responding to the survey, far more than other concerns—labor cost increases (47.4%), the exchange rate (45%), energy/material prices (20.4%) and tougher regulations (20.4%).

See the full survey here.

Since 1983, JBA and JETRO have conducted surveys to obtain an accurate assessment of Japanese companies in Southern California. The results of these surveys have been utilized to foster better understanding of Japanese companies in the region and facilitate their business activities.

Staff Contact: Susanne Stirling

Susanne T. Stirling
Susanne T. Stirling, senior vice president, international affairs, has headed CalChamber international activities for more than four decades. She is an appointee of the U.S. Secretary of Commerce to the National Export Council, and serves on the U.S. Chamber of Commerce International Policy Committee, the California International Relations Foundation, and the Chile-California Council. Originally from Denmark, she studied at the University of Copenhagen and holds a B.A. in international relations from the University of the Pacific, where she served as a regent from 2012 to 2021. She earned an M.A. from the School of International Relations at the University of Southern California. See full bio.