Japan has been going through a series downturns and recessions further weighed down by declining asset prices and a strong currency since the 1990s. This inevitably led the once second-largest economy in the world to face nearly two decades of hardship.

Despite being in the doldrums, Japan was able to weather the storm quite well thanks to its diverse and sustainable pool of conglomerates, and small and medium enterprises, according to a Bank of Korea report obtained by a local newswire.

The report filed in December last year was aimed to provide lessons and examples from the Japanese industrial sector to Korean companies, which are also about to face the same difficulty as Japan as Korea’s economy enters a low-growth period with a shrinking workforce due to the rapidly aging population.

Japan’s high-tech manufacturing and engineering resources, or the art of Monozukuri, that survived throughout the years have contributed to the country to remain as an economic powerhouse.

Its technology that has been passed down through generations kept Japanese companies competitive, while on the contrary, owners or founders of Korean companies were too focused on transferring management rights to their next of kin whether or not they were fit for the top executive job.

Japanese companies foremost look at whether the next in line for top positions are professionally capable, and do not grant preferential treatment to family members.

This makes a vast difference, said the report, on why Japan has the world’s largest number of sustainable and durable companies that have lasted for over 100 years.

There are about 7,200 companies that have lasted over 200 years in 57 countries. Japan has the highest number of companies at more than 3,100 that have operated for 200 years, while there are only two in Korea that remained in the market for 100 years.

Doosan Group and Korea Electric Power Corp. are the only two centennial companies, according to Forbes.

By Park Hyong-ki (hkp@heraldcorp.com)