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In 1873, the Ministry of Engineering, responsible for promoting Japan’s modernization, commissioned Hisashige Tanaka to develop telegraphic equipment. He built a factory in Tokyo in 1875 to accommodate the growing government orders. This was Tanaka Seizo-sho (Tanaka Engineering Works), one of the forerunners of Toshiba.Separately, in 1878, Ichisuke Fujioka developed Japan’s first arc lamp while studying at the Imperial College of Engineering (now the Faculty of Engineering of the University of Tokyo), under the tutelage of visiting professor William Ayrton. At that time, Japan had to import all of its electric lamps. Fujioka established Hakunetsu-sha Co., Ltd. in 1890 to manufacture light bulbs in Japan.
The two firms pioneered the development of electrical equipment in Japan. Tanaka Engineering Works created a waterwheel-powered turbine generator and Hakunetsu-sha developed a radio transmitter. In 1921, Tokyo Denki (Tokyo Electric Company; the name was changed from Hakunetsu-sha in 1899) invented the double-coil electric bulb, later recognized as one of the six great inventions in the history of bulb technology.
The Great Kanto Earthquake of 1923 caused immense damage, leaving over 100,000 people dead. Tokyo Electric Company lost many employees in the disaster. The company’s president helped to inspire the reconstruction effort, famously remarking that, “A factory without a research institute is like an insect without antennae.” The company actively entered new fields around this time, including medical equipment and radio devices.
In the 1930s, the Japanese government introduced a ban on the production of home appliances to conserve vital supplies of iron and steel for the war effort. Hard times had arrived.
As co-members of the Mitsui zaibatsu, led by Mitsui Bank, Shibaura Seisaku-sho (Shibaura Engineering Works; the name was changed from Tanaka Engineering Works in 1893) and Tokyo Electric Company held cross-shareholdings and collaborated in a number of areas. As technology made progress, demand started to grow for home appliances that incorporated the advances made in heavy electrical machinery. The two companies merged in 1939 to form Tokyo Shibaura Denki (Tokyo Shibaura Electric Co., Ltd.). The merged entity already had ambitions to become one of the world’s leading electrical machinery manufacturers.
As the war intensified, the company grew rapidly by filling state orders for radios, vacuum tubes and other military supplies, and also producing generators. However, production capacity was crippled by bombing raids targeting factories.
As production recovered in the postwar years, the company focused initially on heavy electrical machinery and then returned to making smaller electrical equipment as reconstruction progressed. New sales subsidiaries were established to strengthen sales capabilities and exports to Southeast Asia began.
Japan’s economy was booming by the second half of the 1950s, leading to rapid growth in the heavy electrical machinery, electronics and communications industries. Sales and profits grew quickly as Toshiba created novel products, developed original technologies, expanded existing factories and built new production facilities to supply fast-growing markets.
Overseas sales and manufacturing subsidiaries were established to develop the international business. The ratio of overseas sales gradually rose.
The economic downturn following the first oil crisis in 1973 led Toshiba to invest more heavily in R&D, the rationale being that profits were the source of corporate vitality while technology was the driving force behind business development. The expanded R&D organization and higher R&D spending led to many new technologies that were the first in the world or the first in Japan.
Other initiatives to improve production technology, maintain high quality, save labor and shorten delivery lead-times contributed to significantly higher profits.
in 1984, the abbreviated form “Toshiba” replaced Tokyo Shibaura Denki as the company’s official name (in English, “Toshiba Corporation” was adopted in 1983).
Economic stagnation in Japan during the 1990s led Toshiba to adopt the “concentration and selection” approach to achieve sustained growth. This involved concentrating resources in sectors with growth potential and new businesses, while selectively promoting growth in mature or declining sectors through reform and restructuring. Toshiba focused resources on semiconductors and expanded the PC business.
In 1999, Toshiba introduced the in-house company system, creating eight in-house companies. Authority was delegated to these in-house companies to give them greater autonomy and promote faster decision-making.
Rapid economic growth in developing countries and sluggish growth in the developed world have led to major changes in economic and industrial paradigms in the 21st century. To prevail amid intensifying global competition transcending national borders, Toshiba continues to focus on restructuring businesses to reinforce their earnings base while seeking to transform its overall business structure by targeting growth sectors and emerging businesses. The aim is to become an even stronger global contender by pursuing the “concentration and selection” approach while creating World's First and World's No. 1 products and services that are cost-competitive and captivate customers.