Industry and energy

This section focuses on the secondary sector, namely manufacturing and energy industries. These industries produce goods and services that are consumed as final or intermediate goods and services, and that are necessary for activities in a society, while they also employ labour and provide wages to households. Physical damage to these industries not only leads to a shortage of goods and services that they produce, but also causes declines in income to their labour forces. In addition, because of the globalised production networks as well as the lean production system employed in various manufacturing industries, the damage and business interruptions brought about in one region could spread to other regions in the same countries and potentially across the world. Some recent empirical observations, for example the declines in production of car-manufacturing companies at various countries in the aftermath of the 2011 east Japan earthquake and tsunami, proved that the modern manufacturing network appears vulnerable to such catastrophic disasters. In this context, the production networks, such as intra- and interindustry linkages, should be encompassed to understand a comprehensive picture of disaster effects.