This paper examines one aspect of porcelain production in modern Japan. In contrast to the neighboring Tono area, which mainly increased the number of its small-scale businesses, Seto area businesses increased their factory sizes. Seto also differed from its other neighboring area, Nagoya, which was mechanized thanks to large quantities of merchant capital.<BR>At the beginning of the Meiji era, the Seto area attained rapid growth owing to the export of porcelain to the United States and China. But businesses were deprived of a home market by the Tono area because of its higher wages. In addition, Seto porcelain gradually seemed to reach its peak for export production because of its decreasing popularity and defeat in competition with products from other areas. The Seto area subsequently specialized in the middle process, not the final process : Seto became a subcontractor for Nagoya.<BR>In order to cope with the difficult situation, Seto businesses used a new means of production : plaster molds. The use of plaster molds adapted relatively well to mass and homogeneous production, and businesses had to expand their factory sizes. But the domestic means of production, the potter's wheel, was still maintained. In other words, the technological innovation was a reversible change.<BR>The expansion of factory sizes influenced Seto in other ways. There was, for example, specialization of labor, the local money market, and adjustment to new technology. To conclude, Seto's businesses unexpectedly expanded their factories' sizes, and they were able to adapt to changes in the economy and prepare for future growth.