Opportunities in JAPAN McHenry County College December 7, 2012
QUICK COMPARISON JAPAN USALand Area 145,925 sq mi 3,794,101 sq miPopulation Density 873.9 people sq mi 83 people sq mi2008 Population 127 million people 304 million people2030 Estimated Population 117 million people 323 million people• Japan is approximately the size of California and stretches from Maine to Florida.• Iowa has 3 times as much arable land as Japan.• It has 13 cities with more than 1 million people, compared to the USA’s 9 cities. Tokyo 8.5 mil Kobe 1.5 mil Saitama 1.2 mil Yokohama 3.6 mil Kyoto 1.4 mil Hiroshima 1.1 mil Osaka 2.6 mil Fukuoka 1.3 mil Sendai 1.0 mil Nagoya 2.2 mil Kawasaki 1.3 mil Kitakyushu 1.0 mil Sapporo 1.9 mil (Japan Marketing Data 2008-09)
QUICK COMPARISON (continued) Japan USA male: 78.8 years male: 75.65 yearsLife Expectancy (2009 est.) female: 85.62 years female: 80.69 yearsPopulation Density (2009 est.) 1.21 children born/woman 2.05 children born/womanGDP PPP (2008 est.) $4.356 trillion (3rd) $14.441 trillion (1st)Per Capita GDP (2008 est.) $34,115 (24th) $47,440 (6th) Source: 2009 CIA World Fact Book• Japan has the world’s longest life expectancy. At the same time, it also is the first industrialized nation to enter zero population growth.• Seniors in Japan have more than $13 trillion in household savings.
By 2055, Japan’s population over 65 years will surpass 40%. The photobelow on the left was recently taken in Shibuya, a neighborhood popularwith young people in Tokyo. In the photo on the right, the young peoplehave been replaced with older people from Sugamo, an elderly hotspot.
JAPANESE MANUFACTURING FACILITIES IN THE USA 1987 1992 1999 2002 2007 2010 Michigan 25 85 103 94 90 109 Indiana 12 76 112 102 97 117 Illinois 28 114 120 116 109 124 Ohio 16 128 183 170 165 168 Kentucky 10 70 100 102 116 122 Tennessee 17 55 99 81 91 85 Alabama 9 24 35 39 48 44 Georgia 40 84 112 105 110 89 TOTAL 157 636 864 809 826 858 U.S. Total 550 1724 2126 1961 1918 2153Source: JETRO’s Annual Survey on Business Conditions of Japanese Companies in the U.S. & Canada – Nov. 2010 & past years
IN THE MIDWEST• Japan’s Presence in the U.S. Midwest - “Steady Growth”• Approximately 27.8% of Japanese Manufacturing in the US is Located in the Midwest. Why?• Particularly, Transportation Machinery Parts Facilities = 48 Source: JETRO’s Annual Survey on Business Conditions of Japanese Companies in the U.S. & Canada – Nov. 2010 Ohio Alabama Texas 4% Others 4% Kentucky Ohio 6% 19% Indiana South Carolina 5% Tennessee Michigan California 4% Georgia North Illinois Carolina Kentucky North Carolina 3% Illinois 14% California 4% South Carolina Georgia Alabama 4% Others Michigan Indiana 12% 13% Texas Tennessee 8%
JAPANESE MANUFACTURERS IN THE US (Total 2,153 Plants) 660 599 205 5 VT 2 53 NH 8 47 1 2 9 MA 1 15 39 CT 22 3 109 RI 2 15 16 12 168 43 69 10 1 124 117 492 7 5 21 DE 1 10 122 28 MD 69 10 9 16 85 20 4 50 16 7 44 89 113 13 20 20 689 9Source: JETRO’s Annual Survey on Business Conditions of Japanese Companies in the U.S. & Canada – Nov. 2010
DEVELOPMENTS & NEW TRENDS• New sectors o Information and Communication Technology (ICT) o Green Technology & Clean Technology (esp. EV, battery) o Medical & Biotechnology o Service robotics o Silver Services• New business models o Services that can be adopted to meet needs of Japanese consumers (e.g., financial, real estate, logistics, funeral) o Technology transfer & licensing
CHALLENGES FOR JAPANESE MANUFACTURERS• Aging population• Overdependence on haken (temporary workers)• Overreliance on automotive industry• Endaka or high yen recession [Refers to the strong yen compared to other currencies. Because Japan is highly dependent on exports, this can cause a recession.]• Rise of Asian tech communities• Low cost foreign production• Maintaining quality versus global competitors• The challenge innovation• Rebuilding from the Great East Japan Earthquake of 2011
THE JAPANESE MARKET1. Japan is the worlds second-largest market with a market scale ranking near the top of developed nations. In fact, each of Japan’s geographic regions has an economic scale similar to or greater than many countries.2. The Japanese are sophisticated consumers with high purchasing power. They tend to be early adopters and are eager to stay on the cutting edge with the latest technologies, making Japan an ideal test market for new products.3. Japan has a highly developed business environment. From major multinationals to small ventures, Japan’s world-class companies produce innovative products and services. Japan’s strong technology-based industries offer many opportunities for foreign companies to partner with Japanese firms at all stages.4. Japanese companies value loyalty and emphasize long-term business relationships. Foreign- affiliated companies have long found their partnerships with Japanese companies to be ones of commitment and dependability, resulting in reduced costs and improved quality.5. Japan is a global leader in technological innovation and product development. Partnerships with Japanese firms enable foreign companies to leverage their respective talents, which is vital to remaining globally competitive.6. Japan offers foreign companies access to new Asian markets. Many consumer products that gain popularity in Japan, such as movies, game software, clothing and cosmetics, go on to become popular throughout East Asia.
SAYING “YES” TO JAPAN Entrepreneurship on the rise in Japan• Japan does not have a history of entrepreneurship. Japanese are more risk averse. Start-up capital is not as readily available.• The government is trying to make Japan more attractive for entrepreneurs. Decreased business costs Revised Commercial Code – April 2006 Globally Harmonized Accounting Rules More Liquidity in Labor Market Improved IT Infrastructure• There are opportunities for innovative foreigners who can recognize the potential in the Japanese market and think outside the box.
THE 3 P’s FOR DOING BUSINESS IN JAPAN• Product & Management – Must be suitable or adaptable to Japanese consumers and businesses • Japanese have a high standard of quality expectations and after sales service• Patience – Japanese decision making takes longer that the American counterpart • Relationship Building • Implementation of business transaction – Consensus building (Ringi System and Nemawashi )• Persistence – A trusting relationship must be built first – Long-term commitment-definition
ABOUT JETRO CHICAGO OUR MISSION In order to strengthen the economic relationship between the U.S. and Japan, it is our mission to assist Midwest companies and/or organizations enabling to expand their business ties with Japanese partners.JETRO Chicago: JETRO Chicago on a National Level:Responsible for 12 Midwest States Responsible for Business Partnering and>Illinois >Missouri Investment in the following industries>Indiana >Nebraska •Automotive OEMs>Iowa >North Dakota •Automotive Parts>Kansas >Ohio •Robotics Technologies>Michigan >South Dakota •Biotechnology>Minnesota >Wisconsin JETRO has 6 offices in the United States: Atlanta, Chicago, Houston, Los Angeles, New York, San Francisco
ABOUT JETROThe Japan External Trade Organization (JETRO) is a government-related organization thatworks to promote mutual trade and investment between Japan and the rest of the world.As Japan’s official overseas trade & investment agency, JETRO’s network, resources andaccess are powerful tools unparalleled by any other organization or company.Established: Established in 1958Employees: Approx. 1,600 (January 2011)Offices: JETRO has 36 offices in Japan and 73 offices in 55 countries world wide.
PRIORITY SECTORS Employment Effect/ Large Scale Investment ① Retail + Service Environment •Apparel , Restaurant, Distribution (Store Expansion, Distribution Center etc) • Next Generation Vehicles & Technology • Services utilizing new business models • New Energy Generation (Solar/Wind/Wave etc.) (Advertising, fitness, etc.) • Manufacturing, supply, and joint development of •Establishment of distribution points for related materials + components (Solar Cells, Lithium Japan-made foodstuffs, products, or Ion Battery Materials, etc. ) contents (Online shopping mall, master • Other (Smartgrid, Material Recycling Technology franchiser etc.) etc.) Smart Meter Data Center ・ BPO ②Other Industries Green-IT Mobile Communications •(Manufacturing Centers, Online Shopping •Call centers, Customer Service etc. w/ potential for job creation)•Pharmaceutical Development ICT(Contract Research Organizations, HC IT (Electronic Online Reservations • LCC + other airlines Japan service•Contract Manufacturing Organizations, Medical Records) Flight Simulator (including regional airports)software etc.) HC Business Process Augmented Reality • Airport Related Services (Fixed Base•Medical Devices+ Systems Outsourcing (BPO) Applications Operator etc.)(AED, Cancer Diagnosis + Treatment etc.) •Establishment of local regular ferry•Tools and services for Geriatric Care routes(Acquisitions of private nursing homes,Telemedicine etc.) • Friendly acquisitions of hotels +resorts•Beauty Related (Anti-aging products & Medical Tourism • Businesses targeted to Asian touristsservices etc.) (Visit for the purpose of medical (Travel agency, Payment Systems etc.） treatment) Healthcare -Spa Facilities Tourism
JETRO’S SERVICES• Consultations on corporate structures, company registration, visa applications and tax and labor procedures• Market research on different industry sectors• Temporary office space at JETRO’s Invest Japan Business Support Centers (IBSCs)• Human resource assistance, including introductions to qualified HR agencies and information on wage rates, employment law and Japan’s social insurance system• Site selection assistance• Business matching programs and Japan Trade Missions• Examples of past success cases• Information on government subsidies and incentives
JETRO’S SERVICES (continued)• To date, JETRO has helped more than 500 companies from around the world establish an office in Japan.• JETRO Chicago has helped more than 35 companies establish a Japan office since 2005.
INVEST JAPAN BUSINESS SUPPORT CENTERS (IBSCs) Nagoya Osaka Tokyo KobeFukuoka Yokohama
AMENTIES @ THE NAGOYA IBSC 5 incubations offices, equipped with a desk, chairs, lockers, telephone, fax, internet connection 2 conference rooms 1 auditorium hall
STARTING A BUSINESS IN JAPAN (JETRO IBSC services are in blue letters)
JETRO CHICAGO IS HERE TO HELP YOU! JETRO Chicago Business Development TeamRalph Inforzato Kevin KalbDirector of Business Development Project Coordinator, Business DevelopmentTel: 312-832-6000 Ext 103 Robotics, automotive, and manufacturing inquiriesEmail: Ralph_Inforzato@jetro.go.jp Tel: 312-832-6000 Ext 205 Email: Kevin_Kalb@jetro.go.jpKohei OkuiDirector of Business Development Robert CorderTel: 312-832-6000 Ext 105 Project Coordinator, Business DevelopmentEmail: Kohei_Okui@jetro.go.jp Biotechnology & life sciences and business services inquiries Tel: 312-832-6000 Ext 204 Email: Robert_Corder@jetro.go.jp We look forward to helping you!