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Jun arima Jetro - Asia Business Week Dublin
The Dublin Asia Ireland Trade and Investment Summit focused on maximizing business opportunities in Japan as presented by Jun Arima, Director General of JETRO London. Key points included Japan's robust economic recovery driven by Abenomics, innovations in renewable energy and health sectors, and Tokyo's Olympic 2020 as a catalyst for growth. The document emphasizes the importance of understanding Japan's business ecosystem, utilizing support networks, and establishing local partnerships for success in the Japanese market.
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Jun arima Jetro - Asia Business Week Dublin
- 1. ASIA BUSINESS WEEKDUBLIN Asia Ireland Trade and Investment Summit 5 June 2014 Maximizing Business Opportunities in Japan Jun Arima Director General, JETRO London
- 2. Maximizing Business Opportunities inJapan June 2014 Jun ARIMA Director General, JETRO London 2
- 3. 3 Abenomics: “3 Arrows”for the Economic Rebirth Bold Monetary Policy Exit from Deflation, Expanded Employment, Economic Boost Flexible Fiscal Policy Growth Strategy Boosting Private Investment 3
- 4. 4 Depreciating Yen andRebounding Stock Prices Annual Hike 57% Highest in 41 Years Annual Drop 18% Biggest in 34 Years
- 5. 5 Robust Economic Recovery AnnualHike 57% Highest in 41 Years Real GDP Growth -3.0% (3Q12) +4.5%(1Q13) +3.5%(2Q13) +1.3%(3Q13) +0.3%(4Q13) +4.9% (1Q14) Private Consumption -1.9% (3Q12) +1.5% (4Q13) + 8.5% Gross Fixed Capital Formation -5.3%(3Q12) +7.3%(4Q13) +12.1%(1Q14) Corporate Performance +12% in Sales +50% in Profit (2013/2012) Year-on-Year Bonus
- 6. 9th/144 inOverall Competitiveness (WEF GCI 2013-2014) 1st /144 in Business Sophistication (WEF GCI 2013-2014) Quantity/quality of local suppliers, broad value chain etc 6 World’s No.1 Sophisticated Market
- 7. 4th/144 inMarket Size (WEF GCI 2013-2014) 7 Huge Market Size GDP Comparison Between Japan’s Region and Foreign Countries
- 8. 8 Strong R&D Basis Source:2012FY Survey by Ministry of Internal Affairs & Communication, OECD R&D Expenses and their shares to GDP (%) R&D Expenses ($100 million) Share to GDP (%) Japan US Germany France UK Canada Italy Russia 0 50 100 150 200 250 300 Japan UK US Germany PCT patents, application/million population 5th/144 in Innovation (WEF GCI 2013-2014)
- 9. 1964 → 2014ＺＥＲＯTokaidoShinkansen opened (1964) 50Years SafetyPassenger fatalities SHINKANSEN TGV ICE 5 trains/h 5 trains/h 15trains/h ×3times Trains / h15 Operating frequency (at peak time） Wider body than any other high speed rail train. Within minute 1 Average delay time per trip Efficiency and ComfortReliability Frequency 9 Excellent Infrastructure - Shinkansen -
- 10. 1st in OECDCountries in Adult Competency on Literacy, Numeracy, Problem Solving with IT Use 10 High Quality Lobour Literacy Numeracy Problem Solving with IT 1 Japan Japan Japan 2 Estonia Estonia Estonia 3 Netherlands Belgium Australia 4 Australia Netherlands Sweden 5 Sweden Sweden Norway 6 Norway Norway Netherlands 7 Denmark Czech Republic Austria 8 Belgium Slovakia Czech Republic 9 Canada Canada Canada 10 Slovakia Austria Korea Source: OECD Programme for the International Assessment of Adult Competencies (2012)
- 11. 3rd Lowest Political/EconomicRisk among 16 Asia Pacific Countries 2nd IPR Protecting Country in the World 6th in Global Peace Index (Only Asian country in top 10) 11 Stable Business Environment 1 Iceland 2 Denmark 3 NZ 4 Austria 5 Switzerland 6 Japan 7 Finland 8 Canada 9 Sweden 10 Belgium Political/Economic Risk in Asia Pacific Countries Global IPR Protection Ranking 2013 Global Peace Index Political & Economic Risk Consultancy’s Annual Report 2012
- 12. Expanding Business Opportunity:Energy Renewable Energy is booming with Feed In Tariff Scheme Full Liberalization of Electricity Market by 2020 in 3 Steps 63 F/S of Smart Communities in the world by Japanese Consortiums 12
- 13. Expanding Business Opportunity:Health 13 0 10 20 30 2008 2009 2010 2011 2012 Expedited Certification of Innovative Medical Devices (Device Lag Behind US) Medical Device Using SME Technologies High Productivity Nursing Care Business Application of Tanker Propeller Manufacturing Technologies for More Durable Joint Prosthesis - Nakashima Medical Co. - Application of Nursing Care Robot Technologies for Improving Productivity - SMART SUPPORT Co.- 2nd largest pharmaceutical market, 3rd largest medical device market in the world and further expanding. Deregulation Progressing (Amended Pharmaceutical Affairs Law)
- 14. 14 4th Arrow: TokyoOlympic 2020 Stadium Olympic Village Media Centre Economic Impact Demand Creation +8.6 - +14.9 trillion JPY Inducing Production + 19.4 - +55 (infrastructure) +95 (tourism) trillion JPY Synergy with Growth Strategy Increase Foreign Visitors Accelerate Infrastructure Investment Enhance Competitiveness of Tokyo Increase Inward FDI
- 15. 15 Gateway to AsiaPacific Market through Mega-FTAs Source: METI 15 Increase FTA Share from 19% to 70% by 2018
- 16. 16 Subsidy Program forFDI to Japan
- 17. 17 Tax and RegulatoryIncentives Combining corporate tax breaks with regional tax reduction measures
- 18. 18 National Strategic EconomicGrowth Area Tokyo Area Ratio of total floor space, employment rules, international medical faculty Kansai Area Medical innovation hub, expansion of mixed medical treatment Niigata Credit guarantee for facilitate large scale agriculture Yabu Shifting the role of agricultural committee for liquidation of farmlands Fukuoka Labor support centre to facilitate ventures and business start-up Okinawa Loosening visa requirement, medical practices by foreign doctors “Groundwork for drilling into hard-rock regulations” (PM Abe 28 March 2014)
- 19. 19 Reviewing Corporate Tax Abolish Reconstruction Tax 1 year earlier (end 2013 FY) “This year, we will set about further reform on corporate tax” PM Abe at Davos 0 5 10 15 20 25 30 35 40 45 Reconstruction Tax Local Tax National Tax Source: Ministry of Finance International Comparison of Corporate Tax
- 20. 20 How to Succeedin Japanese Market ? Understand the business ecosystem (customers, regulatory environment etc) Utilize the support network (JETRO, METI, Local Gov, Embassy, UKTI…) Establish long-lasting local partners Quick response Regular presence and commitments
- 21. 21 Talk to JETROFirst !! Consulting Legal system Cost estimation Taxation Labor law Market regulation Business practice Human resources Location Facilities 50 days free 9 am – 10 pm 6 major cities Fully equipped Shared reception PC room with printer/scanner Conference rooms Information Business library Market reports Business advisor Online database Platform of professional service provider Connection to ministers & regulatory authority JETRO IBSC: one-stop centre for establishing a business base in Japan Invest Japan Hotline: Consultation service on administrative procedures. 21
- 22. 22 Buy Abenomics, InvestJapan JETRO London MidCity Place, 71 High Holborn, London WC1V 6AL, UK Tel:+44-20-7421-8300 Email: Ldn_invest@jetro.go.jp http://www.jetro.go.jp/
Editor's Notes
- #4 You must be familiar with the word “Abenomics” or “Three Arrows”. They are aggressive monetary policy, flexible fiscal policy and growth strategy boosting private investment.
- #5 The impact of these policies is impressive. As you can see, since the autumn of 2012, we have seen drastic change of trends towards yen depreciation and stock rebounding. Yen has become 18% cheaper in 2013. This is the biggest drop in 34 years. Nikkei index has bounced 57% in 2013, the biggest hike in 41 years.
- #6 Abenomics is bearing fruit. Japanese economy is showing a robust recovery. Real GDP growth has turned to positive in the most recent five consecutive quarters. Consumption and capital investment also turned from negative to positive. Corporate performance has dramatically improved both in sales and profit. Bonus payment has also increased.
- #7 In addition to macroeconomic performance, Japan has many strong point. According to World Economic Forum, Japan is the 9th competitive country in the world. In particular, it has the 1st ranking in business sophistication underpinned by quantity and quality of local suppliers and broad value chain. Japan has strong suppliers on components and materials. Their global share is over 70%. Typical example is carbon fibre.
- #8 Japan has the 4th ranking in market size. Japan’s market size is enormous. Each region has GDP equal to entire nation. For example, Kanto region, where Tokyo is located, has the same size of GDP with UK’s entire GDP.
- #9 As for innovation, Japan’s ranking is 5th following Switzerland, Finland, Israel and Sweden. Japan’s R&D expenses per GDP is one of the highest among major countries. Japan has the highest number of patents and patent applications per million population among major countries.
- #10 Another strength of Japan is its excellent infrastructure. Typical example is Shinkanse. Japanese bullet train. For 50 years, it has absolutely no fatality. Its frequency is 15 trains per hour and its average delay per trip is within 1 minute. This is Japan.
- #11 Japan also has very high quality labour. According to the OECD, Japan’s adult has the highest average score in information processing in the field of literacy, numeracy and problem solving with IT.
- #12 Japan’s business environment is very stable and reliable. Japan has the third lowest political and economic risk among 16 Asia Pacific countries. Japan’s intellectual rights protection is the 2nd highest in the world. Japan is the only Asian country ranked in best 10 in Global Peace Index.
- #13 There are many areas offering good business opportunities. Energy sector is one example. Renewable energy sector is booming after introduction of FIT. Japanese electricity sector will be liberalized by 2020 in three steps . This will definitely encourage new entrants and new businesses. We are aiming at smart communities with various types of clean energy technologies and multiple players. This will also create massive business opportunities.
- #14 Health sector is another promising area. Japan has the 2nd largest pharmaceutical and 3rd largest medical device market. With aging population, health/medical market will further expand. To maximize business opportunities, deregulation is progressing including amendment of Pharmaceutical Affairs Law. Certification period of innovative medical devices has been dramatically expedited. Many interesting businesses are emerging. For example, tanker screw technologies are utilized for artificial joints. Robot technologies are used for nursing care.
- #15 Another big opportunity is 2020 Olympic game in Tokyo. It will create massive demand and drive production. It could be called the 4th Arrow.
- #16 You should not just look at Japanese market, but Asia Pacific market beyond it. We are aiming at expansion of our FTA network from 19% to 70% by 2018. Japan is participating in the negotiation of four mega-FTAs including TPP and EU-Japan FTA/EPA. If all of them have been successfully completed, Japan will be a gateway to enormously wide Asia Pacific market.
- #17 Japan is promoting Inward FDI through various policies. Japan has a special subsidy for inward FDI establishing R&D facilities and/or regional headquarters in Japan. For non-SMEs, up to 1/3 of eligible costs (e.g., facility, equipment) will be supported up to 500 million yen. European and American companies have been benefiting from this scheme.
- #18 Combining already available tax incentive under the Act for Promotion of Japan as an Asian Business Centre with regional tax incentives, effective corporate tax in the Zone will be low 20% range. Visa application or patent examination will also be significantly expedited.
- #19 We are taking various initiatives for making Japan most business friendly country. National Strategic Economic Growth Area is a typical example. At the end of March, 6 areas were selected where regulations will be eased to create business friendly environment. Prime Minister Abe called them as “the groundwork for drilling into hard-rock regulations”. In Tokyo area, high rise office building can be built in the city centre through easing regulation on ratio to total floor space. In Kansai area, medical innovation hub will be developed by allowing mixed medical treatment. In Fukuoka, a labour support centre will be established to facilitate business start-up.
- #20 PM Abe is also committed to review internationally high corporate tax. As a first step, special corporate tax for reconstruction was abolished 1 year earlier than planned. Last week in London, PM Abe reiterated his strong determination to review corporate tax this year.
- #21 You may think Japanese market is closed and difficult to make a success. On the contrary, there are many successful foreign companies in Japan. Their average profit ratio is higher than all Japanese average. Of course, there are knacks for success. All the successful companies unanimously refer to such elements as Clear understanding of business ecosystem Clever utilization of support network Finding a good local partner Quick response, regular presence and commitments And most importantly, Patience
- #22 If you consider doing investment in Japan, talk to JETRO, my organization, first. JETRO’s international business support centre is a one stop shop for establishing business base in Japan. JETRO is offering consulting service, free-of-charge business incubation offices and wide range of business/market information. In addition, JETRO has also launched Invest Japan Hotline to help foreign companies going through regulatory procedures.
- #23 This is the photo of PM Abe inviting UK companies to invest in Japan on the occasion of Invest Japan Seminar on 1 May in London. Let me conclude my presentation with his killer phrase “Buy Abenomics and Invest Japan”