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Opportunities in JAPAN
McHenry County College
December 7, 2012
QUICK COMPARISONJAPAN USA
Land Area 145,925 sq mi 3,794,101 sq mi
Population Density 873.9 people sq mi 83 people sq mi
2008 Population 127 million people 304 million people
2030 Estimated Population 117 million people 323 million people
Tokyo 8.5 mil Kobe 1.5 mil Saitama 1.2 milYokohama 3.6 mil Kyoto 1.4 mil Hiroshima 1.1 milOsaka 2.6 mil Fukuoka 1.3 mil Sendai 1.0 milNagoya 2.2 mil Kawasaki 1.3 mil Kitakyushu 1.0 milSapporo 1.9 mil
(Japan Marketing Data 2008-09)
• 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.
Japan USA
Life Expectancy (2009 est.) male: 78.8 yearsfemale: 85.62 years
male: 75.65 yearsfemale: 80.69 years
Population Density (2009 est.) 1.21 children born/woman 2.05 children born/woman
GDP 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
QUICK COMPARISON(continued)
• 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 photo below on the left was recently taken in Shibuya, a neighborhood popular with young people in Tokyo. In the photo on the right, the young people have been replaced with older people from Sugamo, an elderly hotspot.
JAPANESE MANUFACTURING FACILITIES IN THE USA
1987 1992 1999 2002 2007 2010Michigan 25 85 103 94 90 109Indiana 12 76 112 102 97 117Illinois 28 114 120 116 109 124Ohio 16 128 183 170 165 168Kentucky 10 70 100 102 116 122Tennessee 17 55 99 81 91 85Alabama 9 24 35 39 48 44Georgia 40 84 112 105 110 89TOTAL 157 636 864 809 826 858U.S. Total 550 1724 2126 1961 1918 2153
Source: 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
Ohio19%
Kentucky14%
Indiana13%
Tennessee8%
Michigan12%
Georgia4%
Illinois4%
North Carolina3%
California4%
South Carolina5%
Alabama4% Others
6%
Texas4%
OhioKentuckyIndianaTennesseeMichiganGeorgiaIllinoisNorth CarolinaCaliforniaSouth CarolinaAlabamaOthersTexas
JAPANESE MANUFACTURERS IN THE US (Total 2,153 Plants)
53
47
492
13
9
1
10
3
1
7
20 4
1
16
5
9
113
9
12
21
16
7
15
124 117
109
168
122
85
16
44
20
20
89
50
69
28 10
MD
10
DE 1
69 43
39
5
RI 2
CT
15
MA
22
NH 8
VT 2 205
599
689
660
2
Source: 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 & Biotechnologyo Service roboticso Silver Services
• New business modelso Services that can be adopted to meet needs of Japanese
consumers (e.g., financial, real estate, logistics, funeral)o Technology transfer & licensing
CHALLENGES FORJAPANESE 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 world's 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 JAPANEntrepreneurship 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 CHICAGOOUR MISSIONIn 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 has 6 offices in the United States:Atlanta, Chicago, Houston, Los Angeles, New York, San Francisco
JETRO Chicago: Responsible for 12 Midwest States
>Illinois >Missouri>Indiana >Nebraska>Iowa >North Dakota>Kansas >Ohio>Michigan >South Dakota>Minnesota >Wisconsin
JETRO Chicago on a National Level:
Responsible for Business Partnering and Investment in the following industries
• Automotive OEMs• Automotive Parts• Robotics Technologies• Biotechnology
The Japan External Trade Organization (JETRO) is a government-related organization that works 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 and access are powerful tools unparalleled by any other organization or company.
ABOUT JETRO
Established: Established in 1958
Employees: Approx. 1,600 (January 2011)
Offices: JETRO has 36 offices in Japan and 73 offices in 55 countries world
wide.
•Pharmaceutical Development (Contract Research Organizations, •Contract Manufacturing Organizations,software etc.)•Medical Devices+ Systems(AED, Cancer Diagnosis + Treatment etc.)•Tools and services for Geriatric Care (Acquisitions of private nursing homes,Telemedicine etc.)•Beauty Related (Anti-aging products &services etc.)
Environment• Next Generation Vehicles & Technology• New Energy Generation (Solar/Wind/Wave etc.)• Manufacturing, supply, and joint development of
related materials + components (Solar Cells, Lithium Ion Battery Materials, etc. )
• Other (Smartgrid, Material Recycling Technology etc.)
• LCC + other airlines Japan service (including regional airports)
• Airport Related Services (Fixed Base Operator etc.)
• Establishment of local regular ferry routes
• Friendly acquisitions of hotels +resorts• Businesses targeted to Asian tourists
(Travel agency, Payment Systems etc. )
Medical Tourism (Visit for the purpose of medical
treatment)-Spa Facilities
ICT
① Retail + Service•Apparel , Restaurant, Distribution(Store Expansion, Distribution Center etc) • Services utilizing new business models (Advertising, fitness, etc.) •Establishment of distribution points for Japan-made foodstuffs, products, or contents (Online shopping mall, master franchiser etc.)
②Other Industries•(Manufacturing Centers, •Call centers, Customer Service etc. w/ potential for job creation)
Healthcare Tourism
Employment Effect/ Large Scale Investment
Smart MeterGreen-IT
Data Center ・ BPO Mobile Communications
Online Shopping
HC IT (Electronic Medical Records) HC Business Process Outsourcing (BPO)
Online ReservationsFlight Simulator
Augmented Reality Applications
PRIORITY SECTORS
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
• 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.
(continued)
JETRO’S SERVICES
Tokyo
Yokohama
Osaka
Kobe
Fukuoka
Nagoya
INVEST JAPAN BUSINESS SUPPORT CENTERS (IBSCs)
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 InforzatoDirector of Business DevelopmentTel: 312-832-6000 Ext 103Email: [email protected]
Kohei OkuiDirector of Business DevelopmentTel: 312-832-6000 Ext 105Email: [email protected]
Kevin KalbProject Coordinator, Business DevelopmentRobotics, automotive, and manufacturing inquiriesTel: 312-832-6000 Ext 205Email: [email protected]
Robert CorderProject Coordinator, Business DevelopmentBiotechnology & life sciences and business services inquiriesTel: 312-832-6000 Ext 204Email: [email protected]
We look forward to helping you!