In his policy speech to the Diet in 2003, Prime Minister Junichiro Koizumi announced a new target of doubling the cumulative amount of foreign direct investment in Japan within five years. Since then, the Japanese government has been working actively towards this target through related ministries and agencies to promote investment opportunities in Japan, deregulate and remove barriers to foreign companies, create a favourable living environment, and improve local and national structures and systems. As part of this endeavour, JETRO has been providing more support to foreign businesses in Japan than ever before. Mr Yutaka Harada, Senior Advisor Invest Japan, at the JETRO London office, introduces the role that JETRO plays in the following interview:
|Mr Harada gives advice to a British businessman
What kind of initiatives have been taken by JETRO in response to Prime Minister Koizumi's target?
In October 2002, JETRO London set up an Investment Team consisting of five members. The number of annual consultations has increased rapidly and we carried out over 180 consultations in the last fiscal year.
Previously, when setting up a business in Japan, companies had to go through numerous bureaucratic procedures and visit various ministries and institutions just to get information. In May 2003, JETRO set up the Invest Japan Business Support Centre (IBSC) in central Tokyo, to bring all the services needed for investing in Japan under the one roof. Highly specialised advisors and sector specialists have been retained within the centre, providing confidential consultations on matters such as potential partners, company registration, taxation, office location and recruitment. Companies can also take advantage of office space, a reference library and auditorium, all located within the same facility. Use of all of these services is free of charge, for a period of up to two months. Since it opened, 11 UK companies have benefited from the centre's support services.
In addition, the JETRO London Office has been busy conducting seminars all over the UK in collaboration with Regional Development Agencies and UK Trade and Investment (UKTI), with the aim of introducing the business opportunities in Japan.
|JETRO's Invest Japan Business Support Centre (IBSC), Tokyo
What are the advantages for Japanese economy of promoting foreign business in Japan?
What is envisaged is far more than an inflow of capital into Japan; it is the fresh thinking, management know-how and technology that foreign companies can bring to Japan, further creating a sound and competitive business environment in Japanese society. This is one of the keys to rejuvenating the Japanese economy and creating new job opportunities which will be advantageous for the Japanese people. This also happened in the UK, when it accelerated the recovery of its economy by actively inviting foreign direct investment in the 1980s and '90s.
What are the advantages of setting up a business in Japan compared to other locations in Asia?
Japan is a different kind of investment location to the rest of Asia. It is not actively searching for a large volume of greenfield investments but more high-end investment. Japan's labour costs are higher than other areas in Asia but, at the same time, it boasts an abundance of highly trained and educated human resources with the highest ratio of R&D investment to GDP in the world. Other attractive qualities include our excellent telecommunication infrastructure, easy access to data and statistics for business development and high level of technology, with a strong system for the protection of intellectual property rights. Furthermore, once new technology has been developed in Japan, it is then possible to transfer know-how to other markets to gain further profit, as Vodafone did with its camera phone technology in the past. Finally one can not forget that Japan still has the second largest economy in the world which grew at its fastest pace in more than 13 years in the final quarter of last year, surpassing growth in the US and Europe. Japan's population is the wealthiest in the world, with one of the best income levels and highest rates of individual savings, providing excellent opportunities in the retail sector.
In what cases have UK companies been successful in launching business in Japan? What is the key?
I think that any UK company, which has a competitive and precise business model in the UK and other foreign markets, and a firm willingness to succeed, has a strong chance of success in Japan. The ����ey' would be to research the market fully before you enter, which of course, is something JETRO can provide support and guidance on.
Could you introduce a recent success story of a British company in the Japanese market?
UK companies are successful because they bring unique concepts to the Japanese market. Examples of companies which JETRO has supported would include one that sells industrial components of world-class products through catalogues; another that produces handmade beauty products in the style of a food retailer and already has 28 branches and its own production facilities in Japan; and another consultancy firm which advises non-profit organisations on fundraising.
Contact: Investment Team, JETRO London Centre, Leconfield House Curzon Street London W1J 5HZ; tel: 020 7470 4700; fax: 020 7491 7570, email: email@example.com.