Introduction to Doing Business in Japan

Transcription

1 Introduction to Doing Business in Japan January 19 th, 2011 Kevin Kalb, Project Coordinator

2 Presentation Outline Japan s Demographics and Economy MajorJapanese Industries & Trends Japanese Presence in the US Establishing Business in Japan What is JETRO?

3 QUICK COMPARISON JAPAN USA Land Area 145,925 sq mi 3,794,101 sq mi Population Density people sq mi 82.2 people sq mi 2010 Population 127 million people 312 million people 2030 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. Tokyo is the largest metropolitan area in the world with 35.6 million people. Japan 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 ) 09)

4 Life Expectancy (2009 est.) QUICK COMPARISON (continued) Japan male: 78.8 years female: years USA male: years female: years GDP (2010 est.) t) $4.308 trillion (3 rd ) $ trillion (1 st ) Per Capita GDP (2010 est.) $42,325 (17 th ) $47,132(9 th ) Source: UN, International Monetary Fund 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.

5 Japan s Aging Society (in Thousand) Age of 65 or older Higher Case Medium Case Lower Case Popula ation Age of Actual Estimates Age of 14 or younger Data : Ministry of Health, Labor and Welfare, Government of Japan (Year)

6 QUICK COMPARISON 2010 est. GDP by country Source: International Monetary Fund

7 WHAT DO JAPANESE MANUFACTURERS MAKE? Automobiles, heavy trucks and parts Electronics (consumer electronics, computers and semiconductors) Industrial machinery (automation, tooling, etc.) Iron & Steel Petrochemicals Pharmaceuticals & biotechnology Advanced materials (composites, nanotech, etc.) 65% of all Japanese exports are automobiles, heavy trucks or related parts. Japan is home to six out of top 10 largest vehicle manufacturers in the world. Japan has 7 out of top 20 world's largest chip manufacturers as of In 2004, the Japanese food industry (including processing) was worth more than $800 billion, which is comparable to the food industries of the USA and the EU.

8 DEVELOPMENTS & NEW TRENDS New sectors o Information and Communication Technology (ICT) o Green Technology & Clean Technology o Medical & Biotechnology o Service Robotics o Cool Japan o Japanese Food and Food Ingredients 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 & licensingi

9 JAPANESE PRESENCE IN THE USA In2005, Japan was the second largest investor in the U.S. (Survey of Current Business, Aug. 2006,Tables F4 & F5, pp. D11 D12) UK 17.3% Japan 11.6% ($190.3 billion dollars) Germany 11.3% In 2004, Japanese affiliated companies in the U.S. employed more than 614,000 people. In 2007, there were over 1,900 Japanese affiliated manufacturing plants in the US (JETRO). Beyond the economic impact, these companies import ideas like monozukuri and kaizen. QUESTION: Where is Japanese manufacturing in the US? Why is it there?

10 JAPANESE MANUFACTURING FACILITIES IN THE USA Illinois Indiana Michigan Ohio Kentucky Tennessee Alabama Georgia TOTAL U.S. Total Source: JETRO Chicago Manufacturing Plant Survey

11 WHAT MAKES JAPANESE MANUFACTURERS DIFFERENT? MONOZUKURI! QUALITY Manufacturers are committed to quality, not just cost. EFFICIENCY Manufacturers focus on eliminating waste and inefficiency as much as possible. This includes nonproductive activity (muda), inconsistencies (mura) and physical strain (muri). KAIZEN & GEMBA The continual and ongoing process of improvement and learning by all employees, from the CEO to production workers, is kaizen. Gemba means the actual place where work is done, where kaizen takes place. KANBAN Termed Just In Time in English, this means having the materials and workers at the precise moment you need them, eliminating i excess inventory. FLEXIBILITY Japanese production workers are usually skilled in multiple functions, allowing employees to be used shifted as need be. COOPERATION Management and employees work together, building consensus before major decisions. CUSTOMER FOCUS Companies listen to their customers and give them what they need.

12 CHALLENGES FOR JAPANESE MANUFACTURERS Over dependence on haken (temporary workers) >Automotive focus Endaka 2010 [Endaka means high yen recession. This is a state in which the yen is high compared to other currencies. Since Japan is highly dependent on exports, this can cause a recession.] Rise of Asian tech communities Low cost foreign production Under utilization of women in workforce

13 THE JAPANESE MARKET 1. 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 technologybased 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 Japanesecompanies 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 i globally ll 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 p throughout East Asia.

14 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

15 About JETRO (Japan External Trade Organization) JETRO, or the Japan External Trade Organization, is a government-related organization that works to promote o mutual ua trade and investment e between ee 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. Established: Established in 1958 Employees: l Approx. 1,680 (830 in Japan and 850 overseas) (As of April 2007) Offices: JETRO has 36 offices in Japan and 73 offices in 54 countries world wide.

16 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 is responsible for 12 Midwest states JETRO has 6 offices in the United States: Atlanta, Chicago, Houston, Los Angeles, New York, San Francisco

17 Integrated JETRO Support JETRO is a one stop servicecenter center, ready to assist companies with all of their Japan needs. Setting up Office Time Frame IBSC Consulting Business Development Group Mission Business Matching Advisor Providing Basic Information Attractive Sectors, Success Cases Incentives Sharing the Japanese Mindset Monozukuri Seminar / Workshop etc

18 We are here to help your company JETRO Chicago Business Development Team Ralph Inforzato Director of Business Development Tel: Ext Tomonori Shibahara Director ofbusiness Development Tel: Ext Gl Galen Cox Automotive Advisor, State of Michigan Tel: Kevin Kalb ProjectCoordinator Coordinator, Business Development Robotics, automotive, and manufacturing inquiries Tel: Ext Robert Corder Project Coordinator, Business Development Biotechnology & life sciences and business services inquiries Tel: Ext

19 Thank you! For more information, please visit