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Why Should Companies Invest in Japan?
Posted in: Blog, Business in Japan by admin on November 17, 2009
JETRO, the Japan External Trade Organization, offers some compelling reasons for companies to invest in Japan:
1. Japan — A Market of Enormous Potential – Japan is an enormous market, the world’s second largest in terms of economic scale (2007: US GDP 13.8 trillion, Japan 4.4 trillion, Germany and China 3.3 trillion). The scale of the economies of the country’s individual regions rivals that of some countries. Japan’s regions also offer an attractive market and extensive business opportunities.
2. Sophisticated Consumers with High Purchasing Power and Discerning Tastes – In addition to possessing high purchasing power, Japanese consumers are early adapters and move quickly to stay on the cutting edge of the latest technologies.
3. Promising Markets and Industries – Japan’s industries are globally competitive, and, as can be seen in the automotive sector, the nation’s industrial structure is extremely broad-based, with a large number of smaller companies functioning to support the world heavyweights. For foreign companies, Japan is not just an attractive sales market; in all of its sectors, Japan offers foreign companies extensive opportunities.
4. Home of the World’s Top Companies – Japan is home to many of the world’s top companies. These companies have established bases throughout the world and continue to expand their procurement, production and sales networks. And they are continuing to offer unique and innovative products and services as a result of active investment in R&D, conducted to enable them to enhance their international competitiveness and maintain growth.
5. SMEs Possess Unique Technologies – Japan hosts a large number of small and medium-sized enterprises (SMEs) which, while perhaps small in scale, are tremendously innovative. Many of these SMEs work in areas of basic production that support the international competitiveness of major companies, supplying, for example, equipment and parts that rely on high-precision machining technologies. Other SMEs may possess unique technologies, enabling them to occupy niches that major companies find difficult to enter.
6. Innovation Ushering in the Future – In recent years, there has been an increase in cooperation between foreign companies and Japanese companies, universities and other organizations in the fields of research, technology and product development. Research and development supports industry, is the wellspring of future competitiveness, and is an area of vigorous activity in Japan, involving extensive cooperation between the government, businesses and universities. In addition, Japan’s expenditure on R&D as a percentage of GDP is the highest of any advanced nation.
7. A Gateway to the Asian Market – As the East Asian market grows rapidly, the economic integration between countries in the region continues to strengthen. The sustained high growth of the region is increasing its influence on the world economy, while regional exchanges of personnel, goods and funds are intensifying and economic relationships grow closer at every level of industry. Against the backdrop of a rapidly growing East Asian region, Japan is becoming ever more important for companies from around the world as a location for regional headquarters and R&D bases to support their push into Asia.
8. Foreign Companies Expanding Business in Japan – Japan is a business destination that offers abundant potential for foreign enterprises to increase their profit. The number of firms seeking to expand their businesses in Japan with a long-term investment strategy is steadily increasing.
9. Mature Investment Infrastructure – Recent years have seen a steady increase in foreign investment in Japan. Japan’s industrial structure and business environment are similar to those of Europe and the US, and this makes it simpler for foreign companies to establish themselves here and to expand their businesses within the country than it is in other Asian countries. The Japanese government is also making considerable efforts to improve the investment environment.
10. A Secure, Comfortable Living Environment – While home to a very unique culture, Japan has also welcomed elements of many foreign cultures. This coexistence of what is uniquely Japanese with cultures from around the world makes life in Japan constantly fresh and exciting. The nation also possesses all the elements required for a comfortable life, including stable infrastructure, clean and safe urban environments, and efficient social systems. Japan welcomes its guests with a secure and comfortable lifestyle, rich with the potential to enjoy the diversity and beauty of nature in all its seasonal changes.
Modified from JETRO:
http://www.jetro.go.jp/en/invest/whyjapan/
