Our first business visit was with JETRO – the Japan External Trade Organization – a governmental agency charged with expanding Japan’s efforts to boost trade, investment and global economic cooperation. We were greeted and briefed by Mikihiko Shimizu, Director of the Invest Japan promotion division, and his associate Takeshi Watanabe.
The focus of the briefing was on JETRO’s efforts to promote foreign direct investment (FDI) in Japan, seen as a critical element of the government’s efforts to revitalize the county’s economy. In addition to the attractiveness of the Japanese market, JETRO positions Japan as a vital gateway to emerging Asian markets, including China and South Korea, specifically in high value-added industries involving the environment and high-tech sectors. Two key points were (1) that while many global companies manufacture in China to take advantage of low costs, significant and innovative components are researched and developed in Japan, and (2) the sophisticated character of Japanese consumers with purchasing power and discerning tastes enables companies to successfully take ideas from Japan and apply them to other markets.
Additional attention by the presenter’s and student questions was placed on the key requirements and barriers related to a foreign company entering the Japanese market. JETRO provides consulting services in marketing, legal and regulatory issues, taxation and accounting questions, employment and labor issues and incorporation procedures. Currently some 1,000 companies, large and small, are taking advantage of these services, including the provision of free temporary office space in Tokyo.
As a professor teaching international business, I was impressed with the depth and candor of the JETRO presentation and response to excellent student questions. In particular, the response to the last question of the session hit on a fundamental global business principle. When asked what was the most important thing a foreign company must do to be successful in Japan, the response noted that an “understanding and adaptation” to the Japanese consumer was critical.