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The Building Blocks of Business and Personal Success

Posted on: 21 Aug 2010
Link: http://empoweringabc.com/2010/08/21/j-is-for-japan-entry-and-startups/

EmpoweringABC.com
The Building Blocks of Business and Personal Success

Posted on: 21 Aug 2010

J is for Japan Entry and Startups

Recent GDP figures show that China is now the #2 economy in the world, surpassing Japan which long held that position.

The news sent a shockwave through Japan and set off a bunch of media commentary about what Japan can do to return to growth, envigorate its stagnant economy, and recapture the darling #2 position.

The news also enforced beliefs that China is the Asian market to be in. New economic wealth means lots of new money to go around the table. Better get your fingers into that pie.

But hold on for a second…

Japan is still relevant

Land your business in Japan
Being on the ground in Japan there are a few things I’d like to tell you that the GDP figures do not.

Landing your company in Japan still makes good business sense today and for the forseable future. Why?

  • Rich population
  • Ethical society
  • Stable social environment
  • Low government intervention

In my view, Japan is still far ahead of China in 3 of these 4 areas… maybe even all 4, depending on where you’re looking.

1. Rich population

According to a Wikipedia article that looks at countries in terms of GDP per capita (2009 figures), Japan is still the #1 economy in Asia. To put things in perspective against other prominent Asian countries:

Country Intl. Monetary Fund World Bank CIA Factbook
Japan 17 22 18
Singapore 20 25 27
Hong Kong * 25 29 29
China 98 103 102
* Hong Kong is not a separate country so officially it does not rank on the chart, but if it were to rank this is where it comes in.

What Japan has going for it is that the wealth is spread fairly evenly across the population, not concentrated in a few ultra prosperous niches. The average Japanese consumer still has considerable discretionary buying power.

And while purse strings have been drawn tighter due to the economic situation, people in general do not like to feel poor for very long. Consumer spending is still there if you have the right product — as evidenced by Apple’s iPhone 4 and iPad still being backordered for months.

Japanese companies still have a strong desire for good, stable business relationships with partners, and they have resources to apply where beneficial.

Japan is like the Galapagos of everything — not just its mobile phones which are often lamented for cross carrier incompatibility. However, this fact of life also means that competition here is fierce and businesses are always looking for opportunities and competitive advantages. If your business offers a good product or service, you have a very good marketplace to sell it.

2. Ethical society

You may have heard stories about how you can leave a wallet on a park bench in Tokyo, and come back a day later to find it still be there. Well, I think that is still true even today.

Okay, there are certainly those people who would empty the wallet’s content, but speaking of the society as a whole the Japanese are extremely ethical.

For a business setting up in Japan, that translates into 2 key things:

Dependable workforce. After living here so long, you don’t even think about the importance of getting prompt and polite service wherever you go. It’s just the norm. Only when I go home to the US and compare the customer experience firsthand, then do I realize how generally good things are in Japan across the entire spectrum.

Less likely to become your competitor. Japanese people tend to be very loyal and respectful. They are less likely to see your employment or business relationship as a chance to steal secrets and gain experience in order to set up their own competing business in the not-too-distant future.

3. Stable social environment

Living in Japan is very peaceful.

There aren’t large and active political movements that turn into public clashes or demonstrations. There aren’t a lot of fringe groups that try to disrupt society. Even the yakuza, while it still very much exists, stays out of the way of the general public.

Strikes and shut downs of basic social services are almost unheard of to the level that it makes national news when the commuter trains are running late.

For a business, all this “status quo” is pretty nice. You probably still want your BCP and crisis communications plan in order, but you may not ever need them.

4. Low government intervention

The Japanese government has been rather ineffective at putting the country on a path to economic recovery.

But the good news is that it is largely a democratic system and they don’t meddle in controlling private business affairs or trying to restrict information flow and access.

According to Doing Business Japan ranks #15. By comparison, China ranks at #89. A lot of the factors considered are a matter of government regulations.

Where Japan could do better is:

  • Simplify and streamline business startup procedures
  • Reduce business taxes

These things are being talked about in the media and they are on the political radar screen right now.

If the Japanese government can lower these barriers, we could see more companies coming in and setting up shop in Japan as well as domestic Japanese companies expanding operations, both of which would lead to greater chances of economic recovery and, dare I say it, “economic growth.”

The Entrepreneurship Mentor Initiative (EMI) which recently started up is another example of how people are aware of the need for business growth in this country, and trying to do something to encourage it.

Japan has a lot going for it in terms of appeal to businesses starting up here. Do you see anything I’ve missed? Or what do you think can be done to encourage entrepreneurship and businesses landing in Japan?
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2 Responses to “J is for Japan Entry and Startups”

  1. Jon

    G’day,

    Agree that Japan still has many advantages over China for companies wish to enter Asia. To add to your list, Japan is “wired” in the sense that their is high speed, stable Internet throughout the country meaning the efficiecy of doing business in Japan (particularly outside of the major cities) outstrips China

  2. Kevin Ing

    Hi, Jon.

    Good point. That applies to both hard-wired and mobile connections.

    A couple ways I see that benefiting businesses are:

    1. Potential and existing customers have easier access to your service if you operate online. Or if you don’t have actual operations online then you can still communicate with customers across the entire country very easily.

    2. Good internal communications capabilities no matter where you or your people are. You also have easy communications with offices and partners overseas.

    -Kevin

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This entry was posted on Saturday, August 21st, 2010 at 9:55 am and is filed under Business, English. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.