The UK Trade & Investment team in Japan has pulled together the five trends that matter right now to businesses in Japan.[memb_has_membership memberships=REGISTERED-MEMBER]
Shift towards low carbon
Securing long term energy supplies is a top priority issue for Japan as it continues to rethink its policies following the March 2011 earthquake and tsunami. The Japanese government and business have been making a big push towards renewables. Growth areas are low carbon energy generation such as offshore wind, solar PV and biomass, as well as in grid development, demand-side management, and smart storage. Companies and consumers are looking for technological solutions which conserve energy, with Smart technologies at the forefront. UK strengths in this area are well understood here. For more, please contact Matthew Matsumoto-Prouten (renewables) or Etsuo Watanabe (Smart Technologies).
Globalising business environment
With the long term trajectory towards a shrinking domestic market, Japanese companies are looking to expand their operations in overseas markets in a broad spectrum of industries often through M&A. The largest challenge for these companies is how to develop talent that can lead their global operations successfully. English is one key component of this: Rakuten & UniQlo have introduced English as their corporate language (even in Japan). Other challenges are the globalised skill-set needed to succeed and talent management of a global workforce. In addition to the people aspect, Japanese companies are becoming more aware of management of various risks (legal, IP, natural, terrorism, political etc) in a different business environment. These are areas where the UK excels, and there are long-term opportunities for UK providers in education & training, human resources, project management, consultancy and finance. For more details please contact Naomi Takegoshi in our Consultancy & Services team.
Consumer appreciation of quality, authenticity & originality
Along with company and product heritage, these are key selling points in Japan for many UK and other foreign brands – especially with one of the highest-spending and competitive customer segments: working women. Japanese consumers overall spend more of their disposable income on consumer goods than other comparable markets. Companies with quality products which have heritage, authenticity and originality built-in to the company or product brand regularly taste success here. Products stamped ‘made in the UK’ will find a receptive audience from buyers, agents and consumers. But it is a highly competitive market and UK companies should be ready to adapt their products to suit local tastes. For more contact Akiko Yanagisawa (lifestyle & creativity) or Kae Miyazawa (fashion & retail).
An ageing society
Japan has one of the fastest ageing societies on the planet. In 2010, approximately 23% of Japan’s 127 million people were over 65 – and this is predicted to increase to over 30% by 2025 and to 40% by 2055. In many ways a source of concern at a national level, it is also creating opportunities in specific sectors – healthcare, pharmaceuticals and medical devices being three notable ones. As a result of the demographic shift, the Japanese population is facing an increasing number of chronic and long-term diseases. Japan now has the second largest healthcare and pharmaceutical markets in the world, after the US, with national medical expenditure around £250 billion, and with record growth rates in recent years. For more contact Hitomi Nakai and Kaori Arai in our Life Sciences team.
Removal of trade barriers
Trade liberalisation is now firmly on the political agenda in Japan with recent progress on regional and bilateral agreements pushed by the new government. Prime Minister Abe formally announced in March that Japan is to join the Trans-Pacific Partnership (TPP) talks to reduce tariffs between countries around the Pacific, including the US, Australia, Mexico and other large economies. The opening of negotiations on the Economic Partnership Agreement with the EU should be a significant medium to longer term opportunity for UK companies with the European Commission estimating that an EU-Japan FTA could increase EU exports to Japan by 30%. The move towards trade liberalisation whether in Europe or Asia is good for British companies in a range of industries, with non-tariff barriers targeted for removal in areas such as: food & drink, medical devices, pharmaceuticals, automotives, chemicals and construction materials, amongst others. For more about the possible opportunities please contact the Marketing Team.
Published June 2013.