An introduction to the sector, the opportunities available and how your business can enter or expand in Japan.
Japan & Technology
Japan’s IT and Communications market is vast and one of the most advanced worldwide. With the third largest economy in the world and GDP per person 7 times that of China, Japan is a key driver of economic growth.
Exciting developments across all sectors in recent years has resulted in a unique and diverse market ranging from digital media and music to high-tech electronics, IPR and consultancy. Always early adopters of new technologies, Japanese consumers are keen and ready to try the latest tech-gadget or revoluntionary app, constantly spurring demand.
Rapid development of the industry globally and predictions of its future growth have enticed Japanese companies to look further afield for opportunities available to grow their business.
UK Appeal
Success after success in Silicon Valley and rising technology giants in both China and Korea mean Japan is now looking abroad to keep itself in the ICT race. As increasing numbers of Japanese companies post a representative to Silicon Valley, there is no doubt that Japanese companies care what is happening in the US, but the UK’s prime position in Europe is a very attractive and unique selling point.
With exponential sector growth both real and projected, time to market now is crucial. Japan is rethinking its once-traditionally conservative stance on partnerships. UK companies have a special appeal for collaborations says UK Trade and Investment Japan market specialist Etsuo Watanabe: “Japanese technology and manufacturing skills combined with the innovation and creativity of UK companies is the ideal match to innovate products.”
London’s internationally recognised position as one of the hubs of digital marketing as well as the country’s reputation for Big Data has attracted Japanese attention. The Big Data sector is forecast to expand to GBP 4.2 billion in 2017 according to Yano Research and offers vast opportunities for collaborative working, particularly in advanced wireless communication and cloud services.
Energy Solutions are also of interest explains Watanabe: “Advances in smart metering devices and consultation strategies and the best way of deployment are potential opportunities for UK companies interested in doing business in Japan.”
The Existing Market
Opportunities for UK companies include the incremental approach of improving an existing product or service and the radical approach of complete innovation. Joint ventures, collaborations and trading companies working as distributors are all possibilities.
Watanabe says the enquiries he and his specialised team at UKTI Japan receive are varied both in type and origin: “Approximately 20% of enquiries are about a tangible product: a piece of equipment or device which can be imported and sold, while over 70% are for IT or software which can be licenced.
And the enquiries are not all from big companies either,” he adds. “Business is growing between the little guy and Japanese companies, made possible through the internet.”
“Companies want something that gives them the edge,” insists Watanabe. “There is no business that cannot be successful as long as they adapt to the needs of the Japanese market and its customers.”
The Approach
With extensive experience of helping UK companies do business in Japan, Watanabe knows a good idea is not enough for success. He encourages businesses to learn about the Japanese market and consider the key messages they want to give a Japanese audience. “How companies present themselves is important. UK companies need to put themselves out there,” he says.
When doing business in Japan professionalism and relationship building are important. Trust is crucial and IP is well protected. Consensus and a long-term approach are often adopted in decision-making, with companies considering product and company reliability as well as company progression. “There is a high chance that consensus will be needed from everyone before management can make a decision,” says Watanabe.
Japanese companies can be hesitant of a “disruptive idea” and progress may be more likely if it has had proven success in other countries but with smaller companies, especially in the digital space which can be more open-minded and flexible.
Larger companies are often keen to optimise on development internally so divisions responsible for corporate venture capital would be a good starting point for UK companies. In recent years steps to up-skill English and international understanding have been increasing and some Japanese companies may have teams or strategies in place to assist communication.
Getting Started
Export to Japan can provide help for your company to explore or expand in the Japanese market. It is a not for profit online platform led by UKTI Japan at The British Embassy Tokyo and Consulate-General Osaka.
Contact Etsuo Watanabe (Tokyo) or Hirokuni Miyamatsu (Osaka), our ICT Senior Trade Advisers, to get expert advice and help for your business in Japan.
March 2014
