J APAN 2016 G7 : ’s time to rise With the world’s top pan more open and outward look- ing has been the rise of tourism. leaders gathering in The government’s drive to increase Japan this month, the the number of foreign visitors 42nd G7 Summit will ahead of ’s staging of the shed new light on the Olympic Games in 2020 has seen country and show just the country consistently break its annual tourist arrivals record since how far it has come the Prime Minister assumed offi ce in December 2012. It is a success When leaders of seven of the story Japan will no doubt be keen world’s most industrialized coun- to show off to many of the world’s tries gather in Ise-Shima, Japan, most powerful people as host of the on May 26-27 their decisions on 2016 G7 proceedings – which not such weighty subjects as how to only includes the two-day leaders’ support a continuingly weak global summit, but a total of 10 high-level economy, the spread of terrorism, ministerial meetings held in some curbing North Korea’s nuclear am- of the country’s most impressive bitions and reining in Russia will destinations throughout the year. likely capture most of the headlines. However, while the G7 summit But the summit of the Presidents is a wonderful chance for Japan At this year’s G7, Japan will “Discussions at the sum- and Prime Ministers of the United to fl aunt its famous hospitality, want to reaffi rm this vital role as mit will be wide-ranging. States, , Japan, , Brit- most importantly, the high-profi le Asia’s “representative” by putting There are key issues that ain, and known as the event will be an occasion for the Asian issues fi rmly on the agenda. I will be emphasizing (G7) will also serve country to fl ex its leadership mus- With Japan having worked particu- as a golden opportunity for the host cles and demonstrate to its allies larly hard to improve relations with where I believe Japan nation to showcase its credentials that it can be counted on politi- countries such as Vietnam, the Phil- can play a central role.” as a global and regional leader. cally, as well as economically. ippines and , Prime Minis- Over the past two decades, Ja- Perhaps the biggest trademark ter Abe is expected to further illus- Shinzo Abe, pan has been facing the challenge of Shinzo Abe’s reign, besides Abe- trate his and Japan’s regional and of economic stagnation and isola- nomics, has been his determined global leadership by pushing the tion, but now the country is keen to international relations. The prime challenges facing the Asia-Pacifi c In fact, there is plenty that the trumpet itself as a new, more open minister’s diplomatic relish has region into the spotlight, and par- other G7 nations can learn from and more globally-minded partner. become well-known and largely ticularly the ongoing issue of the Japan. Its women are amongst the Although the jury is still out on fuelled by his so-called “Abe Doc- South China Sea dispute. most highly educated in the world Prime Minister Shinzo Abe’s epony- trine” – one that promotes an As summit chair, Japan will lead and Japanese students score at the mous revitalization plan known ambitious, multi-vector foreign talks on a whole gamut of issues top of the global math, reading, and as ‘Abenomics’ – with his pledge policy that has made him the most affecting the world at large – both science rankings by the OECD. Also to shake up the highly regulated traveled Japanese leader in history. at the main summit and the various according to the OECD, Japan is economy having so far made slow In little over three years, Abe has ministerial meetings – including the healthier than America and most progress – the International Mone- visited more than 63 countries and state of the global economy, envi- European countries, ranking as the tary Fund last month backed Abe’s held more than 400 summits. ronment issues, health and educa- least obese developed country. efforts to open up Japan’s economy “One trend that has clearly tion. Japan, of course, will be eager On the topic of climate change, as well as his massive monetary emerged is that Abe has moved to demonstrate how it is setting an which will be particularly pertinent easing campaign, reiterating that away from Japan’s traditional example in these areas. at this year’s summit following the “structural reforms that raise pro- diplomatic role characterized as Economically speaking, for historic U.N. Climate Change Con- ductivity are vital” for the country. an internationalist middle power instance, despite decades of of- ference (COP21) that took place in With Japan facing a shrinking and nowhere is this more evident fi cially slow macro growth the Paris last November, Japan’s energy domestic market due to its rapidly than in the case of global sum- real economic picture of Japan is consumption per unit of GDP is al- aging population, the Prime Min- mitry,” wrote Hugo Dobson in the rosier than one might anticipate. ready some 30% less than the aver- ister has put globalization at the Global Policy Journal recently. According to the Financial Times, age of other G7 nations, making it a forefront of his economic policy, “Japan has traditionally cherished in the decade from 2005 to 2014, top performer in the world. knowing that it is not only one of its seat at the top table, acted in real GDP per person grew more in “Discussions at the summit the country’s best hopes of secur- its self-appointed role as repre- Japan than in the , will be wide-ranging,” Prime Min- ing long-term growth, but also a sentative of Asia, mediated be- Great Britain and the Eurozone. ister Abe told CNN recently. “I way of increasing Japan’s pres- tween the US and Europe, and What’s more, Japan remains hope that by working closely with ence and infl uence internationally taken its great power responsi- a high-income country by Organi- other G7 leaders we can have – an essential requirement if the bilities seriously as evidenced by zation for Economic Cooperation fruitful discussions on address- nation is to maintain its position its high levels of compliance with and Development (OECD) stand- ing all of these important issues. as a global economic heavyweight. summit commitments and its ards, and according to the World There are key issues that I will be Another key pillar in the Abe hosting of relatively and consist- Bank, income inequality is lower emphasizing where I believe Ja- administration’s plan to make Ja- ently successful summits.” than in the U.S. pan can play a central role.”

Japan-NW-Project8p V6.indd 1 27/04/16 18:34 Japanese fi rms’ eyes set on global markets A more international mindset, combined with falling domestic demand, is seeing an unprecedented globalization push

Globalization would not seem to be But many Japanese executives leader in market share of PV in- a problem for Japanese companies have seen the writing on the wall verters used in solar power sys- which for decades have been major, and are now transforming their tems by increasing its production and in some cases, dominant players management practices to better lines from two to 18. in world market sectors such as for meet these challenges in order to Executives at another Japanese automobiles and consumer electron- make their companies truly global. giant, Asahi Holdings, came up with ics. However, a slew of new econom- One of Japan’s most widely-known a dual-track business model, one ic and business realities are proving and respected fi rms around the aimed at the domestic market and that for Japanese companies to world is Toshiba Mitsubishi-Elec- the other targeting overseas expan- avoid being left behind in globaliza- tric Industrial Systems Corpora- sion, according to President and tion’s new wave, they need to dra- tion (TMEIC), whose President CEO Mitsuharu Terayama. The com- matically boost overseas revenues and CEO Kiyotaka Machida says pany’s already extensive mining and to offset falling demand at home. he is well aware of the steps that metal refi ning operations will take With demographers forecast- Japanese companies must take. a further step toward globalization “Our revenues break down ing the Japanese population to “I think it’s diffi cult to imagine through a new model of processing with 30% from Japan, decrease by more than 20% by that the manufacturing sector will various materials to delivering the 30% from Asia and 30% 2050, fewer people means less augment its production capacity in fi nal product direct to the consumer. consumption, as well as lower tax Japan while the population is basi- “This will mean the whole chain is from U.S and Europe. We revenues. Also surprising to many cally expected to decrease in the involved – which no other refi ning have adopted local produc- familiar with the Japanese traits future. Many executives are already companies are doing – in expand- tion for local consumption.” of company loyalty and esprit de making decisions from a ‘global ing our operations, so that Asahi corps, the country has among the consolidated management’ stand- becomes the world’s top refi ning Takuya Shimarura, CEO & most anemic work productivity point with the emphasis placed company,” says Mr. Terayama. President of AGC Asahi Glass rates of the world’s most devel- on investments and mergers and Diversifying business lines along oped economies, while at the same acquisitions overseas,” he explains. with acquisitions are another way to time, foreign manufacturers are In one example of forward international expansion, a method and techniques which are worth making major inroads into luring thinking regarding foreign mar- which has worked for several Japa- promoting internationally,” he says. Japanese consumers. kets, TMEIC became the global nese companies such as the manu- “We should encourage technical facturer AGC Asahi Glass. “Back in tie ups or partnerships for smaller the 1950s and 1960s, we went into companies with larger companies.” India and Southeast Asia for the Helping out in just that area in glass and commodity chemical busi- fact is the Japan External Trade nesses,” recalls President and CEO Organization (JETRO), a govern- Takuya Shimamura. “And one of the ment-related organization that turning points for our globalization works to promote Japanese trade strategy was the later acquisition of and investment. “As a whole, Japa- a Belgian company called Glaverbel, nese SMEs do not have much ex- the resources of which we leveraged perience operating abroad,” says to expand our network.” JETRO Chairman & CEO, Hiroyuki Today, with the pace of mergers Ishige. “So we organize business and takeovers quickening among missions to offer opportunities for many Western companies leading these SMEs to do presentations in to more and more world-straddling front of foreign corporations, to behemoths, several Japanese ex- communicate their strengths, and ecutives see survival through the to help them fi nd partners.” country’s small and medium-sized operations cooperating more close- ly on a global scale. “It’s important for Japanese companies to clarify their true strengths and work with one an- other,” argues Teruhisa Ueda, the President and CEO of Shimadzu #TheWorldfolio Corporation, a manufacturer of pre- #JapanTheWorldfolio cision analytical instruments. Provid- ing more detail on how this scheme might work, Masaki Hojo, the Presi- PRODUCED BY dent and CEO of material handling GLOBUS VISION group Daifuku, outlines how diffi cult Connor Sullivan - Editorial Director it is for small and medium-sized Luisa Galindo - Project Director companies to engage globally. Winnie Chan - Project Assistant “Despite these fi rms being very Caroline Govin - Project Coordinator small, they still have the technology Gemma Gutierrez - Regional Director

Japan-NW-Project8p V6.indd 2 28/04/16 18:08 Industry leaders at core of Japan’s sustainability drive

There is an increasing trend toward environ- be contributing to the conserva- of CO2, there is a particular onus on mental sustainability and social responsibility tion and improvement of the envi- Japan to combat climate change, throughout Japan, especially following the ronment,” explains Mr. Terayama. and one of the most important “It is something which has been facets of the country’s strategy to 2011 Tohoku disaster, but also thanks to the entrusted to us by the next gen- reduce carbon emissions and im- globalization push instilled by Abenomics eration, and we must not destroy prove energy effi ciency by 2030 it while it is in our hands.” is to increase the use of renewable Prior to the G7 Summit in Mie Pre- increasing trend toward environ- AGC Asahi Glass is another energies. Indeed Japan has under- fecture later this month, the respec- mental and social care throughout company that abides by this ethos. gone a renewable energy revolution tive environment ministers from Japan’s private sector, especially “How are we going to address en- since the Fukushima disaster in 2011 each G7 nation will meet in Toyoma following the Tohoku earthquake vironment issues through the prod- which led to all of the country’s nu- to exchange views and build consen- in 2011 (which killed over 16,000 ucts we offer the market?” asks clear reactors being shut down, with sus on global environmental issues. people), and more recently the two President and CEO, Takuya Shima- the country’s solar power capacity The meeting is momentous for Kumamoto earthquakes, but also mura. “Well, in the area of glass, having shot up from 4.9 gigawatts a number of reasons. As the fi rst thanks to the globalization push we offer high insulating glass, in (GW) that year to 23.3 GW today. major inter-governmental environ- instilled by Prime Minister Shinzo the chemical segment we produce Now Japan wants to more than mental meeting since the historic Abe’s Abenomics policy which has air conditioning gas to reduce CO2 double its solar capacity to 53.3 GW UN Convention on Climate Change triggered a common concern to- emission, and in ceramics, by apply- over the next 14 years, and helping (COP21) held last December in wards sustainability and the adher- ing inorganic ceramics on the roads to realize that goal will be compa- Paris, further high-level negotia- ence to international corporate so- we can alleviate UHI (urban heat is- nies such as TMEIC. tions will be required in Toyoma cial responsibility (CSR) standards. land phenomenon) by almost 10%.” “TMEIC currently promotes to implement fresh climate change “Environmental issues are very Such responsible measures ‘Triple-E’ as our company catch- procedures, including the newly important to us,” says Mitsuharu taken by large businesses like AGC phrase,” explains Kiyotaka Machida, agreed 2030 Agenda for Sustain- Terayama, President and CEO of Asahi Glass to reduce their contribu- President and CEO of the Toshiba able Development. Asahi Holdings, conveying a senti- tion to UHI and carbon emissions and Mitsubishi joint venture. “The The May 15-16 gathering in ment felt widely across the country from their everyday operations will three ‘Es’ refer to energy, effi ciency Japan is also noteworthy for being and its businesses. “I believe that the be vital as Japan faces up to its en- and ecology, and signify our idea of the fi rst G7 environment minis- world’s interest in the environment vironmental issues on a macro-scale. contributing to the environment by ters’ meeting since 2009, making has decreased somewhat in recent As the world’s fi fth-biggest emitter making effi cient use of energy.” it a key forum for dialogue to har- years because of various political monize G7 nations’ policies in this issues we are facing. The leaders of area. What’s more, with Japan be- the world must take climate change ing one of the world’s most impor- into consideration more seriously.” tant economies, Toyoma is also a Following COP21 and the recom- chance for the country to seriously mencement of the G7 environment communicate its efforts towards ministers’ meeting this month, gov- creating a better and more sus- ernments are beginning to catch tainable global environment. on says Mr. Terayama, however he At the recent COP21, the Japa- stresses that it is vital for the pri- nese government made a pledge to vate sector to set a good example cut carbon emissions by 26% from too. Since its establishment in 2013 levels by 2030, which com- 1952 for instance, Asahi Holdings pares favourably to the pledges has been recycling precious metals of other G7 nations made in Paris, and has continually aimed to be the including the U.S. which has tar- foremost company in eco-business, geted reductions of between 18% working to develop technologies, and 21% by 2025, relative to their products and services, and leading most recent emissions. As well as other fi rms in activities to preserve allowing Japan to further outline the global environment. its strategy for achieving it carbon Aside from air pollution, one of cutting goal, the Toyoma meet- the biggest environmental issues ing will also see how the country in Japan today is waste manage- plans to implement its objective ment. Modern day cultures pro- of realizing a 35% improvement duce a lot of trash, and on a small in energy effi ciency by 2030 – the island nation like Japan, there is other vow made by Prime Minister only so much room. Asahi Holdings, Shinzo Abe at COP21. which specializes in waste disposal, Having set itself such ambitious is at the forefront of tackling this targets, going forward the Japanese problem, detoxifying and properly government will need all the help it disposing all types of waste, and can get from Japanese industries promoting the realization of a sus- in order to realize them. Thankfully, tainable, recycling-oriented society. it seems many domestic compa- “I believe that it is of the ut- nies are up for the task. There is an most importance as a business to

Japan-NW-Project8p V6.indd 3 27/04/16 18:38 “We are recognized as an gy with our PV inverters (a device that converts currents from solar “TMEIC promotes excellent company that panels onto an electrical grid), ‘Triple-E’ as our company exists in a sound manner. while also offering power sources, catchphrase. It refers In Japan we always try motors and systems that are the to energy, effi ciency and to sustain a company basic elements for converting elec- ecology, and signifi es our for the long-term rather tricity into physical energy.” Mr. Machida continues: “We idea of contributing to the than create momentarily are very unique in the world in environment by making big profi ts.” a way that we are a specialized effi cient use of energy.” manufacturer possessing motors, Suichi Kato, power electronics and system so- Kiyotaka Machida, Chairman & CEO, K’s Holdings lutions as core technologies. We President & CEO, TMEIC will leverage these three core tech- nologies as we strive to contribute By developing high cost-perfor- to solving various environmental sparked by another national corpo- pursuing high numbers and sales mance and high quality generators and energy issues.” rate trend – globalization. results will not allow us to achieve and power converters, and using The efforts of TMEIC are un- With sustainability having be- our objectives,” he says. “In fact, by cutting-edge technologies of ro- doubtedly indicative of the aug- come an important criterion for always thinking how we can con- tating machinery and power elec- mented focus of Japanese business- business conduct in the global tribute more to society and create tronics, TMEIC is instrumental in es over recent years to implement economy, social responsibility has high value services that meet the promoting green energy systems more sustainable practices, not only become essential for the increas- demand, the results inevitably fol- in Japan and the use of renewable with regards to environmental re- ing number of Japanese companies low. Today, we are contributing to energies globally through its oper- sponsibility but in their contribution looking to invest in overseas mar- society by collaborating with all our ations across the world. “The ba- to society in general. While CSR kets. As Teruhisa Ueda, President customers in Japan and overseas.” sic concept of CO2 reduction and initiatives are nothing new to Japan and CEO of Shimadzu Corpora- As more and more Japanese energy saving is to use renewable (in fact many attribute the tradi- tion explains, this drive towards fi rms follow in the footsteps of energy to the highest extent pos- tionally high level of social aware- globalization combined with the Shimadzu and either begin or ex- sible while not wasting electricity,” ness of Japanese businesses to the inherent Japanese morals inspired pand their international operations explains Mr. Machida. “In this re- country’s ancient virtue of Omote- by Omotenashi is in turn propel- over the coming years, expect to spect, I believe that as a company, nashi, or hospitality), the growing ling more sustainable practices. see Japan Inc. fl y the fl ag for envi- we truly contribute to promoting trend of sustainability amongst “Through our 140 years of his- ronmental and social responsibility widespread use of renewable ener- domestic fi rms is said to have been tory, we have learned that simply both at home, and abroad.

Japan-NW-Project8p V6.indd 4 27/04/16 18:39 Changing demographic dynamics offer opportunities for business diversifi cation

While Japan’s declining many leading companies are health services, as well as the “The future of health care choosing to diversify into the need for greater investment in goes towards preventative and aging population sectors of health and life care biotechnology, companies like is set to cause a demo- services in order to both help Shimadzu Corporation are also medicine and maintain- graphic and economic Japan through its challenges, eager to expand their opera- ing proper health. I fi rmly headache, it is also pre- and also to capitalize on them. tions in these growing sectors. believe that creating this senting opportunities “The life and health sector is “The core of our business synergy of medical and one in which everyone should is science and technology, and analytic instruments to for Japanese companies capitalize on, because there is afterwards we fi nd areas that wishing to diversify into a global increase of health con- they can be applied to,” says improve our diagnostics is the growing sectors of sciousness, as well as an aging President and CEO, Teruhisa the future of Shimadzu.” health and life care, ICT, society,” explains Mitsuharu Ueda. “Our important focus and robotics Terayama, President and CEO of now is our efforts into research Teruhisa Ueda Asahi Holdings, which is now di- and development, particularly President and CEO, Shimadzu versifying into the manufacture the integration of analysis Earlier this year, the results of of massage chairs and other equipment into medical tech- Japan’s latest census were re- healthcare equipment. “It has nologies. For example, in the “The world is changing leased and revealed that the only been a year since we start- case of cancer, our aim is to drastically and rapidly, country’s population has offi - ed this business with the acqui- create a possibility of earlier and this is led by the cially shrunk. It has decreased sition,” says Mr. Terayama. “The detection so that cancer cells speedy evolution of by almost a million people in company that we acquired has can be removed while they’re the IT sector. We are the last fi ve years, down from various channels within this sec- still small, because we know just over 128 million people in tor, so we are now working to that if we do so, people have looking into how we 2010 to 127.1 million in 2015. fi nd and select what healthcare a bigger chance to recover. can capitalize on ICT in Despite being fully antici- products best fi t the needs, and Therefore, by creating this syn- order to create a new pated by the Japanese gov- also make it profi table.” ergy between medical and ana- business model.” ernment and wider public, a In addition to pursuing lytic instruments, particularly declining population poses a growth, the decision to diversi- through analysis of blood and Hiroshi Ohnishi, President & CEO, number of demographic chal- fy was also driven by the desire of bodily fl uids, we think we lenges. The combination of a to actively contribute towards can contribute to an earlier di- Isetan Mitsukoshi Holdings low birth rate and a growing the country’s demographic di- agnosis of these diseases,” Mr. life expectancy means that lemma, adds the Asahi Holdings Ueda affi rms, emphasizing that this respect are the develop- Japan’s population is not only chief. “Japan is suffering from a he believes the medical seg- ment of e-commerce services shrinking, but also aging. With very bad fi scal state at the mo- ment of the business to be the and robotics, or artificial intel- the proportion of working ment, one of the reasons is the future of his company. ligence (AI). age people falling, the result- increasing amount of medical Along with healthcare and “The world is changing dras- ing smaller labor force could and social security costs that biotechnology, information tically and rapidly, and this is struggle to drive the country’s the government must burden and communication technol- led by the speedy evolution future economic growth. because of the aging popula- ogy is also a sector that is of the IT sector,” says Hiroshi It isn’t a problem that’s tion. If people become health- set for unprecedented growth Ohnishi, President and CEO of unique to Japan, however. ier, it will create less cost, so thanks to Japan’s changing de- Isetan Mitsukoshi Holdings, The World Economic Forum’s we want to contribute to peo- mographic dynamics. With the which is behind Japan’s biggest Global Agenda Council on Ag- ple’s health through our life and number of working age people chain of department stores. ing predicts that over the next health business.” on the slump, the evolution of “Two years ago we reorganized four decades the rapid aging With the demographic trans- technology is being seen as a and boosted our e-commerce of populations will be one of formation and the great need solution to a decreasing labor segment which led to a 20 to the biggest issues affecting for modernization throughout force as a way of increasing 30% increase in sales. Out of the world, having a significant the health sector set to create productivity. Some of the most total sales of our business, it impact on areas such as social a strong growing demand for promising areas for the private is still a very low percentage,” welfare, public health and eco- medical equipment, care and sector to take advantage of in he explains. “American depart- nomic prosperity. ment stores on average take in Although Prime Minister Proudly sponsored by: the sales from e-commerce of Shinzo Abe has made tackling about 20 to 25% of their to- the problem a priority, many tal sales whereas in Japan it is experts say that the loom- only 1 to 2% of the total, which ing demographic crisis will be actually means there’s a lot of extremely difficult to avoid. potential for us. We are look- However, with every chal- ing into how we can capitalize lenge comes an opportunity. on ICT in order to create a new With rising concerns over how business model.” to provide care for increas- Another company which sees ing numbers of older people, the vast potential of e-com-

Japan-NW-Project8p V6.indd 5 27/04/16 18:39 merce and is evolving its busi- trying to harness this as well.” tise in scientifi c and technologi- “We are always develop- ness accordingly is Daifuku. “The Kakaku.com is particularly cal invention, even robots are market is always changing,” well placed to capitalize on the now becoming common place ing new technologies says Masaki Hojo, President and double edged sword posed by and increasingly seen as a vi- and ideas to contribute CEO. “Ten years ago, Daifuku an aging population. With Ja- able answer to the nation’s la- to customer operation enjoyed being at the forefront pan experiencing sluggish wage bor shortages. This is especially effi ciency and we are of providing material handling growth over the last decade the case since Prime Minister looking to grow our systems to the fl at-panel display or so, one major reason attrib- Shinzo Abe’s promise of a “robot industry in Japan. Now, we are uted to this is higher rates of revolution”, which will see de- business further in the concentrating on developing the retirement, as high-wage baby- regulation and research funding e-commerce sector. The distribution automation for the boomers are being replaced by eventually double Japan’s robot business potential for the e-commerce sector. We are al- low-wage young workers and market size from 600 billion yen future is very good.” ways developing new technolo- the growing ranks of elderly ($5 billion) to 1.2 trillion yen. gies and ideas to contribute to are increasingly tapping into USEN Corporation recently Masaki Hojo, customer operation effi ciency their savings. For Kakaku.com, teamed up with Unirobot Inc. President & CEO, Daifuku and we are looking to grow our less disposable incomes actually to explore more opportunities Spectacular cherry blossom dis- business further in this sector, make for better business. “Peo- in the sector, for instance. “We plays, stunning Shinto temples maybe twice of what it is now. ple are becoming very cost con- have not made any concrete and shrines, a fresh and light cui- The business potential for the scious, in terms of their day to decisions,” says USEN Presi- “The life and health sine popular around the world, future is very good.” day spending, and that goes for dent Kimimasa Tamura. “But in sector is one in which state-of-the-art transport and the “We live in a society where utility costs as well,” explains this aging society, I’m looking everyone should capi- unfailingly polite locals have long everything is changing at Mr. Tanaka. “Due to that, we for a different type of business talize on, because there drawn foreign visitors to Japan. breakneck speed,” agrees Mino- think that the price comparison which can add value to our ser- is a global increase of However it is with the added ru Tanaka, President of Kakaku. service that we can provide to vices in combination with our factor of easier visa regulations com, a pioneer of Japanese the Japanese household through automatic payment systems.” health consciousness, as and a weak yen against the rising e-commerce and the coun- our website will probably gain “AI is evolving at a fast rate,” well as an aging society. strength of the U.S. dollar and try’s price comparison website quite a bit of popularity.” adds Mr. Terayama, Asahi Hold- We are now working other currencies that have really kings. “Especially in terms of As Japan’s demographic and ings President. “It’s not that to fi nd and select helped fuel the recent unprec- smart phone usage which has economic dynamics continue to robots are going to be better healthcare products.” edented tourism boom as the been a very disruptive force in transform, the country’s busi- at everything but we are defi - country prepares for the 2020 many sectors, not just the In- nesses evidently have to adapt nitely considering using AI for Olympic Games – an event which ternet, but anything from food and generally become more in- our customer service at our Mitsuharu Terayama, will further showcase Japan to to services. Of course, we are novative. Such is Japan’s exper- stores in the future.” President & CEO, Asahi Holdings the world. The proof is in the numbers. In 2015, foreign arrivals soared to 19.7 million, up some 30% from the previous year and an astounding quadrupling of the 5.2 million in 2003, in part thanks to the government’s am- bitious “Visit Japan” campaign launched that year. At the same time, the visi- tors spent a record 3.5 trillion yen ($31 billion) in 2015 or more than 70% than the year before, refl ecting the fact that Japan not only boasts unique cultural and historical attractions, but is also fi rmly established as the premiere destination for the lat- est style, whether it’s fashion, food or other fun trends. Where else but in Japan, for example, could a visitor check into a Godzilla-themed hotel, dine at a robot restaurant with a dinner show featuring human- oid dancers and singers or take part in a festival dedicated to anime cartoons? Now, in a bid to increase tourism revenue aimed at boost- ing the economy, Prime Minister Shinzo Abe’s government is working to double the current number of foreign visitors to 40 million by 2020.

Japan-NW-Project8p V6.indd 6 27/04/16 18:40 ‘Cool Japan’ keeps breaking tourism records

The tourism boom is one Tourist arrivals in Japan restaurant has universal appeal of the benefi ts of Abe- for travelers so I think whether in nomics changing mind- Rolling 12-month sum, people (m) Japan or the United States, there 20 is room for more than one player.” sets in Japan and opening Another non-travel sector up the country to the rest company benefi tting from the 15 of the world, with many tourism boom is Isetan Mitsu- businesses eager to jump koshi Holdings which operates 10 department stores that are reg- into one of the economy’s istering increased sales from the brightest markets 5 Chinese tourists taking advan- tage of the relaxed visa rules. Spectacular cherry blossom dis- 0 “Chinese visitors account for plays, stunning Shinto temples 25% of sales at our store in the and shrines, a fresh and light cui- ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 Ginza district and some 10% at sine popular around the world, Source: Thomson Reuters Datastream our main store in Shinjuku,” says state-of-the-art transport and the President and CEO Hiroshi Ohnishi. unfailingly polite locals have long “Today we have decided a in New York and is offering its Mr. Ohnishi explains that drawn foreign visitors to Japan. new vision for tourism,” Abe said service in the United States. while he would like to cater pri- However it is with the added when announcing the new tar- “Travel-related businesses are marily to the local needs, he ac- factor of easier visa regulations gets. “Tourism is an important pil- very lucrative for the group and cepts that the Japanese market and a weak yen against the rising lar of our country’s growth strat- the U.S. market is a high prior- is shrinking and the company strength of the U.S. dollar and egy, and a trump card for regional ity for Tabelog,” explains Kakaku has to also cater to such a sig- other currencies that have really revitalization. In order to estab- President Minoru Tanaka. “Of nifi cant customer base as the helped fuel the recent unprec- lish a tourism-based country, I’m course, our big competitor there tourists. “It seems that foreign- edented tourism boom as the determined to take any political is Yelp, but we offer a site that is ers are very aware of the ex- country prepares for the 2020 measures in advance to be fully simpler, shorter and more com- cellence and value of Japanese Olympic Games – an event which prepared,” he added. prehensive. I think that is the big goods and we are also trying to will further showcase Japan to Offi cials say these measures difference. Wanting to eat a deli- convey that same message to the world. would include further steps to cious meal in a world-renowned our fellow Japanese,” he says. The proof is in the numbers. facilitate tourist visas, launch a In 2015, foreign arrivals soared promotional effort abroad for the to 19.7 million, up some 30% country’s national parks and mon- from the previous year and uments and improve fl ight access. an astounding quadrupling of Japanese companies in sec- the 5.2 million in 2003, in part tors other than tourism are em- thanks to the government’s am- bracing the efforts and jumping bitious “Visit Japan” campaign into the market. Music distributor launched that year. and ICT company USEN Corpora- At the same time, the visi- tion, for example, just opened its tors spent a record 3.5 trillion fi rst local-style capsule hotel in yen ($31 billion) in 2015 or more Tokyo’s hip Shibuya district aimed than 70% than the year before, at introducing foreign travelers to refl ecting the fact that Japan Japanese cultural traditions. not only boasts unique cultural “When you are a guest at and historical attractions, but the hotel, you are given a sum- is also fi rmly established as the mer kimono called the yukata to premiere destination for the lat- wear around town, eat locally est style, whether it’s fashion, grown and prepared Japanese food or other fun trends. food and purchase traditional Where else but in Japan, for products,” explains USEN Presi- example, could a visitor check dent Kimimasa Tamura. into a Godzilla-themed hotel, USEN also operates the “Cozy dine at a robot restaurant with Japan” website which the Presi- a dinner show featuring human- dent says provides information oid dancers and singers or take for visitors on booking accommo- part in a festival dedicated to dations of all types, plus sightsee- anime cartoons? ing, dining and travel tips. Now, in a bid to increase Software and services com- tourism revenue aimed at boost- pany Kakaku.com, which runs ing the economy, Prime Minister Japan’s online retail giant, has Shinzo Abe’s government is entered the web restaurant working to double the current review and reservation sector number of foreign visitors to 40 used by travelers with Tabelog million by 2020. which has now opened an offi ce

Japan-NW-Project8p V6.indd 7 27/04/16 18:40 Cultural uniqueness essential to Japan’s rebranding As the country embraces globalization, it is also encouraged to embrace its distinct cultural characteristics as a way of promoting the Japanese brand abroad Japan, with its famously unique government’s ‘Cool Japan’ initia- As Mr. Ohnishi points out, much for resilience and tenacity, and one traditions and customs, has al- tive, which has set out to promote of Japan’s historic economic suc- that has had many other econo- ways been considered curiously some of the nation’s most unique cess and evolution of its society can mies looking on enviously. ‘different’ by the rest of the world. cultural outputs overseas, such as be attributed to the seven virtues of It is this work ethic along with A source of endless curiosity to anime and manga. the samurai, which roughly trans- another predominant Japanese foreigners, its countless cultural On the back of this, the G7 late as righteousness, courage, be- characteristic called Kodawari quirks have earned it a reputation Summit taking place this month nevolence, respect, honesty, honor, (the uncompromising devotion to a as a land of wonder and intrigue. will shine an unprecedented spot- and loyalty. To this day, the code of pursuit) that gives the country yet For many Japanese on the other light on the country – an oppor- Bushido remains the nation’s moral another strength to draw from; an hand, their cultural individuality tunity that Japanese government fiber and set of principles that almost uncanny attention to detail has sometimes been a source of and businesses will no doubt be guide everyday life. Through the (think sushi, or the nation’s affinity self consciousness. After all, as keen to exploit in order to proudly company’s recently launched ‘This for graphic arts, design and high the old Japanese proverb goes: “A communicate what makes them is Japan’ corporate campaign, Ise- technology). “The ability to create nail that sticks out will be ham- different, and how this makes Ja- tan Mitsukoshi is working to raise and a delicate care to detail is the mered down.” In other words, be- pan competitive. awareness of Japanese virtues basis of our culture,” says Teruhisa ing different doesn’t come all that Where the Abe administration overseas. But how exactly does the Ueda, President and CEO of Shi- naturally to Japan. has focused on the country’s so- business aim to profit? madzu Corporation. “Nowadays, However, as globalization called “coolness”, business lead- “In order for department manufacturing is coming to a mo- takes hold of the country, times ers such as Isetan Mitsukoshi say stores to survive, we need to find lecular level so it’s going to become are rapidly changing. With a that certain traditional ideas that what makes us unique and what important for many Japanese com- growing number of domestic are unique to the nation should we can provide that nowhere panies to improve the sensitivity, companies now breaking into also be promoted. “The world has else can,” explains Mr. Ohnishi. delicateness and high quality of our international markets, many are their eyes on Japan like never be- “One of the things that we would products.” In order to do this, and quickly becoming better aware fore,” says Hiroshi Ohnishi. “So we like to communicate is the spirit generally become more competi- of what sets them apart and are must take advantage of this op- of Omotenashi.” tive in the global marketplace, Mr. actively embracing it. It is a new portunity to accurately communi- Omotenashi, in a nutshell, is Ueda says Japan should evolve its way of thinking captured by the cate Japanese virtues.” Japan’s unique approach to hospi- long held emphasis on the value tality – the essence of which Japa- of teamwork, which is arguably nese department stores like Isetan the greatest influence the coun- Mitsukoshi embody on a daily ba- try’s business culture has had on sis. Practicing Omotenashi involves the western world over the years. the subjugation of self in service to Teamwork doesn’t just call for col- a guest, or put simply, going “the laboration within one company, extra mile” – and then some. It is explains Mr. Ueda, but cooperation a concept already translated suc- between multiple businesses. cessfully by some global Japanese “American and European busi- companies who regularly send for- nesses are [often] going to have eign staff to Japan to train in the a larger scale than us,” he says. “Japanese way” of customer ser- “While some [Japanese] compa- vice. Isetan Mitsukoshi will look nies may be of a smaller magni- to emulate this as the company tude, as long as these companies expands abroad says Mr. Ohnishi. become aware of their strengths, With Omotenashi today firmly collaborate and create a network, engrained in Japan’s business cul- we will be able to contribute to ture, it joins a whole list of other the global market.” values that Japan champions in Kiyotaka Machida, President the workplace and which its busi- and CEO of TMEIC agrees that ness community would do well to for domestic businesses to really communicate abroad. For instance, get a step ahead, identifying the “In Japan there is a famous word country’s strengths, embracing its called Ganbaru, which means cultural differences, and proudly to work hard,” explains Shuichi displaying them to the world, will Kato, Chairman of K’s Holdings, be key as Japan moves forward. the consumer electronics chain. “My hope is for other countries More than that, Ganbaru typically to recognize Japan in terms of means – as with Omotenashi – to its culture and values,” he says. go beyond the call of duty. While “These can all be considered as in- Mr. Kato believes that Ganbaru tegral to the brand of Japan, and can be taken to the extreme by I would like people who come to some companies and eager-to- the G7 summit to experience please employees, it is a trait that Japan, and to truly understand has bestowed Japan a reputation what it is all about.”

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