Export Development Strategy Japanese Target Market

EXPORT DEVELOPMENT STRATEGY JAPANESE TARGET MARKET

IT TRAINING CENTER COMPLEARN

COMPSECUR SP. Z O.O.

Polish Chamber of Commerce and Industry in Japan Tokyo, 2009 EXECUTIVE SUMMARY

The following document, entitled “Export development strategy: Japanese target market” has been prepared by the Polish Chamber of Commerce and Industry in Japan (PCCIJ) in cooperation with the CompSecur sp. z o.o. as a professional consulting service concerning strategy of Japanese target market export development of Information Technologies training services offered by the CompSecur sp. z o.o. company. Works on preparation of the document began on October 25th, 2009 on a basis of agreement between the CompSecur sp. z o.o. company and the Polish Chamber of Commerce and Industry in Japan (PCCIJ). The document addresses the following issues:

1) Justification of selection of the Japanese market for the planned export development of CompSecur sp. z o.o. services. 2) Analysis of a competitive position of CompSecur sp. z o.o. at the Japanese market in regard to Export Subjected Services. 3) Analysis of the Japanese target market research, which addresses: a) applicable legal acts, necessary legal procedures, common customs, common business practices, applicable legal rules conditioning access of the CompSecur sp. z o.o. services to the target Japanese market, b) procedural and tax oriented analysis of selling of the export subjected services on the target Japanese market. 4) Analysis of a current business situation of the CompSecur sp. z o.o. in its core business domain of operation and a prognosis of these operations growth in regard to export development to the target Japanese market. 5) SWOT analysis of export subjected services in the target Japanese market, divided into three target sectors: individual consumers sector (B2C), private companies sector (B2B), public institutions sector (B2G). 6) Identification of export goals and export strategy elements to be implemented by the CompSecur sp. z o.o. during the time of 24 months between January 2010 and December 2011. 7) Recommendation of CompSecur sp z o.o. export development to the target Japanese market. 8) Description of a strategy for CompSecur sp. z o.o. export development to the target Japanese market, including indication, justification and particularization (detailed description) of the following actions to be implemented by CompSecur sp. z o.o.: a) participation in Japanese information technologies related business exhibitions and events in a role of an exhibitor, b) organization and participation in business missions to Japan, c) searching for and selecting partners on the Japanese market, d) obtaining necessary documents allowing for export development to the target Japanese market, e) obtaining consulting services in regard to possible strategies for financing of actions implementing the export development strategy, f) obtaining consulting services in regard to creating CompSecur Export Subject Services identification profile on the target Japanese market (including a promotional campaign and necessary translations of promotional and informational materials). 9) Estimation of costs associated with implementing each of identified actions listed above, within the total budget of 50 000 Euro. 10) A preliminary time schedule for implementing of the actions of export development strategy listed above, within a 24 month time period between January 2010 and December 2011.

Polish Chamber of Commerce and Industry in Japan (PCCIJ) S&L Bldg., 8F, 1-10-8 Higashi-gotanda, Shinagawa-ku, Tokyo 141-0022, Japan Tel: +81-3-5793-7902, Fax: +81-3-5793-7903, http://www.pccij.or.jp

______Piotr Suszycki-Tanaka Official seal Fujio Nakamura Chairman of the Board, PCCIJ Date prepared Operating Manager, PCCIJ

CompSecur sp. z o.o. ul. Pilsudskiego 74/309, 50-020 Wroclaw, Poland Tel: +48-71-722-8038, Fax: +48-71-722-8039, http://www.compsecur.com

______Przemyslaw Tomczak Official seal Wojciech Donderowicz President of the Board Date approved Vice President of the Board CompSecur sp. z o.o. CompSecur sp. z o.o.

TABLE OF CONTENTS

Executive Summary...... 2 1. Subject of export development ...... 9 1.1. Company profile ...... 9 1.2. Export subjected information technologies training services profile ...... 17 1.2.1. Information technologies training services programme ...... 17 Internet technologies and development of web services...... 20 Fundamentals of modular programming...... 20 Applications of IT in business and administration ...... 20 Calculation and databases applications...... 21 E-commerce and Internet advertisement technologies ...... 21 Data engineering ...... 21 Legal aspects of information security ...... 22 Telecommunication IT support systems ...... 22 New models for information technologies ...... 22 Computer graphics and multimedia technologies ...... 22 Internet collaboration technologies ...... 23 Information security fundamentals ...... 23 Advanced cryptography and cryptoanalysis ...... 23 Computer networks ...... 24 Security of e-Commerce ...... 24 Theoretical information security ...... 25 Quantum information processing security applications ...... 25 Microsoft operating systems management ...... 26 Advanced Microsoft operating systems management ...... 26 Secure network infrastructures ...... 27 Secure information architectures ...... 27 Secure information management systems ...... 28 Common Internet threats ...... 28 Quantum cryptography ...... 28 Formal aspects of information security ...... 29 Advanced quantum information and communication ...... 30 2. Japanese target market selection justification ...... 35 2.1. Consumer Japanese market overview ...... 37 2.1.1. ICT use in the consumer sector ...... 39 2.1.2. Education in Japan ...... 41 2.1.2.1. Lower secondary schools...... 42 2.1.2.2. Upper secondary schools ...... 43 2.1.2.3. Universities and colleges ...... 44 2.1.2.4. Learning population ...... 46 2.2. Japanese enterprise market overview ...... 47 2.3. Japanese ICT market overview ...... 52 3. Competitive position on Japanese target market ...... 58 3.1. Competition analysis outline...... 58 3.2. Major competitive players ...... 60 3.2.1. Information technologies training centers ...... 60 3.2.2. Information technology security consulting companies ...... 66 3.2.3. Universities ...... 67

3.2.3.1. The Open University of Japan ...... 68 4. Japanese target market analysis in regard to the subject of export ...... 69 4.1. Applicable legal acts ...... 69 4.1.1. Business operations related legal acts ...... 69 4.1.2. Foreign exchange related acts ...... 72 4.1.3. Taxation legal acts ...... 72 4.1.4. Justice related legal acts ...... 73 4.1.5. Labor related legal acts ...... 73 4.1.6. General legal acts and constitution ...... 74 4.1.7. Civil legal acts ...... 74 4.1.8. Information technologies related legal acts ...... 75 4.1.9. Government and administration related legal acts ...... 76 4.1.10. Education related legal acts ...... 77 4.1.11. Finance related legal acts ...... 77 4.1.12. Basic ICT Law ...... 77 4.1.13. Trademark protection ...... 79 Equality for both Japanese and foreign nationals ...... 80 First-to-file rule ...... 80 Scope of protection ...... 80 Protection of trademarks about retailers, etc...... 80 Similarity of trademarks ...... 81 4.1.13.1. Validity and term of trademark registration ...... 81 4.1.13.2. Cancellation of trademark ...... 82 4.1.13.3. Trademark registration ...... 82 4.1.13.4. International registration of trademarks ...... 83 Application under the Paris Convention ...... 83 Application under the Madrid Agreement ...... 83 4.1.14. Design protection ...... 83 4.1.14.1. Design registration ...... 85 4.1.15. Japanese Law Translation ...... 86 4.2. Legal business procedures ...... 86 4.2.1. Legal forms of business operation ...... 86 4.2.1.1. Representative office ...... 87 4.2.1.2. Branch office ...... 88 procedures for establishing a branch office ...... 89 4.2.1.3. Subsidiary company ...... 89 procedures for establishing a Kabushiki-Kaisha (joint-stock corporation) ...... 91 Procedures for establishing a Godo-Kaisha (Limited Liability Company) ...... 93 4.2.1.4. Limited liability partnership (LLP) ...... 94 procedures for establishing a limited liability partnership ...... 94 4.2.2. Registration certificate ...... 95 4.3. Taxes ...... 96 4.3.1. Domestic sourced income taxation ...... 96 4.3.2. Corporate income taxes ...... 97 4.3.2.1. Tax notification after registration ...... 98 4.3.2.2. Representative offices ...... 99 4.3.2.3. Scope of income subject to corporate tax ...... 99 4.3.2.4. Calculation of income subject to corporate tax ...... 100 4.3.2.5. Remittances to home country ...... 100

4.3.2.6. Taxation of retained earnings of family corporations ...... 100 4.3.2.7. Treatment of losses ...... 100 4.3.2.8. Corporate reorganization tax system ...... 101 4.3.2.9. Filing of tax return and payment of corporate taxes ...... 101 4.3.2.10. Imposition of enterprise tax on a pro forma basis ...... 102 4.3.2.11. Withholding income tax ...... 102 Withholding at source and payment procedures...... 102 Withholding tax on residents ...... 102 Withholding tax on domestic corporations ...... 103 Withholding tax on non-residents and foreign corporations...... 103 4.3.2.12. Tax treaties ...... 103 4.3.3. Consumption tax...... 103 4.3.3.1. Self-assessment and payment ...... 104 4.3.3.2. Deduction of purchase tax...... 104 4.3.3.3. Tax exempt enterprises ...... 104 4.3.4. Personal tax ...... 104 4.3.4.1. Self-assessed income tax ...... 105 4.3.4.2. Withholding income tax ...... 105 4.3.4.3. Filing and payment ...... 106 4.3.4.4. Individual residential taxes, individual enterprise tax ...... 106 4.3.5. Other principal taxes ...... 106 4.3.6. Other taxation regarding international transactions ...... 107 4.4. Employment and salaries ...... 108 4.5. Common customs...... 112 4.5.1. Business relevant customs ...... 112 Bowing ...... 112 Greetings ...... 112 Formal and informal language ...... 113 Working ethics ...... 113 Modest and harmonious attitudes...... 113 Group decisions ...... 113 Seniority system ...... 114 Manners of congratulations and condolences ...... 114 Hospitality and seating ...... 114 4.5.2. Japanese traditions ...... 114 Tea ceremony ...... 115 Kimono and Yukata ...... 115 Geisha ...... 115 Cherry blossom ...... 115 4.5.3. Japanese annual events ...... 116 1st – 3rd January New Year (Shogatsu) ...... 116 3rd February Beginning of Spring (Setsubun) ...... 116 11th February National Foundation Day (Kenkoku kinenbi) ...... 116 3rd March Doll Festival / Girls Festival ...... 116 April Cherry Blossom Festival (Hanami) ...... 116 29th April Showa Day (Showa no hi) ...... 116 3rd May Constitution Day (Kenpo kinenbi) ...... 116 4th May Greenery Day (Midori no hi) ...... 117 5th May Children’s Day (Kodomo no hi) ...... 117

7th July Star Festival (Tanabata) ...... 117 3rd Monday of July Ocean Day (Umi no hi) ...... 117 13th – 15th August Bon Festival (Obon) ...... 117 3rd Monday of September Respect for the Aged Day (Keiro no hi) ...... 117 2nd Monday of October Health and Sports Day (Taiiku no hi) ...... 117 3rd November Culture Day (Bunka no hi) ...... 117 15th November Seven-Five-Three (Shichigosan) ...... 117 23rd November Labor Thanksgiving Day (Kinro Kansha no hi) ...... 117 23rd December Emperor's Birthday (Tenno no tanjobi) ...... 118 31st December New Year's Eve (Omisoka) ...... 118 4.6. Visa and residential status ...... 119 4.6.1. Procedures for obtaining visa ...... 120 4.6.2. Types of working residence statuses ...... 120 4.6.3. Alien registration ...... 123 4.6.4. Re-entry permission ...... 123 4.7. Governmental strategies and policies ...... 125 4.7.1. The e-Japan Strategy ...... 125 4.7.2. New IT Reform Strategy ...... 126 4.7.3. The u-Japan Policy ...... 127 4.7.4. Enhancement of ICT industry International Competitiveness ...... 128 4.7.5. ICT Productivity Acceleration ...... 128 4.7.6. Creation and fostering of ICT venture businesses ...... 129 4.7.7. Development of e-Government ...... 129 4.7.8. Information security policy ...... 130 4.7.9. Development of ICT personnel ...... 130 4.7.10. Promotion of telework ...... 131 4.7.11. Promotion of ICT R&D ...... 131 4.7.12. International cooperation strategy ...... 133 4.7.13. Official ICT Development Assistance of Japan ...... 134 5. Business state of the art and development prognosis due to export ...... 136 5.1. Assumptions...... 136 5.2. Sales forecast ...... 136 5.3. Profit and loss account forecast ...... 136 5.4. Assets and liabilities change forecast ...... 138 6. SWOT analysis of export to Japanese target market...... 140 6.1. Sector neutral SWOT analysis ...... 141 6.1.1. Strengths ...... 141 6.1.2. Weaknesses ...... 143 6.1.3. Opportunities ...... 144 6.1.4. Threats ...... 147 6.2. Consumer sector (B2C) SWOT analysis ...... 150 6.2.1. Strengths ...... 150 6.2.2. Weaknesses ...... 152 6.2.3. Opportunities ...... 153 6.2.4. Threats ...... 157 6.3. Enterprises sector (B2B) SWOT analysis ...... 159 6.3.1. Strengths ...... 159 6.3.2. Weaknesses ...... 161 6.3.3. Opportunities ...... 162

6.3.4. Threats ...... 166 6.4. Public administration sector (B2G) SWOT analysis ...... 168 6.4.1. Strengths ...... 168 6.4.2. Weaknesses ...... 170 6.4.3. Opportunities ...... 171 6.4.4. Threats ...... 175 7. Export development strategy goals ...... 177 7.1. Sector neutral export development strategy goals ...... 178 7.2. consumer sector (B2C) strategy goals ...... 179 7.3. Enterprises sector (B2B) strategy goals ...... 181 7.4. Public administration sector (B2G) strategy goals ...... 182 8. Export recommendation to Japanese market ...... 183 9. Implementation of export development strategy ...... 184 9.1. Formal procedures ...... 187 9.2. Business missions ...... 190 9.3. Exhibitions and fairs participation ...... 195 7th Information Security Expo & Conference in Tokyo (IST) ...... 195 e-Learning World 2010 Expo & Conference...... 196 Data Warehouse & CRM Expo (D&C) ...... 197 Direct Marketing Expo ...... 197 18th Industrial Virtual Reality Expo & Conference (IVR) ...... 198 Design Engineering & Manufacturing Solutions Expo (DMS) ...... 199 5th RFID Solutions Expo & Conference in Tokyo (RIDEX)...... 199 19th Software Development Expo & Conference in Tokyo (SODEC) ...... 200 13th Embedded Systems Expo & Conference in Tokyo (ESEC) ...... 201 Embedded Technology 2009 (ET) ...... 201 10th Exhibition on Sensing via Image Information ...... 202 Expo Comm Wireless Japan 2010 ...... 203 Interop Tokyo 2010 ...... 204 Security Solution 2010 ...... 204 9.4. Partnerships establishment ...... 206 9.4.1. International trade and cooperation related organizations ...... 207 9.4.1.1. Polish Chamber of Commerce and Industry in Japan ...... 207 9.4.1.2. Japan External Trade Organization ...... 208 9.4.1.3. Japan International Cooperation Agency ...... 209 9.4.1.4. European Business Council ...... 212 9.4.2. Education related organizations ...... 213 9.4.2.1. Japan International Training Cooperation Organization ...... 213 9.4.2.2. Center for Educational Computing ...... 216 9.4.2.3. Association for Overseas Technical Scholarship ...... 217 9.4.3. Information technologies related organizations ...... 219 9.4.3.1. National Institute of Informatics ...... 219 9.4.3.2. Japanese Information Technology Services Industry Association ...... 220 9.4.3.3. Japan Electronics and Information Technology Industries Association ...... 221 9.4.3.4. Japan Science and Technology Agency...... 223 9.4.3.5. Information Technology Promotion Agency ...... 224 9.4.3.6. Information Processing Society of Japan ...... 227 9.4.3.7. National Institute of Multimedia Education ...... 228 9.4.3.8. Polish-Japanese Institute of Information Technology ...... 229

9.4.4. Governmental organizations ...... 231 9.4.4.1. Japanese Government ...... 231 9.4.4.2. Ministry of Education, Culture, Sports, Science and Technology ...... 232 9.4.4.3. Ministry of Internal Affairs and Communications ...... 234 9.4.4.4. Ministry of Foreign Affairs ...... 238 9.4.4.5. Ministry of Economy, Trade and Industry ...... 241 9.4.4.6. Embassy of Poland in Japan ...... 245 9.4.4.7. Embassy of Japan in Poland ...... 246 9.4.4.8. Tokyo Metropolitan Government ...... 247 9.5. Promotion ...... 252 9.6. External funding ...... 254 10. Export development time schedule and cost estimation ...... 255 References...... 262

1. SUBJECT OF EXPORT DEVELOPMENT

1.1. COMPANY PROFILE

CompSecur sp. z o.o. is a Polish registered company in a legal form of a limited liability company, which was founded as an academic spin-off from Wroclaw University of Technology in 2005.

The company registered data is following:

CompSecur sp. z o.o. ul. Pilsudskiego 74/309, 50-020 Wroclaw, Poland Tel: +48-71-722-8038 Fax: +48-71-722-8039 http://www.compsecur.com email: [email protected] VAT ID no. 897-173-92-49 (NIP) Paid-in funding capital: 500 000 PLN KRS: 0000303601, REGON: 020713664 Educational company registration no. 2.02/00095/2008 and 2.02/00147/2009

Core profile of CompSecur sp. z o.o. business activity focuses on advanced Information Technologies (IT) security consulting and training services (carried out within the IT Training Center CompLearn, a subsidiary department of the company). Graphical logos of the CompSecur sp. z o.o. company and of the CompLearn IT Training Center are presented above.

The company headquarters is located in Wroclaw. There are 8 office branches registered in major cities of Poland as well. The funding capital of the company is 500 000 PLN and average year income is of order of 1 million PLN. The company currently employs 30 persons (of whom 8 full-time), including academic employees with PhD and Professor scientific degrees. The company has been founded by 4 academic employees with scientific degrees in disciples of advanced information technologies and theoretical physics, who aligned the primary domain of company’s professional activities and business operations according to their scientific backgrounds and specializations, especially in regard to quantum mechanics based information processing.

The company is included in the formal state registry of educational companies (no. 2.02/00095/2008, 2.02/00147/2009) and has been accredited by the Polish Agency for Enterprise Development within the 2.1 SPO-WKP programme (accreditation no. 1588/2007 in the field of advisory and training services concerning Information Technologies). The company operates the Information Technologies Professionals Database (ITPD) Internet platform supporting an advanced cooperative environment for international community of few thousands IT professionals working in Europe.

The 4 co-founders and current owners of the company, as well as some of the employees and cooperating professionals simultaneously pursue also their academic careers, especially in the scope of advanced ITs (in areas of quantum information and computation, as well as quantum cryptography research in Polish and international research institutions). The company is supporting and directly participating in research and development works of the Polish national scientific network Laboratory of Physical Foundations of Information Processing (LFPPI), which groups several research institutes of main public universities in Poland, cooperating in the field of IT foundations science aiming towards development of highly advanced and novel concepts that hold potential to further increase information processing capabilities of future information societies.

In the context of described scientific activity of company’s staff, it is important to address the research and development (R&D) programmes, the company is engaging into. Currently one of the most important issues within the scope of R&D actions being undertaken by the company concerns the 7th Framework Programme of the European Union, especially domains of Information Communication Technologies (ICT) and Future and Emerging Technologies (FET). The company is actively engaging in cooperation under application oriented technological research initiatives with international entities (both of private and public sectors). The research team of the company cooperates scientifically with many international groups, including contact with the Nanoelectronics Collaborative Research Center (NCRC) at the University of Tokyo. Important R&D projects the company undertakes concern also national security (especially addressing security of the national public administration communication within IP networks). In these theme of projects (funded by the national public finances supervised by the Polish Ministry of Science and Higher Education), the company currently prepares to launch of an advanced and unique in a national scale technology demonstrator project for quantum key distribution protocol merging with the IPsec protocol for encryption of secret communication in IP networks in a Peer-to-Peer model. Within this project planned in strict cooperation with the Quantum Cryptography Laboratory in Wroclaw University of Technology (being a part of a larger programme of the National Quantum Technologies Laboratory, a network of several leading high-technology laboratories of public universities and research institutes in Poland), the company will seek to integrate IPsec IKE (Internet Key Exchange) with QKD (Quantum Key Distribution) no-entaglement protocol of BB84 family, within an extended, reprogrammed library of the IPsec protocol, relying the key exchange on the physical layer of ISO/OSI network model implemented by advanced experimental devices providing quantum communication channels by means of standard telecommunication networks optical fibers. Resulting technology demonstrator will allow to establish a quantum secured virtual private network (VPN), which will be further developed into an advanced IT networking product, able to offer the highest security means in critical applications of secret communication for public administration. The developed technology demonstrator for unconditionally secure symmetric encryption cryptographic system will stand in opposition to only conditionally secure asymmetric encryption cryptographic systems, the security of which are based on the complexity of mathematically difficult problems to either provide key exchange for OTP, AES or 3DES symmetric encryption schemes within a Diffie-Hellman type protocols, or to provide public key encryption within the RSA or other similar protocols. Along a theme of this project, the company is also providing an advanced IT security training programme for over 1000 employees of public administration institutions in Poland, during the years 2008-2011, as contracted in 2008 with the Polish Ministry of Internal Affairs and Administration (MSWiA). The company is a technological partner of leading international IT corporations, including Microsoft, IBM, Cisco, Symantec, Juniper Networks, Internet Security Systems, Sun Microsystems, Hewlett Packard, Novell Networks, Red Hat and MySQL. Under the partnership cooperation programmes the company is entitled to access to detailed specifications of the most modern information technologies and solutions introduced by those corporations.

The company is engaged not only in the commercial and research and development activities. It also belongs to a group of SME sector IT companies in Poland, that is dedicated to implementation of non-commercial social support projects funded from state and European Union budgets, with goals extending from society digital exclusion counteractions (among other more specialized actions, the company is implementing also social responsibility support projects in terms of free IT education services to unemployed and disabled) up to information society development directly undertaken efforts (projects of advanced IT training programmes in schools, universities, public institutions and national governmental ministries). The company is experienced in successful implementation of projects supporting education of Information Technologies (both in terms of commercial and non-commercial activities, latter of which were partially financed from the state budget and from the European Union funds during the last 4 years). In 2006 the company in cooperation with Wroclaw University of Technology and Higher School of Management and Finances launched a new higher education initiative in domain of information processing and communication security (with substantial share of distant learning model employed in offered courses, as ministry approved stage of a postgraduate formal higher

education beyond a Master of Science degree). The company also launched numerous other projects of specialized and general IT training courses, including training programmes consistent with standard accreditation requirements of independent ICT skills quality assessment and acknowledgement institutions.

In relation to government target sector of the company, it is important to stress the scope of Human Capital Operational Programme in which the company had successfully served over 4000 end customers with IT general and specialized trainings (during the last year 2008, the total budget of government entities contracted projects of the company exceeded 4 million PLN). Among successfully completed IT educational projects the company was implementing, there are the ZPORR 2.5, SPO-WKP 2.1 and POKL 6.1.1, altogether accounting for above 4000 trained individual customers. In the first half of the year 2008 the company in cooperation with Wroclaw University of Technology won the national-level competition of the Ministry of National Education for implementing of a national scale IT educational programme for specialized training of at least 400 high school level IT teachers (POKL 3.3.2) within the total budget of 1.3 million PLN. During the same period of time the company also won the national-level competition of the Ministry of Internal Affairs and Administration for implementing of a large-scale, nation-wide project of specialized IT training in information security domain of at least 1000 public administration officers (POKL 5.2.1) working in governmental institutions in the whole country (total budget of 1.3 million PLN).

A list of the most recent IT educational projects implemented by the company and contracted with the government within the Human Capital Operational Programme funded from European Union budget include:

1. Project POKL 6.1.1 concerning key IT competencies education for women. The first edition with budget of 0.3 million PLN was successfully completed with 300 individuals completed 180 hours long programme of general IT training in the assumed total time period of 18 months (the project has been finished in June 2009). The second edition is currently undergoing within the budget 0.5 million PLN with expected limit of 500 individuals completing the extended training programme. 2. Project POKL 5.2.1 concerning specialized IT education of public administration officers of national governmental institutions. The project is currently ongoing within the time frame of 42 months and the total budget exceeding 1.3 million PLN (assumed limit of trained administration officers is 1000). The project is a part of a wider programme implemented by the company towards future increase of share for e-administration type services within the national public sector. 3. Project POKL 8.2.1 concerning implementation of the training programme of IT business and administration skills and competencies among Polish public universities students, as well as teaching and scientific staff. Within the budget of 0.3 million PLN and the 15 months time frame the project expects to deliver special IT training to over 200 students and PhDs in Poland, that will benefit from special IT qualifications in regard to academic entrepreneurship. 4. Project POKL 9.2 concerning high school modernization programmes implementation in regard to improving general and specialized IT training of school students and teachers. Within the time frame of 18 months the ongoing project, funded with 0.5 million PLN, is expected to support above 1000 school students and at least 20 schools (including IT teaching programmes improvement and introducing distant learning technologies in support of the school didactical processes). The direct continuation of this project would be implementation of the nation-wide high-school teachers IT training programme within the 2008 won IT training services vendor competition by the Ministry of National Education (following assignment of 1.3 million PLN for providing training of over 400 IT high school teachers). 5. Project POKL 7.2.1 concerning general and specialized IT training services for disabled individuals by the distant learning technologies and special Internet platform interfaces. Within the budget of 0.5 million PLN and time frame of 18 months the project planned to support over 1000 disabled individuals country-wide with appropriate methodology of general and more advanced IT skills training.

The total share of the public sector, governmental contracted educational services in the total sales of the company accounts for over 50% of its income. The strategy of the company to develop in direction of public sector demand fulfillment in IT education turned out to be very effective in the domestic target market during the recent period of almost 2 years lasting economic breakdown. Most of the company’s direct competitors on the national market were seriously affected by the drop of sales in the private sector, while the Information Technologies public sector (strongly supported by the post-accession funding programmes from the European Union budget) remained stable and within sustained and high growth dynamics.

The table below presents chronological view on the CompSecur sp. z o.o. company operations since 2005.

The history timeline of the CompSecur sp. z o.o. company Date Event description November 2005 The company begins its operations as an academic spin-off from Wroclaw University of Technology founded by the advanced quantum information research group in Institute of Physics with support of the European Commission Funding Programme ZPORR (Integrated Operational Programme for Regional Development), which financially supports academic entrepreneurship. The company business model is to focus on most advanced services in both hardware and software fields of information processing and transmitting security. March 2006 The company is formally incorporated under the name CompSecur and a legal form of a private enterprise (registered seat at ul. Pilsudskiego 74/309, the NOT Building, Wroclaw 50-020, Poland). The company employs staff of 8 persons (of whom only 3 full-time). June 2006 The company wins competition of the ZPORR Programme for the approved by the European Commission funding of its initial investment and operations within the European Social Fund (EFS). The company invests over 50 thousand PLN in advanced networking and computer server infrastructure, with utilization of open source software for e-commerce solutions, especially in the scope of e-learning services. The company increases employment of part-time Information Technologies experts. The company adopts model of teleworking and provides its part-time personnel with notebook class computers and software systems enabling an efficient distant cooperation. July 2006 The company establishes 6 departments focusing on following areas of information security related operations: CompSecurity (department responsible for production and implementation of IT security software layer solutions, as well as IT security consulting and auditing), CompLearn (Information Technologies Training Center, responsible for implementation of basic and advanced IT training services for individuals and organizations, specialized in IT security within both the stationary education model and the distant learning model with utilization of internally developed e-learning platforms), CompResearch (the R&D department), CompSoftware (department responsible for production of software solutions, especially in the scope of IT security, as well as learning management technologies), CompTele (department specialized in IT support services for telecommunication carriers and operators, including expertise in OSS/BSS systems, NGOSS and VAS), CompWireless (department responsible for services in area of wireless networks, especially concerned with the security of wireless networks and protocols). August 2006 The company establishes cooperation with the Laboratory of Quantum Cryptography (LKK) at Wroclaw University of Technology and a National Scientific Network, Laboratory for Physical Foundations of Information Processing (LFPPI), grouping several leading public research institutions in the country, on the plane of research and development of new and advanced quantum information processing and communication technologies (especially quantum cryptography). September 2006 The company is contracted with its first large-scale contract for deployment and installation of a few hundred Hewlett-Packard licensed workstations computers, secure network infrastructure, as well as specialized group collaboration software for organizational entities of municipal government of Wroclaw. October 2006 The company increases staff employment by 3 new full-time employees, experienced IT professionals. The company extends its computer and network infrastructures.

October 2006 In cooperation with Wroclaw University of Technology LKK and LFPPI, as well as with the Higher School of Management and Finances in Wroclaw, the company prepares programmes for advanced IT security training in a non-stationary postgraduate studies for IT professionals. The company employs 4 didactical teams under direction of academic employees with academic scientific degrees in areas of advanced computer science and telecommunication (the staff of the company increases to 18 persons). January 2007 The company initiates partnership with series of higher education universities across Poland and launches a nation-wide scale postgraduate studies on information security for individuals holding a Master of Science university degree in computer science. March 2007 The company enters partnership with Microsoft and IBM corporations, gaining access to some of the most advanced, internationally leading software and hardware products and technologies. The business partnerships are further extended by cooperation with: Sun Microsystems, Cisco, Juniper, Hewlett-Packard, Symantec, Novell, Internet Security Systems, MySQL and RedHat, mostly in regard to information security value added services provider role, an integrator of solutions and an advanced consulting company. March 2007 The company receives accreditation of the Polish Agency for Enterprise Development (accreditation no. 1588/2007) within the European Commission approved Sector Operational Programme: Development of National Enterprises (SPO-WKP 2.1) as an expert consulting and training company in the field of Information Technologies. May 2007 The company’s IT Training Center CompLearn is contracted for an advanced training service of 20 senior engineers from a leading national IT company Spin S.A., a subsidiary of Prokom S.A., providing OSS/BSS solutions (Operation Support Systems / Business Support Systems) to a public, national-scale telecommunication operator TP S.A. July 2007 The company is contracted for deployment and installation of Microsoft ERP (Enterprise Resource Planning) and CRM (Customers Relationship Management) Microsoft Dynamics NAV software among different companies in Wroclaw. July 2007 The company launches the European IT Professionals Database (ITPD) networking platform aimed towards enabling cooperation of IT professionals working in different projects and companies across the whole European Union. Within few months the ITPD platform hosts few thousands of registered IT professionals from EU countries. September 2007 The company is once again contracted in a large scale project for deployment and installation of HP licensed workstations network and computer infrastructure, as well as specialized group collaboration software for municipal government entities in Wroclaw. January 2008 The company is contracted for the IT training project supporting over 1000 unemployed individuals on the local job market by development and implementation of an ICT key competencies e-learning courses programme with aim to enable employment of supported individuals in a modern local economy of an evolving information society. Budget of the project is over 280 thousand PLN and there is an 18 months time frame for project implementation. The project is successfully concluded on June 2009, with results surpassing project assumed numbers of supported individuals by over 30%. April 2008 The company changes its legal form to a limited liability company CompSecur sp. z o.o. with paid-in funding capital of 260 thousand PLN. May 2008 The company establishes 8 branch offices in the biggest cities in Poland. October 2008 The company wins the competition organized by the Ministry of Education within the Human Capital Operation Programme approved by the European Commission for providing specialized IT training (in terms of post-graduate IT study in cooperation with Wroclaw University of Technology) of over 400 Information Technologies vocational school teachers in the whole country by external financing from the European Social Fund (the total budget of the project is 1.3 million PLN). November 2008 The company is contracted to IT technical competences training of over 1000 students and IT programme modernization project, mainly related to e-Learning solutions in IT vocational schools in Wroclaw. The budget of the project is over 540 thousand PLN. November 2008 The company is qualified and listed in the state educational institutions registry at no. 2.02/00095/2008 (later on reassigned to 2.02/00147/2009). November 2008 The company is accredited by the European Information Technologies Certification

Institute in Brussels, Belgium in regard to some programmes of the CompLearn offered IT training services. In particular the company is accredited to license the EITCA Information Security programme, EITCA Business Information programme and the EITCA Key Competencies Programme. Training services offered by the CompLearn IT Training Center, both in distant and stationary models, enable individuals to pass EITCI examination and certification procedures and obtain an internationally approved formal IT qualifications confirmation in a certain specialization. December 2008 The company is contracted to ICT R&D related training of 500 university students. The budget of the project is approximately 320 thousand PLN. December 2008 The company extends its office space in the NOT Building at ul. Pilsudskiego 74. The company launches an IT apprenticeship programme for 9 new employees. January 2009 The company’s staff takes part in a first international workshop on quantum cryptography commercialization organized and accredited by the IdQuantique company and Geneva University, in Les Diablerets, Switzerland. The company representatives establish contacts for further cooperation with the IdQuantique company, a leading European Union (Swiss) company specializing in commercial quantum cryptography systems. January 2009 The company receives funding for development of a new technology e-learning platform within the Operational Programme Innovative Economy (POIG) with budget over 720 thousand PLN. March 2009 The company is contracted by the Ministry of Internal Affairs and Administration to advanced IT security training of over 1000 national public administration officers under the project aligning with the IDABC strategy of European Commission for e-administration and e-government development in the country. The budget of the project is 1.3 million PLN, and the timeframe for implementation of projected training services is 3.5 year. June 2009 The company acquires a new office in Wroclaw with combined space of over 200 square meters. The company invests over 50 thousands PLN in new hardware and software. October 2009 The company once again is contracted for the IT training project supporting over 1000 unemployed individuals on the local job market by redeveloping and reimplementing extended e-learning training programme of ICT key competencies for employment in a modern local economy of an evolving information society (with stress put on telework enabling key IT competencies). The budget of the project is over 400 thousand PLN and the time frame for its implementation is 2 years. October 2009 The company increases the funding paid-in capital to 500 thousand PLN. October 2009 The company is contracted by the Polish Agency for Enterprise Development with the project for development of ICT training services export into target Japanese market with funding of over 50 thousands Euro within the European Commission approved Innovative Economy Operational Programme. The implementation of the export development project will be undertaken during years 2010-2011 as described in detail in the document. November 2009 The company prepares for engagement in a R&D project to be funded under the Ministry of Science and Higher Education programme, related to national IT security in scope of securing IP communications of public administration offices by quantum cryptography (QKD, quantum key distribution) integrated with the IPsec protocol library. The company partners with the Quantum Cryptography Laboratory at Wroclaw University of Technology, one of advanced European research centers in this field. December 2009 The company achieves over 1 million PLN income over year 2009 with over 4 million PLN contracted for a long term. The employed staff is 30 persons (of whom 10 full-time). December 2009 The company’s IT Training Center CompLearn has been contracted by many institutions for information security training and consulting services in closed B2B models of sale (the company was contracted among other entities by Panda Security, Warsaw Municipal Government, Lukas Bank, Safe Computing, Spin, Business Trading Poland, Phoenix Business, PalCom Systems, Kameg, Pol Perfect, NetLab, Polish R&D Center, Edusec, Unitech, Alfanet, Nordea). Individual IT training customers exceeded the number of 4000. December 2009 The company invests over 250 thousand PLN in advanced IT infrastructure (including high end server cluster equipment, network devices and broadband Internet connections, as well as hardware VPN security solutions and specialized software for distant learning).

The company’s expertise in advanced Information Technologies (especially in quantum information domain) is confirmed by international research activities of the company’s technical staff and collaborators, including:

 Co-authorship of several scientific publications related to advanced quantum information research in international scientific journals from the Master Journal List of Thomson Reuters: o Reducing of spin pure dephasing due to magnons in quantum dots, W. Jacak, J. Krasnyj, L. Jacak, Phys. Rev. B 78, 073303 (2008), selected to the Virtual Journal of Nanoscale Science & Technology o Low-temperature properties of diluted magnetic semiconductor, spin waves, W. Jacak, J. Krasnyj, L. Jacak, S. Kaim, Phys. Rev. B 76, 165208 (2007) o Unavoidable decoherence in semiconductor quantum dots, L. Jacak, J. Krasnyj, W. Jacak, R. Gonczarek, P. Machnikowski, Phys. Rev. B 72, 245309 (2005), selected to the Virtual Journal of Nanoscale Science & Technology o Renormalization of the Froehlich constant for electrons in a quantum dot, L. Jacak, J. Krasnyj, W. Jacak, Phys. Lett. A 304, 168 (2002) o Laser action in electrically driven QD matrix, J. Krasnyj, A. Chuchmala, W. Jacak, M. Tytus, W. Donderowicz, Phys. Stat. Sol. A 204, 1950 (2007) o Gaussian QDs type II in in-plane electric field, J. Krasnyj, M. Tytus, W. Donderowicz, W. Jacak, A. Chuchmala, Phys. Stat. Sol. A 204, 1944 (2007) o Quantum information processing on spin degrees of freedom in QDs placed in diluted magnetic semiconductor, W. Jacak, J. Krasnyj, J. Jacak, M. Krzyzosiak, L. Jacak, Phys. Stat. Sol. C 3, 3702 (2006) o Photoluminescence structure of highly excited quantum dots of type II, J. Krasnyj, W. Donderowicz, W. Jacak, M. Tytus, Radiation Measurements 42, 683 (2007) o Structure of the Exciton-Complex X - in electrically Defined Quantum Dot of Type II, L. Jacak, J. Krasnyj, W. Jacak, Phys. Low-Dimensional Structures, 11/12, 1 (2003) o Dephasing of orbital and spin degrees of freedom in semiconductor quantum dots due to phonons and magnons, W. Jacak, J. Krasnyj, J. Jacak, R. Gonczarek, L. Jacak, Phys. Stat. Sol. C 3, (2006) 3707 o Spin qubit and its decoherence in QD in a diluted magnetic semiconductor medium, W. Jacak, J. Krasnyj, J. Jacak The proceedings of the 28th International Conference on the Physics of Semiconductors, http://scitation.aip.org/spinweb (2006) o Decoherence of charge and spin in QDs, W. Jacak, J. Krasnyj, L. Jacak, Eds. A. Mendez-Vilaz, J. Diaz, Modern Reseach and Educational Topics in Microscopy, Microscopy Book Series, Formatex (2007) o Differences between photoluminescence spectra of type-I and type-II quantum dots, J.Krasnyj, M.Tytus, W.Jacak, A.Chuchmala, W.Donderowicz, L.Jacak, Journal of Physics: C 104, 012011 (2008) o Far-infrared laser action from parabolic quantum dots matrix, J.Krasnyj, A.Chuchmala, W.Jacak, M.Tytus, W.Donderowicz, L.Jacak, Journal of Physics: C 104, 012012 (2008) o Quantum dot spin pure dephasing due to bulk magnons at low temperatures, W. Jacak, J. Krasnyj, L. Jacak, Phys. Stat. Sol. C 6, 841 (2009) o Decoherence of orbital and spin degrees of freedom in quantum dots, W. Jacak, J. Krasnyj, L. Jacak, R. Gonczarek, PhD thesis based monograph, Wroclaw University of Technology (2009)  Participation in international and national research projects: o International quantum information research project within the 5th European Union Framework Programme IST STREP SQID Semiconductor Quantum Information Device (no. UE STREP IST-1999-11311)

o International project of the European Quantum Information Network of Excellence QUIPROCONE within the 6th European Union Framework Programme o National quantum information research projects contracted by the Ministry of Science and Informatization within the group Laboratory for Physical Foundations of Information Processing (no. PBZ-MIN-008/PO3/203 and no. MNiSW 106/E-345/BWSN-0166/208) o National Committee for Research and Science grants in quantum information (no. N N202 260 734, no. N PO3B 085 25 and no. 1195/B/H03/2007/33)  Presentations and exhibitions during following international research conferences: o Canada-Poland-Japan International Symposium on Semiconductor, Magnetic and Photonic Nanostructures (Wroclaw, Poland 2009) o LFPPI International Conference (Sopot, Poland 2009) o 5th International Conference on Semiconductor Quantum Dots (Gyeongju, Korea 2008) o 4th International LFPPI Symposium on Quantum Information & Engineering (Wroclaw, Poland 2008) o 4th International Conference on Semiconductor Quantum Dots (Chamonix, France 2006) o 28th International Conference of Physics of Semiconductors (Wien, Austria 2006) o European Conference on Luminescent Detectors and Transformers of Ionizing Radiation 2006 (Lvov, Ukraine 2006) o Trends in Nanotechnology 2006 (Grenoble, France 2006) o European Optical Society Annual Meeting 2006 (Paris, France 2006) o International Conference on Security and Management 2006 (Las Vegas, Nevada, USA 2006) o 3rd International LFPPI Symposium on Quantum Information & Engineering (Wroclaw, Poland 2006) o 3rd Conference on Spintronics and Quantum Information Technology (Awaji Island, Japan 2005) o IEEE International Conference on Technologies for Homeland Security and Safety (Gdansk, Poland 2005) o 2nd International LFPPI Symposium on Quantum Information and Engineering (Wroclaw, Poland 2005) o Quantum Information and Quantum Control Conference (Toronto, Canada 2004) o International Symposium on Nanotechnology and Patenting (Haag, Netherlands 2004) o Nano and Giga Challenges in Microelectronics (Cracow, Poland 2004) o 1st International LFPPI Symposium on Quantum Information & Engineering (Wroclaw, Poland 2004)  Research related distinctions and awards: o Ignacy Lukasiewicz Award of the PGNiG foundation for research achievements o Award of the Polish Science Foundation (FNP) programme START o Research Award of Lower-Silesia Euroregion Marshall

1.2. EXPORT SUBJECTED INFORMATION TECHNOLOGIES TRAINING SERVICES PROFILE

The core services offered by the CompSecur sp. z o.o. encompass a broad scope of professional IT training courses prepared and directed by academic teachers and industrial specialists.

Currently the company is engaged into development of the general and more specific IT training services offered within a distant learning (e-learning) model to individual and institutional customers. Since 2005, the company has been offering and selling training services on the whole domestic market (covering all regional areas). Already over 200 thousands of individual customers were interested in information technologies training services of the company. Since 2006 the company offered formal higher education programmes in area of advanced information technologies security within a cooperation with information processing and computer science departments and institutes of public and private domestic universities.

The company’s experience in terms of provided training services is above 4000 customers (either individual customers or staff of the institutions being delegated by employers), and 200 thousands of training programme hours realized.

The quality of services of the company in terms of distant learning (e-learning) technologies is one of the highest in the country (the advanced Internet based educational platforms, developed continuously within the yearly funds of order of 1 million PLN) allow for convenient asynchronous and synchronous collaboration models for the didactical staff work with trainees and students of the courses accompanied by advanced functionalities of knowledge delivery and methods of gained qualifications testing. The technical development of distant learning solutions implementing IT education services of the company is a permanently ongoing process lead by specialists in the field (within the yearly budget of order of 1 million PLN, with substantial support from government and European Commission funds within the Innovative Economy Operational Program).

The broad set of offered IT courses and trainings, served only within a distant learning education model, will be subjected to the planned export on the Japanese target market. Initially the offered programme will cover similar courses as those offered in the domestic market, followed by an introduction of a more advanced and sophisticated information technology courses.

1.2.1. INFORMATION TECHNOLOGIES TRAINING SERVICES PROGRAMME

The preliminary version of the planned export subjected information technologies training services programme is already available within the framework of distant learning offer of the CompSecur company, carried out under its subsidiary organizational entity, the Information Technologies Training Center CompLearn.

The company is in possession of all of the didactical material (including lectures, syllabuses, exercises and software laboratories) prepared in the special e-learning form compliant with the Sharable Content Object Reference Model (SCORM), a widely accepted set of standards and methodologies for the e-learning process implementation within the Internet network by means of web based systems. The company also has available enabling technologies in the form of advanced e-learning platforms that allow for very efficient education processes implementation within the planned distant model of sales in the Japanese target market.

Distant learning programmes of the company, as implemented on advanced e-learning platforms (LMS, i.e. learning management systems), are characterized by high level of flexibility for organization of didactical processes, allowing for instance for an arbitrary time organization of teaching and learning processes (with asynchronous classes for students ongoing on-demand all the time during day and night). The possibly high

effectiveness of the distant learning didactical forms has been achieved due to utilization of advanced technologies for both asynchronous and synchronous presentation, communication and management.

In regard to contents of offered training programmes, the curriculum vary from basic and fundamental problems and qualifications up to advanced domains of technologies not even commercialized as of yet. Offered training programmes embrace standard IT courses for different target groups, as well as sophisticated and comprehensive higher education faculties for narrowed professional specialization in certain IT domains (e.g. information security or applications of IT systems in business and administration operations). It is important to mention that the major target group for B2C IT training services offered within a distant learning model is constituted by already well educated individuals (often holding higher education diplomas in the field of computer science), who wish to develop their professional careers in domains convergent with offered specialized trainings. Such individuals usually hold normalized full time job positions, which preclude or at least impede their participation in standard, stationary courses and trainings. Extending of the ICT education levels and skills within the society (concerning both groups of IT professional individuals and representatives of other professions for which Information Technologies start to play an important role) is resulting simultaneously in disseminating of digital literacy and counteracting digital exclusion with increasing value of working force for the economy in information society. The difficulty level of the offered training programmes is also differentiated with courses of content suitable for customers ranging from individuals not possessing even basic Information Technologies skills up to computer science professionals. The e-learning platforms advanced operations instructions integrated courses allow students for prompt comprehension of the most effective methodologies and techniques for computer learning within a distant model (due to such courses even individuals lacking basic ICT skills for operating computer systems and Internet are able to effectively undergo the programmed e-learning didactical process).

The offered e-learning courses contain differentiated distant didactical forms, including lectures, exercises, projects, seminars, consultations and computer laboratories, all performed in distributed network models in the e-learning platform environment. Testing and examination procedures are performed both in the stationary and distant models according to requirements of a given external accreditation. In the case of distant testing, the company uses professional testing procedures providers (such as e.g. Prometric), as well as proprietary solutions (Internet based multi answer tests fulfilling series of formal and technical requirements for their credibility). The e-learning tools employed in offered distant training services enable synchronous and asynchronous group cooperation and detailed reporting functionalities (including virtual presence assessment, and all activities logging with advanced statistics). Especially real-time group collaboration with usage of special set of network distributed RTC (Real-Time Collaboration) suites is determining high quality of delivered educational value, allowing for integration in training programmes of important group hands-on and tutorials in virtual software environments. Nonetheless another important aspect of the technology, lies in subsystems of throughout activities analysis for both the trainees and the trainers, enabling efficient management and quality assurance, as well as individualized approach of didactics to students tackling with more difficulties or surpassing average results.

An important step in preparation for the export of the information training services according to the programme already implemented by the company will be applying Japanese translations (to both the technology interfaces of web-based e-learning platforms and essential contents of the training programmes), as well as specific contents modifications concerning different national standards in information technologies (however information technologies are currently internationally standardized on even very low level of abstraction, there will be several fields in the existing programmes that will need appliance of minor corrections and reformulations, especially in the national sensitive matters, such as legal regulations concerning Information Technologies, mandatory standards and norms for information security, etc.).

Below there is presented an outline of the information technologies training services programme planned to be subjected to export to the target Japanese market. Altogether the company initially plans to launch 25 general and specialized distant learning IT courses in Japanese language of both theoretical and practical character. Some of the courses will be suitable for people with low ICT skills and some on the hand will appeal to high level IT professionals seeking to acquire new qualifications in some of many different topical areas.

Some courses include topics such as fundamentals of internet technologies and development of modern web services along with novel channels of Internet marketing media, applications of the services oriented architectures and software as a service development models. Other courses deal with introduction to fundamentals of programming and software engineering, along with formal methodologies for software design. Yet other courses concern applications of software information technologies and systems to business and administration, this especially concerns applications of new open source software systems, that currently are already very sophisticated in many areas exceeding best available proprietary solutions and systems. Some of the courses deal with topics of practical applications of advanced databases processing software with regard to systems referred to as Business Intelligence. There are also courses that apply to some of the most widely accepted vendor specific systems and technologies, e.g. courses concerning administration and management of Microsoft business applications software. Some of the offered courses will concern advanced technologies applied to e-Commerce and Internet sales, while they become the dominating platform for business models and operations. Other courses will be dealing with a more sophisticated applications in business processes. The programme also contains courses with regard to development of information technologies supporting telecommunication, i.e. OSS/BSS systems, SDP service delivery platforms, etc. There will be offered courses concerning computer graphics and marketing issues in the field of new multimedia techniques (3d animation, actionscript programming, etc.). Some courses will refer to novel systems allowing for both synchronous and asynchronous online collaboration, which is a very important class for applications not only in distant telework, business and administration, but in virtually any group of activities in society. Most advanced courses will cover completely new information and communication technologies development, just starting to emerge from research laboratories and prototypes stages to commercial applications holding a potential to revolutionize information processing. Very important class in the scope of offered courses will cover topics focusing on information and data engineering, information search engines and information security concepts and technologies. In the latter class there will be included courses containing fundamentals of cryptography, conceptual security of computer networks and practical problems of information security in a regard to e- Commerce market (e.g. security sensitive sectors such as electronic finance and banking, or electronic data interchange between business entities). Some of the courses will focus on theoretical aspects of information security (with regard information, communication and coding theories, as well as computational complexity theory) with implications for practical applications. Other courses will deal with novel paradigms of quantum information processing. The quantum information processing is currently the most advanced information technologies research field holding many promises, especially for information security (e.g. teleportation of states carrying information, exponential improvement of algorithms complexity for solutions of certain mathematical problems of high importance, like factoring of prime numbers, absolutely, mathematically unconditional secure communication, etc.) but is still not determined to be even feasible for implementation. In particular there will be one course dedicated completely to quantum cryptography, which offers a fundamental change in assuring information and communication security in peer-to-peer communication (already in stage of commercial development). The programme will contain courses that focus also on very practical and applicable security management techniques in vendor-specific advanced systems operating networks (e.g. CISCO, Novel, Juniper, IBM, Sun and Microsoft networking systems and solutions). Available courses focus also on IT security of even more practical type, supported by extensive software laboratories dealing with information security in different logical layers of information processing of any type of abstract organization. Some courses will deal with both formal and legal aspects of information processing and security. There are also courses concerning common information threats (especially in public network environments

such as the Internet) and different methodologies to counteract those threats. Some courses will focus specially on information security tools enabling different defense measures and possibilities to identifying and tracking sources of attacks.

INTERNET TECHNOLOGIES AND DEVELOPMENT OF WEB SERVICES

 HTML programming  Cascading style sheets CSS  XML, XHTML and XSL languages  DHTML language  Javascript and CGI scripts  Advanced dynamic websites creation  Advanced forms programming  Servlets and ASP technology  ASP.NET and PHP preprocessor  Databases integration, SQL language  Visual websites development  Websites hosting platforms  LAMP technology stack (Linux, Apache, MySQL, PHP)  Content Management Systems (Joomla, Drupal, etc.)  Efficient web search techniques  Architecture and operation mechanisms of Internet search engine  Advanced utilization of Internet resources  Utilization of Open Source software for business applications and web development  Web 2.0 paradigm

FUNDAMENTALS OF MODULAR PROGRAMMING

 Introduction to object oriented and event-driven programming  Modular programming in C# on the Microsoft .NET platform  Microsoft Silverlight technology  Modular programming in Java and JavaBeans technology  Modular programming in platform frameworks  Programming aspects of computer graphics  Distributed programming  Open source frameworks modular programming  CMS web modular programming

APPLICATIONS OF IT IN BUSINESS AND ADMINISTRATION

 Introduction to IT applications in business and administration  Business software and IT systems supporting business and administrative operations  Advanced utilization of Microsoft Office in business and administration  ERP (Enterprises Resource Planning) software in business and administration applications  CRM (Client Relationship Management) software in business and administration applications  BI (Business Intelligence) software in business and administration applications  Workflow software in business and administration applications

 HR (Human Resources) management software in business and administration applications  RTC (Real Time Collaboration) software in business and administration applications  Project resources management software in business and administration applications  Wireless networks and VoIP Internet telephony for efficient business operations

CALCULATION AND DATABASES APPLICATIONS

 Building a sophisticated calculation sheets  Employing advanced analytical and statistical functions  Advanced queries and query tables creation  Advanced macro definitions  Techniques for graphical representation of data  Employing programming languages for building of advanced functions  Advanced applications of Relational Database Management Systems  Integration of spreadsheets and databases  Optimization tasks in calculation sheets and databases

E-COMMERCE AND INTERNET ADVERTISEMENT TECHNOLOGIES

 Statistics and trends on Internet utilization  The market of e-Commerce and e-Invoicing transactions  Electronic data interchange (EDI) systems  The market of Internet payment transactions and e-Banking  Statistics and trends in Internet advertisement market  Basic definitions in Internet advertisement  Forms of Internet advertisement  Context and demographic targeting  CPM, CPC and CPA Internet advertisement models  Search engine optimization and search engine marketing (SEO, SEM)  Information search engine positioning techniques  Technologies of Internet advertisement  Internet search engines advertisements systems

DATA ENGINEERING

 Introduction to databases  Introduction to data warehouses  Relationship databases management systems  Databases schemes design and implementation  Minimalization and normalization procedures  Advanced data indexing methods  Data search methods  Introduction to Internet search engines  Statistical operations and expert data systems  Business Intelligence (BI) systems  Semantic information and semantic web data model  Introduction to artificial intelligence

LEGAL ASPECTS OF INFORMATION SECURITY

 Risk management  Confidential information  Personal and private data protection  Public key infrastructure certifications and PKI hierarchy  Japanese ICT law and legal acts  SLA (Service Level Agreements) ICT security contracting  International ICT security industry norms

TELECOMMUNICATION IT SUPPORT SYSTEMS

 Introduction to telecommunication technologies  ISO/OSI model for telecommunication  3G and 4G mobile technologies  3G and 4G services development  OSS/BSS systems  Introduction to NGOSS framework  Introduction to VAS platforms  IT wireless networks (WiFi, WiMax, WiBRO)

NEW MODELS FOR INFORMATION TECHNOLOGIES

 Incompleteness theorems  Lambda calculus and Touring machine models  Church-Turing thesis  Introduction to probabilistic computational model  Introduction to quantum information processing (QIP) model  Quantum information for computer scientists  Quantum cryptography  Spintronics IT applications

COMPUTER GRAPHICS AND MULTIMEDIA TECHNOLOGIES

 Theoretical introduction to computer graphics  Classification and technologies of computer graphics models  Use of computer graphics to for raster and vector graphics  Histograms of 2D graphics  Filters and raster effects  Layers of raster and vector graphics  Vector transformations  Images scaling and resampling  Animation techniques in 2D computer graphics  Advanced use of computer tools and software for advanced graphics and animation  Introduction to 3D design and 3D animation  Tools and technologies for 3D design and 3D animation  Presentation methods

INTERNET COLLABORATION TECHNOLOGIES

 Corporate subsector of RTC (Real Time Collaboration) tools  Distant learning (e-Learning) technologies subsector  Remote IT support (IT helpdesk) technologies subsector  Remote IT services and products deployment technologies subsector  Models of logical distribution of Internet collaboration services  Collaboration documents repositories and versioning systems  Online collaboration and telework management systems  Corporate internal communication systems, Intranets  Market players and licensing models

INFORMATION SECURITY FUNDAMENTALS

 Cryptography and cryptoanalysis  Historical cryptography  Steganography  Symmetric private-key cryptography  Assymetric public-key cryptogragy  One-time pad (OTP)  Popular private-key protocols (3DES, AES)  Popular public-key protocols (RSA)  Key exchange protocols (D-H)  Secure IT networks protocols  IT threats (hacking, Internet attacks, viruses, spy and malicious software)  IIS services security management  Introduction to quantum cryptography and quantum key distribution (QKD)  e-Commerce IT security

ADVANCED CRYPTOGRAPHY AND CRYPTOANALYSIS

 Fundamental definitions in cryptography (confidentiality, authenticity, authorization, integrity, encoding and decoding, key)  Basic techniques for encoding and decoding  Permutation and translation ciphers (matrix ciphers) and codes  Hash functions  Cryptology theory  Cryptography, cryptoanalysis and steganography techniques  Cryptographic systems  Asymmetrical and symmetrical cryptosystems  Public Key Infrastructure (PKI) and digital signature  Private key distribution problems and introduction to quantum cryptography  Algorithmic implementations of cryptography (cryptographic algorithms)  Asymmetrical cryptography algorithms: RSA, DH  Symmetrical cryptography algorithms: DES, IDEA, RC5, 3DES, AES (Rijndael)  Authorization and authentication problems and solutions  Implementations of password and biometrical security systems

COMPUTER NETWORKS

 Network topology, packets, links, session  Models of network communication (packets commutation, links commutation)  Different types of networks topologies and technologies  Topological networks models (rings, stars, P2P, mixed)  Fundamental theoretical ISO/OSI model of network communication  Abstraction layers in ISO/OSI and their security  Techniques for link access control  Network devices and their security  Wired networks (LAN, WAN, MAN), technologies and devices  Wireless networks (telecommunication and IT industries), technologies and devices  Ethernet/TCP/UDP/IP/ICMP protocols stack  Internet security  Packets commutation and routing (logical links for packets)  Internet networking layer protocols (IPv4, IPv6)  Internet transport layer protocols (TCP, UDP)  IT security protocols  Internet security protocols (IPSec and SSL)  World Wide Web architecture and HTTP protocol  Other Internet services (telnet, ssh, gopher, ftp)  Domain Name System (DNS) architecture  LAMP technologies stack  SOA and SaaS application models

SECURITY OF E-COMMERCE

 Professional security audit  Common practices for interviewing and auditing  Practices in professional IT security auditing in organization  Fundamental IT logical layers (infrastructure, architecture and IT systems)  Definition of information privileges and threats in layers  IT security policy  Formalization of norms and common practices  Formalization of information flow inside of an organization  High level modeling languages for workflows (UML, BPMN)  Applied cryptography  Usage and applications of asymmetrical (public-key) cryptography  Usage and applications of Public Key Infrastructure (PKI)  Usage and applications of symmetrical (private-key) cryptography  Security of e-Finance and e-Banking (bank and financial IT systems)  Threats for e-Finance and e-Banking sectors  e-Finance and e-Banking security domains and protocols stacks  Device level security systems (hardware IT security)  Logical level security systems (software IT security, protocols

THEORETICAL INFORMATION SECURITY

 Introduction to Shannon’s information and communication theory  Message and messages source  Communication channel  Information units (bits, hartleys, bins)  Information measures (entropy)  Introduction to graph theory  Introduction to conditional probability  Bayes’ theorem  Random numbers and pseudorandomness  Introduction to coding (encoding and encryption)  Information codes types  Humming codes  Information and data compression (with loss and without loss)  Shannon’s theorems in information theory  Definition of channels without and with information loss  Errors in information and loss of messages integrity  Error correcting schemes and procedures  Introduction to complexity theory  Mathematical problems classes (e.g. non-polynomial NP and polynomial P)  Algorithms  Asymmetrical cryptography (public-key cryptosystems) context  Computational models and information theory  Touring machine and state automata (deterministic and indeterministic)  Boolean algebra and classical circuits theory  Probabilistic computational model  Introduction to complexity theory  Introduction to quantum computational model  Aspects of quantum threat for asymmetrical cryptography

QUANTUM INFORMATION PROCESSING SECURITY APPLICATIONS

 Introduction to quantum mechanics  Quantum mechanics postulates and formalism  New quantum paradigm of information  Quantum information state  Quantum messages source  Quantum unit of information (qubit)  Quantum entaglement and its measure  Quantum measurement  The EPR paradox and violation of Bell inequalities  Realism and localism assumptions  Analysis of EPR paradox and Bell inequalities  Quantum circuits theory  Quantum gates, universality and reversibility  Quantum algorithms implementation (exponential gain)

 New quantum aspects of IT security  Shor factorization algorithm  No-cloning, no-deleting and no-broadcasting theorems  Introduction to quantum key distribution schemes (QKD)  Perspectives for practical implementation of quantum computers  Technologies of quantum computers implementations  Problems with decoherence (quantum information noise)

MICROSOFT OPERATING SYSTEMS MANAGEMENT

 Fundamentals of operating system resources management  Advanced configuration and management  System integrity management  System security management  Configuration and management of network domains  Configuration and management of system users  Configuration and management of systems services, including IIS services  System backup and upgrade configurations  Ways for preventing and reacting on a system failure situations

ADVANCED MICROSOFT OPERATING SYSTEMS MANAGEMENT

 Issues connected to secure installation and patching routines  User accounts and authorization  User groups and privileges  Authorization and user authentication mechanisms  System configuration  Hardware IT devices configuration  Network configuration (protocols, services, built-in firewall system)  Remote management configuration  Configuration of a network domain  Active directory system configuration  IIS (Internet Information Services) configuration  IIS security routines  IIS monitoring subsystems  Management of IIS services  Hard disks and memory management  NTFS file system management and configuration  Sharing resources  Setting privileges  Configuring compression subsystems  Operating system security configuration and management  System management console  System archiving and system recovery tools and mechanisms  Failure situations

SECURE NETWORK INFRASTRUCTURES

 Basic concepts of IT networking infrastructure  IT network topologies and types of networks  Network hardware devices  Wired network devices  Wireless network devices  Hardware (device based) security of wired networks  Hardware IDS/IPS systems  Hardware firewalls and network gates  Hardware (device based) security of wireless networks  Radius and Diameters AAA (authentication, authorization and accounting) servers  Wireless hardware IDS/IPS systems  Wireless hardware firewalls and network gates  Commercial network devices and network security solutions  Homologations, legal aspects and norms for network devices  IT networking security norms  Network devices homologation offices and legal regulations  Specific legal regulations in a finance sector  Problems with doubling IT networking systems  Secure network infrastructure deployment  Network infrastructure configuration and management

SECURE INFORMATION ARCHITECTURES

 Basic concepts of information architecture  General IT security software  Firewall systems  Antivirus and malicious software protection systems  Operating system security  Configuration and management of Microsoft and Unix operating systems  Operating system protection software  Remote management and security monitoring systems  Operating systems network connection scanners  Network intrusion detection and prevention systems (IDS/IPS)  Public Key Infrastructure (PKI) systems  Legal regulations and certification offices procedures  Internet security systems  E-mail security systems (including privacy and anti-spam systems)  Web protection systems (HTTPS protocol and web servers security)  Internet privacy protection systems  Advanced mechanisms of identification, authorization and authentication  Hardware and software solutions (including biometric security systems)  Data security systems  Secure data erasing, utilization and disposal systems  Backup copies systems  Data archiving systems

 Deployment of a secure information architecture  Secure information architecture configuration and management

SECURE INFORMATION MANAGEMENT SYSTEMS

 Basic concepts of complex secure information systems  Security of business and organization support systems  ERP, CRM, BI, Workflow, SFA, BS, RTGS, HR systems security  Secure integration of business support IT systems  Distributed IT systems security  Security of e-Services, e-Commerce and e-Business  IT security models practices and norms  IT security administration and management in IT systems  Remote monitoring and management  Finance sector IT systems security (e-Finance and e-Banking)  Deployment of a secure IT systems  IT systems security configuration and management

COMMON INTERNET THREATS

 Basic notions of Internet and other IT networks threats  Types of possible Internet attacks  Passive attacks (eavesdropping, scanning)  Active attacks (passwords breaking, phishing, spoofing and masquerading, services blocking, bombarding, unauthorized remote access, session hijacking)  Popular hacking tools  Hacking tools for decryption, password breaking, ports scanning, eavesdropping, phishing, spoofing, remote accessing (Trojan horses), breaking into wireless networks, breaking VoIP Internet telephony security measures  Malicious software  Viruses (viral software), Internet Works, rootkits, Trojan horses and backdoors  Advertising and spying software  Loggers, dialers, malicious plug-ins and key loggers  Case studies  Hacking and cracking cases  Spam cases

QUANTUM CRYPTOGRAPHY

 New IT security paradigm  Independence on classical cryptography  Asymmetrical (public-key) cryptography threatened by quantum computers  Unconditional security of quantum cryptography  Vernam or one-time pad (OTP) cipher  Quantum key distribution (QKD) schemes  The authentication problem and the quantum key growth or expansion (QKG or QKE) schemes  Quantum cryptography protocols not using quantum entaglement

 BB84 (Bennett, Brassard 1984) and B91 (Bennet 1991) quantum cryptography protocols and their modifications  Quantum key sifting procedures  Quantum key distilling procedures  Eavesdropping detection procedures  BB84, B91 protocols and other modified quantum cryptographic schemes with no entanglement practical implementations  Quantum cryptography protocols using quantum entaglement  E92 (Ekert 1992) quantum cryptography protocol and its later modifications  Quantum key sifting procedures  Quantum key distilling procedures  Eavesdropping detection procedures  E92 protocol and other modified quantum cryptographic schemes with entanglement practical implementations  Quantum channels and decoherence  Models of quantum cryptosystems  Quantum cryptography applications and QKD implementations  MagiQ, idQuantique, NEC, Sequant companies  Quantum cryptographic scientific laboratories  Deployment of quantum cryptography (quantum key distribution schemes)  Hardware and software configuration and QKD systems management

FORMAL ASPECTS OF INFORMATION SECURITY

 Risk management  Confidentiality of information  Japanese legal regulations towards confidentiality analysis  Listing of confidential information types due to legal regulations  Japanese legal regulations towards electronic communication sector  Legal acts analysis  Japanese legal regulations towards telecommunication sector  Legal acts affecting telecommunication market analysis  Issues connected to concessions and frequency spectrum bands licenses  Private data protection  Japanese legal acts on private date protection (security of processing, limits in publication, etc.)  Private data protection in context of IT systems and IT security  Homologations  Japanese homologations legal regulations analysis  Certification and PKI (Public Key Infrastructure) hierarchy  Japanese legal regulations towards digital signature  National PKI Certification Center  Japanese legal database IT legal acts analysis  Security norms analysis  SLA (Service Level Agreement) legal issues  Warranties connected issues and legal regulations

Beyond the above listed offer of general information technologies course, the planned export will also introduce in Japan training in the field of highly advanced information technologies, primarily those based on

quantum information processing paradigms. Since most of the quantum information technologies are currently in the stage of research and at most being early adopted technology demonstrators and prototypes, those advanced courses will not position themselves as a response to high demand for general ICT skills and information technologies key competencies.

Nevertheless advanced training in this domain will position company as one of the leading high-level IT education providers among SMEs in Japan, and will allow for valuable partnership and cooperation possibilities with much more developed R&D corporations, research organizations and educational institutes. In terms of a long-term strategy, the company will seek cooperation with most advanced Japanese vendors of quantum information technologies, to become a strategic partner in education and dissemination in this field of future IT development, both of private corporations and research centers, bridging and converging ideas and conceptions from different viewpoints internationally (the company already cooperates with research networks and commercial early adopters of QIP, i.e. quantum information processing technologies in the European Union).

Below is presented a preliminary coverage of the programme to be introduced as an advanced educational offer to high-level information technologies professionals in Japan, and field of special expertise of the company in terms of advanced information technologies consulting services:

ADVANCED QUANTUM INFORMATION AND COMMUNICATION

 Quantum mechanics and quantum information fundamentals of information processing o Linear algebra and functional analysis for quantum information . Vectors, linear complex spaces and their norms o Inner products o Linear operators o Hermitian conjugation . Group theory o Operators o Generators o Representations o Postulates of quantum mechanics . Hilbert spaces and information states definition . Unitary evolution and reversibility o Deterministic solution of a first-order differential equation o Schrodinger equation . Hermitian operators and spectral decomposition theorem . Quantum measurements and von Neumann projection . Positive Operator Valued Measurement . Quantum measurement as superselection . Quantum Zeno effect, freezing of quantum evolution by measurement . Composite systems, tensor product and entanglement o Determinism and indeterminism in quantum mechanics and quantum information o Qubits and their properties . Pure state . Mixed state . Bloch sphere model . State vectors and density operators formalisms o Trace and partial trace

o Reduction of density matrix o Concavity of density operators o Time evolution of density matrix and Liouville equation . Generalizations of qubits o Entanglement properties . Bell states . Bell inequalities and EPR paradox . Schmidt decomposition procedure . Schmidt representation and Schmidt number . Entanglement purification procedure . Entanglement teleportation and entanglement swapping . Local-realism violation in quantum information . Superdeterminism  Quantum computation and information processing o Quantum unitary operations o Quantum trace preserving operations o Rabi oscillations o Interaction for entangling quantum states o Quantum systems simulation o Quantum complexity . Quantum Turing machine complexity model . Quantum complexity classes of BQP, QMA, PostBQP o Quantum computational models and architectures . Reversibility of quantum information processing . Irreversibility of Boolean algebra classical information processing . Quantum gate (circuit) model o Single qubit gates o Hadamard and quantum negation gates o Multi qubit gates o CNOT gate and universality result o Toffoli gate o Solovay-Kitaev theorem . One-way quantum computer (cluster states) . Adiabatic quantum computation . Quantum cellular automata . Quantum Turing machine for computation . Topological quantum computation o Quantum computation physical implementations . Trapped ions implementations . Molecules, neutral atoms and cavity QED implementations . Superconductors implementations o Josephson junctions o Charge qubits o Flux qubits o Phase qubits . Quantum dots implementations . Quantum optics implementations o Linear optics o Optical cavity and optical lattice for ultra cold atoms

. Spin implementations o Impurities and single molecular clusters spintronics o Nuclear magnetic resonance NMR o Kane model o Loss-DiVincenzo model . Topological (fault-tolerant) implementations . Harmonic oscillator implementation o Quantum algorithms . Deutsch-Jozsa algorithm . Quantum search algorithms o Oracle algorithm model o Grover’s algorithm . Simon algorithm . Quantum Fourier Transform family of algorithms o Shor QFT product form o Order finding o Factorization (Shor algorithm) o Factorization to order finding reduction o Period finding o Discrete logarithm computation o Hidden subgroup finding o Kitaev QFT . Novel quantum algorithms o Quantum information applications . Quantum teleportation . Superdense coding o Quantum memory o Quantum random number generators o Quantum programming  Quantum information and communication o Landauer principle o Quantum information properties . No-cloning and no-broadcasting theorems . No-deleting theorem . Measures of quantum information o Quantum information distance as trace distance and fidelity o Von Neumann entropy and entanglement measure o Concavity of von Neumann entropy o Quantum relative entropy and distance measure o Convexity of quantum relative entropy o Projective measurements and entropy o Mutual information and conditional entropy o Negativity of conditional entropy for entanglement o Subadditivity and strong subadditivity properties . Quantum information theory o Holevo bound o Quantum information compression o Transmitting classical information in noisy quantum channels o Transmitting quantum information in noisy quantum channels

o Fano inequality o Quantum data processing inequality o Quantum singleton bound o Quantum refrigeration o Quantum t-design o Quantum continous variables (QCV) o Entanglement . Local Operation and Classical Communication (LOCC) . Bi-partite pure state entanglement . Entanglement distillation . Entanglement dilution . Entaglement classes . Multiparty entanglement and its applications o Quantum noisy communication channels . Classical and quantum noise comparison . Markov processes . Environment interaction and decoherence fundamentals . Quantum operations o Operator sum representation o System coupled to environment o Master equations o Quantum tomography . Quantum noise o Phase flip and bit flip o Depolarizing channels o Phase damping channels o Amplitude damping channels o Quantum error correction and purification . Three qubit bit flip code and phase flip code . The Shor code . Discretization of errors and errors modeling . Degenerate codes . Quantum Hamming bound . Classical linear codes . Calderbank-Shor-Steane codes . Stabilizer codes o Stabilizer formalism o Gottesman-Knill theorem o Stablizer quantum circuits . Fault-tolerant quantum computation models o Fault-tolerant quantum operations and logic o Fault-tolerant quantum measurements o Decoherence . Off-diagonal decoherence and dephasing . Zurek superselection as total dephasing . Relaxation and amplitude decoherence . Solid state and quantum dots decoherence o DiVincenzo criteria o Phonon induced decoherence

o Diluted magnetic semiconductors spin decoherence by magnons o Decoherence and control tradeoff o Reducing of pure dephasing in low temperatures o Quantum imaging  Quantum communications o Quantum cryptography . Symmetrical cryptography . Quantum key distribution (QKD) . Quantum key expansions (QKE) . Privacy amplification and information reconciliation . Quantum cryptography attacks o Authentication and man-in-the-middle attack o Photon number splitting attack . Advanced entanglement quantum cryptography o BB84 and B92 protocols and their modifications o Photon coding and phase coding . Advanced no-entanglement quantum cryptography o E91 protocols and its modifications o Entanglement pairs sources and non-linear optics o Quantum networks

The presented above outline of the strictly advanced education in scope of new and perspective directions of quantum technologies development in regard to information and communication systems, will allow to shape perspective on the future choice and adaptation of novel technical solutions, appropriate for the needs of certain applications and sectors of operations in increasingly computerized and globalized information society economy. Advanced quantum information technologies hold potential for a new technical revolution in terms of computation and communication.

Even though these technologies are not as of yet commercialized and early prototypes exist, the company will seek to continue its expertise expansions in this direction. As mentioned before, at the beginning of 2009 the company took part in the first international workshop for quantum cryptography commercialization organized and certified by the IdQuantique company and Geneva University in Les Diablerets, Swiss. The company representatives established contact with the IdQuantique company, a leading European Union (Swiss) company specializing in commercial quantum cryptography systems.

Currently on the global market there exist only few companies that are actively developing commercial technologies of quantum computation and cryptography. Most important of these companies are following:

 European Union o IdQuantique (http://www.idquantique.com) o Siemens (http://www.siemens.com)  United States of America o MagiQ (http://www.magictech.com) o BBN Networks (http://www.bbn.com) o D-Wave (http://www.dwavesys.com) o IBM (http://www.ibm.com)  Japan o NEC (http://www.nec.com) o Fujitsu (http://www.fujitsu.com) o Toshiba, Cambridge Research Laboratory (http://www.toshiba-europe.com)

2. JAPANESE TARGET MARKET SELECTION JUSTIFICATION

Japanese market is the second biggest and matured markets in the world just after the United States, with approximately $5 trillion of nominal GDP. It is also the third biggest market (after the United States and China markets) in terms of purchasing power parity of population.

As of year 2001, Japan had over 67 million workers with a very low unemployment rate (as of 2007 at around 4% level, but due to recent crisis of late 2008 rapidly deteriorating). Japan's GDP per hour worked was the world's 19th highest as of year 2007 (however independent markers of the BIGMAC index show that in terms of hourly salary Japanese workers are paid best in the world). In terms of economic dependencies Japan is continuing to decrease its strong connection with the USA economy. Japanese economy was the fastest growing in the world during the period between the 1960s and the 1980s, called the “Japanese miracle” (it averaged in 10% yearly GDP growth during the 1960s, 5% average yearly growth in the 1970s and a 4% average yearly growth in the 1980s). Japan economic growth slowed significantly during the 1990s, primarily due to the sudden domestic asset price bubble burst combined with national policies allowing speculative excesses in the stock and real estate markets.

Share of Gross Domestic Product (GDP) in the world in US $ trillion

USA India Rest of the world Canada 1,22 USA 1,4 Japan 14,2 Spain China 1,6 Germany Rest of the world Russia France 1,61 18,96 UK Brazil Italy 1,61 Japan China Brazil Italy 4,91 4,33 Russia 1,61 UK Spain 2,65 France Canada 2,85 Germany 3,65 India

Source: World Bank, World Development Indicators 2009

Administration efforts to revive economic growth during the 1990s met with very limited success and then were further hampered by the global economic slowdown that started in 2000 and lasted for 2 up to 3 years. The first signs of economy growth recovery appeared in 2003, but only after 2005 some serious growth came back to Japanese GDP marker (the growth of 2005 was measured at 2.8%, while just the next year it accounted an impressive 5.5%, which was surpassing far beyond both the growth rates of the United States and the European Union in 2006).

From 2002 to 2007 economy of Japan had the longest recovery time after world war II. The economy growth was driven primarily by export. Japanese economy export dependence increased in last decade and noted its highest level in 2007. During 2008-2009 financial crisis, Japanese export decreased significantly, while Japanese economy entered recession. Japanese exports in recent decades shifted towards high value-added goods (primarily automobiles, electronics and machinery. Therefore Japanese economy was very sensitive to impact

of the global recession, causing dramatic fall of demand for high value-added goods (in contrary e.g. to China, exporting low value-added products). In this perspective the recovery of the global economy will lead to increase in production of high value-added goods exported from Japan by increased international demand.

In terms of regional allocation of the GDP in Japan, it is interesting to compare the following map by JETRO relating Japanese regions to whole developed countries in terms of generated GDP volumes.

Source: JETRO 2009

Great size and volume concerns both the consumer market (important for B2C model of services export) and private enterprises market (important for B2B model of services export). Deriving from the strength of both the consumer and business internal markets, also the public sector of government and administration (funded by consumer and business taxes) is one of the largest in the world.

As described in section 1.2. the planned export of services will concern all 3 sectors (consumers sector, private enterprises sector and public administration and governance sector) within both the B2C (consumer sector) and B2B (private enterprises and public administration sectors) sale models.

Japan ranks 12th of 178 countries in the Ease of Doing Business Index 2008 and it has one of the smallest governments in the developed world. It is important to mention that in general opinion Japan is one the world centers of new technologies and advanced services. As a result of JETRO (Japanese External Trade Organization) performed survey of foreign-affiliated companies operating in Japan conducted in early 2008, more than 20% of these entities perceives Japan as a their strict center for research and development and as a base for business activities in Asia. This makes Japanese market a good target market for advanced Information Technologies (IT) training services. Each year more of international companies partner with Japanese entities to develop new products and services and innovative technologies in domain of Information and Communication Technologies (ICT), while conducting R&D on the highest level of advancement. In order to further justify the selection of Japan as a target market for planned Information Technologies training services export, an extended economic study will be first presented below (taking into account consumer and enterprises sector, as well as education system), followed by an analysis of ICT market sector in Japan (with its subsector of IT).

2.1. CONSUMER JAPANESE MARKET OVERVIEW

With population of over 127 million people Japan is one of the biggest countries in the world. About 17.1 million Japanese citizens (13.5%) of which 8.8 million males and 8.3 million females is in the age of up to 14 years old. 16.2 million (22.2%) citizens of which 11.9 million males and 16.2 million females is in the age of over 64 years old. The remaining group of society, constituting 64.3% of whole population, in number of 81.8 million citizens (of which there are 41.2 million males and 40.5 million females) is in their working age, i.e. between 15 and 64 years old (with the last category defining the Japanese consumer target market volume).

Japanese population in millions

28,1 million 17,1 mil. 22% 14%

81,7 million 64%

Before 16 years old Between 16-64 years old Over 64 years old

Source: World Bank, World Development Indicators, 2009

Japanese population demography in millions

Females 40,5

90 Males Females 80 70 60 Females 16,2 50 Females 40 8,3 30 Males 20 41,2 Males Males 10 11,9 8,8 0 Before 16 years Between 16-64 Over 64 years old old years old

Source: World Bank, World Development Indicators, 2009

Consumer Japanese market in general terms is the second most developed market in the world. The below table illustrates most important figures and positions Japan on the second highest place (just behind the USA) among other counties in terms of retail sales volume.

Retail sales and household expenditures worldwide No Country Population (millions) Household Retail sales Retail sales expenditure total per person (billions of $) (billions of $) (dollars) 1 USA 284 6937 2330 8204 2 Japan 127 2373 1040 8183 3 China 1272 556 445 350 4 Germany 82 1096 385 4684 5 UK 60 921 278 4641 6 Italy 58 655 262 4541 7 France 59 713 242 4088 8 India 1033 293 212 205 9 Canada 31 381 136 4387 10 Spain 40 343 125 3165

Source: Global retailing IDG, 2003

9000

8000

7000

6000

5000

4000

3000

2000

1000

0 USA Japan China Germany UK Italy France India Canada Spain

Household expenditure (billions of dollars) Retail sales total (billions of dollars) Retail sales per person (dollars)

Source: Global retailing IDG, 2003

The level of consumer spending in Japan during the last decade has reached that of USA (i.e. approximately $8000 per person), nearly twice as much as the third and fourth country in terms of retail sales per person (Germany and UK with approximately $4600 per person). Due to this fact Japanese market is one of the most mature and developed markets in the world (with volume sales half as big as those of the USA, only due to half as big population as it lives in the USA).

The consumption level of households in Japan is currently well over $300 billion (which is over 53% of Japan’s real GDP of approximately $560 billion). Household expenditures were in stagnation since domestic economic bubble burst in early 90’s, until early 2003, when the first signs of growth became evident. This process was accompanied by stable consumer shift from basic low-priced goods to expendable and high-priced items and services (the problems in labor market produced a high demand in the scope of services improving jobs

qualifications, i.e. language courses and ICT competencies courses becoming affordable after consumption crisis).

This situation of constant growth and economic upturn was under a very serious pressure during last year’s crisis. Japanese economy as connected with dollar has been struck severely by the financial and then retail sectors collapse in the US. Also the labor market noted a significant decline, which will probably repeat the situation of increased demand for job market related services while households economic situation will improve. The process of recovery is already noticeable by the most recent data and new values of economic markers seemingly confirming that situation has been put into control (especially since the US and Japanese governments launched their finance and key industrial sectors support programmes).

During recent years the average amount of savings per household (excluding single-person households) exceeds $120 thousand, illustrating the continued potential for high consumption among Japanese households. Japanese society, which previously was quite homogenous, began to experience widening gaps in income and spending from the end of the ’90s. A Cabinet Office report found that the recovery in consumption has been fueled by working households, especially households whose breadwinner works for a large corporation. Meanwhile, the society continues to polarize into a wealthy class with high income and savings, and another class with much less. As this stratification continues, the former class consumes expensive products, such as luxury brand goods, housing and automobiles, extravagant cruise vacations etc., while the latter class shops mainly at discount stores.

Although this polarization does have the advantage for retailers of making it easier to refine targets, it has disadvantages as well, such as the need to conduct even more analysis of consumer segments market when developing and selling products. Even with this stratification, however, there are still few people in Japan who are very poor, so products will not necessarily sell simply because they are inexpensive.

2.1.1. ICT USE IN THE CONSUMER SECTOR

The use of ICT by consumers in Japan is at one of the highest levels worldwide. As the Internet usage statistics are not as high as compared e.g. to South Korea, on the other hand levels of access to mobile communication systems and networks of 3rd generation are exceptionally high. Similar situation concerns level of adoption of new IT technologies, which in Japan is exceptionally high (this last aspect is of special importance to the planned export development strategy, due to the fact to high rate of technology adoption is accompanied by demand for specialized IT education and training services in lifelong learning society model).

The Internet population in Japan at the end of 2007 was estimated to be over 88 million people (increased by 0.7% in relation to the previous year), determining the penetration rate at the level of 69% (increased by 0.5% in relation to the previous year), with over 90% of households being connected. When personal Internet use is compared in demographic terms between 2007 and 2004, the Internet use has expanded across all generations (especially the use of Internet increased among individuals aged 50 to 79 years, with over 10% in the 3 years time period). The proportion of Internet users on home computers who have broadband access is 40.6% of the entire population above age of 6 (as of the end of 2007), which accounts for 79.6% of all home Internet users (most common broadband technologies include FTTH, DSL, cable, FWA, as well as other wireless protocols).

The analysis of Internet use in terms of services by demographic age criteria reveals shopping, Internet auctions and financial transactions demonstrating only a small difference in the usage rate among different generations. There is a significant gap between young and older individuals in terms of use of Internet for viewing videos and listening to music, for social networking, as well as for online games. The former case is the usage of Internet as a tool, already established well in all generations. The latter case is however the usage of Internet as a media source and social interface, being already established well in the younger population and expected

to expand with maturing of this generation. In governmental reports by the Ministry of Infrastructure and Communications in Japan, there are presented reports of the questionnaire surveys results, which were conducted in regard to frequency of use TV, newspaper, magazines or books, radio, Internet on PCs, and Internet on mobile phones as media sources chosen daily by consumers. The results are following:

 For young individuals: o 4% more decreased usage of newspapers as media sources in relation to those who increased o more increased usage of PCs as media sources in relation to those who decreased by 53% o more increased usage of mobile phones as media sources in relation to those who decreased by almost 39%.  For senior individuals: o more increased usage of PCs media sources in relation to those who decreased by over 23% o more increased usage of mobile phones as media sources in relation to those who decreased by 38%.

The dynamics of increasing usage of Internet as media source will require operation of constantly advancing IT devices and solutions in terms of software primarily (the transparency of hardware devices will cause the hardware layer detached from the end-user even more then it is the case currently). Also the matters of security will become especially pronounced in the continued processes of trusted media delivery and communication shift to Internet. This will result in need to operate more advanced functionalities (by end-users in simplified interfaces) but by professionals at increasing high level of complexity, determining increased demand for specialized education and training in domain of Information Technologies.

According to Japan Direct Marketing Association, currently the marketing channel most frequently used by its members in regard to distant model of sales corresponding to distant learning services provision is the Internet with almost 75% (followed by direct mail, catalogs, flyers, magazines, newspapers and TV). The companies use Internet as marketing channel primarily as a platform for taking orders (86% of companies).

Marketing channels for distant sales business model of JADMA members

75% 80% 66% 70% 58% 60% 51% 50% 38% 37% 40% 30% 28% 30% 17% 15% 20% 4% 10% 0%

Source: Japan Direct Marketing Association, 2009

According to estimates by the Ministry of Economy, Trade and Industry, the Electronic Commerce Promotion Council of Japan (ECOM) and NTT Data Institute of Management Consulting, Inc., the size of the business-to- consumer electronic commerce (B2C EC) market is over $50 billion. The mobile B2C EC market is a very significant part, constituting over 20% of the whole B2C EC market. This is due to the fact that mobile Internet is highly advanced and available in Japan, as well as especially popular among young consumers, who use their mobile devices to search for product information and make purchases. In Japan it is common that some of the consumers access Internet exclusively from their mobile devices. Due to the fact that almost 70% of population in Japan have access to Internet (this accounting for over 80% of all households) interesting change of patterns in consumers sector can be observed. Before ubiquitous access to Internet, it took a lot more time to exchange information and volume of the exchanged information was smaller, thus consumption took place within limited information environment. A theoretical model of AIDMA concerning consumers psychological processes with regard to product purchase in such limited circumstances was a good description of such recent situation: consumer behavior was focused on attention to a product, interest in the product, desire for the product, memory of the product, and action towards the product (purchase). With ubiquitous access to Internet and huge amounts of information new consumption models emerge that outdate AIDMA. Currently consumers pay attention to and become interested in a product, then gather information on the product on the Internet and make comparisons and examinations of prices of the same product and several other similar products. Using collected information they make a well-informed purchase decision after evaluation of all options. Moreover a consumer who has actually purchased a product discloses own experience of the purchase on the Internet and the information is shared among consumers. Such opinion becomes a source of information on the product for other consumers. This leads to modern information society consumption process which is primarily centered on information.

2.1.2. EDUCATION IN JAPAN

In relation to planned export subjected IT training services it is important to describe the standard educational system in Japan, considering its whole offer at different stages of maturity, as relevant to defining target groups among Japanese students for key and specialized IT competencies training offer.

Japanese regulations define education as compulsory at the elementary and lower secondary school levels. All students after graduating elementary and secondary school progress to schools of upper secondary level, which is voluntary. Most students attend only public schools during their lower secondary level of education. However private education sector grows quite popular at the upper secondary and university levels. Japanese education system is widely known of its strict adherence to highest quality of teaching , and the qualities of the education system constituted important factors in the country’s recovery and rapid economic growth in the second half of XX century. According to the Programme for International Student Assessment coordinated by the OECD, Japan currently ranks in regard to level of knowledge and skills of 15-year old children as the 6th best in the world.

The most important legal regulation concerning education in Japan was the Fundamental Law of Education and the School Education Law (holding up to this date), that were accepted after II World War under direction of the USA occupation military forces. The latter legal act (School Education Law) defines the particularities of the school system that are still in effect today. According to those regulations the educational system in Japan is following:

 Six years of elementary school (starting from age of 6 years old)  Three years of junior high school (starting from age of 12 years old)  Three years of high school (starting from age of 16 years old)  Two or four years of university (starting of age of 19 years old)

Both public and private education sectors constitute important target markets for the planned export of IT training services. Therefore it is important to analyze current structure of the Japanese formal educational system.

The table below illustrates formal education system’s structure in Japan.

Structure of Japanese education system Age Grade Educational establishment type

3 Kindergarten Special

4 School 5 6 7 1 Elementary school 8 2 Compulsory Education 9 3 10 4 11 5 12 6 13 1 Lower secondary school (Middle school) 14 2 Compulsory Education 15 3 16 1 Upper secondary school (High school) College of

17 2 technology 18 3 19 University: National Medical School Community

20 Associate Undergra- Academy Veterinary school College duate Dentistry School Pharmaceutical School Vocational National Defense Medical School College 21 22 Bachelor 23 Graduate National 24 Master School: Academy:

Master Master 25 Graduate National Medical School: Ph.D

26 School: Ph.D Defense Veterinary School: Ph.D 27 Ph.D Academy: Dentistry School: Ph.D Ph.D Pharmaceutical School: 28 Ph.D Ph.D

Source: Ministry of Education, Culture, Sports, Science and Technology of Japan, 2009

The regulated school year in Japan begins in April of each year. All of the classes are held 5 to 6 days a week (i.e. starting from Monday and lasting till Friday, or sometimes Saturday, which depends on the type of the school). Each school year consists of 3 school terms (semesters), which are mutually interrupted by 2 short holidays during spring and winter, and a one longer vacation summer break.

2.1.2.1. LOWER SECONDARY SCHOOLS

The lower secondary school covering grades from 7 to 9 are attended by students of age between 12 and 15. The school programme is increasingly focused on academic studies (because despite the fact that it is still possible to exit the formal education system after completing lower secondary school and find employment, just fewer than 4% of students did so in the last decades).

As it is the case with elementary schools, most (circa 95%) lower-secondary schools since the 1980s were public. Approximately 5% of those schools were private. The main distinction between private and public schools in Japan is naturally the tuition fee. In case of private school education an average cost of junior high school education is averaged at around $4000 per student, i.e. about four times more than the $900 estimated by the Ministry of Education as the cost for students enrolled in public lower secondary schools.

In lower secondary schools, teachers are often majored in subjects of their teaching specialization (above 80% graduated from a four-year college). Classes are quite large, with thirty-eight students per class on average, and each class is assigned a homeroom teacher who doubles as a counselor. Unlike elementary students, lower-secondary school students have different teachers for different subjects. Teachers, however, rather than the students, move to a new room for each fifty or forty-five minute period.

Instruction in lower-secondary schools tends to rely on the lecture method. Teachers also use other media, such as television and radio, and there is some laboratory work. Currently over 95 % of all public lower secondary schools have computers including schools using computers for administration related purposes. Classroom organization is still based on small work groups of four to six students, although no longer for reasons of discipline. All course contents are specified in the Course of Study for Lower-Secondary Schools. Some subjects, such as Japanese language and mathematics, are coordinated with the elementary curriculum. Others, such as foreign-language study, begin at this level, though from April 2011 English will become a compulsory part of the elementary school curriculum. The junior school curriculum covers Japanese language, social studies, mathematics, science, music, fine arts, health, and physical education, as well as industrial arts, homemaking, moral education and special activities. Due to after classes activities and private extracurricular study schools (juku), in which many students participate during evenings and weekends, a declining focus is put on school performance, which is widely criticized by teachers.

In Japan almost all (above 94%) of young students continue education after elementary and junior high school or lower secondary school (altogether lasting 9 years and jointly referred to as a middle school) at a 3 years lasting senior high school or upper secondary school.

2.1.2.2. UPPER SECONDARY SCHOOLS

As mentioned in chapters above the upper-secondary school even though being not compulsory in Japan, had 94% of all lower secondary school graduates following its course of formal education as of the year 2005.

In Japan both the public and private upper secondary schools (with private schools accounting for 55% of all upper secondary schools) are not free of charge for students and have paid tuition. By the estimations of the Ministry of Education in Japan the annual family expense for the education of one child in a public upper secondary school is of order of 300 thousand yen i.e. approximately $3000. Private upper secondary schools, are estimated to be at least twice as expensive on average.

The curriculum of education in upper secondary school encompasses academic courses preparing for further studies on the universities and in colleges, both within technical and humanistic subjects or vocational courses preparing students to find a job right after graduation without further education in the university. Most of the schools offer only full-time education, while some provide part-time, evening and correspondence courses.

The first-year programmes for students in both of upper secondary schools are similar including basic courses: Japanese, English, mathematics, physics, history, geography and biology. Vocational and academic programme differences are introduced with changes of courses content and courses selection in the second year within an individualized approach, with a stress still put on academic education. Vocational (primarily technical) programmes includes several hundred specialized courses, such as information processing, navigation, business

English, industry related subjects, manual crafts, etc., while business and industry related topics most commonly chosen by students making above 70% of selections made.

Schools are organized into structures resembling higher education, with departments and teachers specialized in their studies majors and teaching many courses in the area of their specialization (most teachers in upper secondary schools in Japan are university graduates). The didactical process also depends primarily on the lecture system with broad and demanding programme and a standard and uniform approach to teaching subjects.

According to new reports by Japanese government over 75% of upper secondary schools graduates then attend to university level schools (i.e. a universities or technical universities, junior colleges, trade schools, or another type of post-secondary school institutions). In Japan the high level of education determines very strong competition, which is especially noticeable at the level of higher education university entrance. According to novel statistics published in Japan two universities are currently considered as top-ranked in Japan. These are the University of Tokyo and Keio University.

2.1.2.3. UNIVERSITIES AND COLLEGES

According to MEXT (Ministry of Education, Culture, Sport, Science and Technology in Japan) formal classification the institutions for higher education in Japan consist of universities, junior colleges, colleges of technology, as well as specialized training colleges (specialized schools) which offer specialized courses.

According to MEXT statistics since the end of World War II, the scale of higher education in Japan has expanded remarkably, particularly in the number of private institutions. Today the scale of higher education in Japan ranks among the highest in the world.

The following is the structure of higher education system in Japan:

 Universities and Graduate Schools o The purpose of universities, as the centers of advanced learning, is to provide students with wide-ranging knowledge and to conduct in-depth teaching and research in specialized academic disciplines. The term of study is four years (six years for medicine, dentistry and veterinary medicine). Graduates are awarded a bachelor's degree. o A university may also establish a graduate school offering master courses (two-year standard term of study) and doctoral courses (five-year standard term of study: four years for medicine, dentistry and veterinarian medicine) or professional degree courses (two-year standard term of study; however, depending on the field in some cases it can take between one and two years or more than three years). Those who have completed the graduate course are awarded either a master's, a doctorate or a professional degree.  Junior Colleges o The purpose of junior colleges is to conduct in-depth learning and research in specialized disciplines and to develop abilities necessary for employment and daily life. The term of study is two or three years and the graduates are awarded an associate degree.  Colleges of Technology o The purpose of colleges of technology is to conduct in-depth learning in specialized disciplines and to a develop student's abilities necessary for employment. o Colleges of technology, unlike universities or junior colleges, admit graduates of lower secondary schools. The term of study is five years (five years and half for mercantile marine studies) and graduates are awarded the title of associate.

Advancement rate to institutions of higher education in Japan in %

80 70 21,7 60 20,8 18,9 50 12,1 13,5 16,9 40 30 45,8 49,8 50,1 20 39 37,9 38,2 36,8 24 10 17 10,3 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2002

Advancement rate to universities and colleges Advancement rate to courses at speciallized training colleges

Source: Ministry of Education, Culture, Sports, Science and Technology of Japan, 2009

Fields of study distribution among university students in Japan

Home Natural sciences Medicine economics 3% 3% Education Agriculture 2% 5% 3% Pharmacology Other 2% 8%

Humanities Social sciences 17% 39%

Engineering 18%

Source: Ministry of Education, Culture, Sports, Science and Technology of Japan, 2009

In order to improve the quality of education, universities under guidance from MEXT are improving the content and methods of education and are educating students increasingly shifting balance towards emphasizing the role of students’ own work and study.

2.1.2.4. LEARNING POPULATION

In view of the projected IT training services export, an interesting analysis concerns annual numbers of individuals in population of a formal education system of Japan. According to most recent statistics of the Ministry of Education, Culture, Sports, Science and Technology (MEXT) in regard to annual population of individuals undertaking education in Japanese formal education system (statistics gathered and processed in 2008 concern data for 2006), most important conclusions that could be drawn in regard to planned export subjected IT training services are as follows:

 Annually there are over 2.5 million of students in Universities and 0.9 million students in Specialized training colleges in Japan (only 60 thousands students annually take courses in Universities of technology),  Annually over 250 thousands of students undertake distant learning courses at Universities in Japan and over 130 thousands of individuals take part in Ministry certified distant education in different fields and specializations,  Each year over 250 thousands of students graduate from Universities in Japan,  About 1.2 million of individuals annually undertake university extension courses,  There is over 3.5 million of individuals attending annually to upper secondary schools (while 290 thousands students take distant courses at upper secondary school curriculum level),  There is over 3.6 million of individuals attending annually to lower secondary schools (while 1.3 million taking private classes, and 2.9 attending to private lower secondary schools).  Over 7,4 million of individuals annually take part in courses of private institutions lifelong learning.

Learning population in Japanese education system (in millions of individuals)

2,07 6,77 3,63 1,38

2,89 7,2 3,49

2,5 0,29 0,21 1,87 7,46 0,06 0,9 1,74 0,33 1,2 0,25 Kindergartens Nursery schools Public elementary schools Private elementary schools Private elementary cram schools Public lower secondary schools Private lower secondary schools Private lower secondary cram schools Upper secondary schools Upper secondary schools part-time Junior colleges Colleges of technology Universities Specialized training colleges Vocational training institutions Graduates University extension courses Private lifelong learning

Source: Social Education Survey, Ministry of Education, Culture, Sports, Science and Technology of Japan, 2009

2.2. JAPANESE ENTERPRISE MARKET OVERVIEW

Japanese enterprise sector is the second strongest in the world, behind USA. Banking, insurance, real estate, retailing, transportation, ICT and construction are all major industries in Japanese economy. Probably the most well-known to consumers around the world Japanese enterprises are of the automobile and ICT industries. Some of the largest enterprises in Japan include Toyota, NTT, Nintendo, Canon, Honda, Takeda Pharmaceutical, Sony, Nippon Steel, Tepco, Mitsubishi, Toshiba, Fujitsu, NEC, Canon, Kyocera, Minolta, Nikon, Olympus, Yamaha, Oki, Panasonic, Pioneer, Hitachi, JVC. Japan hosts some of the world's largest banks. The Tokyo Stock Exchange, known for its Nikkei 225 and Topix indices is the second to USA largest stock exchange in the world by market capitalization. The Forbes Global 2000 registry had listed 326 Japanese companies (i.e. 16.3% of all world biggest companies as of 2006). Japanese implementation of capitalism has many distinct features. The keiretsu enterprises (characteristic, mutually connected Japanese business groups) are very influential. Lifetime employment and seniority-based career advancement are also very common in Japanese work environment. Japanese companies are known for management methods such as the Toyota Way (emphasizing company philosophy guidelines embracing respect for the people and their continuous improvement, resulting in high level of devotion of personnel to development of a company). Shareholder activism in Japanese companies is rather rare. Recently, Japan has moved away from some of these norms cultivated for over a half century. In the Index of Economic Freedom, Japan is ranked 5th most liberal, unregulated economy of 30 Asian countries.

In Japan there are over 4.72 million enterprises of all sizes, out of which:

 5.5 thousand are large companies with capital over 1 billion yen  28.3 thousand are medium companies with capital between 100 million and 1 billion yen  1.09 million are small companies with capital between 10 to 100 million yen  3.60 million are small (micro) companies with capital below 10 million yen.

The table below illustrates sales volumes by all of the major industries of Japanese enterprises, as well as sizes (measured by capitalization). It is clear from the statistics that ICT and electrical industries together generate sales volume of over 150 trillion yen (almost $1.7 trillion) and account for 10% of the whole Japanese economy.

Sales volumes of Japanese companies by industry and size in 2008 Value of sales in yen Value of sales in USD All Industries 1508,21 trillion yen $16,66 trillion Manufacturing 445,05 trillion yen $4,92 trillion Food 51,30 trillion yen $566,87 billion Chemicals 40,59 trillion yen $448,57 billion Petroleum and coal products 20,76 trillion yen $229,44 billion Iron and steel 22,52 trillion yen $248,90 billion Metal products 22,17 trillion yen $244,99 billion General machinery 37,57 trillion yen $415,19 billion Electrical machinery 40,80 trillion yen $450,84 billion Information Communications 34,40 trillion yen $380,11 billion Transportation machinery 63,77 trillion yen $704,71 billion Non-Manufacturing 1063,15 trillion yen $11,75 trillion Construction 126,28 trillion yen $1,39 trillion Wholesaling and retailing 562,29 trillion yen $6,21 trillion Real estate 38,67 trillion yen $427,27 billion Information communications 57,49 trillion yen $635,31 billion Transportation 62,18 trillion yen $687,12 billion Electricity 18,85 trillion yen $208,28 billion Services 160,74 trillion yen $1,78 trillion

Corporations with capital of 1 billion yen or over 588,14 trillion yen $6,50 trillion 100 million to 1 billion yen 235,02 trillion yen $2,59 trillion 10 to 100 million yen 566,84 trillion yen $6,26 trillion under 10 million yen 118,21 trillion yen $1,30 trillion

Source: Statistics by the Ministry of Finance, 2009

Japanese enterprises are currently facing very difficult external conditions. Large enterprises sector is focused mainly on export of advanced goods, volume of which significantly dropped due to decreased demand associated with financial crisis impact on developed markets in western countries. Large Japanese companies are currently seeking to enter low developed markets, less affected by the financial crisis of late 2008 and still experiencing dynamic growth (important part of such markets are geographically located in Central Eastern Europe). Due to high level of competition from South Korean and Chinese enterprises, Japanese companies in order to succeed in export to new emerging markets will need to localize production and recruitment of labor force. Japanese companies on the other hand are in a good position to leverage their high technological advancement to offer innovative solutions for international problems in energy and climate terms. Intervention programmes of the Japanese government have been introduced to support whole industries (especially export intensive industries, driving whole economy, such as automobile industry or electronic and ICT industries). Countermeasures in form of tax reduction and direct subsidies to large corporations have been introduced by the government.

Small and medium enterprises (SMEs) in Japan are currently also facing very severe economic circumstances being a consequence of the global financial crisis of 2008. Japanese government undertook countermeasures and launched programmes of stimulation interventions within a series of economic measures included in the fiscal 2009 supplementary budget (this year’s supplementary budget was the largest in history of Japan). Among economic measures to revive the sector of SMEs, emergency guarantees and safety-net loans were launched in funding of over 47 trillion yen (i.e. 527 billion dollars). Other measures concerned enhanced loans, increasingly business-friendly environment for SMEs and simplified subcontracting trade regulations. In Japan there are over 4.2 million SMEs, which employ over 70% of Japan’s labor force, thus it is evident that the whole economy is greatly dependent on this sector. SMEs in Japan realize that they cannot depend only on a short term public intervention and support, because it will soon be unavailable. SMEs in Japan, similarly as in other countries plagued by recession, must focus on most efficient strategies for development and growth. Two proven universal strategies to achieve those goals are through investment in innovation and human resources.

The key to success in both aspects lies in ICT proficiency. For innovation, ICT plays a crucial role as enabling SMEs increased knowledge sharing and common information processing in an internationally collaborative environment resulting in new ideas based upon connection of many fragmented know-how resources worldwide (e.g. adopting and mixing new solutions deployed in many different countries with adding specific domestic market modifications may already result in valuable innovation, on the other hand pure innovations based on commercialization of breakthroughs in fundamental research also require access to enormous complexity of information projected from different sources distributed internationally). For human resources, ICT proficiency results in a direct improvement of efficiency in business and in technical operations (due to communications enhancement, more effective management and significant added value of information access to creativity of the workforce).

The focus currently put on human resources development and training in difficult circumstances of an economic breakdown is an excellent opportunity for competitive offer of ICT education with high ratio of quality to cost. This is well summarized by the Minister of Economy, Trade and Industry, Mr. Toshihiro Nikai:

Diverse SMEs and small enterprises are the source of innovation for Japan. At the same time, it is important for proprietors to take leadership in adapting to the changing needs of the market, and to manage an enterprise in a way that best utilizes their wisdom and ingenuity. Also, efforts to carve out new businesses such as through collaborations between agriculture, commerce and industry, and to expand sales channel to emerging countries including Asia, which enjoy economic growth even after the financial crisis, will be crucial for SMEs and small enterprises to continue growing.

Meanwhile, “human resources” remain the most important management resource, and proactive efforts are needed in securing and training personnel even as we are in these most difficult time. Rather, the current recession could even be taken as a chance for SMEs and small enterprises to recruit outstanding personnel. It is expected that by overcoming the current difficulty through the joint, shoulder-to-shoulder efforts of management and employees, SMEs and small enterprises will gain new managerial strength through the sense of mutual trust in the workplace. I will conclude by expressing my determination to find a way out of the current recession and put the Japanese economy on track for recovery by identifying our policy goals with the SMEs and small enterprises and presenting for them a bright future vision.

Concerning management resources that support SMEs innovation, strategic protection and utilization of intellectual properties are needed, as well as the transmission of technological and technical skills to develop personnel capable of innovation. In order for SMEs to develop sales channels, it is primarily important for them to invest in the use of ICT and IT (especially in the context of developing overseas markets).

Percent of Japanese enterprises interested in foreign ICT products and services

VOIP 12 11 IPv6 11 14 Home Network 14 18 Broadband Content 16 20 Licence and Content Management 21 15 Storage Systems 21 17 Distributed Computing 16 24 Japanese Sarbanes-Oxley Act (SOX) 29 12 Biometrics Identification System 19 23 Thin Client System 25 17 Business Intelligence 22 21 WiMAX 26 21 Wireless LAN 29 20 Virtualization 30 27 Image and Speech Recognition 31 27 Internet Security 34 27 Services Oriented Architecture (SOA) 36 27 RFID Traceability 35 32 Open Source 42 25 NGM Device 27 41 Encryption and Authentication 35 33 Web 2.0 45 30 Other 36 39

0 10 20 30 40 50 60 70 80

Short Term Long Term

Source: JETRO, 2009

The graph on the previous page illustrates well interest rates of the Japanese enterprises in investments in foreign ICT technologies. The statistics in the large scale market survey averaged over large companies and SMEs have been published by JETRO in September 2008. The most important conclusions are as follows:

 Both in the short and the long term Japanese companies are primarily interested in investment in technologies enabling: o Web 2.0 (45% short term and 30% long term) . This new model of web operations leads to improvement of Internet marketing channels efficiency and allows to scale business internationally . This investment is anticipated mostly short-term, which points at the need of Japanese companies to expand their marketing channels promptly o Encryption and authentication (35% short term and 33% long term) . This technologies are most fundamental security and safety measures for communication in networks . As e-commerce is becoming a major way for companies in Japan to sale and operate, it is natural that most fundamental security measures of cryptographic area become key interest of companies, just second to marketing needs of Web 2.0 enabling technologies . Major threats and risks the companies want to lower in this case concern confidentiality and trust, especially in relation to electronic financial operations o New Generation Media Devices (27% short term and 41% long term) . This mainly concerns technologies enabling shift to ubiquitous connectivity (mobile hand held devices with computer like capabilities holding potential to further expand marketing channels) . Although this investment is mainly planned for the long term (as currently the level of technology is maturing) it constitutes a very important trend o Open source (42% short term and 25% long term) . Technologies enabling low cost production of software solutions especially related to Internet services (and thus connected with the Web 2.0 investments) . The main focus on the short-scale of this investments confirm its relation with Web 2.0 investments as needed to increase marketing channels capacities and sales o RFID traceability (35% short term and 32% long term) . New applications enabled by the RFID technologies (Radio Frequency Identification) are focusing mostly on management of stock and sales . Investment need in this area is mostly due to retail industry, for which RFID bring promise of great reduction of operation costs o Services oriented architecture SOA (36% short term and 27% long term) . This investment drive is characterized by the need of lowering costs for deployment and operating ICT infrastructures . Business operation models are shifted toward sale of services in ubiquitous Internet environment o Internet security (34% short term and 27% long term) . Technologies related to Internet security constitute a broader set then just encryption and authentication measures . The need of investment is mostly the same as in the case of encryption and authentication, but concerning also additional threats and risks of operations hampering due to ICT infrastructure attacks beyond confidentiality and trust (e.g. malware software and computer viruses, IP Denial of Service attacks, etc.)

An attempt of quantitative estimation of capital potential for described above investments can be undertaken on the basis of IT software investment data by Japanese companies throughout the year 2008. The amounts of capital spent on such software investments are very impressive. Table below presents this spending due to statistical data of the Ministry of Finance in Japan in division for quarters of the year 2008 and different size categories of enterprises.

IT software investment in Japanese companies in 2008 All sizes of Companies with Companies with Companies with companies Capital over 1 Capital between Capital between billion yen (i.e. 100 million and 1 10 and 100 $11 million) billion yen (i.e. million yen (i.e. $1-11 million) $0.1-1 million) 1st quarter 2008 1.33 trillion yen 0.98 trillion yen 0.16 trillion yen 0.19 trillion yen ($14.7 billion) ($10.8 billion) ($1.76 billion) ($2.10 billion) 2nd quarter 2008 0.82 trillion yen 0.59 trillion yen 0.13 trillion yen 0.09 trillion yen ($9.06 billion) ($6.52 billion) ($1.43 billion) ($0.99 billion) 3rd quarter 2008 0.84 trillion yen 0.62 trillion yen 0.12 trillion yen 0.09 trillion yen ($9.28 billion) ($6.85 billion) ($1.32 billion) ($0.99 billion) 4th quarter 2008 0.77 trillion yen 0.54 trillion yen 0.13 trillion yen 0.10 trillion yen ($8.51 billion) ($5.97 billion) ($1.43 billion) ($1.10 billion)

Source: Statistics by the Ministry of Finance, 2009

From the data it is evident that the late 2008 crisis has severely impacted the volume of investments (lowering it almost twice in the 4th quarter in relation to the 1st quarter). Nevertheless the value of almost $9 billion for 3 months of just IT software investment is still an enormous quantity. Even though most of the investment is due to large and medium companies (correspondingly $6 billion and $1.4 billion), the smaller companies investment in IT remain on a very high level internationally.

It is important to mention, that generally in recent years investment in IT software makes almost 10% of all investment made quarterly by Japanese companies (approximately 9.5% percent in case of large companies and up to 5% in case of small companies with capital not exceeding 100 million yen).

The facts described above make it clear that export development of IT training services is well aligned with current macroscopic trends in Japanese market. The use of advanced IT technologies will significantly increases in the enterprises sector, following with the need for staff with high levels of IT skills which will cause two important effects:

 Japanese companies will proportionally increase investment in personnel IT proficiency development  The pressure on the job market will increase in regard to high level of IT skills in all economy sectors.

Combining the ICT investment resulting with the further need for companies to focus on development of human resources as a strategy to successfully lead company through the current crisis is a very positive circumstance for the planned export strategy of IT training services.

2.3. JAPANESE ICT MARKET OVERVIEW

Japanese Information and Communication Technologies (ICT) market is a broad industry encompassing telecommunication sector and Information Technologies (IT) sector. Nevertheless the two sectors are converging in a fast pace, the IT still remains much smaller sector then the ICT (including mobile and stationary telecommunication business operations). In regard to planned export of IT training services, both markets (the general ICT market and its subsidiary IT market) are of key importance. Both markets are also in a strictly leading position worldwide in terms of volume and development achievements.

According to official data of Ministry of Internal Affair and Communications (MIC) the ICT is increasingly taking role of a new infrastructure for production activities and the importance of ICT has increased significantly in Japan. Corporation seeking economic growth, utilize ICT as a way to increase effectiveness of their production (it is already evident that ICT infrastructure such as computers and networks improves economic efficiency). As ubiquitous networks development progresses, information and knowledge exchange take place on a very broad scale through ICT networks, enabling dynamic creation of various innovations and new added values. Accumulation of ICT and development progress of ubiquitous networks improve general productivity of the Japanese economy through combination of effects due to economic efficiency of networks, and new sources for added values.

Official governmental data of Japan state that nominal domestic product of the ICT industry in 2006 is 95.2 trillion yen (i.e. approximately $1 trillion) and the ICT industry is the largest industry in Japan, accounting for 9.8% of total Japanese nominal economic product (recent data from 2008 point that ICT industry has slightly decreased its value to 91.2 trillion yen, i.e. below $1 trillion). The ICT industry has consistently contributed to the real GDP growth of Japan since 1996. In 2006, the degree of contribution of the ICT industry to the real GDP growth rate of 2.7% was 1.0%, with a contribution rate of 37%, which is exceptionally high. The conclusion can be drawn that the ICT industry has been a driving force in the economic growth of Japan since 1996. Historically ICT industry product declined from 2000 to 2004, but has gone back to increasing trend since 2005. Recent international finance crisis in late 2008 and 2009 again hampered the growing trend, but since the crisis has been seemingly overcome by interventions, the perspective for further growth of the market are optimistic.

The real domestic product of the ICT industry in 2006 was 123.8 trillion yen ($1.36 trillion), i.e. up by 3% from the previous year. Real domestic production has been increased consistently since 1995, recording an average growth rate of 5.2% from 1995 to 2004.

Since the growth of nominal product is smaller than that of real product, the ICT industry can be identified as an industry with a noticeable reduction in prices compared with other industries (this is well aligned with high level of technology advancement which results in technologies life cycle shortening: what is modern presently in a short term scale becomes obsolete as new solutions are being constantly devised and implemented). Real GDP of the ICT industry has grown consistently since 1995, and the average growth rate from 1995 to 2006 is 7.1%. Taking into account real GDP of major industries from 1995 to 2006, the average growth rate of 7.1% for the ICT industry is the highest, followed by electrical machinery (annual average growth rate 6.8%) and transportation machinery (3.5%).

Number of employees in the Japanese ICT industry in 2006 was 3.85 million individuals (up by 1.9% over the previous year), accounting for 6.8% of all Japanese industries. In comparison to 2005 the number of employees increased in information services by 5.1%, in research by 2.5% and in ICT-related services by 2.1%. There was a decline in number of employees in the ICT hardware construction industry by 13.7%.

In terms of proportion of the size of the ICT market in different countries, the size of the Japanese market accounts for over 10% of the global market in every sector of ICT industry. Considering corporate global ICT

market share by Japanese ICT enterprises as of 2006 they have accounted for more than 10% in the system development and system management control sectors, with 13.3% and 13.8%, respectively, but for less than 10% in the consulting, BPO, hardware product support, and software product support sectors, with 7.5%, 8.5%, 9.5%, and 7.3%, respectively. In all these markets, the highest share was due to USA companies. In the software market USA share is also extremely high, while the share of Japanese companies is only 0.4% for application software and 2.5% for infrastructure software, both below 3%. When taking under consideration corporate market share in the major information system-related device markets in the world, Japanese companies have a dominant market share in the copying machines market of 63.3%. In the notebook PC and printers market Japan has a share of 23.8% and 32.1%, respectively. On the other hand, the Japanese share of the desktop PC, workstation and server market is 6.1%, 3.6% and 6.8%, respectively: all less than 10%. In the storage market, Japan has a 13.0% market share.

Considering annual average growth rate of the market from 2005 to 2007, the characteristic growth rate of the Japanese market was less than 5% in every sector, i.e. remaining at a low level as compared to the average worldwide market. Markets in Asia-Pacific, the Middle-East, Africa, Eastern Europe and Central and South America are growing much faster than the global average, leading the global markets. In order for the ICT corporations of Japan to continue to grow, it is advised by the government and included in general ICT development strategies to initiate partnerships and expand presence in the rapidly growing markets of Asia- Pacific, the Middle East, Africa, Eastern Europe and Central and South America.

The size of the Japanese IT market investment (IT being subset of the broader ICT market, regarding only information technologies without accounting for telecommunication) as assessed by international market research company, according to 2008 statistics by IDC Group is worth $108.9 billion until 2011 (this including $42.5 billion hardware investment market, $22.2 billion software investment market and $44.2 billion IT services investment market), which adds up to approximately 9.8 trillion yen.

Japanese IT market investment value in 3 main segments in USD until 2011

Services segment $ 44,2 billion

Software segment $ 22,2 billion Hardware segment $ 42,5 billion

Software segment Services segment Hardware segment

Source: IDC Group statistics, 2008

Technical capabilities of Japan in terms of both the ICT and its subset IT markets remain strong due to advanced education and research systems in private and in public terms. They support development of the IT and ICT sectors in all stages of the production processes, starting with advanced fundamental research, thru applications R&D to design and mass production. The scale of the market is very large, showing a strong basis for further, stable growth.

Japanese IT market real GDP growth dynamics in trillions of yens

70 60 50

40 69,7 60,5 30 52,9 46,4 20 10 0 2000 2002 2004 2006

Source: Information and Communication in Japan 2008, Ministry of Internal Affairs and Communication, 2008

For the purpose of export development strategy, not only the state of the art of the ICT market is important, but primarily the perspectives and predictions for its further growth play a key role in success of the strategy.

Magnitude of the Japanese ICT market by all analyses is expected to consistently increase in many areas. The table below illustrates predicted growth forecasts in certain segments due to governmental statistical sources (particularly dynamic growth should be expected in e-commerce transactions for the retail sector, and information processing security).

A very important segment of Japanese ICT market concerns mobile devices. Convergence is one of the major trends responsible for bridging technologies of cellular networks with ubiquitous access to the Internet and in terms of devices to render mobile handheld devices with capabilities of computers, while further reducing dimensions of mobile computers (such as notebooks).

Main technologies employed in new generations of mobile ICT devices include electronic distant payments for retail applications, navigation (compliant with GPS and other network systems of localization). The ICT market segment for outsourcing of services is also expected to expand significantly in the near future (especially in response to an increasing corporate needs for infrastructure management as their network infrastructures advances very dynamically).

With ubiquitous network and information processing threats to security and integrity of data are scaling very fast.

Increasingly important become solutions and systems for information protection. Technologies increasing stability of function and security of communication are expected to note especially high increase in demand.

As illustrated on the graph below, increase in market value for the information security during years 2008-2013 will be of order 70% (from 369.2 to 548.7 trillion yen). The other dynamically growing segments of ICT market are also contained within the graph (with particular high dynamics forecasted for wireless broadband and online payments services, and in terms of volume change for broadband lines and Internet advertising):

Projected market growth for main ICT segments in trillions of yens

13,1

Wireless broadband 382,6

Information security 369,2 548,7

Online payments 222 456,2

Internet advertising 575,2 841,3

Broadband lines 1256,2 1 472,9

0 500 1000 1500 2000 2500 3000

2008 2013

Source: Information and Communication in Japan 2008, Ministry of Internal Affairs and Communication, 2008

Below, there has been also illustrated forecasted growth from 2008 to 2013 of B2C e-Commerce segment (almost doubling its volume to an impressive 12 trillion yens, which is roughly $120 billion USD, which is alone exceeding the current total IT market volume in Japan).

Business to consumer e-Commerce segment value of ICT market in trillions of yens

15000

10000

5000 6225.5 11715.3

2008 2013

Source: Information and Communication in Japan 2008, Ministry of Internal Affairs and Communication, 2008

As already mentioned in analyses by external, international market research companies, the value of Japanese IT market is dynamically growing. Forecasted investment according to IDC 2007 is of order of $108.9 billion until the year 2011, this including:

 The private enterprise sector: $89.6 billion o Small and medium enterprises (SME): $36.4 billion o Large enterprises (above 1000 employees): $53.2 billion  The public sector (government, schools, NPOs) and consumers sector: $19.3 billion

The graph below illustrates well these proportions.

Investment value of IT market sector in Japan in USD until 2011

$ 19,3 billion 18% $ 36,4 billion 33% $ 53,2 billion 49%

SMEs private sector Large enterprises private sector Public sector

Source: IDC Group statistics, 2008

It is expected that a substantial part of IT projected investment in all sectors in Japan will be allocated in IT training services, that are necessary part of new technologies development and implementation, thus rationalizing export development of this kind of services to Japan.

It is also important to present data concerning investment in Japanese ICT market development in private sector in terms of Compound Annual Growth Rate (CAGR), which is a good indicator of the target market growth dynamics:

 All enterprises: 1.7% CAGR  Small and medium enterprises (SME): 3.7% CAGR  Large enterprises (above 1000 employees): 1.1% CAGR

Compound Annual Growth Rate

4,00% 3,50% 3,70% 3,00% 2,50% 2,00% 1,70% 1,50% 1,00% 1,10% 0,50% 0,00% All enterprises SMEs Large enterprises

Source: IDC Group statistics, 2008

Also according to analysis by Nikkei Net (July 2007) and Nomura Research Institute (January 2008), all Japanese financial institutions, manufacturing, retail and service-oriented SMEs are expected to have between the years 2006 and 2011 the highest historic growth rate in ICT investment.

All together the Japanese internal target market for the ICT products and services, as described in the previous chapter encompasses:

 Private enterprise sector o 5.5 thousand large enterprises (with capital above 1 billion yen) o 28.3 thousand medium companies (with capital between 100 million and 1 billion yen) o 1.09 million SMEs (with capital above 10 million yen) o 3.6 million small / micro companies (with capital below 10 million yen)  Public government and administration sector  Consumers sector o 127 million of people o 47 millions of households (including 78% in urban areas)

The recommendations by reports of NikkeiNet and Nomura Research Institute indicate specifically that currently circumstances indicate a very good time for all types of IT solutions providers for targeting described above sectors (especially consumer and SMEs sectors), providing IT related services.

In regard to distant model of service provision to customers it is important to stress that according to Japan Direct Marketing Association (JADMA), the size of the Japanese whole distant sales market in 2004 was estimated to be over $25 billion (largest amount since the JADMA survey in this aspect has begun, i.e. 1983). This amount has been achieved within an expansion since 1999, despite downturn and stagnation in whole retail sales market in recent years. In 2004 it was estimated that distant sales make up to 2% of all retail sales in Japan, with further growth expected (the main driver being Internet sales). With high confidentiality this value could be extrapolated at least 10 times greater to distant sales volume in ICT market (taking into account ICT sector advancement, distant sales models currently account for over 20% of ICT sales).

3. COMPETITIVE POSITION ON JAPANESE TARGET MARKET

3.1. COMPETITION ANALYSIS OUTLINE

From the performed competition analysis it follows that most of the information technology related training concern topical courses that are of average length of 15 hours. This is exactly the same length as the prepared programme of information technologies training subjected to planned export.

The price for one information technologies related course (lasting about 15 hours) is depended on the topic and advancement level, but generally can be assigned to limits from 30 000 yen to 100 000 yen, i.e. $330 to $1100 (in case of narrow and specialist courses the price can exceed even 1 000 000 yen, i.e. $10 000). Averaging over general and more advanced courses it is acceptable to state that an average price is for information technologies related training course (lasting 15 hours) is of order of 50 000 yen, i.e. approximately $550.

Projected IT training 15-hours course price comparison (CompLearn vs. average Japanese IT training company)

40 000,00 ¥ Average 50 000,00 ¥

20 000,00 ¥ Min 30 000,00 ¥

80 000,00 ¥ Max 100 000,00 ¥

0,00 ¥ 20 000,00 ¥ 40 000,00 ¥ 60 000,00 ¥ 80 000,00 ¥ 100 000,00 ¥

CompLearn 15-hours IT course price Japnese company 15-hours IT course price

Source: Averaged Japanese companies data, 2009

In regard to price the company export services will be differentiated from competing companies commercial offers with a lower price, while ensuring similar or higher quality of service. Lowering of price will be possible in part due to initial outsourcing of some of operational processes to Poland that enables cutting costs of operation with simultaneous adherence to high level of quality.

On average the small to medium size company focusing on information technologies training services has approximately few thousands customers (graduates of offered IT courses) experience, which is comparable with CompSecur sp. z o.o. company customer service experience (already over 4000 customers).

It is important to note that the competition analysis resulted with the conclusion that there is quite a considerably interchangeable use of terms regarding information technologies training services. An analysis has been performed of the variants in direct translation to English language that are most commonly used.

Terms interchangeable with the subject of information technologies and with the action of training as used in Japan (in direct English translation) are presented in the table below:

Interchangeable terms as used in Japan in relation to services subjected by the export development strategy IT (Information Technology) Training ICT (Information Communication Technologies) Courses PC (Personal Computer) Learning Computer Lessons Computer science classes Network education Internet didactics Information processing skills Informatics qualifications IT (Information Technology) competencies ICT (Information Communication Technologies) knowledge

3.2. MAJOR COMPETITIVE PLAYERS

3.2.1. INFORMATION TECHNOLOGIES TRAINING CENTERS

Below is the list of private companies and smaller private schools that offer courses of information technologies training, but not equivalent to programmes required to offer ministry approved formal qualifications of bachelor or master in disciple of computer science and information technology related education.

 ASD PC School 1-17-23 Osakidai, Sakura City, Chiba Tel: +81 43-481-3715 Fax: +81 43-481-3717 http://www2.odn.ne.jp/~asd  Alex Computer School Kawasaki School 2-5-7 Isago, Kawasaki-ku, Kawasaki City, Kanagawa Tel: +81 44-221-1284 Fax: +81 44-221-1284 http://www.alex-net.co.jp  Aoba PC School 3-2-1 Susukino, Aoba-ku, Yokohama City, Kanagawa Tel: +81 45-902-1808 Fax: +81 45-903-9605  Asai Computer Service Co., Ltd. 3-12-2-103 Abeno-suji, Abeno-ku, Osaka City, Osaka Tel: 06-6647-5550  Ascent Co., Ltd. 2-9-1-203 Yokagawa-cho, Nishi-ku, Hiroshima City, Hiroshima Tel: 082-233-2861 Fax: 082-231-3609  Best Partner 14-33 Naniwa-cho, Kita-ku, Osaka City, Osaka Tel: +81 6-6377-4520 Fax: +81 6-6377-4521 http://www.bestpartner.co.jp  Beyond, Inc. Levante Tarumi 3 Bankan 204, 1-6-1 Hyuga, Tarumi-ku, Kobe City, Hyogo Tel: +81 78-704-3633 Fax: +81 78-704-3644 http://www.bekkoame.ne.jp./~yiijima  Bitzemi 7-4 Teppo-cho, Naka-ku, Hiroshima City, Hiroshima Tel: +81 82-227-3310  CAD Network Service Co., Ltd. 4-21-19 Shimo-ochiai, Shinjuku-ku, Tokyo Tel: +81 3-3951-6511 Fax: +81 3-3952-6979 http://www.cadnet.co.jp

 Case Method Inc. Hirakata Nikko Heights 302, 2-89-15 Minaminakaburi, Hirakata City, Osaka Tel: +81 72-837-2333 Fax: +81 72-837-2334  Cherub Japan International 3-21-16 Sugamo, Toshima-ku, Tokyo Tel: +81 3-5394-0721  Chiyoda College of Business 5-15, Higashi Ueno 5-chome, Taito-ku, Tokyo Tel: +81 33842-1901 Fax: +81 33843-1179  Chuo Technical College Senmon Gakko Schools -Computers 1-11-22 Kita-tanabe, Higashisumiyoshi-ku, Osaka City, Osaka Tel: +81 6-6719-0111  Computer Music Club Dee 1-5-2-5F-A Kita-horie, Nishi-ku, Osaka City, Osaka Tel: +81 6-6538-9908 Fax: +81 6-6578-2455 http://www.dipss.com/dee/  Cosmopia PC School 1-2-3 Kita-aoyama, Minato-ku, Tokyo Tel: +81 3-3475-5522 http://www.cosmopia.co.jp  Dai-x Ikebukuro School 1-5-6 Higashi-ikebukuro, Toshima-ku, Tokyo Tel: +81 120-100974  Daiei Computer College Hakata 8-36-2F Hakataeki-chuogai, Hakata-ku, Fukuoka City, Fukuoka Tel: +81 92-473-0446  Daiei Computer College Tenjin 2-14-8-8F Tenjin, Chuo-ku, Fukuoka City, Fukuoka Tel: +81 92-761-7411  Daiei Computer School Kokura School 2-10-3F Sembamachi, Kokurakita-ku, Kitakyushu City, Fukuoka Tel: +81 93-551-1070  Daiei Computer School Kurosaki School 3-1-3-5F Kurosaki, Yahatanishi-ku, Kitakyushu City, Fukuoka Tel: +81 93-641-0435  Dies Cad School Akamatsu Bldg., 4-1 Chausuyama-cho, Ten'noji-ku, Osaka City, Osaka Tel: +81 6-6772-9278  Digital Creator College Wao Tokyo 1-21-1 Nishi-shinjuku, Shinjuku-ku, Tokyo Tel: +81 3-5381-0155 Fax: +81 3-5324-3412 http://www.wao-creative.com  Digital Hollywood

DH 2001 Bldg. 3, Kanda Surugadai 2-chome, Chiyoda-ku, Tokyo Tel: +81 35281-9222 Fax: +81 35281-9229  Digital Network Center 1-7-7 Kasukabe, Kasukabe City, Saitama Tel: +81 48-760-1581 Fax: +81 48-760-1582 http://www.palette.co.jp  Dnfal 13-22 Fujimi-cho, Naka-ku, Nagoya City, Aichi Tel: +81 52-339-0026 Fax: +81 52-323-3299 http://www.dfl.co.jp  Fujitsu FOM Ltd. Schools -Computers 1-16-1 Kaigan, Minato-ku, Tokyo Tel: +81 3-5401-8470 Fax: +81 3-5401-8471 http://jp.fujitsu.com/group/fom/  Fujitsu Office Machine Ltd. 1-3-1 Chuo, Aoba-ku, Sendai City, Miyagi Tel: +81 22-267-5011  Fukuoka OA Seminal Nishijin School 4-9-37-1-3F Nishijin, Sawara-ku, Fukuoka City, Fukuoka Tel: +81 92-831-3618  Hello Pasocon Kyoshitsu Fushimimomoyamako 732 Setomono-cho, Fushimi-ku, Kyoto City, Kyoto Tel: +81 75-621-3757  Human Academy Tachikawa 2-10-1 Akebono-cho, Tachikawa City, Tokyo Tel: +81 42-540-1836 http://www.athuman.com  Ikeda Business School Ikeda Bldg., 3-3-1 Fujita, Yahatanishi-ku, Kitakyushu City, Fukuoka Tel: +81 93-641-9822  Ing Licenseacademy Abeno School Apollo Bldg. 7F, 1-5-31 Abeno-suji, Abeno-ku, Osaka City, Osaka Tel: +81 6-6647-3671  Ing Licenseacademy Ibaraki School Iharakosan Bldg. 5F, 1-1 Suehiro-cho, Ibaraki City, Osaka Tel: +81 72-633-7852  Ing Licenseacademy Namba School 1-10-4 Namba-naka, Naniwa-ku, Osaka City, Osaka Tel: +81 6-6647-3471  Ing Licenseacademy Takatsuki School Green Plaza 1 Gokan 4F, 1-1 Konyamachi, Takatsuki City, Osaka Tel: +81 72-683-5141  Ing Licenseacademy Umeda School

1-11-4-21F-3 Umeda, Kita-ku, Osaka City, Osaka Tel: +81 6-6341-0181  J J Splus Sapporo Minami1jo-nishi4, Chuo-ku, Sapporo City, Hokkaido Tel: +81 11-272-9800 http://www.jjs.co.jp  JC21 Education Center 1-3-1 Kakyoin , Aoba-ku, Sendai City, Miyagi Tel: +81 22-222-6696 Fax: +81 22-222-6854 http://www.jc-21.co.jp/  JJS Sendai Kotodai-ko 2-18-19 Hon-cho, Aoba-ku, Sendai City, Miyagi Tel: +81 22-216-9800  Kabuto-yama College of International Liberal Art 3-2-10 Motoyama-kitamachi, Higashinada-ku, Kobe City, Hyogo Tel: +81 78-453-5931  Karino OA School, Yachiyodai 7-1-19 Yachiyodai-nishi, Yachiyo City, Chiba Tel: +81 47-482-5927  Keiyo PC School 2-4-7-4A Imai, Chuo-ku, Chiba City, Chiba Tel: +81 43-265-0909 Fax: +81 43-265-0910 http://www.keiyopc.com  Kobe Computer College 1-6-35 Yamamoto-dori, Chuo-ku, Kobe City, Hyogo Tel: +81 78-242-0014  Kyoto Computer College Sanjo-dori Shimmachi-kado, Nakagyo-ku, Kyoto City, Kyoto Tel: +81 75-255-5000  Live IT Seminar Tennoji School 1-5-1 Abeno-suji, Abeno-ku, Osaka City, Osaka Tel: +81 6-4396-5115 Fax: +81 6-6649-0666 http://www.livein.co.jp  MTC Hiroshima 10-22 Kyobashi-cho, Minami-ku, Hiroshima City, Hiroshima Tel: +81 82-263-8001 http://www.bien.co.jp  Morris Business School 191-4 Nakahori-cho, Nakagyo-ku, Kyoto City, Kyoto Tel: +81 75-255-4648 Fax: +81 75-255-2917 http://www.morris.co.jp  NCS Technology Corp. 1-9-6 Edobori, Nishi-ku, Osaka City, Osaka Tel: +81 6-6444-1002

Fax: +81 6-6444-1081 http://www.n-tec.co.jp/  Nakano Career School Nakano Br. 3-37-7 Nakano, Nakano-ku, Tokyo Tel: +81 3-3381-9555 Fax: +81 3-3229-5273 http://www.nakanocareer.com/  Nakano OA School Ichikawa Br. 1-8-1 Ichikawa, Ichikawa City, Chiba Tel: +81 47-326-1859 Fax: +81 47-321-3481 http://www.nakano.ac.jp  New Horizon CD Training Center 4-26-12 Meieki, Nakamura-ku, Nagoya City, Aichi Tel: +81 52-583-4700 Fax: +81 52-583-4343  OA Plaza Yokohama 347 Yatsu-cho, Kanazawa-ku, Yokohama City, Kanagawa Tel: +81 45-783-9801  Ohara J School Kokura School 3-9-20 Kyomachi, Kokurakita-ku, Kitakyushu City, Fukuoka Tel: +81 93-551-0820  Ohji Business College 2-13-1 Oji, Kita-ku, Tokyo Tel: +81 3-3911-0067  Osaka Computer School 1-5-21 Nakamoto, Higashinari-ku, Osaka City, Osaka Tel: +81 6-6974-4611  Osaka Morinomiya Kogei 1-6-11-901 Morinomiya Chuo, Chuo-ku, Osaka City, Osaka Tel: +81 6-6943-5984  Ota Information & Business College 1361, Higashinagaoka-cho, Ota, Gunma Tel: +81 120168-109  PFE Corp. 1-5-11 Kugenuma-kaigan, Fujisawa City, Kanagawa Tel: +81 466-30-1618 Fax: +81 466-30-1618 http://www.peachfield.com  Palwave Co., Ltd. 8-8 Hatchobori, Naka-ku, Hiroshima City, Hiroshima Tel: +81 82-221-5771 Fax: +81 82-221-5071 http://www.palwave.co.jp  Pasoko. Net 1-19 Mameda-cho, Mizuho-ku, Nagoya City, Aichi Tel: +81 52-871-3111 Fax: +81 52-832-3881

http://www.pasoko.net  Personal Computer System Co., Ltd. 3-2-4 Namiki, Kawaguchi City, Saitama Tel: +81 48-259-2279 Fax: +81 48-259-2281  Sahya PC Kyoshitsu 1-40-28 Kamariya-nishi, Kanazawa-ku, Yokohama City, Kanagawa Tel: +81 45-780-6040 http://www.mxb.mesh.ne.jp  San-ai Pasocon Kyoshitsu 5-3-2 Sekime, Joto-ku, Osaka City, Osaka Tel: +81 6-4255-3040 Fax: +81 6-4255-3033 http://www.ingnet.or.jp  Sophia Computer College 4-3-22-203 Nishinakajima, Yodogawa-ku, Osaka City, Osaka Tel: +81 120-707778  Sozoryoku Kaihatsu Center Beruza Akasaka 3F, 2-12-15 Daimyo, Chuo-ku, Fukuoka City, Fukuoka Tel: +81 120-097098  Tohoku Computer College 3-1, Kakyoin 1-chome, Aoba-ku, Sendai, Miyagi Tel: +81 22224-6501  Tokyo Electronics College 6-1, Higashi Ikebukuro 3-chome, Toshima-ku, Tokyo Tel: +81 33982-3131 Fax: +81 33980-6404  Tokyo PC S.A School Chiba 2-7-10 Shin-chiba, Chuo-ku, Chiba City, Chiba Tel: +81 43-242-7611 Fax: +81 43-242-7774 http://www.t-pcsa.com  U-com Sogo Gakuin Kawaramachi 427 Ebisu-cho, Nakagyo-ku, Kyoto City, Kyoto Tel: +81 75-255-4417  Will PC School 4-23 Goryo-cho, Tarumi-ku, Kobe City, Hyogo Tel: +81 78-706-3179 Fax: +81 78-706-3179 http://www.gold.ocn.ne.jp  Win School Kyoto-ko 717-1 Higashi-shiokoji-cho, Higashinotoin-dori Shichijo-sagaru-nichome, Shimogyo-ku, Kyoto City, Kyoto Tel: +81 75-361-3734  Wintem Ltd. 1-1-8-8F Hon-cho, Aoba-ku, Sendai City, Miyagi Tel: +81 22-212-5333 Fax: +81 22-268-0551

http://www.wintem.com  Wit Co., Ltd. 2-5-5 Azuchimachi, Chuo-ku, Osaka City, Osaka Tel: +81 6-6265-7005 http://www.winet.co.jp  Yuka Co., Ltd. 2-5-1 Shin-chiba, Chuo-ku, Chiba City, Chiba Tel: +81 43-243-7177 Fax: +81 43-203-8380 http://www.ccjc-net.or.jp/~kkyuka

3.2.2. INFORMATION TECHNOLOGY SECURITY CONSULTING COMPANIES

Below is the list of several chosen Japanese companies that focus on information technologies security consulting, providing also advanced training in this regard:

 SimNet Computing Ltd. 3rd Fl., Takanawa Bldg. 13-11, Takanawa 4-chome, Minato-ku, Tokyo Tel: +81 35789-7670 Fax: +81 35789-7671  Blue Coat Systems K.K. 10th Fl., Prudential Tower 13-10, Nagata-cho 2-chome, Chiyoda-ku, Tokyo Tel: +81 33580-8350 Fax: +81 33580-8360  Crisscross K.K. 3rd Fl, Maison Tomoe Bldg. 16-1, Minami Aoyama 3-chome, Minato-ku, Tokyo Tel: +81 33423-6932 Fax: +81 33423-6931  Entrust Japan Co.,Ltd. 3rd Fl., Ascend Jimbocho Bldg. 23, Kanda Jinbo-cho 2-chome, Chiyoda-ku, Tokyo Tel: +81 35211-8900 Fax: +81 35211-7810  Intercom, Inc Sorimachi Bldg. 3-5, Taito 1-chome, Taito-ku, Tokyo Tel: +81 33839-6231  Nihon SafeNet K.K. 8th Fl., Onarimon Center Bldg. 17-17, Shinbashi 6-chome, Minato-ku, Tokyo Tel: +81 35776-2751 Fax: +81 33436-2236  RSA Security Japan Ltd. 13th Fl., Tokyo Bank Assn Bldg. 3-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo Tel: +81 35222-5200

 SecuGen Japan, Ltd. Tsukiji MF Bldg. No.26 12-10, Tsukiji 2-chome, Chuo-ku, Tokyo Tel: +81 35565-7911 Fax: +81 35565-7930  Sumisho Computer Systems Corp. Harumi Island Triton Square Office Tower-Z 8-12, Harumi 1-chome, Chuo-ku, Tokyo Tel: +81 35166-2500 Fax: +81 35166-1009  Top Layer Networks Japan Inc. 2nd Fl., Kioi-cho WITH Bldg. 32, Kioi-cho 3-chome, Chiyoda-ku, Tokyo Tel: +81 33511-1201 Fax: +81 33511-1208  Tripwire Japan K.K. 24-8, Sekiguchi 1-chome, Bunkyo-ku, Tokyo Tel: +81 35206-8610 Fax: +81 35206-8613  VeriSign Japan K.K. 13th Fl., Nittobo Bldg. 8-1, Yaesu 2-chome, Chuo-ku, Tokyo Tel: +81 33271-7011 Fax: +81 33271-7028

3.2.3. UNIVERSITIES

In Japan there is more than 700 universities (public and private ones). In these universities more than 2.8 million students were enrolled during year 2005. Above 60% of Japanese universities offer education in regard to information technologies and computer science.

At the top of the officially regulated higher education structure, these institutions provide four-year training leading to a formal bachelor's degree approved by the Ministry. Some of the universities offer six-year programmes leading to a professional degree of Master of Science.

There can be distinguished 2 types of public four-year colleges, with following numbers as of 2005:

 87 national universities (including The Open University)  86 local public universities, founded by prefectures and municipalities  553 private four-year colleges

In Japan majority of university students attend full-time day programmes within stationary learning process. In 2005 the most popular faculties in terms of enrolling undergraduate students were:

 social sciences, including business, law, and accounting (38%)  engineering (17,3%)  humanities (16,%)  education (5,7%)

On most of these faculties there are increasingly more courses related to information technologies.

The average cost for university level education which includes tuition, fees, and living expenses for one year equals to over 1.5 million Yen (i.e. approximately $16 500). From last two decades statistics, about 80% of this cost is paid by parents of students with the amount constituting in average 20% of a family budget. In order to be able to cover university level education students frequently work part-time or borrow money through the government-supported Japan Scholarship Association. Assistance in terms of studies financing is also offered by local governments, non for profit organizations, and other institutions.

In Japan higher university level education is more common among men than women. In 2005 women made only 39% of all university undergraduates, but their number is slowly increasing. Women's choices of faculties and programmes of study still tend to follow traditional patterns, with more than two-thirds of all women enroll in education, social sciences, or humanities courses. Only 15% of women studies scientific and technical subjects, while they represent not more than just few % of students in engineering.

Quality of higher level education in Japan is of very high standard, as recognized internationally by many prestigious rankings: e.g. 11 of Japanese universities have been ranked in THES QS World University Ranking in 2006 (the University of Tokyo was ranked 19th and Kyoto University was ranked 25th).

3.2.3.1. THE OPEN UNIVERSITY OF JAPAN

The Open University of Japan is the new name of the University of the Air, a distance learning university with a nation-wide cover in Japan.

The Open University of Japan has been established and accepted first students in 1985. It was founded within the national government programme that provided financing and regulated university operations by a single- issue type legal act. Currently the university is operated by the Open University in Japan Academia and is formally classified as a private university. It’s headquarters are based in Chiba and offices are distributed in all 47 prefectures of Japan.

The Open University of Japan is modeled upon the system of the Open University in the United Kingdom. It has accreditation of the Ministry to offer undergraduate and graduate degrees to its students. In 2007 the university had over 90 thousands of students enrolled and 45 thousands students graduated (since conception the university had over 800 thousands students taking courses, being one of the largest educational and academic institutions in Japan).

The main department of the Open University of Japan which is concerned with the development of technologies for the distant education is the newly formed Centre of ICT and Distance Education (CODE), which was created after integration of the National Institute of Multimedia Education (NIME).

The CODE within its international cooperation initiatives actively collaborates with the European Schoolnet (an organization of all European Union member states ministries of education). The Director of Department of International Collaboration of CODE is Mr. Tsuneo Yamada. The CODE is engaged in operation in Japan of similar project to European eTwinning (assembling a network of educational distant learning contents exchange and share between schools), namely the Gloss project which interoperates with another projects of this type in Asia (e.g. with the Keris project of Korea).

4. JAPANESE TARGET MARKET ANALYSIS IN REGARD TO THE SUBJECT OF EXPORT

4.1. APPLICABLE LEGAL ACTS

There are number of important Japanese laws that relate to the planned export strategy and future business operation of the company in Japan. Below is presented the list of most important legal acts that are applicable to the domain of operation the company will engage in. The complete forms of the translated documents are available as the appendices to this document and are also accessible publicly over the Internet within Japanese Law Translation system of Ministry of Justice.

The list of legal acts has been divided within areas of their application, as presented in the following chapters.

4.1.1. BUSINESS OPERATIONS RELATED LEGAL ACTS

The legal regulations of business operations are described in detail in the following acts:

 Commercial Registration Act o Act No. 125 of July 9, 1963  Companies Act (Part I, Part II, Part III and Part IV) o Act No. 86 of July 26, 2005  Companies Act (Part V, Part VI, Part VII and Part VIII) o Act No. 86 of July 26, 2005

Description of procedures and necessities associated with commercial business operation according to those acts is in detail described in the chapter 4.2.1.

In Japanese law there are detailed regulations that concern different types of partnership and formal cooperation tie-ups between business enterprises:

 Small and Medium-Sized Enterprise Cooperatives Act o Act No. 181 of June 1, 1949  Limited Partnership Act for Investment o Act No. 90 of June 3, 1998  Limited Liability Partnership Act o Act No. 40 of May 6, 2005

The regulations on fair competition, fair trade and monopolization practices on the Japanese market are provisioned within the:

 Unfair Competition Prevention Act o Act No. 47 of May 19, 1993  Act on Prohibition of Private Monopolization and Maintenance of Fair Trade o Act No. 54 of April 14, 1947

Very important in terms of especially business within the consumer segment of market (B2C model) but also in other segments as well (within B2B model) is legislation concerning liability of products offered on the market (constituting protection of product buying side). These regulations are contained within the following act:

 Product Liability Act o Act No. 85 of July 1, 1994

In relation to business operations concerning the consumer sector (B2C model) there are two very important legal acts regulating contracting matters and product safety:

 Consumer Contract Act o Act No. 61 of May 12, 2000  Consumer Product Safety Act o Act No. 31 of June 6, 1973

Special legal provisions concerning specified types of commercial transactions are articulated within the following acts:

 Act on Specified Commercial Transactions o Act No. 57 of June 4, 1976  Order for Enforcement of the Act on Specified Commercial Transactions o Cabinet Order No. 295 of November 24, 1976  Regulations for Enforcement of the Act on Specified Commercial Transactions o Ordinance of the Ministry of International Trade and Industry No. 89 of November 24, 1976

Legal regulations that concern the trademark protection, the copyright protection, and the patent law are contained within the following acts:

 Trademark Act o Act No. 127 of April 13, 1959  Copyright Act o Act No. 48 of May 6, 1970  Patent Act o Act No. 121 of April 13, 1959

The general law concerning intellectual rights property is defined by the:

 Intellectual Property Basic Act o Act No. 122 of December 4, 2002

Japanese legal system standardizes the industries with provisions contained within the:

 Industrial Standardization Act o Act No. 185 of June 1, 1949

Very important and of practical significance are regulations concerning promotion of industrial technology development and enhancement related to cooperation between science and research entities with the private enterprises sector in terms of technology transfer and innovation:

 Industrial Technology Enhancement Act o Act No. 44 of April 19, 2000  Act on the Promotion of Technology Transfer from Universities to Private Business Operators o Act No. 52 of May 6, 1998

Within the group of acts relating to development of new technologies, there has been quite recently adopted following legislation (that concerns primarily new energy related technologies, therefore not directly related to the planned export subjected services, but nevertheless of important potential shaping directions of modern technologies development and information infrastructures necessary for operation and support of those technologies, in particular signifying information technologies for rationalization management of energy and

support of control of new energy sources). The context legislation in this regard is covered by the following legal acts:

 Order for Enforcement of the Act on Special Measures for the Promotion of New Energy Use o Cabinet Order No. 208 of June 20, 1997  Act on Promotion of Global Warming Countermeasures o Act No. 117 of October 9, 1998  Act on the Rational Use of Energy o Act No. 49 of June 22, 1979  Basic Act on Energy Policy o Act No. 71 of June 14, 2002

An important general part of legislation in regard to business operation is constituted by regulations describing the public aid and assistance that could be provided to private enterprises under certain conditions and within certain programmes and circumstances. These matters are described by the:

 Public Assistance Act o Act No. 144 of May 4, 1950

Unrelated to the planned export of the company, but still one of the basic laws in business and trade regard regulation is the legal act concerning commodity market exchange (i.e. trade of raw or primary products in terms of standardized contracts):

 Commodity Exchange Act o Act No. 239 of August 5, 1950  Order for Enforcement of the Commodity Exchange Act o Cabinet Order No. 280 of August 31, 1950

Some matters that indirectly relate to business operations concern the inc

 Act on Authorization of Public Interest Incorporated Associations and Public Interest Incorporated Foundation o Act No. 49 of June 2, 2006

More general and large-scale approach to business operations regulation is taken within the legal act towards formation and development of regional industrial clusters, defined as common interest groups of local governance and administration entities, different industrial branches entities and educational entities, that are considered as main drivers of regional development.

 Act on Formation and Development of Regional Industrial Clusters through Promotion of Establishment of New Business Facilities o Act No. 40 of May 11, 2007

Important to mention is also legislation concerning regulations toward inward direct investment, that articulates procedures and possible financing methods of business operations. Legal act on this matter is the following:

 Order on Inward Direct Investment o Ordinance of the Prime Minister's Office, Ministry of Finance, Ministry of Education, Science and Culture, Ministry of Health and Welfare, Ministry of Agriculture, Forestry and Fisheries, Ministry of International Trade and Industry, Ministry of Transport, Ministry of Posts and

Telecommunications, Ministry of Labour and Ministry of Construction No. 1 of November 20, 1980

4.1.2. FOREIGN EXCHANGE RELATED ACTS

Exchange in terms of international economic and trade relations between Japan and other countries is regulation by the Japanese law in the following legal acts:

 Foreign Exchange and Foreign Trade Act o Act No. 228 of December 1, 1949  Foreign Exchange Order o Cabinet Order No. 260 of October 11, 1980

The regulations that concern both import and export control in Japan are contained within:

 Import Trade Control Order o Cabinet Order No. 414 of December 29, 1949  Export Trade Control Order o Cabinet Order No. 378 of December 1, 1949  Export Trade Control Ordinance o Ordinance of the Ministry of International Trade and Industry No. 64 of December 1, 1949

In regard to international exchange Japanese legal system describes measures for conformity assessment of specified equipment subjected to foreign trade:

 Act for Implementation of the Mutual Recognition between Japan and Foreign States in Relation to Results of Conformity Assessment Procedures of Specified Equipment o Act No. 111 of July 11, 2001

There are special provisions in the Japanese law that are addressed at regulation of foreign lawyers interaction within the legal system of Japan, contained within the act addressed to this issue:

 Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers o Act No. 66 of May 23, 1986

Japanese law also regulate what is meant by illegal export and import of goods (with special attention to cultural goods):

 Act on Controls on the Illicit Export and Import and other matters of Cultural Property o Act No. 81 of July 3, 2002

4.1.3. TAXATION LEGAL ACTS

All issues concerning taxation are regulated by the following legal acts:

 Income Tax Act (Limited to the provisions related to nonresidents and foreign corporations) o Act No. 33 of March 31, 1965  Corporation Tax Act (Limited to the provisions related to foreign corporations) o Act No. 34 of March 31, 1965  Act on Special Measures Concerning Taxation (Limited to the provisions related to nonresidents and foreign corporations)

o Act No. 26 of March 31, 1957

4.1.4. JUSTICE RELATED LEGAL ACTS

The most basic legal regulations on justice in Japan are contained within the following acts:

 Court Act o Act No. 59 of April 16, 1947  Comprehensive Legal Support Act o Act No. 74 of June 2, 2004

In relation to justice focusing on intellectual property matters (copyrights infringements, patent violations, etc.), recently a legal act has been constituted concerning special type of court:

 Act for Establishment of the Intellectual Property High Court o Act No. 119 of June 18, 2004

Quite important is resolution concerning promotion of alternative methods of solving legal disputes, contained within the following act also of 2004:

 Act on Promotion of Use of Alternative Dispute Resolution o Act No. 151 of December 1, 2004

4.1.5. LABOR RELATED LEGAL ACTS

Legal matters on ensuring stability and security of employment, as well as promotion of mechanisms supporting development of employed human resources have been stipulated in the following acts:

 Employment Security Act o Act No. 141 of November 30, 1947  Ordinance for Enforcement of the Employment Security Act o Ordinance of the Ministry of Labour No. 12 of December 29, 1947  Human Resources Development Promotion Act o Act No. 64 of July 18, 1969

Separate and very important matter in Japanese legislation is equal opportunity policy concerning women and men and welfare of workers taking care of children or other family members.

 Act on Securing of Equal Opportunity and Treatment between Men and Women in Employment o Act No. 113 of July 1, 1972  Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave o Act No. 76 of May 15, 1991

In relation to labor insurance the following act is in power:

 Act on the Collection of Insurance Premiums of Labor Insurance o Act No. 84 of December 9, 1969

There are special regulations that concern employment management of part-time workers:

 Act on Improvement of Employment Management for Part-Time Workers

o Act No. 76 of June 18, 1993

The legislation that concerns fundamental industrial safety and health protection is distributed within the following acts (correspondingly concerning general issues and hazards related to electricity and danger materials):

 Industrial Safety and Health Act o Act No. 57 of June 8, 1972  Electrical Appliance and Material Safety Act o Act No. 234 of November 16, 1961

Another key legislation for the regulation domain of labor force in Japan contains introduction and specification of legal frameworks for unions operations. The provisions in this regard are contained within the:

 Labor Union Act o Act No. 174 of June 1, 1949

Japanese legal system also regulates formal qualifications of professionals engineers and their examination in competence of the Ministry of Education, Culture, Sports, Science and Technology. The purpose of this legislation is to specify qualification of professional engineer and to ensure the appropriateness of the business, so as to contribute to the improvement of science and technology and development of the national economy of Japan. The following act contains provisions in this matter:

 Professional Engineer Act o Act No. 25 of April 27, 1983

4.1.6. GENERAL LEGAL ACTS AND CONSTITUTION

The most general and highest in hierarchy legislation act constituting Japanese legal system is the Constitution of Japan:

 The Constitution of Japan o Constitution November 3, 1946

Another general legislation that concerns financial sphere of national operation is the legal act regulating status of powers of Bank of Japan.

 Bank of Japan Act o Act No. 89 of June 18, 1997

These documents are the highest level regulations accordingly for government and society organization and financial operation of the country. All other specific laws need to conform with above primary regulations.

4.1.7. CIVIL LEGAL ACTS

The most general regulation for civil society organization in Japan are provisioned within the following acts that date back to the XIX century:

 Civil Code (Part I, Part II, and Part III) o Act No. 89 of April 27, 1896  Civil Code (Part IV and Part V) o Act No. 89 of April 27, 1896

Important legislation in civil rights concerns the protection of personal information of society members, which is in detail regulated by the:

 Act on the Protection of Personal Information o Act No. 57 of May 30, 2003

In regard to immigration and foreign society members in Japan, the following laws are holding:

 Alien Registration Act o Act No. 125 of April 28, 1952  Immigration Control and Refugee Recognition Act o Cabinet Order No. 319 of October 4, 1951  Ordinance for Enforcement of the Immigration Control and Refugee Recognition Act o Ordinance of the Ministry of Justice No. 54 of October 28, 1981

Important legislation concerns prevention and countermeasures for the spousal violence problem:

 Act on the Prevention of Spousal Violence and the Protection of Victims o Act No. 31 of April 13, 2001

Important regulation in context of civil law is also concerning persons with disabilities. In this regard the following act regulates the support to disabled (the act itself has application towards all societal aspects concerning persons with disabilities).

 Services and Supports for Persons with Disabilities Act o Act No. 123 of November 7, 2005

4.1.8. INFORMATION TECHNOLOGIES RELATED LEGAL ACTS

The most important legal act addressing to information technologies in the Japanese law is the:

 Basic Act on the Formation of an Advanced Information and Telecommunications Network Society o Act No. 144 of December 6, 2000

This act will be described in detail in the chapter 4.1.12. Second most important act concerns the issues connected with legal regulation of electronic means for authentication (i.e. electronic signature and description of criteria for approving entities as public trust certification institutions validating electronic signatures).

 Act on Electronic Signatures and Certification Business o Act No. 102 of May 31, 2000

There are comprehensive legal acts that regulate limits on information processing that concerns identification of telecommunication (e.g. mobile) services subscribers and senders:

 Act on Identification by Mobile Voice Communications Carriers of their Subscribers and for Prevention of Improper Use of Mobile Voice Communications Services o Act No. 31 of April 15, 2005  Act on Special Provisions of the Telecommunications Business Law Attendant upon the Enforcement of the "Agreement under ARTICLE VI of the Treaty of Mutual Cooperation and Security between Japan and the United States of America regarding Facilities and Areas and the Status of United States Armed Forces in Japan" o Act No. 107 of April 28, 1952

 Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers and the Right to Demand Disclosure of Identification Information of the Senders o Act No. 137 of November 30, 2001  Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers and the Right to Demand Disclosure of Identification Information of the Senders o Act No. 137 of November 30, 2001

The specific law also regulated the status and powers of the national largest communication corporation, the NTT Corporation (Nippon Telegraph and Telephone Corporation), that is operating majority of information technologies infrastructure for telecommunication in Japan:

 Act on Nippon Telegraph and Telephone Corporation o Act No. 85 of December 25, 1984

Very important regulation in regard to information technologies and communication in networks concerns countermeasures for abuses and violations within electronic mail communication (e-mails), especially referred to as SPAM, with unwanted marketing messages automatically generated in great volumes and sent to databases of e-mail addresses with results in flooding mail boxes and disabling normal communication. The legislation in this regard is contained within the:

 Act on Regulation of Transmission of Specified Electronic Mail o Act No. 26 of April 17, 2002

Also very important regulations (especially in terms of security) concern the electronic means for finance operations (i.e. electronic banking) along with articles of the following act:

 Electronically Recorded Monetary Claims Act o Act No. 102 of June 27, 2007

Somewhat related to information technologies legal acts concern also measurements standards and electricity and electric infrastructure:

 Measurement Act o Act No. 51 of May 20, 1992  Electricity Business Act o Act No. 170 of July 11, 1964

There are also some more specific legal acts that concern technical matters connected to information technologies, like those regulating integrated circuits industry, the key industry in continuous development of information technologies in hardware terms:

 Act on the Circuit Layout of a Semiconductor Integrated Circuits o Act No. 43 of May 31, 1985

4.1.9. GOVERNMENT AND ADMINISTRATION RELATED LEGAL ACTS

The main legal regulations that constitute framework (below the abstraction level of Constitution of Japan) for government organization and operation in Japan, as well stipulate ethical code of Japanese public service, are contained within the following acts:

 National Government Organization Act o Act No. 120 of July 10, 1948

 National Public Service Ethics Act o Act No. 129 of August 13, 1999

In terms of society control and evaluation of government actions and policies the following act is in power:

 Government Policy Evaluations Act o Act No. 86 of June 29, 2001

The administrative procedures (concerning interaction and communication of administration with other entities in society) are in detail regulated within the following act:

 Administrative Procedure Act o Act No. 88 of November 12, 1993

The following acts regulate on the other hand limitations on access and protection of information (especially personal information) held and processed by the administration:

 Act on the Protection of Personal Information Held by Administrative Organs o Act No. 58 of May 30, 2003  Act on Access to Information Held by Administrative Organs o Act No. 42 of May 14, 1999  Administrative Counselors Act o Act No. 99 of June 30, 1966

4.1.10. EDUCATION RELATED LEGAL ACTS

In relation to education sector in both of economic and social terms an important legislation in regard to planned export development strategy of information technologies training services is the following act regulating organizational standards for establishing universities in Japan:

 Standards for Establishment of Universities o Ordinance of the Ministry of Education, Science and Culture No. 28 of October 22, 1956

4.1.11. FINANCE RELATED LEGAL ACTS

Legal provisions on standards of financial operations (e.g. crediting legal framework) is contained within the banking act:

 Banking Act o Act No. 59 of June 1, 1981

4.1.12. BASIC ICT LAW

The Basic Act on the Formation of an Advanced Information and Telecommunications Network Society (Act No. 144 of December 6, 2000) was legislated in order to bridge the international digital divide. The primary objective of this law is to promote rapidly and preferentially the policies concerning the establishment of a society based on advanced telecommunications networks.

The purpose of the Law is to promote measures for the formulation of an advanced information and telecommunications network society by stipulating the basic ideas and the basic policy for formulating measures, clarifying the responsibilities of the State and local governments, establishing the Strategic

Headquarters for the Promotion of an Advanced Information and Telecommunications Network Society, and providing stipulations on the development of a priority policy programme for the formation of an advanced information and telecommunications network society, in light of the urgency to adapt to the world's rapid and drastic changes in the socioeconomic structure caused by the utilization of information and communications technologies. As used in the Law, an "advanced information and telecommunications network society" is a society in which people can develop themselves creatively and vigorously in all fields of activities by acquiring, sharing and transmitting a variety of information or knowledge on a global scale freely and safely through the Internet and other advanced information and telecommunications networks.

The law aim is to assist in building of a society in which people can enjoy the benefits of information and telecommunications technology by having the opportunities to use the Internet and other advanced information and telecommunications networks easily and independently, and being able to fully and creatively demonstrate their individual abilities through such opportunities.

In the context of this analysis very important are the 7th and 8th articles of the Law, accordingly:

 Concerning the role sharing between the State / local governments and the private sector: Article 7. In forming an advanced information and communications network society, the private sector shall take the leading role in principle, while the State and local governments shall implement measures centering on the establishment of an environment where the private sector can exert its full potential, including promotion of fair competition and solution of causes that obstruct the formation of an advanced information and telecommunications network society, such as revision of regulations.  Concerning correction of gaps in opportunities for use of ITs: Article 8. In forming an advanced information and telecommunications network society, it is necessary to make active efforts to correct gaps in opportunities and skills for use of information and telecommunications technology that are caused by geographical restrictions, age, physical circumstances and other factors, considering that such gaps may noticeably obstruct the smooth and uninterrupted formation of an advanced information and telecommunications network society.

The regulation provisions a leading role in shaping of the Japanese information society by a private sector, which constitutes a good environment for both types of B2C and B2B export development of IT training services. Regulation towards necessity of active efforts towards correction of gaps, especially in terms of information and communication technologies skill levels is also creating good opportunity for governmental cooperation in terms of further developing export subjected services.

Of important matter in relation to the planned export development is the Article 24 of the law which stipulates that Japan should actively extend technological and other types of cooperation to developing countries and regions. Also within the Article 16 it is explicitly stated that of specially important matter is support of “learning of the skills that are necessary for utilizing information and telecommunications technology, considering that these factors are all indispensable and closely interlinked”. The following two articles are also of great importance:

 Promotion of education and learning as well as development of human resources: Article 18. Within formulation of measures on the creation and development of an advanced information and telecommunications network society, it is necessary to promote ICT education so that all people can utilize information and communications technology, and to take the required measures to develop creative human resources with expert knowledge or skills that will lay the foundations for the development of an advanced information and communications network society.  Facilitation of e-commerce:

Article 19. In formulating measures on the formation of an advanced information and communications network society, it is necessary to review regulations, establish new general principles, appropriately protect and exploit intellectual property rights, protect consumers, and implement other measures required for the facilitation of e-commerce, etc.

As combined, the above articles directly support, on the level of national regulation, planned actions of increasing level in Japanese society digital literacy by employing electronic distant learning based techniques and methodologies in conjunction with electronic marketing and sale channels (altogether constituting the definition of e-commerce) with teaching information technologies skills services.

As an additional important aspect of the Law provision, Article 24 could be again stressed, as concerning a current situation with advanced communications networks are spreading worldwide, and instructing measures to be taken in formulating policies concerning the creation of a society based on advanced communications networks internationally. The measures should include those which are necessary for making active efforts to establish international standards, regulations, etc. concerning advanced communications networks, electronic commerce and other social and economic activities using such networks, and that Japan should take active part in those international efforts. The measures also include those necessary for forming international alliances for research and development of such standards and regulations, as well as for extending related technological assistance and other forms of international cooperation with developing countries.

4.1.13. TRADEMARK PROTECTION

In accordance to legal acts regulating trademark protection system in Japan - the Trademark Act (Act No. 127 of April 13, 1959), the Copyright Act (Act No. 48 of May 6, 1970), the Patent Act (Act No. 121 of April 13, 1959) and the Intellectual Property Basic Act (Act No. 122 of December 4, 2002) - a chapter concerning this legal matter is presented, based upon the information published by JETRO (Japan External Trade Organization).

Japan's trademark system provides for the protection of the marks and logos that are used in commerce on goods or services. By enabling trademarks to identify the source of goods or services, and to identify their qualities and publicize them, the trademark system protects the commercial reputation of persons using trademarks, thereby contributing to the development of Japan's industries and protecting the interests of consumers. Japan's trademark system is regulated by the Trademark Law.

It is important to stress that under the Japanese law, unregistered trademarks and designs (formal protection of which is described in detail in the following chapter 4.1.3.) may be protected from unauthorized use by other people under the Unfair Competition Prevention Law. If a trademark or design is not registered but becomes generally known or famous in Japan after use, the trademark or design, as well as the form of the object that becomes generally known, is protected. Furthermore, forms of new goods are protected for up to three years from the date on which they were first sold in Japan, even if no patent, utility model right or design has been registered. This means that if any other person copies the form of that new product, protection is available under criminal or civil law.

The experts publicly authorized to act as agents in carrying out application procedures for intellectual property rights such as patents, designs and trademarks, are, of course, patent attorneys; in Japan they are known as benrishi. Regular lawyers (bengoshi) may also perform this work, however, because a very high level of expert knowledge regarding intellectual property rights is required, it is most common for those who wish to acquire rights, or whose patent or trademark rights have been infringed, to hire a patent attorney. Furthermore, under Japanese law, legal action pertaining to infringement of rights is currently the sole domain of lawyers (bengoshi), but starting in 2004, patent attorneys (benrishi) may also represent a client in court along with a lawyer (bengoshi) as long as they pass certain national examinations.

EQUALITY FOR BOTH JAPANESE AND FOREIGN NATIONALS

Japan's Trademark Law offers equal protection for Japanese and foreign nationals; the same trademark registration process and conditions apply to those resident in Japan and overseas. Therefore, by offering proper trademark protection to people who do not currently live in Japan and companies presently without head offices or branches in the country, Japan's trademark system encourages future expansion into the Japanese market by overseas businesses.

FIRST-TO-FILE RULE

Trademarks do not have to be currently in use (either in Japan or overseas) in order to be registered in Japan; if the trademark owner has the intention of using the trademark in the future, it can be registered in Japan as long as certain criteria are met. Thus, it is very important for any foreign business that thinks it might expand into Japan at some time in the future to consider applying for registration of trademarks in Japan before entering the Japanese market. Note, however, that trademarks must be used within three years after registration, or they may be nullified. Using a trademark just once within those three years is enough to prevent trademark rights from being cancelled.

SCOPE OF PROTECTION

Under Japan's Trademark Law, trademarks are categorized as follows:

1. Trademark consisting of characters including Japanese characters, alphabetical characters and other foreign characters. 2. Trademarks consisting of devices or symbols. 3. Trademarks consisting of characters and devices/symbols. 4. Three-dimensional trademarks (this is a new addition to the law included in a revision in 1996; at present, dolls, spheres and three-dimensional signs are protected).

There is also a system known as Collective Trademark Registration, which was included in the law in the 1996 revision. While this differs from the types of trademark protection described above, it provides for the registration of trademarks by any group comprised of businesses (with the exception of groups that are not official bodies corporate) for the purpose of allowing all members of the group to use the trademarks. Specifically, the system aims to protect the unique brands and names used by groups formed to revitalize regional economies and specific industries.

A system called the Regional Collective Trademark system was also introduced by a legal amendment in 2005 in order to protect and strengthen regional brands. This allows the registration of marks consisting of a regional name and generic name for a commodity or service, provided that certain requirements, such as being sufficiently well-known in a certain area, are met.

Formerly, a collective trademark application by the Chamber of commerce and industry was not accepted. However, according to a revision of the Trademark Law in 2006 (Enforcement on April 1, 2007), the Chambers of commerce and industry is now entitled to file collective trademark applications.

PROTECTION OF TRADEMARKS ABOUT RETAILERS, ETC.

According to a revision of the Trademark Law in 2006 (Enforcement on April 1, 2007), "Retail services, etc." may now be accepted as designated services for the purpose of protection for the names of retail and wholesale stores and the names of mail-order businesses (including online sales).

Therefore, it is now possible to register the names of stores, such as retail outlets, as well as the names of individual products.

SIMILARITY OF TRADEMARKS

Trademarks must be unique in order to be registered; the sound, the appearance and the meaning of every trademark must not be similar to any other trademark, either individually or collectively.

1. Sound This refers to the sound of the trademark as well as the pronunciation of any characters used therein. Going by the standard of English language education in Japan, it can reasonably be assumed that most Japanese people will be able to understand the pronunciation of English words or Japanese words written in alphabetical characters correctly. However, the same cannot be said for words of other languages. Therefore, in order to avoid confusion, it is preferable to add Japanese kana characters showing how to pronounce the trademarks consisting of words in foreign languages other than English to ensure that the proper pronunciation is protected. 2. Meaning This refers to the meaning inferred from the characters that comprise the trademark. In the case of a trademark in a foreign script, the words "Black Cat", for example, would conjure up the image of a black cat in the minds of Japanese people, however the German words "Schwarze Katze" or the Spanish words "Gato Negro" would not immediately spark the appropriate feline image in people's minds, and it is possible that they are recognized as coined words which do not have a specific meaning. Therefore it is possible that such trademarks could not exclude other trademarks which do cause people to imagine a black cat if registered as trademarks. In this situation, it may be better to obtain separate protection for a trademark which consists of a Japanese translation of the original foreign-language phrase. 3. Appearance Trademarks consisting of characters that Japanese people are unable to recognize as written characters, such as Mongolian or Hindi, are treated as trademarks consisting of devices. This means that the trademark owner is unable to reap any benefits that a trademark consisting of written characters may have, so one idea is to apply for a separate registration of trademarks consisting of a Japanese translation or Japanese characters denoting the pronunciation of the foreign-language phrase.

Note also the following two major differences between Japanese trademarks and those of some other countries.

1. Smells and tastes, etc., are not subject to protection as trademarks. 2. Dynamic trademarks, such as moving animals or other objects, are also not subject to protection.

4.1.13.1. VALIDITY AND TERM OF TRADEMARK REGISTRATION

When a trademark is registered, that trademark is protected against unauthorized use of identical or similar trademarks by any other person; such use may constitute a breach of civil or criminal law. Trademark owners are disadvantaged by the illegal selling of fake brand-name goods. The trading of such bogus items is severely punishable under Japanese law, and in many cases, illicit sellers of fake brand-name goods are charged with criminal (as opposed to civil) offences.

Once registered, a trademark is protected for 10 years starting from the registration date, assuming that the trademark is not subsequently invalidated or cancelled. Protection can be renewed for further 10-year periods.

Because Japan's trademark system is generally operated on a first-to-file rule basis, therefore, if the owner of the trademark wishes to protect his trademark legally, it has to be filed an application for registration to Japan Patent Office and to be registered in principle. However, famous or known trademarks without taking any procedures for filing are protected exceptionally assuming that they are only famous or known in Japan but also in foreign countries.

4.1.13.2. CANCELLATION OF TRADEMARK

Under Japan's Trademark Law, trademarks can be registered even if they are not in use at the time under the first-to-file rule. However, one should be fully aware that, if a trademark is not used at all within a period of three years following registration, a petition for the cancellation of that trademark may be filed by an interested third party. Incidentally, "use" of a trademark is not limited to the displaying of the trademark directly on a product; the printing of a trademark in a pamphlet together with an image of the product, the use of the trademark in an advertisement for the goods such as in a newspaper, or the displaying of goods featuring the trademark on an Internet website all constitute "use."

By the rapid spread of the Internet of these days, everyone can easily access many kinds of website in the world. In such circumstances, when the trademark is used only on the website, there are arguments whether it could be the use of the trademark under Japan's Trademark Law. If the trademark is used on the website obviously for the purpose of the sales in Japan, it could be authorized that it is the use of the trademark. However, if the trademark is used on the website for the purpose of the sales in foreign countries, there is a doubt whether it is the use of the trademark under Japan's Trademark Law or not.

Japan's trademark system protects the right of duly authorized trademark owners. For instance, where overseas-based goods or services are provided in Japan, and where the overseas company involved has entered into an agency agreement with a Japanese company, if that local agent applies for registration of the overseas company's trademark without due cause or permission the duly authorized trademark owner may file a petition for the cancellation of the Japanese registration, and can thereby regain their trademark rights.

4.1.13.3. TRADEMARK REGISTRATION

Following a revision of the Trademark Law in 1992, Japan's trademark system has been operated under the same international classification system as other countries; there are 45 classes of goods and services, as well as those for goods and services unique to Japan. Applications can be made for individual classes or in several classes at once (known as "multiple-class" applications). Since April 1, 2008, however, a notification of reasons for refusal pursuant to the body of Article 3, Paragraph 1 of the Trademark Act is now issued if goods and services in eight or more similar groups are designated per class due to operational requirements at the Japan Patent Office.

It is always best to consult a professional advisor such as a patent attorney, known in Japan as a benrishi, when applying for trademark registration. Naturally, applying for and being granted registration of a trademark incurs fees. The fees for this process in Japan are as follows.

1. Application fees a. One trademark in one class: 12,000 yen (approximately $130). b. One trademark in multiple classes: 12,000 yen for the first class, and an extra 8,600 yen for each additional class. Note that the above amounts are official fees only, and do not include patent attorney's fees, etc. 2. Registration fees

When filing an application, fees differ according to whether the application is for a single class or multiple classes. Registration fees, on the other hand, are 37,600 yen ($410) per trademark per class regardless of the type of application. If a company engaged a patent attorney, it will be charged fees in addition to the above registration fees; these may include fees for the work involved in paying the official fees. 3. Renewal expenses 48,500 yen ($530) per class must be paid as a renewal registration fee at the time of renewal. As in the case of applications and registrations, there will also be charged other fees, such as a fee for the work involved in paying renewal registration fees, if engaged a patent attorney.

If the examination process goes smoothly, a trademark can be registered in as little as three months from the time of filing the application. Generally, however, the examination takes approximately six months, and the registration takes another one or two months. So it is advised to be prepared for about eight months after application to complete the process.

4.1.13.4. INTERNATIONAL REGISTRATION OF TRADEMARKS

In principle, to obtain trademark rights in Japan from within a foreign country, an application for registration must be filed with the Japan Patent Office. However, the following two schemes may be preferable alternatives.

APPLICATION UNDER THE PARIS CONVENTION

If company intends to apply for registration of a trademark in Japan only, or in a small number of countries, it may be a good idea to file application under the Paris Convention.

APPLICATION UNDER THE MADRID AGREEMENT

Japan is also a signatory to the Madrid agreement, so this is another alternative when making an international trademark application that includes Japan. Under this system, it is possible to file an international application and register trademarks in specified countries based on the application initially filed in home country. This is a particularly handy system for conglomerate companies with interests in many countries around the world.

4.1.14. DESIGN PROTECTION

In accordance to legal acts regulating design protection system in Japan, the chapter concerning this legal matter has been prepared, based upon the information published by JETRO (Japan External Trade Organization). Japan's design system is regulated by the Design Law, which protects the attractive and comfortably functional shape, pattern, color and other design characteristics of items relating to their external appearances. Japan's Design Law protects new designs as the property of the designer, and also encourages the use of designs, thereby promoting the creation of new designs and contributing to the development of Japan's industry.

Under Japan's Design Law, protection is available for the form, pattern or color of an object or a combination of these, which appeals visually to the viewer's sense of aesthetics. Put simply, Japan's system protects the shape, form and external appearance of an object.

1. Criteria o Visual appeal to aesthetic sense

Objects whose form cannot be recognized by the human eye, such as a single grain of powder, do not meet this criterion. o Industrial usability The design must be able to be recreated using an industrial (mechanical or hand-based) process and must be able to be mass-produced. 2. Examination criteria o Novelty No identical or similar design must have been in existence before the application was made; in other words, the design must be completely new. o Ease of creation No design that is adjudged to be lacking creativity will be registered, regardless of whether or not it is new. o Uniqueness Designs that are either identical or similar to other designs for which applications have been filed or which have been registered are not deemed to be newly-created designs, and will therefore not be registered (except for the application filed by the same person). o Eligibility From a standpoint of public interest, the following designs will not be registered. . Designs that may breach public order and morals. . Designs that may cause confusion with any item pertaining to the business of any other person. . Designs consisting of only the minimum form necessary to ensure the functions of the object. o One design per application Discrete applications must be made for each design. In some cases, however, several objects may be deemed to comprise a "design of a set of objects" as long as certain criteria are met. o Priority If more than one application is filed for the registration of two identical or similar designs, the application filed first will be eligible for registration. If the same person files two identical or similar design applications within a certain period, one of which is deemed as the original design and the other is deemed as a related design, both designs will be eligible for registration under the related design system.

Protection of design rights begins once a design is registered, and continues for 20 years. However, it is important to note that, contrary to trademarks, it is necessary to pay an annuity each year in order to maintain protection. Furthermore, while design rights generally lapse upon the passing of 20 years, if the form of the registered object becomes famous, it is possible to receive protection under the Unfair Competition Prevention Law even after design rights lapse.

Japan's Design Law provides a system of protection that is very unique to this country. Below are some major examples of this.

1. Related design system Under Japan's Design Law, not only are designs originally registered in relation to a certain object protected, but similar designs related to that object and filed in a certain period are also protected. However, if advance confirmation is required regarding the extent to which a design is similar to the one registered, one may register a design as a "similar design." 2. Design of a set of objects Under the provisions of Japan's Design Law, design applications and registration usually follow a one- design-per-object principle, however there is an exception to that rule. This exception allows for

discrete objects that common sense dictates are usually sold as a set—a knife, fork, and spoon, for example—to be registered as a single design of a set of objects. Intelligent use of this system has the advantage of helping keep costs to a minimum. 3. Secret designs When a design is registered, it is generally published in the Design Gazette, however Japan offers a system that allows a registered design to be kept a secret for a certain period upon application. This is known as the "Secret Design" system. Because designs are influenced so strongly by fads and fashions, and because some products' periods of popularity tend to end sooner than others', this system aims to protect the rights of the design-owners for a certain period of time. It should be noted, however, that this system tends to limit litigators' options when suing for infringement of rights, and so the system is used infrequently at best. 4. Partial designs Because traditionally design rights have protected an entire object, protection could not be guaranteed against infringement by people who copied only parts of a design. However, under a revision to the law in 1998, the partial design system was introduced allowing registration of parts of shapes or forms with distinct characteristics. Thus, while it used to be that if somebody copied only part of a design they would escape prosecution as long as the overall design was not similar, the new system allows registration of partial designs, meaning that infringements can be prosecuted. Indeed, this is one of the most important aspects of Japan's Design Protection system. 5. Protection of screen designs According to a revision of the Design Law in 2006, screen designs (such as the designs of operation screens for programming DVD recorders, operation screens for selecting a person to call on a cellular phone, and photo printer setup screens) under the certain conditions are now protected within the scope of designs which forms a part of goods.

4.1.14.1. DESIGN REGISTRATION

Applying for and being granted registration of a design incurs fees. The fees for this process in Japan are as follows.

1. Application fees o 16,000 yen per design ($175) o It should be stressed that the above amount is the official fee only, and does not include patent attorney's fees, fees for design drawings, etc. 2. Registration fees A registration fee is required when registering a design, however these fees differ from those of trademarks. The design registration fee for the first year is 8,500 ($90) yen and an annuity must be paid each year in order to maintain the validity of the design rights. The annuities are as follows. o Years 1 through 3: 8,500 yen per year ($90) o Years 4 through 10: 16,900 yen per year ($185) o Years 11 through 20: 33,800 yen per year ($370)

If the examination process goes smoothly, a design can be registered in as little as three months from the time of application. Generally, however, the examination takes approximately six months, and the registration takes another one or two months. Allow about eight months after application to complete the process.

4.1.15. JAPANESE LAW TRANSLATION

The Ministry of Justice of Japan had recently made available an Internet based on-line interactive service to provide English translation of all important Japanese legal acts. In the database there are currently deposed nearly 200 legal acts, as well as a detailed dictionary of English-Japanese law related vocabulary. Minor acts not yet translated are being continuously updated and added to the database.

The access to the service is open and free of charge at http://www.japaneselawtranslation.go.jp.

There are also links leading to the service directly from pages of the Japanese Ministry of Justice.

4.2. LEGAL BUSINESS PROCEDURES

4.2.1. LEGAL FORMS OF BUSINESS OPERATION

In accordance to legal acts regulating private business operations in Japan, the chapter concerning possible forms to establish business presence and sales in Japan within the planned strategy of export development has been prepared, based upon the information published by JETRO (Japan External Trade Organization).

Foreign companies generally establish a business presence in Japan in one of four modes:

 Representative office  Branch office  Subsidiary company o Kabushiki-Kaisha (Joint-stock corporation) o Godo-Kaisha (Limited liability company - LLC)  Limited liability partnership - LLP

Legal differences between three last types each of these forms are summarized in the table below.

Legal differences between Branch office, Subsidiary company and a Limited liability partnership - LLP

Branch office Subsidiary company Limited liability Kabushiki-Kaisha Godo-Kaisha partnership - LLP (Joint-stock (Limited liability corporation) company - LLC) Restrictions on equity Notification must Notification must be Notification must be Notification need not be participation be filed with the filed with the Bank of filed with the Bank of filed with the Bank of Bank of Japan Japan Japan Japan Capital No capital 1 yen or more 1 yen or more 2 yen or more (if 2 Although establishment with capital of 0 yen is partners) theoretically possible, approval is granted ex post facto, and it is not in practice possible to incorporate a company without a capital Number of investors - 1 or more 1 or more 2 or more Liability of equity Unlimited Limited to amount of Limited to amount of Limited to amount of participants/parent equity participation equity participation equity participation company toward creditors Transfer of equity No equity May be transferred Unanimous approval of Unanimous approval of participation share participation share freely in principle. equity participants partners required May be stipulated in (members) required articles of incorporation that approval of Board of

Directors is needed for transfer of shares. Number of executives Representative in Details in tables in No legally stipulated No legally stipulated required Japan. following sections minimum. minimum. All partners 1 or more In principle, all are executive officers members are executive (one or more partner officers, but a must be an individual representative who has an address in member may be and is resident in Japan appointed (at least one for more than 1 year, or representative must a Japanese corporation) have an address in and be resident in Japan) Legally stipulated No legally Details in tables in No legally stipulated No legally stipulated term of office for stipulated term following sections term term executives Regular general Not required In principle, must be Not required Not required meeting of held every year shareholders (members) Possibility of public No equity Possible Not possible Not possibile offer of stock (equity participation share participation share) Possibility of Not possible. Need - Possible Not possible.Need to reorganization into to separately close separately dissolve joint-stock branch office and partnership and corporation establish joint- establish joint-stock stock corporation corporation Distribution of profits - Allocated according May be allocated at a May be freely allocated and losses to equity different rate from with the unanimous participation ratio equity participation approval of partners rate if specified in articles of association Taxation of profits Income arising Taxed according to Taxed according to No taxation of within Japan is in profits of joint-stock profits of Godo Kaisha partnerships principle taxed corporation and and profits allocated to themselves. profits allocated to participants Taxation of profits shareholders allocated to partners

Source: JETRO 2009

In Japan attorneys, judicial scriveners and administrative scriveners (gyoseishoshi lawyers) are among the specialists who may be consulted on the establishment of branch offices and companies. These specialists can be asked to prepare various documents on a client's behalf (e.g., documentation related to the establishment of Japanese branch offices and Japanese corporations, transfers of location, changes of executives, changes of business purposes, increases in capital, organizational changes, mergers, dissolution, etc.). Commercial registration applications for submission to the Legal Affairs Bureau are the exclusive province of judicial scriveners and attorneys.

4.2.1.1. REPRESENTATIVE OFFICE

Representative offices are established as locations for carrying out preparatory and supplemental tasks aimed at enabling foreign companies to engage in full-scale business operations in Japan. These offices may conduct market surveys, collect information, purchase goods and implement publicity/advertising efforts, but they are not permitted to engage in sales activities. The establishment of representative offices does not require registration. A representative office cannot ordinarily open bank accounts or lease real estate in its own name,

so agreements for such purposes must instead be signed by the head office of the foreign company or the representative at the representative office in an individual capacity.

Representative offices aimed at the collection and provision of information may be freely established without any registration requirements under the Japanese Commercial Code; no notification need be provided to tax offices, as representative offices do not engage in business operations in Japan and thus are not subject to corporate tax. However, representative offices established by foreign banks, insurance companies, securities companies, or other financial institutions are exceptions; prior notification must be provided to the Financial Services Agency for such representative offices (as stipulated in the Banking Law, Securities Exchange Law and other laws).

A bank account opened by a representative office will ordinarily be registered jointly in the name of the office and an individual representative, as in "(name of representative), Japan Representative Office, (name of company)."

The documentation generally required for a representative office to open a bank account is as follows:

 Passport of representative  Certificate of alien registration of representative  Company brochure  Leasing agreement  Bank seal

4.2.1.2. BRANCH OFFICE

Foreign companies wishing to engage in business operations in Japan must establish a branch office or a subsidiary company. The simplest means for a foreign company to establish a base for business operations in Japan is to set up a branch office. The branch office can begin business operations as soon as an office location is secured, the branch office representative determined, and the necessary information registered. A Japanese branch office is a business location that provides services in Japan decided upon by an organization authorized by the foreign company, and ordinarily is not expected to engage in independent decision making. A branch office does not have its own legal corporate status, but instead is deemed to be encompassed within the corporate status of the foreign company. In general, therefore, the foreign company is ultimately responsible for all debts and credits generated by the activities of its Japanese branch office. A Japanese branch office, however, may open bank accounts and lease real estate in its own name.

A branch office may begin business operations after registering its establishment with the Legal Affairs Bureau. Branch offices of foreign companies must register in accordance with the registration requirements for Japanese corporations of most similar form to that of the foreign company. In order to select the most similar form of Japanese corporations and to determine the information to be registered, reference should be made to the foreign company's articles of incorporation, establishment certificate, registration certificate, and other such documentation. Once the details of the branch office to be registered, the address of the branch office, the representative in Japan, the date of establishment of the branch office and the disclosure method for balance sheets, are determined, the information that must be registered can be ascertained.

Document(s) certifying the information to be registered must be submitted when applying for registration of the establishment of a branch office, and the certified document(s) must be issued by the competent authorities in the home country of the foreign company. It is often convenient to use an "affidavit" on information for registration certified by that country's embassy/consulate in Japan (if the embassy does not provide notary services, certification by a public notary in home country is required).

PROCEDURES FOR ESTABLISHING A BRANCH OFFICE

1. Determination of branch office information to be registered 2. Examination at the Legal Affairs Bureau of similar corporate names 3. Establishment of branch office (date of branch office establishment is at the branch office's discretion) 4. Preparation of affidavit on establishment of branch office 5. Certification of affidavit by embassy or consulate in Japan (if corresponding embassy does not provide notary services, certification by a public notary in home country is required) 6. Application to the Legal Affairs Bureau for registration of branch office establishment; registration of company seal with the Legal Affairs Bureau 7. Acquisition of certificate on registered information and company seal registration certificate(approx. two weeks after application for registration) 8. Opening of bank account under branch office name

The required time for procedures fulfillment is about one month after determination of branch office information to be registered.

4.2.1.3. SUBSIDIARY COMPANY

A foreign company establishing a subsidiary company in Japan must choose to establish the subsidiary company as a joint-stock corporation (Kabushiki-Kaisha, K.K.), limited liability company (Godo-Kaisha, LLC), or similar entity stipulated by Japan's Corporate Law. Both unlimited partnerships (Gomei-Kaisha) and limited partnerships (Goshi-Kaisha) are granted corporate status under the Corporate Law, but they are rarely chosen in practice because equity participants bear unlimited rather than limited liability. All types of subsidiary companies can be established by completing the required procedures stipulated by law and then registering the corporation. A subsidiary is a separate corporation from the foreign company, so the foreign company will bear the liability of an equity participant stipulated by law for all debts and credits generated by the activities of the subsidiary. Other methods by which a foreign company may invest in Japan using a Japanese corporation but without establishing a subsidiary are by establishing a joint venture with a Japanese enterprise or investment company, and by equity participation in a Japanese enterprise.

Comparison regarding directors of Kabushiki-Kaisha (joint-stock corporations) The case in which a committee is established Small and medium companies Large companies (joint-stock corporations with capital of less (joint stock corporations with capital of 500 than 500 million yen and total liabilities of million yen or more or total liabilities of 20 less than 20 billion yen) billion yen or more) Kabushiki Joto Seigen Kokai Kaisha Kabushiki Joto Seigen Kokai Kaisha Kaisha (publicly Kaisha (publicly (joint-stock corporations traded joint- (joint-stock corporations traded joint- subject to restrictions on stock subject to restrictions on stock the transfer of issued corporations the transfer of issued corporations shares) that are not shares) that are not Kabushiki Joto Kabushiki Joto Seigen Kaisha) Seigen Kaisha) Directors No. Appointment of 1 or more Appointment Appointment of 1 or more Appointment required. Executive officer of 3 or more required. Executive officer of 3 or more with right of required with right of required representation if no representation if no representative director is representative director is appointed (at least one appointed (at least one director with the right of director with the right of representation must have representation must have an address in and reside an address in and reside

in Japan). in Japan). Term 2 years in principle. 2 years 2 years in principle. 2 years Extendable up to 10 Extendable up to 10 years. years. Board of directors Establishment optional. Establishment Establishment optional. Establishment (3 directors or more) Establishment required if required Establishment required if required board of auditors is board of auditors is established. established. Representative director(s) Appointment possible if 2 Appointment Appointment possible if 2 Appointment or more directors of 1 or more or more directors of 1 or more appointed. Executive required. appointed. Executive required. officer with right of Executive officer with right of Executive representation. officer with representation. officer with right of right of representation. representation. At least one director with the right of representation must have an address in and reside in Japan. Executive officers Appointment not possibile Auditors No. 1 or more may be Appointment of 1 or more required Appointment appointed.However, of 3 or more appointment of 1 or more required is required if a board of directors is established and no accounting counselor is appointed Term 4 years in principle. 4 years 4 years in principle. 4 years Extendable up to 10 Extendable up to 10 years. years. Board of auditors Establishment possibile Establishment (3 or more auditors) required Accounting Appointment Appointment possible Appointment necessary auditor Term 1 year Accounting Appointment Appointment possible. Appointment possibile councilor possible However, 1 or more must be appointed if a board of directors is established and no auditor is appointed. Term 2 years in principle. 2 years 2 years in principle. 2 years Extendable up to 10 Extendable up to 10 years. years. An agent of a company newly established under the Corporate Law who must be a certified public tax attorney or certified public accountant. An auditing councilor prepares financial documents in association with the directors, and may not hold another position as well, such as director, auditor, or accounting auditor.

Source: JETRO 2009

Comparison regarding directors of Kabushiki-Kaisha (joint-stock corporations) The case in which a committee is not established Small and medium companies Large companies (joint-stock corporations with capital of (joint stock corporations with capital of less than 500 million yen and total 500 million yen or more or total liabilities liabilities of less than 20 billion yen) of 20 billion yen or more) Kabushiki Joto Kokai Kaisha Kabushiki Joto Kokai Kaisha Seigen Kaisha (publicly traded Seigen Kaisha (publicly traded (joint-stock joint-stock (joint-stock joint-stock corporations corporations that corporations corporations that subject to are not Kabushiki subject to are not Kabushiki

restrictions on the Joto Seigen Kaisha) restrictions on the Joto Seigen Kaisha) transfer of issued transfer of issued shares) shares) Directors No. Appointment of 3 or more required Term 1 year Board of directors Establishment required (3 or more directors) Representative director Appointment not possible Executive No. Appointment of 1 or more required. Appointment of representative executive officer if 2 or more (at least 1 executive officer with the right of representation must have an address in and reside in Japan). Term 1 year Auditors Appointment not possible Board of auditors Appointment not possible (3 or more auditors) Accounting Appointment Required auditor Term 1 year Accounting Appointment Possible (prepares financial statements in collaboration with directors) councilor Term 1 year Auditors committee Establishment required (for auditing, etc. of performance of duties by executive officers). Consists of 3 or more directors, of which at least half must be outside directors. Nominating committee Establishment required (to decide on proposed appointment and dismissal of directors for submission to the general meeting of shareholders). Consists of 3 or more directors, of which at least half must be outside directors. Benefit committee Establishment required (to determine compensation of executive officers, etc.). Consists of 3 or more directors, of which at least half must be outside directors.

Source: JETRO 2009

Subsidiary companies are established through registration with the Legal Affairs Bureau. The application date for registration will also be the date of establishment, and the company may carry out business operations from that date. Some of the documents needed for the subsidiary establishment procedures should be prepared in the home country of the foreign company: document(s) certifying the profile of the foreign company, document(s) certifying the representative authority of the foreign company's representative and document(s) certifying the authenticity of the signature of the foreign company's representative.

The foreign company's articles of incorporation, establishment certificate, registration certificate and other official documents as well as an affidavit notarized by a notary public in the home country of the foreign company are ordinarily used. These documents will be required in completing the procedures for certifying the subsidiary company's articles of incorporation in Japan. These documents may also be needed when requesting a financial institution in Japan to take custody of the subsidiary's capital and issue a capital custody certificate. The capital custody certificate is a certificate issued by a financial institution when the full amount of the subsidiary's capital has been remitted to a special account specified by the financial institution asked to take custody. The certified articles of incorporation and the capital custody certificate will both be needed when applying for registration of company establishment.

PROCEDURES FOR ESTABLISHING A KABUSHIKI-KAISHA (JOINT-STOCK CORPORATION)

1. Determination of profile of joint-stock corporation to be established (the profile should contain information including the following: trade name, location of head office, business objectives, business year, amount of capital, issue price of shares, existence of provisions restricting transfer of shares, existence of board of directors, names of directors and representative directors, terms of directors, names of equity participants, and values of their investments) 2. Examination at the Legal Affairs Bureau of similar corporate names

3. Preparation of joint-stock corporation's articles of incorporation 4. Acquisition of registration certificates, etc. for parent company, and preparation of affidavits regarding profile of parent company and affidavits regarding signatures of representatives of parent company (affidavits must be attested by a public notary in equity participants' own countries; if an individual or corporation with an address in Japan is the promoter of a joint-stock corporation and a foreign enterprise is the underwriter of shares in that corporation when it is established - such a situation is called a "formation with outside offering," or Boshû Setsuritsu - affidavits regarding the parent companies may not be required) 5. Notarization of joint-stock corporation's articles of incorporation by Japanese notary public 6. Application to bank for capital custody and issue of capital custody certificate (if a joint-stock corporation is incorporated with the joint equity participation of an individual or corporation with a bank account in Japan, it may not be necessary to apply to a bank for capital custody and issuance of a capital custody certificate. In this case, it is sufficient for the capital to be paid into the joint equity participant’s bank account in Japan, and for documentary evidence to be submitted by the representative director of the joint-stock corporation in place of a bank-issued capital custody certificate in order to certify that payment of the full amount of capital has been received) 7. Remittance of joint-stock corporation capital to special bank account 8. Appointment of directors and other officers, such as representative directors and auditors 9. Examination by directors and auditors of legality of establishment procedures 10. Application to the Legal Affairs Bureau for registration of joint-stock corporation establishment (joint- stock corporation establishment date); registration of company seal with the Legal Affairs Bureau 11. Acquisition of certificate on registered information and company seal registration certificate (approx. two weeks after application for registration) 12. Opening of bank account under company name 13. Notification of stock acquisition to the Bank of Japan (notification prior to company establishment may be required in certain sectors)

The time requirements for fulfilling of the procedures is about two months after determination of profile of company to be established. While in this case shares issued when the joint-stock corporation is established are shared by the promoter and foreign enterprise, the joint-stock corporation may be made a 100% subsidiary of the foreign enterprise by subsequently transferring the shares held by the promoter.

The required articles of incorporation list absolute matters and relative matters. Absolute matters are matters that must be stated for the articles of incorporation to be valid, and relative matters are matters that do not have legal effect unless stated in the articles of incorporation. In the case of Kabushiki-Kaisha (joint-stock corporations) matters listed in articles of incorporation are as follows:

 Articles of incorporation of Kabushiki-Kaisha (joint-stock corporations) o Absolute entries . Purpose . Trade name . Place of principal office . Value or minimum amount of assets contributed at time of incorporation . Name and address of each promoter o Main relative entries . Names of persons contributing in kind . Assets to be contributed . Value of the assets, and number and type of shares assigned therefore . Assets to be taken over after the coming into existence of the corporation, value thereof, and name of transferor

. Incorporation expenses incurred by the corporation . Appointment of auditor(s) . Appointment of board of directors . Rules on allocation of profits

PROCEDURES FOR ESTABLISHING A GODO-KAISHA (LIMITED LIABILITY COMPANY)

1. Determination of profile of Godo Kaisha to be established (this profile should contain information including the following: trade name, location of head office, business objectives, business year, amount of capital, names of members (equity participants) and values of their subscriptions, names of representative members, and names of executive officers (representative members in the case of a corporation) 2. Examination at the Legal Affairs Bureau of similar corporate names 3. Acquisition of certification regarding equity participants (in equity participants' own countries): a. Acquisition of registration certificates, etc. for companies that will become equity participants, and preparation of affidavits regarding profiles of companies that will become equity participants and affidavits regarding signatures of representatives of companies that will become equity participants (affidavits must be attested by a public notary in equity participants' own countries) 4. Acquisition of certification regarding equity participants (in Japan): a. Acquisition of registration certificates for companies that will become equity participants b. Acquisition of seal certificates for individuals/companies that will become equity participants 5. Preparation of Godo Kaisha's articles of incorporation 6. Payment by members of investment stipulated in articles of incorporation 7. Application to the Legal Affairs Bureau for registration of establishment of Godo Kaisha (Godo Kaisha establishment date), registration of company seal with the Legal Affairs Bureau 8. Acquisition of certificate of registered information and company seal registration certificate (approx. two weeks after application for registration) 9. Opening of bank account under company name 10. Notification of stock acquisition to the Bank of Japan (notification prior to company establishment may be required in certain sectors)

The time requirement for fulfillment of the procedures is about one month after determination of profile of company to be established.

In the case of Godo-Kaisha (limited liability companies) matters listed in articles of incorporation are as follows:

 Articles of incorporation of Godo-Kaisha (limited liability companies) o Absolute entries . Purpose . Trade name . Place of principal office . Names and addresses of members . Statement that all members are limited liability members, and the purpose and value of members' contributions o Relative entries . Relative entries may be freely determined provided that they do not contravene the Corporate Law

4.2.1.4. LIMITED LIABILITY PARTNERSHIP (LLP)

It is also possible to do business by using a Yugen Sekinin Jigyo Kumiai. This type of entity, considered the Japanese version of a limited liability partnership (LLP), is not a corporation, but a partnership formed only by the equity participants, who have limited liability.

LLPs are also distinguished by the fact that internal rules can be freely determined by agreement between the equity participants, and that taxes are levied on profits allocated to equity participants without LLPs themselves being liable for taxation.

A limited liability partnership is formed when two or more individuals or corporations conclude a limited liability partnership agreement, pay the investment specified in the agreement, and register the entity thus established. As the law does not describe in detail how LLPs should operate, unlike in the case of joint-stock corporations, details are laid down in LLP agreements. Accordingly, finalizing the content of the LLP agreement is the most important stage in the process of establishment of an LLP. Furthermore, as a partnership must be established with an individual resident in Japan or a Japanese corporation, several documents need to be prepared by both Japanese party and the foreign party.

PROCEDURES FOR ESTABLISHING A LIMITED LIABILITY PARTNERSHIP

1. Determination of profile of LLP (the profile should contain information including the following: name of partnership, location of business establishment, business objectives, business year, names of members and their investments, date of entry into effect of the LLP agreement, and period of existence) 2. Examination at the Legal Affairs Bureau of similar corporate names 3. Acquisition of certification regarding partners (in partners' own countries): Acquisition of registration certificates, etc. of companies that will become partners, and preparation of affidavits regarding profiles of companies that will become partners and affidavits regarding signatures of representatives of companies that will become partners (affidavits must be attested by a public notary in partners' own countries) 4. Acquisition of certification regarding partners (in Japan): a. Acquisition of registration certificates of companies that will become partners b. Acquisition of seal certificates of individuals/companies that will become partners 5. Conclusion of limited liability partnership agreement 6. Payment by partners of investments specified in agreement 7. Application to the Legal Affairs Bureau for registration of LLP, registration of partnership seal with the Legal Affairs Bureau 8. Acquisition of certificate of registered information and partnership seal registration certificate (about two weeks after application for registration) 9. Opening of bank account under partnership name

The time requirement is about one month after determination of profile of partnership to be established.

Limited liability partnerships (LLPs) agreements should contain absolute matters (validating the agreement) and relative (optional) matters, in the following form:

 Limited liability partnerships (LLPs) agreements o Absolute entries in partnership agreements . Business name . Location of office

. Names and addresses of partners . Date of entry into effect and duration of partnership agreement . Purpose and value of partners' contributions . Accounting year of partnership o Main relative entries in partnership agreements . Statement that unanimous agreement of partners is not required for alterations to the partnership agreement . Statement that unanimous agreement of partners is not required for decisions on conduct of business

4.2.2. REGISTRATION CERTIFICATE

It is important to add that once registration of establishment has been completed for a Japanese branch office or a subsidiary company, a certificate on registered company information can be obtained from the Legal Affairs Bureau. The certificate on registered company information is a document officially certifying a company's registered information.

The principal information to be registered for a joint-stock corporation is as follows:

 Corporate name  Location of head office  Business purposes  Method of giving public notice  Total number of shares to be issued  Types and numbers of outstanding shares  Rules on the limitation of transfer of shares  Amount of capital  Directors and dates of appointment  Representative directors and dates of appointment  Auditors and dates of appointment  Date of company establishment

The certificate on registered company information must ordinarily be presented whenever opening a bank account, filing notifications with administrative authorities, purchasing assets for which name registration is required (real estate, securities, vehicles, telephone lines, etc.), and concluding important agreements with business partners.

On certain occasions, the company seal registration certificate will need to be submitted along with the certificate on registered company information. The company seal registration certificate is a document publicly certifying the company seal that has been registered. This certificate is used to confirm whether or not company seals placed on applications, filings, contracts, etc., have been placed there with legitimate authorization from the company; the certificate may be obtained from the Legal Affairs Bureau after completion of establishment registration. The company seal as well as the names of the persons authorized to use the seal must be registered with the Legal Affairs Bureau when applying for establishment registration. The representatives of the branch office or subsidiary company are the only parties authorized to use the company seal, and their personal seal registration certificates or signature certificates must be presented when registering the company seal.

In the event of changes to the registered information or the company seal, the prescribed modification procedures must be completed promptly. Applications for registration of changes to registered information

must be submitted to the Legal Affairs Bureau within two weeks of the changes for subsidiary companies, and within three weeks of the changes for branch offices.

4.3. TAXES

In accordance to legal acts regulating taxation in Japan, the chapter concerning the forms of taxes associated with business operations of the planned export development has been prepared, based upon the information published by JETRO - Japan External Trade Organization.

Corporations engaged in economic activities in Japan are subject to taxes in Japan on the profits generated by those economic activities.

The tax system however does not impose unfair burdens on multinational corporations engaged in economic activities in Japan on the basis of the mode of their business presence in Japan. All income of corporations established in Japan is, as a rule, subject to taxation, regardless of where it was generated (i.e., the source country of income), but when that income includes profits earned in foreign countries that are taxed in the source countries of that income, foreign taxation deductions are available whereby taxes paid in a foreign country may within certain bounds be deducted from Japanese taxes owed for the purpose of eliminating double taxation between the source country of income and Japan.

Measures have also been implemented to avoid international double taxation in Japan of foreign corporations’ Japanese branches, among these being making only certain income generated within Japan subject to taxation in Japan.

Multinational corporations engaged in activities in Japan that earn income subject to taxation in Japan calculate and pay the taxes owed through withholding procedures or self-assessed income tax procedures according to their form of corporation and type of income.

In Japan there are certified public accountants and tax accountants, specialists providing accounting and tax support to companies operating in Japan. Both are qualification recognized by law, and only persons with these qualifications may engage in legally stipulated monopoly businesses. Certified public accountants enjoy a monopoly on the performance of audits under the Certified Public Accountant Law, while tax accountants have a monopoly on tax agent services, preparation of tax documentation and tax consultations under the Certified Tax Accountant Law. In addition to their respective monopoly businesses, both provide multi-faceted services such as accounting and business consulting.

4.3.1. DOMESTIC SOURCED INCOME TAXATION

The scope of taxable income for corporate tax differs by the mode of activity of a foreign corporation in Japan.

For the purpose of determining the income of non-residents and foreign corporations subject to withholding tax, domestic-sourced income is defined as follows:

1. Interest on public and corporate bonds, interest on savings and deposits derived from offices in Japan 2. Interest on loans for business operations in Japan 3. Dividends on shares or securities investment trusts of domestic corporations 4. Consideration for use of real estate or similar property in Japan; rental of ships or aircraft to residents or domestic corporations 5. Salaries, wages, bonuses and other compensation for the provision of services in Japan 6. Retirement allowances and pensions for services rendered by residents 7. Consideration for the services of freelance professionals in Japan

8. Consideration for personal services rendered by entertainers, freelance professionals, technicians, etc. 9. Usage fees or consideration for transfers of patent rights, know-how, copyrights, etc., in connection with services in Japan 10. Usage fees for machinery and equipment in connection with services in Japan 11. Prizes offered in Japan for publicity/advertising purposes 12. Pensions paid on the basis of agreements concluded in Japan 13. Profit on redemption of discount bonds issued in Japan 14. Income resembling fixed-interest income 15. Certain income from the transfer of real estate in Japan 16. Distribution of profits in accordance with a silent partnership contract (Tokumei Kumiai contract) 17. Certain income other than the above derived from the management, ownership, or transfer of assets in Japan 18. Business income 19. Distribution of profits pursuant to a partnership agreement provided for by Civil Law, and other kindred partnership agreements

4.3.2. CORPORATE INCOME TAXES

The taxes levied in Japan on income generated by the activities of a corporation include corporate tax (national tax), corporate inhabitant tax (local tax), enterprise tax (local tax), and special local corporate tax (local tax), hereinafter collectively referred to as corporate taxes.

Except in instances requiring exceptional treatment, the scope of income subject to corporate inhabitant tax and enterprise tax is (including special local corporate tax; the same applies below) determined, and the taxable income calculated, in accordance with the provisions for corporate tax. Corporate inhabitant taxes are levied not only on income but also on a per capita basis using the corporation's capital and the number of its employees as the tax base. Corporations having paid-in capital of more than 100 million yen are subject to enterprise tax on a pro forma basis.

The income calculated for each business year is used as the tax base for determining these corporate taxes to be levied on a corporation's income. Other corporate taxes include corporate taxes on liquidation income and corporate taxes on reserves for retirement pensions, etc.

The tax rates for corporate tax, corporate inhabitant tax and enterprise tax on income (tax burden on corporate income) and per capita levy on corporate inhabitant tax for each taxable year are shown below (a small company in Tokyo is used as an example). The rates for local taxes may vary somewhat depending on the scale of the business and the local government under whose jurisdiction it is located.

Tax burden on corporate income Brackets of taxable income Up to 4 million yen 4 million yen Over to 8 million yen 8 million yen Corporate tax 18.00% 18.00% 30.00% Inhabitant taxes 1. Prefectural 0.90% 0.90% 1.50% 2. Municipal 2.21% 2.21% 3.69% Enterprise tax 2.70% 4.00% 5.30% Special local corporate tax 2.30% 3.30% 4.30% Total tax rate 26.11% 28.41% 44.79% Effective tax rate 24.87% 26.48% 40.87%

Source: JETRO 2009

The applicable period for the 18% corporate income tax rate is for business years ending between April 1, 2009 and March 31st, 2011.

The rates for corporate inhabitant tax and corporate enterprise tax are shown using Tokyo as an example. The following conditions apply:

 The capital of the corporation is 100 million yen or less.  Corporate tax amount is 10,000,000 yen or less and taxable income is 25,000,000 yen or less.  Offices or factories located in up to two prefectures.

The following tax rates will apply for business year ending on or after April 1, 2011 (Apply only to corporations meeting the above conditions.)

Tax burden on corporate income after April 1st, 2011 Brackets of taxable income Up to 4 million yen 4 million yen Over to 8 million yen 8 million yen Corporate tax 22.00% 22.00% 30.00% Corporate inhabitant taxes 1. Prefectural 1.10% 1.10% 1.50% 2. Municipal 2.70% 2.70% 3.69% Enterprise tax 2.70% 4.00% 5.30% Special local corporate tax 2.30% 3.30% 4.30% Total tax rate 30.80% 33.10% 44.79% Effective tax rate 29.33% 30.85% 40.87%

Source: JETRO 2009

Per capita levy on corporate inhabitant tax Capital amounts Employee number Per capita levy Over 5,000,000,000 yen - Over 50 3,800,000 yen Over 1,000,000,000 yen Or under 5,000,000,000 yen Over 50 2,290,000 yen Over 5,000,000,000 yen - Or under 50 1,210,000 yen Over 1,000,000,000 yen Or under 5,000,000,000 yen Or under 50 950,000 yen Over 100,000,000 yen Or under 1,000,000,000 yen Over 50 530,000 yen Over 100,000,000 yen Or under 1,000,000,000 yen Or under 50 290,000 yen Over 10,000,000 yen Or under 100,000,000 yen Over 50 200,000 yen Over 10,000,000 yen Or under 100,000,000 yen Or under 50 180,000 yen - Or under 10,000,000 yen Over 50 140,000 yen - Or under 10,000,000 yen Or under 50 70,000 yen

Source: JETRO 2009

4.3.2.1. TAX NOTIFICATION AFTER REGISTRATION

When a Japanese corporation or a branch office is newly established in Japan in accordance with Japanese law, tax notification pertaining to start-up must be submitted to tax authorities within a prescribed period after establishment. Tax notification must also be submitted when a foreign corporation generates income subject to corporate tax in Japan without establishing a branch office or when carrying out business activities through locations or parties meeting the conditions below instead of opening a branch office.

In the following cases a foreign corporation carrying out activities without establishing a branch office is required to submit tax notification:

 When construction, installation, assembly or other works, or control and supervision of such works extends for a period of more than one year.  When engaging in business through certain agents, as described below: o Parties having and frequently exercising the authority to conclude business agreements on behalf of that foreign corporation. o Parties storing assets on behalf of that foreign corporation in a volume/quantity corresponding to the ordinary requirements of customers and delivering those assets in response to customers' requests. o Parties who regularly carry out an important portion of the work required for order acquisition, consultation and other activities aimed at the conclusion of business agreements solely or primarily on behalf of a foreign corporation.

4.3.2.2. REPRESENTATIVE OFFICES

The income derived from the activities of a "representative office" through which a foreign corporation engages in business in Japan is not considered taxable as long as the representative office is used only for functions that serve an auxiliary role in publicity/advertising, information provision, market surveys, basic research and other business activities of that corporation.

The income derived from the activities of an office or other place of business in Japan used by the foreign corporation only for the purchasing or the storage of assets is also not considered taxable.

4.3.2.3. SCOPE OF INCOME SUBJECT TO CORPORATE TAX

Corporations established in Japan are subject to taxes in Japan on their worldwide income, whether earned in Japan or other countries. Corporations established in foreign countries are grouped into one of the following three tax classifications, and the aforementioned domestic-sourced income of these corporations is subject to corporate tax, corporate inhabitant tax and enterprise tax in Japan corresponding to their classifications. The corporations under third category below are not subject to corporate inhabitant tax and enterprise tax.

Below the relationship between a foreign corporation's mode of activity in Japan and its taxable income is illustrated:

1. Foreign corporations having a certain fixed place of business, such as a branch, sub-branch, business establishment, office, or factory in Japan. o All domestic-sourced income. Representative offices as described above that serve in an auxiliary capacity in corporations' business activities are not included among these locations. 2. Foreign corporations conducting business through the locations or parties stipulated in 4.3.2.1. above. o Business income, the domestic-sourced income described in 4.3.1. 4), 8), 15) and 17) above and other domestic-sourced income derived from business in Japan. 3. Foreign corporations not corresponding to either 1) or 2) above. o The domestic-sourced income described in 4.3.1. 4), 8), 15) and 17) above.

Locations, sites, agents, etc. falling under first and second of listed above categories are called permanent establishments.

4.3.2.4. CALCULATION OF INCOME SUBJECT TO CORPORATE TAX

The amount of income used as the tax base for corporate taxes on income for each taxable year is determined by making the necessary tax adjustments to corporate profits calculated using accounting standards generally accepted as fair and appropriate. Costs and expenses incurred in earning profits are deductible, except in certain exceptional instances (examples provided below).

Foreign corporations face no restrictions on the locations in which costs and expenses deductible from Japan- sourced taxable income may be incurred. However, detailed statements of costs and expenses incurred overseas and deducted from income in Japan must be prepared, and these costs and expenses allocated fairly in accordance with the arm's-length principle.

Examples of items for which there are limits on deductible costs and expenses:

 Corporate taxes and penalties  Nondeductible amount for donations  Nondeductible entertainment expenses  Amount of allowance reserves transferred  Amount exceeding depreciable limit of depreciable and deferred assets  Write-down of assets  Bonuses or retirement benefits for directors

4.3.2.5. REMITTANCES TO HOME COUNTRY

Remittances made by a branch of a foreign corporation to its head office are in principle free from taxation. In other words, the payer branch cannot as a general rule treat such remittances as expenses, and consequently these same remittances may not be treated as income by the recipient head office.

On the other hand, remittances made by subsidiary companies to their parent company are generally regarded as payments of costs/expenses, distributions of profits or loans (or repayments of loans). Certain of these remittances may be deducted as expenses by the payer subsidiary companies, while others may be regarded as income by the recipient parent company. Some of the payments regarded as income by the parent company (e.g., payments of interest, dividends or usage fees) require withholding of income tax at the source at the time of payment.

4.3.2.6. TAXATION OF RETAINED EARNINGS OF FAMILY CORPORATIONS

A Japanese corporation that is a family corporation and meets certain conditions is subject to taxation of retained earnings as well as corporate tax on ordinary income. Taxation of retained earnings is calculating by multiplying the taxable amount of retained earnings (obtained by subtracting the retained earnings deductible from the amount of retained earnings in each business year) by the special tax rate. The special tax rate varies according to the taxable earnings. If annual the taxable earnings does not exceed 30 million yen, it is subject to a tax rate of 10%. However, if the taxable earnings exceeds this amount, a rate of 15% is charged on the amount in excess of 30 million yen and up to 100 million yen, and any amount in excess of 100 million yen is taxed at a rate of 20%.

4.3.2.7. TREATMENT OF LOSSES

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Net losses under income in each business year are carried forward for the next seven years. Losses may only be carried forward in this way if a blue form tax return is filed in the business year in which the loss arose, and a final tax return is then filed every subsequent year. Corporations that file a blue return are also allowed to carry back a loss to the business year commencing not more than one year prior to the date of commencement of the business year in which the loss arose, and receive a full or partial refund of the amount of corporate tax in the business year in which the loss was carried back. However, this system of carrying back had been suspended except under certain conditions, such as for losses of small and medium-sized enterprises arising in the five business years following the year of original establishment, for business years ending on or before January 31st, 2009.

4.3.2.8. CORPORATE REORGANIZATION TAX SYSTEM

If a corporation transfers assets as a result of a split, merger, or investment in kind of reorganization, gain or loss from the transferred assets is as a rule subject to taxation. However, reorganizations meeting certain conditions, such as those within the same business group or those undertaken for the purpose of a joint venture, are treated as qualified reorganizations, and qualify for deferment of taxation of gain or loss on the transferred assets.

4.3.2.9. FILING OF TAX RETURN AND PAYMENT OF CORPORATE TAXES

1. Final tax return and tax payment Corporations must file a final tax return for corporate tax, corporate inhabitant tax and enterprise tax on their income within two months from the day following the last day of each taxable year. An extension of the deadline for filing a final tax return may be requested, with approval from the director of the taxation office, when a corporation is unable to file a final tax return because the accounting auditor has not completed the audit or because accounts remain unsettled for other unavoidable reasons. The income and tax amounts to be entered in the final tax return must be calculated in accordance with the statement of accounts approved by the general meeting of stockholders. The calculated tax must also be paid within this period. The payment deadline will not be extended even if the deadline for filing of a final tax return is extended as described above. Any interim payment made in advance on the amount of tax owed shall be deducted from the total amount to be paid. 2. Interim tax return and tax payment Corporations whose taxable years exceed six months must file an interim return, within two months from the day marking the end of the first six months of the taxable year, an interim tax return for the period starting on the first day of that taxable year and ending on the day six months thence, and must pay the interim amount of tax owed. 3. Blue form returns Tax return forms for corporations come in two formats: white forms and blue forms. A corporation may file a blue form tax return with approval from the appropriate national tax office. Corporations filing blue form tax returns enjoy a variety of tax benefits. To receive approval from the tax office to file a blue form tax return, a corporation must submit an application for approval prepared in the prescribed format no later than the day prior to the starting day of the taxable year. Newly established subsidiary companies and foreign corporations establishing new branch offices in Japan must submit the application for approval no later than the day prior to either the day marking three months since the establishment of the corporation/branch or the last day of the corporation's/branch's initial taxable year after establishment, whichever comes first.

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4.3.2.10. IMPOSITION OF ENTERPRISE TAX ON A PRO FORMA BASIS

Corporations whose capital or investment exceeds 100 million yen are taxed on a pro forma basis using income, added value, and capital as the taxable base. The standard tax rates for income, added value and capital has been presented in the table below:

The standard tax rates for income, added value and capital

Income levy To September 30th, 2008 From October 1, 2008 Up to 4 million yen per year 3.8% 1.5% Over 4 million yen and up to 8 million yen per year 5.5% 2.2% Over 8 million yen per year 7.2% 2.9% Added value levy 0.48% Capital levy 0.20% Special local corporate tax 148% of income levy

Source: JETRO 2009

Due to the introduction of special local corporate tax, the standard tax rate for income was revised from the taxable year beginning on or after October 1st, 2008. In addition a special local corporate tax has been newly levied at a rate of 148% of the income levy.

For companies with offices and factories located in three or more prefectures, a uniform standard income tax rate of 2.9% is applied to calculate the income tax levy (effective from October 1st, 2008).

As noted by JETRO the tax rates may differ from the standard tax rate depending on the local government concerned.

4.3.2.11. WITHHOLDING INCOME TAX

Income tax takes two forms: self-assessed income tax and withholding income tax. In contrast to self-assessed income tax, which is levied on the income of individuals, withholding income tax is assessed against payments of certain taxable income, whether made by an individual or a corporation. Income subject to withholding income tax is determined in accordance with the tax classification of the recipient of that income.

WITHHOLDING AT SOURCE AND PAYMENT PROCEDURES

Persons who pay income subject to withholding at source must pay the taxation office the amount of tax withheld at source no later than the 10th day of the month following that in which the income was paid. However, when payer with a domicile or business office in Japan pays income to a non-resident or a foreign corporation in another country, the withholding income tax may be paid by the last day of the month following that in which the income was paid. Regarding withholding tax paid on residents' salaries, a special exemption is provided for small businesses with fewer than 10 persons on the payroll that allows them to elect to pay withholding income tax in six-month installments twice a year (up to July 10th and up to January 10th, or January 20th if a business opts for the special exemption).

WITHHOLDING TAX ON RESIDENTS

Payments made in Japan of the following income to residents are subject to withholding at source:

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 Interest (including profit on redemption on specified discount bonds)  Dividends  Salary, wages, bonuses and similar compensation  Retirement allowances  Certain compensation, fees, etc., to persons other than employees

WITHHOLDING TAX ON DOMESTIC CORPORATIONS

Payments made in Japan of the following income to domestic corporations are subject to withholding at source:

 Interest (including profit on redemption on specified discount bonds)  Dividends  Horse racing prizes received by horse owners  Distribution of profits in accordance with a Tokumei Kumiai contract

WITHHOLDING TAX ON NON-RESIDENTS AND FOREIGN CORPORATIONS

Payments made in Japan of the income described in 4.3.1. 1)-16) and 19) above (Domestic-sourced income) to a non-resident or a foreign corporation, or such payments made overseas by payers with a domicile or business office, etc. in Japan, will be subject to withholding income tax. Of these payments, payments of certain categories of income as prescribed for non-residents and for foreign corporations to a non-resident or a foreign corporation with a permanent establishment within Japan are exempt from withholding taxation, provided that a certificate from the taxation office is presented to the payer attesting that the income will be attributed to that permanent establishment and will be added to and counted as business income subject to self-assessment for tax purposes.

4.3.2.12. TAX TREATIES

Japan has concluded tax treaties with many countries for the purposes of avoiding double taxation of income internationally and preventing tax evasion. Particularly Japan has signed the tax treaty also with Poland.

The provisions of tax treaties supersede those of domestic law. In determining the tax liability in Japan of individuals and corporations domiciled in a country with which Japan has a tax treaty, the location of the source of income deemed taxable income under Japanese law (specifically the provisions concerning where the income upon which taxation is based is generated) may at times be amended to accord with these tax treaties. Provisions have also been established in Japan for reducing the tax on, or exempting from tax, various types of income sourced in Japan.

Beyond tax treaty with Poland, Japan has also signed tax treaties with most of the developed countries.

4.3.3. CONSUMPTION TAX

The following domestic and import transactions, except for certain transactions deemed non-taxable, are subject to consumption tax. The consumption tax rate is 5% (national consumption tax rate of 4% and local consumption tax rate of 1%).

1. Domestic transactions: the transfer / loan of assets or the provision of services as a business in Japan by a company for consideration. 2. Import transactions: cargo retrieved from a bonded zone.

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Financial transactions, capital transactions, and certain transactions in the areas of medical care, welfare and education are deemed non-taxable. Export transactions and export-like transactions such as international communications and international transport are exempt from consumption tax.

4.3.3.1. SELF-ASSESSMENT AND PAYMENT

Companies engaged in domestic transactions and parties engaged in import transactions must file and pay taxes on their respective set tax bases. To ensure that double taxation does not occur at the production and distribution stages, a scheme has been adopted allowing the deduction of consumption tax on purchasing from consumption tax on sales.

4.3.3.2. DEDUCTION OF PURCHASE TAX

Consumption tax on purchasing (receipt of the transfer / loan of assets or the provision of services from another party) may be deducted from consumption tax on the taxable base when calculating the amount of consumption tax to be paid. The amount of this deduction is limited, however, depending on the percentage of taxable sales. If taxable sales during the base period amounted to 50 million yen or less, the product of consumption tax on the taxable base multiplied by a given percentage determined by industry may be considered the consumption tax on purchasing for the current taxable year and allowed as a deduction if the prescribed notification is submitted to the director of the tax office.

4.3.3.3. TAX EXEMPT ENTERPRISES

Corporations whose taxable sales are 10 million yen or less for the base period, can elect to forego tax liability exemption to qualify, as taxpayers, for deduction or refund of the amount paid as consumption tax on their purchases. However, a company that has no base period, such as a newly established company, whose capital at the start of the taxable year is 10 million yen or more cannot be a tax-exempt enterprise in that taxable year. In case where a corporation's base period is not one year, the taxable sales during the base period are the amount obtained by prorating the balance during the above-mentioned base period. The prorating is made by first dividing the above balance by the total number of months in the accounting period included in the base period and multiplying the result by 12. The base period is the full accounting period two years prior to current accounting year. A corporation may not have a full base period if it was a) newly established or b) changed its accounting period during the two-year prior period. The base period for such corporation is found by combining all accounting periods that commenced during this two-year prior period.

4.3.4. PERSONAL TAX

All individuals, regardless of nationality, are classified as either residents or non-residents. Individual income tax comprises self-assessed income tax and withholding income tax. Self-assessed income tax will be levied on the individual's income for the calendar year.

The concept of residence and taxable income is as follows:

1. Residents Persons having a domicile in Japan and persons having a residence in Japan for one year or more are termed residents. The worldwide income of residents, regardless of the location of the source of income, is subject to income tax. o Non-permanent residents

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Residents having no Japanese citizenship and having a domicile or residence in Japan for less than five years within the period of ten years are non-permanent residents. The scope of taxation for non-permanent residents corresponds to that for residents, but tax will not be assessed in Japan on income sourced outside Japan as long as that income is not paid within Japan or is not remitted to Japan. 2. Non-residents Persons not qualifying as residents are termed non-residents. Japanese income tax for non-residents will be assessed on income sourced within Japan. As described above, the scope of taxable income for withholding tax on non-residents is covered under the provisions for domestic-sourced income, so, except in special cases, taxation for non-residents is now more commonly completed through withholding at source procedures.

Domicile as used above refers to the principal base and center of one's life. "Residence" refers to a location in which an individual continually resides for a certain time but which does not qualify as a base and center of his/her life.

4.3.4.1. SELF-ASSESSED INCOME TAX

1. Self-assessed income tax on residents Income is calculated using methods established for each of a number of income classifications. The tax is calculated by subtracting the various income deductions from the total amount of income and then multiplying the difference, which is the amount of taxable income, by the progressive tax rates below. Any withholding income tax levied on the income beforehand will be deducted from the calculated tax. 2. Self-assessed income tax on non-residents Non-residents are classified by their circumstances into (a) non-residents having an office, etc., in Japan, (b) non-residents continuously engaged in construction or assembly in Japan for one year or more, or doing business through a designated agent in Japan, or (c) other non-residents. Taxable income is calculated within the scope of income established for each classification described above. The amount of self-assessed income tax levied on non-residents is, as a rule, calculated in the same manner as for residents (subject to certain limits such as non-application of applicable income deductions and foreign tax deductions). Non-residents who earn salary income paid for services provided in Japan and not deemed subject to withholding tax in Japan must file a return and pay a 20% tax on the total amount of that salary. 3. The tax rates for self-assessed income tax on individual income (in the case of residents and of aggregate taxation of non-residents) are as shown below.

Individual income tax rates Brackets of taxable income Tax rates - < 1 950 000 yen 5% > 1 950 000 yen < 3 300 000 yen 10% > 3 300 000 yen < 6 950 000 yen 20% > 6 950 000 yen < 9 000 000 yen 23% > 9 000 000 yen < 18 000 000 yen 33% > 18 000 000 yen - 40%

Source: JETRO 2009

4.3.4.2. WITHHOLDING INCOME TAX

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The withholding income tax for residents and non-residents is as described in chapter 4.3.2.11.

4.3.4.3. FILING AND PAYMENT

Residents must submit an income tax return for the income earned each year, except when tax payment procedures have been completed through withholding at source, and must pay the tax owed between February 16th and March 15th of the following year. Persons whose total income does not exceed total deductions and persons who receive salary income subject to withholding tax from only one payer not exceeding 20 million yen and who have no other income do not need to file a return.

However, non-residents leaving Japan without designating a tax agent and reporting this fact to the director of the taxation office must submit an income tax return and pay the tax owed prior to leaving Japan.

4.3.4.4. INDIVIDUAL RESIDENTIAL TAXES, INDIVIDUAL ENTERPRISE TAX

Individual residential taxes is the collective term for prefectural tax and municipal tax on individual income, and persons having a domicile in Japan as of January 1st each year are subject to these taxes. Individual residential taxes are assessed on income for the preceding year and, except in special cases, taxable income for these taxes is calculated in accordance with the provisions for calculating income for income tax purposes. Residential tax returns must be filed by March 15, but persons submitting self-assessed income tax returns do not have to file again for individual residential tax. The standard rates of individual residential taxes are as shown below:

Individual residential tax rates Prefectural tax rate Uniformity 4% Municipal tax rate Uniformity 6%

Source: JETRO 2009

As indicated by JETRO the tax rates may differ from the standard tax rate depending on the local government concerned.

Individuals engaged in certain businesses specified in local tax laws must pay enterprise taxes. Taxable income for enterprise tax purposes is generally calculated in accordance with the provisions for calculating income for income tax purposes, except where special stipulations apply. Returns must be filed by March 15th, and taxes must be paid in August and November in accordance with tax notices issued by the prefectural government. Individual enterprise tax rates range from 3% to 5%, depending on the type of business.

4.3.5. OTHER PRINCIPAL TAXES

There are a variety of other taxes levied on income, the acquisition/ownership of assets, consumption and other transactions in addition to those described above. Taxes levied on the ownership of assets to which many businesses are subject include the fixed asset tax (depreciable property tax) and the city planning tax. Land, structures and depreciable assets for business use are subject to a fixed asset tax (depreciable property tax) of 1.4%, payable by the owners of said property as of January 1st each year. The city planning tax is surtax on the fixed asset tax, and is levied at a rate of 0.3% on land and structures within city planning zones. Companies in major cities such as Tokyo and Osaka having facilities exceeding 1000 square meters in floor space and / or having more than 100 employees are subject to business office taxes. The tax rates are 600 yen per square meter of floor space and 0.25% of the total amount of employee salaries.

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Furthermore, there is a registration and license tax levied for the registration of real estate / companies and the issue of business licenses, as well as a stamp duty payable as a tax on stipulated documents. Gift tax, inheritance tax and other special-purpose taxes must also be borne in mind.

4.3.6. OTHER TAXATION REGARDING INTERNATIONAL TRANSACTIONS

 Foreign tax credits In order to avoid double taxation of income internationally, a domestic corporation is allowed to credit foreign taxes imposed on its business against Japanese tax up to the creditable limit, and to credit foreign taxes imposed on a foreign subsidiary against Japanese tax up to the creditable limit.  Transfer pricing taxation In order to prevent corporations from setting the prices for transactions with a parent company or other overseas affiliate at a different amount from ordinary (i.e. arm's-length) prices so as to transfer profits overseas, a transaction is treated as having occurred at the arm's length price and the amount of tax calculated accordingly if the income derived from the transaction differs from the arm's length price.  Anti-tax haven taxation In order to prevent domestic corporations from evading taxes by retaining income through a foreign subsidiary established in a so-called tax haven, a domestic corporation is taxed by including in its taxable income an amount corresponding to its interest in the retained earnings of that foreign subsidiary.  Thin-capitalization taxation If a corporation's borrowing from an overseas controlling shareholder exceeds three times its equity (or an alternative reasonable ratio), interest on borrowing corresponding to the excess cannot be deducted from taxable income.

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4.4. EMPLOYMENT AND SALARIES

This chapter concerns employment matters in Japan as described in analysis by JETRO. For foreign companies employing in Japan is important to be aware of local labor rules and customary benefits. Some aspects of employment differ from foreign labor systems and markets, such as the fringe benefits that local labor will expect and the extra responsibilities of the employer for the year ending tax position of the employees. Implementation of the export development strategy will be significantly affected by the salaries that local hires will be expecting.

In Japan employers are generally required to compensate their employees in cash or by way of direct deposit, and salaries are generally paid monthly.

Governmental administration imposes in the case of a full-time employment a minimum salary wage which differs according to the type of industry, area and other specific factors. For example, the minimum wage in the Tokyo area is 719 yen ($8) per hour effective since October 2006. However, competitive wage rates usually exceed the statutory minimum. The table below illustrates the thresholds of Japanese employment salaries in primary departments and positions in companies operating in Japan as of the end of year 2005 (the salary rates are presented in the USD currency).

Annual average salary rates in Japan in USD Department of Position Annual Base Salary Annual Total Cash employment Low Medium High Low Medium High General Head of Organization 226 264 266 509 327 679 260 000 317 864 391 805 Management Finance Head of Finance & 109 658 136 634 159 971 147 168 164 182 191 116 Accounting Accounting Manager 57 449 67 855 78 705 84 520 96 545 106 336 Accountant 31 200 34 145 39 351 43 955 49 827 54 961 Accounts Clerk 25 942 29 291 31 745 37 193 39 736 45 093 Credit & Collections 40 822 42 545 46 124 65 825 72 409 76 333 Supervisor Credit & Collections Clerk 24 332 27 382 29 053 34 009 36 091 38 789 Audit Manager 72 621 79 309 96 021 101 848 120 873 127 521 Human Head of Human Resources 103 900 127 309 156 711 137 854 158 727 185 734 Resources Human Resources 66 914 76 364 87 231 88 684 97 891 114 338 Manager Personnel Clerk 27 407 32 291 48 545 39 362 49 836 71 056 C&B Manager 59 182 65 182 73 609 86 811 92 968 102 298 Administration Office Adm. Manager 65 858 72 000 81 840 90 946 101 227 107 060 Executive Secretary 38 986 44 618 49 877 55 944 62 009 68 080 Secretary 29 215 33 818 38 640 42 009 46 627 55 233 Corporate Legal Counsel 43 068 47 727 62 985 60 721 74 682 91 032 Affairs Information Head of Information 97 456 112 036 124 096 137 974 148 082 167 908 Technology Technology Development Systems Development 59 111 68 891 88 036 88 206 102 986 113 249 Manager Systems Analyst 37 503 43 309 50 228 58 700 65 145 75 550 Analyst Programmer 29 361 34 255 38 939 45 288 51 609 62 698 Computer Operator 39 757 48 545 51 382 58 949 72 555 78 081 Sales and Head of Sales and 125 866 144 982 181 303 155 017 191 155 222 491 Marketing Marketing

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Head of Marketing 101 529 118 145 130 735 141 255 152 509 183 210 Marketing Manager 62 011 67 309 78 062 88 323 98 391 110 381 Brand/Product Manager 50 388 55 527 63 721 76 176 86 341 94 388 Market Analyst 31 190 38 673 46 582 43 088 51 618 63 770 Sales Manager 70 654 84 218 90 801 100 030 115 745 122 697 Regional Sales Manager 56 182 63 055 71 782 86 402 94 200 104 307 Sales Representative 27 273 31 636 36 000 37 855 44 114 50 964 Customer Service Manager 52 738 61 582 72 036 77 750 89 623 97 504 Customer Service Officer 22 364 25 418 28 269 29 744 35 877 39 439 Operations Head of Production 74 902 76 909 86 533 95 819 108 955 133 734 Plant Manager 73 841 81 164 96 733 114 177 120 836 138 267 Head of Quality Assurance 80 660 100 582 112 589 120 462 130 164 153 587 Production 44 182 48 109 49 527 69 947 75 955 80 119 Supervisor/Superintendent Prod. Worker (Skilled) 23 891 27 709 34 036 34 277 40 627 51 628 Maintenance Manager 57 375 68 727 75 974 83 470 96 036 117 890 Technician (Skilled) 31 787 33 164 36 463 48 197 55 964 61 872 Environment Health & 61 244 76 364 90 982 92 656 108 736 125 415 Safety Manager Research & R&D Manager 67 114 69 818 76 364 103 307 115 200 125 709 Development R&D Engineer 36 218 38 945 41 782 55 831 63 182 68 372 Supply & Head of Supply & Logistics 82 607 113 127 123 596 130 685 144 141 152 345 Logistics Head of Purchasing 83 843 90 982 119 494 117 533 132 891 170 788 Warehouse Supervisor 30 133 38 836 51 849 39 991 58 873 77 137 Traffic & Distribution 29 066 33 164 38 863 37 267 46 255 52 566 Coordinator

Source: JETRO 2005

As explained in detail in the above chapter the collection of taxes is focused on the income source. Employees are generally not required to submit an annual income tax return. It is the employer’s responsibility to withhold tax throughout the year, but they are also required to make any necessary year ending adjustments to ensure that the correct amount of tax has been paid to the authorities for each of the employees. In order to fulfill this responsibility, companies need to know many details about the employee’s personal life (for example information on marital status, spouse’s income, number of children, etc.), which might appear intrusive to a foreign business operating in Japan. This is nevertheless a necessary requirement to ensure that the tax withholding is correct.

Foreign companies may be able to pay employees working in Japan without deducting income or social security taxes, under certain circumstances. This applies whether the individuals in question are foreign or Japanese nationals. In order to take advantage of this concession, the payments must be deposited in a foreign bank accounts owned by its employees.

This rule does not apply when deposits are made to Japanese bank accounts. It is recommended that this method of payment be used only at the very early stages of a company’s operations in Japan. Even though there is no legal requirement to do so, it may be advisable to obtain a written declaration from the employees acknowledging their responsibility for filing their individual tax returns and paying the income taxes to the authorities.

Japan has a system of self funded unemployment, retirement, maternity, and occupational accident benefits. All employers are required to make contributions to these funds. The table below illustrates the current rates for health and social insurance as of the year 2006.

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Social and labor insurance rates Employer’s contribution Employee’s contribution Welfare Pension 7.321% of monthly salary and 7.321% of monthly salary and the (nenkin hoken) the first 1.5 million yen of bonus first 1.5 million yen of bonus This provides benefits for old age, Monthly contribution capped at Monthly contribution capped at disability, and/or death. 45 390 yen 45 390 yen Employee Health Pension 4.1% of monthly salary and 4.1% of monthly salary and the (kenkou hoken) the first 2 million yen of bonus first 2 million yen of bonus This provides benefits for Monthly contribution capped at Monthly contribution capped at non-occupational illness/injury. 40 180 yen 40 180 yen Long-Term Health Care 0.615% of monthly salary 0.615% of monthly salary (kaigo hoken) Monthly contribution capped at Monthly contribution capped at This provides benefits for long 6125 yen 6125 yen term care for the elderly. Child Allowance 0.09% of monthly salary and the N/A (jido teyate) first 1.5 million yen of bonus This provides contributions for Monthly contribution capped at child benefit. 558 yen Employment Insurance 0.9% of total compensation 0.6% of total compensation (koyou hoken) This provides benefits to the unemployed. Workers Accident 0.5% of annual compensation N/A Compensation Insurance (rousai hoken) This provides compensation for medical and related expenses arising from a work related accident or illness.

Source: JETRO 2006

For payroll and social insurance purposes, Japan does not use individual identifiers such as social security numbers. Instead, they simply use the name (including the Chinese character and the phonetic spelling) and address for identification. This often leads to problems of compliance reinforcement by the tax authorities. Therefore some foreign companies operating in Japan inadvertently fail to make the required registrations for payroll tax purposes and these companies may not receive immediate notification from the tax authorities that they are in default. However, it should be noted that failure to comply with the registration requirements will be met with penalties which the tax authorities are not likely to waive. Therefore, companies should ensure that they are meeting necessary registration requirements as soon as possible. This situation is likely to change at some point in the future; however, any current discussions regarding the implementation of a numerical style reference system have yet to decide on the most appropriate system.

It is customary to pay seasonal bonuses twice a year (summer and winter). These bonuses are usually not based on individual performance, but rather on a proportion of compensation and the amount is often affected by the company’s operational performance during the year.

A typical fringe benefit would be subsidized commuter costs. Larger corporations may also provide housing to their employees at a subsidized rate. It is also customary for employers to make a lump sum payment to employees when they leave their position of employment, whether through resignation or retirement. This payment tends to be based on years of service and is entirely separate from any pension entitlement that the employee may have.

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Standard working hours in Japan should not exceed eight hours a day and 40 hours a week. However, due to the fact that it is not unusual to see commuting times of one to two hours each way, many offices in Tokyo start work at 9:00 am or 9:30 am. This may be earlier in smaller cities.

Employers must give their employees ten days vacation after 6 months of employment, provided they have worked 80% of the days in the six month period. Employers are then required to add an additional day’s vacation for each year of employment, up to but not exceeding a total of 20 days.

Even though 20 days is the maximum vacation allowed for an employee, Japan has many official holidays. The official holidays are:

 New Year’s Day - January 1st  Adults’ Day - 2nd Monday of January  National Foundation Day - February 11th  Spring Equinox - March 21st  Greenery Day - April 29th  Constitution Day - May 3rd  National Holiday - May 4th  Children’s Day - May 5th  Marine Day - 3rd Monday of July  Respect for the Aged Day - 3rd Monday of September  Autumnal Equinox - September 23rd  Physical Fitness Day - 2nd Monday of October  Cultural Day - November 3rd  Labor Thanksgiving Day - November 23rd  Emperor’s Birthday - December 23rd

In addition to these, most people are permitted an extra three days vacation over the New Year’s season. Many businesses are closed in the first week of the year and for a week in August for Obon Week.

As to retirement matters, companies are generally allowed to set their own retirement age for their employees provided that it is not below the minimum threshold specified by the government. As of May 2005, the minimum threshold for retirement is 60 years.

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4.5. COMMON CUSTOMS

In Japanese culture, which is very old and traditional, a proper etiquette is of great importance in all kinds of situations (both social and professional).

4.5.1. BUSINESS RELEVANT CUSTOMS

Within the widely accepted modern code of etiquette in Japan, a following set of social behaviors that find relation to business is well perceived by Japanese.

BOWING

Bowing (or ojigi, orei) is one of the most important and well-known elements of Japanese etiquette. Even despite this element of accepted social behavior surrounds Japanese from their childhood, in many companies it is commonly a subject of employees training.

The correctly executed bow in Japanese etiquette should be performed with straight back and hands at the sides which concerns men, or clasped in the lap which concerns women, and with eyes looking down. Bow should originate at the waist and by rule the longer and deeper the bow, the stronger the expression of appreciation and respect.

Bows are generally divided into three categories:

 informal (made at approximately 15 degrees angle waist bow and slight nod of head)  formal (made at approximately 30 degrees angle)  very formal (deeper then 30-40 degrees angle)

Although the etiquette of bowing is very sophisticated, a general rule is that superior bows slighter and lesser than his inferior (who should bow deeper and more frequently). In reply to bow one should generally bow in return. If the return bow has been executed in an appropriately long time (e.g. a reply bow lasted more than 2 seconds) it is considered polite to bow back again, which can sometime lead to a series of progressively smaller bows from each side.

Specially deep and long should be bows expressing apologies (lasting at least over 3 seconds and being deep on over 45 degrees in waist bow with a lowered head). The bigger the expression of apology the longer and deeper the bow should be. Bows of thanks or apologies tend to be deeper and last longer than other types of bow.

When dealing with non-Japanese people, many Japanese will shake hands. Since many non-Japanese are familiar with the custom of bowing, this often leads to a combined bow and handshake which can be quite complicated to execute. Generally bows may be combined with a handshakes or performed before or after shaking hands. Generally when bowing in close proximity, as necessitated when combining bowing and shaking hands, people turn slightly to one side (usually the left) to avoid bumping heads.

GREETINGS

Another significance and formalized part of Japanese culture are greetings. It is important to deliver greetings with energy and vigor in proper form according to time of a day or situation.

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Till 11 am the most common greeting, when is the first occasion that day the two people have met, is ohayō gozaimasu (considered as good morning); later it is konnichiwa (good day), which is used till late afternoon, or konbanwa (good evening) and then (good night) oyasuminasai (good night).

It is considered polite to make a wish to meet again instead saying goodbye.

FORMAL AND INFORMAL LANGUAGE

Use of a proper form of language in communication with different persons in different circumstances constitutes another very important part of Japanese etiquette.

In Japanese culture a great emphasis is put on perceiving of universal benefit and good rather than individual. Social responsibility is considered very important. In this sense Japanese culture is group oriented in extent greater than other cultures (e.g. Western cultures). This results in general social attitude of politeness, humbleness, respectfulness among Japanese people. Communication is moderated and appropriately balanced, gentle and indirect.

In the form of language, there is a completely different set of grammar and terminology that relates to formal and respectful communication (e.g. with interaction with members of society with higher status, customers, teachers or elders etc).

WORKING ETHICS

Japanese working ethics is strongly connected with social attitude of politeness and general group oriented culture in Japan. People are at work strictly on time and they never leave before their superiors go home. In the formal working ethics it is considered polite to use en expression osaki ni shitsurei shimasu (I'm sorry to leave before you) instead of good bye after finishing work.

It is also a practice to help other workers even if the do not need too much support.

MODEST AND HARMONIOUS ATTITUDES

It is very important in Japanese society to have modest and harmonious attitudes. One may hit upon an unexpected idea by being cooperative, asking for opinions or teaching those who can not understand work though one may think it useless. It is important to realize that the success of work always belongs to one's team and to have modest and considerate attitudes without emphasizing individual capability.

GROUP DECISIONS

In Japan, regardless of the scale of matters, there is a tendency that decisions are not made by individual's authority but rather by the consent of a group of people.

Therefore, in order to make a decision within an organization, it is necessary that matters are decided on by consultation via circular or brought before meetings. There are not only directors' meetings and in-house meetings but also various minutely organized committee meetings, meetings within various departments and liaison meetings. In Japanese companies, there are several occasions to have Nemawashi, by which, prior to consultation via circular or meetings, one's intentions and situations are explained unofficially to the party involved to discuss advantages and disadvantages of proposed matters.

Group decisions have an important merit, such that as the party involved has already agreed, opponents' opinions are eliminated and matters are effectively implemented. Approval of decisions is usually recorded in

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writing, enabling identification with whom the responsibilities lie, as it is in the case of seldom practiced individual decisions. On the other hand it takes time to decide, but this might have positive effects as eliminating too soon and wrong decisions.

SENIORITY SYSTEM

Since in Japan it is considered that one's capability and contribution to one's company increase by the number of years in service, Japanese society has a system that advances or promotes workers by the numbers of years in service. This system is called a seniority system. However, this seniority system does not promote all people without taking account of the difference of their capabilities. Regardless of one's position, all workers basically have their salaries raised once a year.

MANNERS OF CONGRATULATIONS AND CONDOLENCES

Happy events include marriage, childbirth, entrance into school, transfer to higher positions and promotion. As regards to one's superior, though one may not usually associate with him or her, people sometimes collect some money from relevant departments or employees to present money or goods collectively under joint signature.

In Japan there is a custom that one returns a favor if given a gift. Usually, people give goods called Hangaeshi in return that cost about half of gifts given to them. Return gifts should be always goods and money is not used.

HOSPITALITY AND SEATING

The Japanese culture values hospitality. Although traditionally social meetings take place at restaurants due to insufficient conditions regarding small Japanese apartments, entertaining at home is also a practice.

In Japanese culture hosts present a busy front to guests, giving them all attention. The guest takes the priority so he or she could feel relaxed and pleased, that is why on the contrary to Western custom in Japan guests are not encouraged to make themselves at home. Kamiza is a term referring the best seat within a room reserved for the special guest, which is the most comfortable and usually located the furthest from the door. The most humble seat is called shimoza. The protocol is that those with high standing take kamiza - the farthest seat from a doorway that is the best seat, and those with lower standing take shimoza - the nearest seat from a doorway that is the most humble seat. Though in-house seating arrangements follow one's title, it is polite to offer visitors kamiza - the best seats - regardless of their titles. However, when one visits as a guest and is not offered the best seat, one takes the most humble seat. There is also a seating order in cars. A highest-ranking person takes a seat behind a driver. Next to him or her, a middle-ranking person takes a seat. A lowest-ranking person takes a seat next to the driver.

In Japan it is considered an honor to be invited as to someone’s home therefore guests should act with respect according to proper etiquette. When entering an apartment it is a matter of great importance to take off the shoes and wear slippers offered by the host (but never with bear feet). The left shoes should be turned around in a way to point the door with the front. According to accepted formal etiquette coats or hats should be took off before hosts open the door and put back on not before when the door will be closed.

4.5.2. JAPANESE TRADITIONS

Japanese culture, with its ancient roots, has a great tradition which reflects in the customs or practices that have been passed on from one generation to another. Tradition influences every aspect of Japanese’s life – from ritual way of preparing food, eating and drinking (e.g. Tea Ceremony) through clothing (Kimono, Yukuta)

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to art (Geisha, Kabuki, Ikebana), craft (Japanese swords), music and sport (Sumo wrestling) and many others. The selected examples of Japanese traditional customs and practice are:

TEA CEREMONY

The tea ceremony is an old custom, which orginates from Zen Buddhism. The ceremonial way of preparing and drinking tea, made of of powdered green tea leaves, is composed of many rituals concerning preparing tea by a host and then drinking it by the guests, where almost every hand movement matters. Nowadays the Tea Ceremony become a very popular hobby and a way of spending spare time for Japanese people, who meets in traditional Japenese tea rooms or in private houses to held the tea ritual.

KIMONO AND YUKATA

The most traditional Japanese clothing is Kimono. The full-length garment usually made of silk today is worn only on formal or traditional occasions such as weeding, Tea Ceremony or funeral. Kimonos come in variety of colors and styles which differs depending on occasion, time of a year or marital status of person who wears it – for example the kimono of a married woman (Tomesode) has shorter sleeves and patterns only below the waistline, while Furisode – kimono of non married woman is characterized by extremely long sleeves; floral patterns and bright colors are proper for spring and summer, and darker with fall patterns are most common in the fall. One of the most important part of traditional Japanese Kimono is a decorative sash – obi. Kimono wearing with a proper accessories such as traditional wooden shoes, socks, underwear and small bags for women is called wafuku – Japanese clothes distinct from western style of clothing – yofuku.

Yukata is a cotton, comfortable dress with an informal character, which is worn on summer, at home or after hot baths.

GEISHA

The tradition of Geisha – professional entertaining hostesses who perform traditional Japanese arts – originates from female entertainers performing for the nobility in 7th century and women who danced for warriors in the 11th century. To become a Geisha girls are going through very extensive apprenticeship during which they learn various Japanese traditional arts as playing instruments like shamisen (three stringed instrument), dancing (traditional dance called mai), singing, Ikebana – flower arrangement, conversation, Tea Ceremony, wearing a kimono and other social skills. The proper appearance, meaning wearing a traditional kimono and very pale make up, is also a matter of grate importance for Geisha tradition.

CHERRY BLOSSOM

The cherry blossom, is the name for the flower of cherry trees known as Sakura, which is celebrated in Japan for many centuries. It is recognized as an unofficial Japanese national flower, which has very important position in Japanese culture. In Japan culture cherry blossom is a metaphor for the ephemeral nature of life because of its extreme beauty and quick death. It is also an omen of good fortune and emblem of love. Because of its rich symbolic cherry blossom is a common motive in Japanese art. Japanese celebrate the time of the year when cherry tries bloom for only a couple of days, with cherry blossom viewing (hanami) parties under the blooming tries.

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4.5.3. JAPANESE ANNUAL EVENTS

The old Japanese culture is rich in traditional annual events. Some of them have their roots in Chinese festivals and some are original Japanese and connected to national history or culture. There are also a number of local festivals, which are known and celebrated only in the local scale.

When a national holiday falls on a Sunday, the following Monday is a compensatory day. In addition, many Japanese companies and government offices traditionally close during the New Year's holiday season (December 28th - January 3rd), Golden Week (April 29th - May 5th) and the traditional O-Bon Festival (usually August 12th-15th).

1ST – 3RD JANUARY NEW YEAR (SHOGATSU)

New Year is the most important and elaborate event in Japan. People are decorating their homes and preparing traditional food (osechi), to celebrate by family gatherings, visits to temples or shrines to pray for health and happiness the year through, and meeting with friends. Although only 1st January is a national holiday the tradition is to celebrate till 3rd so many businesses remain closed through January 3.

3RD FEBRUARY BEGINNING OF SPRING (SETSUBUN)

In this day Japanese people goes to temples and shrines on the bean-throwing ceremony regarding dispelling evils and misfortune.

11TH FEBRUARY NATIONAL FOUNDATION DAY (KENKOKU KINENBI)

On the February 11th Japanese celebrate an anniversary of coronation of the first Japanese emperor.

3RD MARCH DOLL FESTIVAL / GIRLS FESTIVAL

On this day families pray for the happiness and prosperity of their girls and to help ensure that they grow up healthy and beautiful. Families celebrate by displaying graceful dolls dressed in ancient costume and eating traditional meal - hishimochi (diamond-shaped rice cakes) and shirozake (rice malt with sake).

APRIL CHERRY BLOSSOM FESTIVAL (HANAMI)

Cherry Blossom Festival is one of the most popular Japanese festivals which is held in the spring, when cherry tries bloom. This is the time for excursions to see cherry blossoms and picnics with family and friends.

29TH APRIL SHOWA DAY (SHOWA NO HI)

Showa Day is a first holiday on the Golden Week. On the Showa Day Japanese people celebrate birthday of former Emperor Showa.

3RD MAY CONSTITUTION DAY (KENPO KINENBI)

The anniversary of coming into force the post war Japanese Constitution.

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4TH MAY GREENERY DAY (MIDORI NO HI)

The day dedicated to nature and environment, which until 2006 was celebrated on April 29 because of Emperor Showa’s devotion to nature.

5TH MAY CHILDREN’S DAY (KODOMO NO HI)

The Children’s Day is a day of Boy’s Festival Celebration. Families with boys display warrior dolls and erect a pole to hoist carp-shaped streamers, which symbolize strength and power. The four above holidays constitute the Golden Week – collection of national holidays within seven days.

7TH JULY STAR FESTIVAL (TANABATA)

The festival originates from Chinese legend about two stars-lovers (Vega and Altair) who could meet only once a year on the 7th night of the 7th month. On this day people write wishes on narrow strips of paper and hang them on bamboo.

3RD MONDAY OF JULY OCEAN DAY (UMI NO HI)

The day dedicated to the ocean, which marks the return of Emperor Meiji from a boat trip to Hokkaido in 1876.

13TH – 15TH AUGUST BON FESTIVAL (OBON)

It is a Buddhist festival honoring the spirits of ancestors, who are returning to their families during these three days. This is a day for visiting grave sites.

3RD MONDAY OF SEPTEMBER RESPECT FOR THE AGED DAY (KEIRO NO HI)

Day dedicated for celebration of the respect for the elderly and longevity.

2ND MONDAY OF OCTOBER HEALTH AND SPORTS DAY (TAIIKU NO HI)

Day dedicated to heath and sport due to anniversary of opening the Olympic Games of Tokyo in 1964

3RD NOVEMBER CULTURE DAY (BUNKA NO HI)

A day for promotion of culture and the love of freedom and peace. On culture day, schools and the government award selected persons for their special, cultural achievements.

15TH NOVEMBER SEVEN-FIVE-THREE (SHICHIGOSAN)

Although it is not national holiday, Seven-Five-Three is widely celebrated in Japan. On this day children aged three, five and seven with their parents pray in shrines for happiness, safe and future.

23RD NOVEMBER LABOR THANKSGIVING DAY (KINRO KANSHA NO HI)

A national holiday for honoring labor.

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23RD DECEMBER EMPEROR'S BIRTHDAY (TENNO NO TANJOBI)

In Japan birthday of current Emperor is a national holiday. The Day of celebration changes together with change of an Emperor.

31ST DECEMBER NEW YEAR'S EVE (OMISOKA)

Last day of a year in Japan is designated for family gathering, eating traditional meal - buckwheat noodles (toshikoshi-soba) and visiting Buddhist temples to listen the 108 (the Buddhist belief that human beings are plagued by 108 earthly desires or passions) bell peals at midnight, which announce coming of the new year.

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4.6. VISA AND RESIDENTIAL STATUS

Within this chapter an outline of the Visa system in Japan is presented based upon a tutorial prepared by JETRO. Each foreign national wishing to enter Japan must have a valid passport, containing a visa corresponding to the purpose of entry into Japan obtained in advance from a Japanese embassy, consulate or other Japanese diplomatic mission abroad (hereinafter referred to as Japanese diplomatic mission abroad).

Upon landing in Japan, the foreign national must then be screened by, and receive a landing permission stamp from, an immigration officer at the port of entry, who will decide on the foreign national's status of residence and a period of stay.

For the Temporary visitor visa above requirements to entry do not apply for nationals of countries with which Japan has reciprocal visa exemption arrangements for foreign nationals having re-entry permission. Poland has bilateral Visa system arrangement with Japan, and so Polish citizens wishing to enter Japan and engage in activities that fall within the scope of a temporary visitor are not required to receive a visa to enter Japan and stay up to 90 days. However, these visa exemption arrangements will not apply to foreign nationals intending to work or engage in other activities for compensation. For this they must obtain appropriate visa status.

Temporary visitor status covers tourism, recuperation, sports, visits to relatives, field trips, participation in short courses or meetings, business liaison and similar activities undertaken staying temporarily in Japan. Holders of temporary visitor status may not engage in working activities. Some concrete examples of persons involved in business who would be covered by this status are as follows:

 Persons staying in Japan for the purpose of trade fair visits  Persons participating in short courses and briefings organized by companies  Persons participating in conferences and other meetings  Persons sent to Japan for business liaison, business negotiations, contract signing, after-sales service, advertising or publicity, market research or other short-term business activities

Market research and other activities in preparation for investing in and commencing a business in Japan are normally considered to fall under temporary visitor status. There are three periods of stay permitted under temporary visitor status: 90 days, 30 days and 15 days (as mentioned above Polish citizens qualify for the 90 days lasting period of stay on a status of temporary visitor).

In order to clarify distinction between visa and residence status, the following definitions are given:

 Visa o A visa is a recommendation required for entry into Japan received in advance from a Japanese diplomatic mission abroad that certifies that the passport is a valid passport and that there are no impediments to allowing the passport holder to enter Japan within the scope of that visa.  Status of residence o Foreign nationals entering and residing in Japan must generally receive landing permission upon arriving at their port of entry, at which time their status of residence in Japan will be determined. In other words, the status of residence constitutes the grounds on which a foreign national is permitted to stay in Japan. It is a qualification enabling the foreign national to carry out the activities stipulated in the Immigration Control and Refugee Recognition Act and to reside in Japan for the purpose of carrying out those particular activities. The scope of activities in which a foreign national may engage during his stay in Japan is determined according to his status of residence. Except where a permit to engage in an activity other than

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that permitted by the status of residence is obtained, the foreign national must not, in principle, engage in any activities generating an income other than those permitted by his status of residence.

4.6.1. PROCEDURES FOR OBTAINING VISA

Visas are applied for and received at Japanese diplomatic missions abroad.

However, Japanese diplomatic missions abroad may be unfamiliar with circumstances in Japan, leading to delays and other difficulties in screening applications for long-term stay visas such as those for foreign nationals seeking to work in Japan. Therefore the Immigration Bureau in Japan often screens these applications to determine whether or not the activities intended by the foreign national wishing to enter and reside in Japan correspond to the conditions for the visa being sought. If it is determined that these activities do in fact meet the visa conditions, a Certificate of Eligibility is issued. If this Certificate of Eligibility is presented to a Japanese diplomatic mission abroad together with a visa application, the conditions for entry and residence will ordinarily be deemed satisfied and a visa promptly issued. A Certificate of Eligibility is not applicable to temporary visitor visa.

A Certificate of Eligibility needs not be obtained in all cases when applying for a visa to work in Japan (e.g. depending on the scale of the company by which the foreign national will be employed, applications for visas can sometimes be submitted directly to the Japanese diplomatic mission abroad).

Below there is presented a list of actions to be performed to obtain visa:

 In Japan o Application for Certificate of Eligibility (submitted to Immigration Bureau in Japan) by the applicant or his proxy o Certificate of Eligibility issued by Immigration Bureau in Japan and sent to applicant or his proxy in Japan o If a foreign national who has applied for a Certificate of Eligibility is already in Japan on a temporary visitor status of residence when the Certificate of Eligibility is issued, that foreign national may be able to change his temporary visitor status of residence to the status of residence approved in the Certificate of Eligibility while still in Japan, without the need to apply for and receive a visa at a Japanese diplomatic mission outside Japan  Outside Japan o Visa application accompanied by Certificate of Eligibility at Japanese diplomatic mission abroad o Visa issued at Japanese diplomatic mission abroad  In Japan o Entry into Japan (landing permission) o Presentation of passport and visa o Submission of Certificate of Eligibility (at port of debarkation)

4.6.2. TYPES OF WORKING RESIDENCE STATUSES

There are many types of residence statuses in Japan visa system.

In this chapter focus is set on working statuses. The table below presents principal statuses of residence related to investment and working in Japan and the activities authorized in Japan for each status:

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Types of residence status in Japan in relation to work Investor or Business A person who: Manager  invests in, commences and operates a business in Japan  operates a business in Japan on behalf of the foreign nationals or foreign corporations that invested in and commenced that business (the chief executive officer or representative director responsible for that business)  is engaged in the management of a business in Japan on behalf of the foreign nationals or foreign corporations that invested in and commenced that business (e.g. a director or department manager employed in the management of that business under the chief executive officer or representative director). Legal or Accounting Activities to engage in the legal or accounting business. An applicant must be a Services foreign attorney, a foreign certified public accountant or those with some other legal qualifications. Engineer Activities to engage in services that require technology and/or knowledge pertinent to physical science, engineering, or other natural science fields, on the basis of a contract with a public or private organization in Japan. Specialist in Humanities Activities to engage in services that require knowledge pertinent to jurisprudence, or International Services economics, sociology or other human science fields, or to engage in services that require specific ways of thought or sensitivity based on experience with foreign culture, on the basis of a contract with a public or private organization in Japan. Intra-company Activities on the part of personnel who are transferred to business offices in Japan Transferee for a limited period of time from business offices that are established in foreign countries by public or private organizations which have head offices, branch offices or other business offices in Japan and who engage at the business offices in the activities described under Engineer or Specialist in Humanities or International Services. Skilled Labor Activities to engage in services that require industrial techniques or skills belonging to special fields, on the basis of a contract with a public or private organization in Japan.

Source: JETRO, 2009

The following documentation is generally needed when applying for a Certificate of Eligibility for all working statuses:

1. Application for Certificate of Eligibility 2. One full-face photograph (4 cm in height x 3 cm in width) 3. Return-mail envelope (with 380 yen postage affixed) 4. Document certifying academic qualifications (may not be necessary in some cases) 5. Curriculum vitae (may not be necessary in some cases) 6. Certified copy of the company register of a Japanese company 7. Company brochure of a Japanese company 8. Financial statements or business plan of a Japanese company

In addition to the above, submission of a copy of an employment agreement, certificate of employment, foreign company's business brochure, business license, and similar documents will be required depending on the type of status of residence.

The following documentation is generally needed when applying for a working visa at a Japanese diplomatic mission abroad after a Certificate of Eligibility has been issued:

1. Application for visa 2. Passport

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3. Certificate of Eligibility 4. Full-face photograph (1-2 photos, 4.5 cm in height x 4.5 cm in width)

A foreign company can establish a business presence in Japan in one of four ways, as described in chapter 4.2.1. Typically, however, companies do so by establishing a representative office, branch, or subsidiary company. The relationship between each of these types of operation and the status of residence of their representatives is determined by the conditions and criteria for each status, but the following is generally likely to be applicable:

 Representative of a representative office or a branch office: o Intra-company Transferee  Representative of a subsidiary company: o Investor or Business Manager

The status of residence of foreigners (except persons falling under the category of Investor or Business Manager) employed by a representative office, branch or subsidiary company will be Intra-company Transferee or other statuses matching each employee's academic or work record and the nature of his work in Japan (Specialist in Humanities or International Services, Engineer, etc.).

Spouses and children dependent on working foreign nationals are granted a Dependent status of residence and are permitted to engage in the day-to-day activities of a dependent spouse or child of a working foreign national residing in Japan. Activities such as attendance at school fall within the scope of activities of a Dependent, but work for compensation is in principle prohibited. Part-time work (in principle no more than 28 hours per week) is possible if permission to engage in activities other than that permitted under the status of residence previously granted is received. Applications for Certificates of Eligibility and subsequent visa for Dependents may be submitted at the same time as those applications for the working foreign national, but applications for Dependents may also be submitted after the working foreign national has first received status of residence to work in Japan.

The period of stay is decided together with the status of residence when the foreign national lands in Japan or changes his status of residence, and the foreign national may only reside in Japan for this stipulated period of stay. Consequently, a foreign national wishing to continue the same activities in Japan with his present status of residence beyond this stipulated period of stay must apply for an extension of this period of stay no later than the last day of that period of stay. Extensions will not be granted if the purpose of the stay has already been completed or there are other problems connected with the status of residence. Applications for extensions of periods of stay may ordinarily be submitted up to two months before the expiration date of the period of stay. The period of stay for working statuses, except for certain statuses including Entertainers engaged in artistic activities, Diplomats, Officials, and Designated Activities, will be either one year or three years.

A foreigner residing in Japan who wishes to cease the activities in which he is currently engaged and to engage exclusively in activities belonging to a status of residence other than that which he presently holds must apply and receive permission for a change of status of residence. For example, a foreign national dispatched from a parent company in a foreign country to a subsidiary in Japan and currently residing in Japan on an Intra- company Transferee status of residence who wishes to resign from the company to which he is dispatched and to invest in and operate his own company needs to apply and receive permission for a change to Investor or Business Manager status of residence. Applications for a change in status of residence are not automatically approved, and permission will not be granted if the new activities do not correspond to the requirements and criteria of the status of residence sought.

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4.6.3. ALIEN REGISTRATION

Foreign nationals residing in Japan longer than a stipulated period must complete alien registration in accordance with the provisions of the Alien Registration Law.

The Alien Registration Law is designed to establish clearly the residence and identity of foreign nationals residing in Japan through alien registration. This registration provides data used for administering immigration control as well as education, welfare, medical care and other services available to foreign nationals.

Foreign nationals must apply for alien registration at the municipal office in the city, ward, town or village in which they reside within 90 days of entering Japan (except when re-entering Japan on a re-entry permit) or, for foreign nationals born in Japan, within 60 days of their birth. However, foreign nationals departing Japan within 90 days of their landing date, and those born in Japan departing within 60 days of birth, are not required to apply for registration.

The application process for alien registration must be completed at the municipal office in the city, ward, town or village in which the foreign national resides. For the new registration applicant must provide the required information in an Application for Alien Registration, available at the municipal office, and submit this form together with his passport and two full-face photographs (photographs not required for persons less than 16 years of age). As a general rule, the foreign national must personally appear at the municipal office to complete these registration procedures. However, if the foreign national is less than 16 years of age or is unable to complete the procedures personally due to illness or other physical disability, a family member or relative living with that foreign national may complete registration on his behalf.

4.6.4. RE-ENTRY PERMISSION

A foreign national residing in Japan who wishes to leave Japan temporarily within his permitted period of stay and, after traveling to his home country or a third country, to enter and reside in Japan again with the same status of residence as before needs to apply for and receive re-entry permission. Under this system, a foreign national who receives re-entry permission before leaving Japan does not need to apply for an entry visa again at a Japanese diplomatic mission abroad prior to re-entering Japan, and can reside in Japan after re-entry with the same status of residence held prior to leaving Japan. Departing Japan without receiving this re-entry permission will result in forfeiture of the status of residence and the period of stay previously granted.

There are two types of re-entry permits: single re-entry permit, which allows only one re-entry into Japan during the period of validity, and multiple re-entry permit, with which one can leave and re-enter Japan any number of times during the period of validity. Multiple re-entry permit is especially convenient for those persons who must often travel back and forth between Japan and the parent company or other foreign business locations. It is not possible to obtain re-entry permission exceeding the permitted period of stay in Japan. In addition, persons staying in Japan on a temporary visitor status of residence are not normally eligible for re-entry permission.

As a general rule, the foreign national must personally appear at the Regional Immigration Bureau (or branch office thereof) having jurisdiction for the location in which he resides to apply for re-entry permission. However, if the foreign national is under the age of 16 or is unable to appear personally due to illness or some other reason, a parent or spouse may apply on his behalf. The applicant also need not appear personally at the Immigration Bureau if applying through an application agent who has been authorized by the Immigration Bureau or has registered with the Immigration Bureau as an application agent.

Necessary documentation and fees for applying for re-entry permission:

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 Application for re-entry permission  Passport (re-entry permit will be delivered into the passport)  Alien registration card  Payment of fees through the purchase of revenue stamps o 3 000 yen ($30) for single re-entry permit o 6 000 yen ($60) for multiple re-entry permit

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4.7. GOVERNMENTAL STRATEGIES AND POLICIES

Japan has achieved one of the world's leading positions in IT (in respect to ICT infrastructure, ubiquitous access to networks and advanced Information Technologies solutions) due to intensive government planning and support on a strategic level of policy formulation, supervised by the Ministry of Internal Affairs and Communication (MIC).

New IT e-Japan II e-Japan Reform u-Japan (2001-2003) Utilization (2007-2010) (2003-2006) Strategy (2006-2010)

In 2001 the e-Japan Strategy has been launched, followed in 2003 by the e-Japan II Utilization Strategy and further backed up by the New IT Reform Strategy. The IT Reform Strategy has been formulated by the IT Strategy Headquarters under MIC in January 2006 as the Japanese new national strategy to keep the position as the most advanced ICT nation with the world's highest infrastructure and citizens ability to use ICT. In June 2007 as a succeeding and extending to a scope of ICT beyond IT, the new strategy named as u-Japan has been adopted. A common important assumption in all of those strategies concerns planned completion of ICT and IT based reforms of the country by 2010 with emergence of information society on a before unprecedented scale.

Within all of the formulated strategies important role is played by policy packages, described subsequently, which implement concrete assumptions of the strategies. Intensive support of ICT development by government is a positive circumstance for the planned export development strategy, for within the programmes of strategies implementations many interesting opportunities for international collaboration will emerge.

4.7.1. THE E-JAPAN STRATEGY

The e-Japan Strategy as a governmental guideline published by the office of Japanese Prime Minister annually since 2001 contained following main priority policy packages areas:

 In order for Japan to make itself a knowledge-emergent society, the nation is required to implement the following four priority policy areas intensively for the development of a new national IT infrastructure: o establishment of an ultra high-speed network infrastructure and competition policies o facilitation of electronic commerce o realization of an electronic government o nurturing high-quality human resources  Japanese nation needs to rapidly develop hardware tools, software skills, and content simultaneously to promote the IT revolution. In particular, the establishment of an ultra high-speed network infrastructure and the nurturing of high-quality human resources, such as through the enhancement of information literacy, will form the essential foundation for the promotion of the IT revolution.

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A very important stress is put on the nurturing of high level specialist human resources, by increasing the information technologies literacy and skills.

4.7.2. NEW IT REFORM STRATEGY

The New IT Reform Strategy was shortly followed up by the government's 2006 Priority Policy Programme (formulated in July 2006). The 2006 Priority Programme for the New IT Reform Strategy contained the following points:

 Seeking to achievement of an IT based structural reform capabilities o IT based structural reform in medical care sector o IT based creation of environmentally friendly society o Introducing highest levels of security and safety in society through IT o Introducing highest levels of road traffic society through IT o Development of electronic public administration and establishing its position as one of the leading in the world in terms of efficiency and convenience o Establishing IT based corporate management in order to enhance international industrial competitiveness o Promotion of ageing society higher quality of life through use of IT  Establishing IT based infrastructure o Creation of IT based society through implementation of universal IT standards o Counteracting digital divide in terms of infrastructure o Deploying highest security measures on the level of IT infrastructures o Establishing infrastructure ready for new generation of services o Cultivation of highly qualified IT human resources meeting international standards o Promotion of research and development as foundations to IT based society in next generations  Disseminating Japanese IT initiatives in the world o Improvement of Japanese competitiveness and presence in international society o Contribution to the international community by presenting Japanese model for problem solving

In April 2007, the IT Strategy Headquarters also formulated the subsequent New IT Reform Strategy Policy Package to further clarify the basic directions of future IT policy.

The Basic Policy 2007 was adopted in July 2007 on fundaments of the IT New Reform Strategy and the New IT Reform Policy Package from April 2007. Since 2007 various plans and strategies are being promoted under the Basic Policy 2007. According to the New IT Reform Strategy the following policies will be pursued by the government:

 The Pursuit of IT Structural Reform Capabilities o Responding to Social Issues that Should Be Resolved in the Twenty-First Century • Structural reform of healthcare through IT • An environmentally-friendly society that utilizes IT o Realization of a Safe and Secure Society • The world’s leading safe and secure society • The world’s safest road traffic environment o Socio-Economic Activities in Twenty-First Century • The world’s most convenient and efficient e-Government

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• Enhanced business competitiveness through establishment of management by utilizing IT • Prosperous lifestyles throughout people’s lifetimes  Development of IT Infrastructure o The Realization of an IT Society without Digital Divide • IT society that adopts universal design • Development of infrastructure that can easily connect to networks that anyone can use at anytime from anywhere for any purpose and that has no digital divide o Measures Designated to Create a Society in Which People Can Live Safely and Securely • The world’s most secure IT society o Human Resource Development and Education • Development of human resource bases with an eye towards the next generation • Education and human resource development that will produce human resources that will be competent anywhere in the world o Research and Development • Promotion of R&D that will form the foundations for the next generation IT society  Provision of Valued Information to the World o Enhancement of the presence of Japan in international competitive society o International contribution by providing problem-solving models

4.7.3. THE U-JAPAN POLICY

The subsequent policy formulation strategy towards ICT development enhancement in Japan is the u-Japan Policy adopted in June 2007. Facing rapidly growing ageing population with a declining birthrate in Japan, ICT has been increasingly expected to serve as the solution for newly emerging social issues. To maximize the potential of ICT, the Ministry of Internal Affairs and Communications (MIC) currently promotes the u-Japan policy as a systematic policy for implementing an ubiquitous society (in terms of ubiquitous access to information everywhere and by anyone). As means for promoting this policy, MIC has established an ICT Policy Outline that includes priority measures to be taken each year (for the budget, tax system and system reform, etc.) in the ICT field. The MIC based on those policy formulations undertake measures in many different areas of ICT development.

A policy package with the following basic points will be promoted under the u-Japan Policy:

 Development of ubiquitous networks (from Broadband to Ubiquitous) o The goal of broadband infrastructure improvement which is set in e-Japan Strategy has been achieved. o The development of infrastructure in the past mainly centered on wired connections, ranging from narrowband to broadband such as DSL, cable networks, and fiber optics. o Under the u-Japan policy a seamless ubiquitous network environment will be created in which people can receive services without being conscious of the networks (wired or wireless). MIC aims to prepare the seamless access environment in every scene, by organic cooperation between fixed networks and wireless networks, and between terminals and networks, or between authentication, data exchange and networks. o As a result, ICT environment that networks are integrated into all aspects of everyday life at the grassroots level will be achieved.  Enhancement of the ICT usage (from introducing ICT to revolution by ICT) o ICT usage in the past had emphasized pioneering computerization and supported the fields where the computerization had not been developed.

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o The u-Japan Policy focuses on resolving various social problems such as the falling birthrate and the aging population. o As a result, people will realize that ICT is a tangible and helpful tool to resolve various social issues.  Upgrading enabling environment (improving the user environment) o As ICT has penetrated deeply into people's lives, worries and disturbances over privacy and information security that are emerging in cyber society have increased. o In order to prevent such problems, so-called negative aspects of ICT, it is necessary to upgrade enabling environment and to take comprehensive and concrete measures. o By developing policies in line with these three basic points, the u-Japan Policy aims to realize a value-creation oriented society in which ICT penetrates deeply into people's lives, and new values emerge one after another through creative ICT usage.

The u-Japan Policy aims for ubiquitous ICT development in terms of it penetrating every aspect of people lives, incorporating items that would have never been considered communication devices. The fundamental concept in the u-Japan Strategy is that it will connect everything and everyone, including the elderly and disabled also being able to use ICT with ease. There will be a huge increase in friendly communication that transcends generation, distance, and language, enabling people enhancement of mutual contacts. Commerce involving product sales and services will shift from being provider-oriented to user-oriented, based on users’ viewpoints and evaluations. ICT will also transform society from one of uniformity and standardization to one that is creative and vigorous, and which strives to achieve more creative business approaches and services, as well as a new social system and values.

The u-Japan Policy represents efforts towards development of next generation of not only ubiquitous, but also universal, user oriented and unique society in international scale.

4.7.4. ENHANCEMENT OF ICT INDUSTRY INTERNATIONAL COMPETITIVENESS

As the ICT industry accounts for about 10% of nominal GDP and is the largest industry in Japan its contribution ratio to real GDP growth rate is about 40%.

However, Japanese-share of the global ICT market is not sufficiently high in relation to the production potential. If the industry is to maintain its growth momentum in the future, it is essential to expand its share of the global market. Being aware of this, the Ministry of Internal Affairs and Communications (MIC) held ICT International Competitiveness Meetings from October 2006 to April 2007, establishing a basic policy for enhancing international competitiveness in the ICT industry in Japan.

Based on the outcomes of the meetings, the MIC set up the Panel on ICT International Competitiveness, created an ubiquitous-specific district and formulated an ICT International Competitiveness Enhancement Program, which is a comprehensive package combining basic programmes, including promotion of the Japan Initiative Project and individual programmes, such as R&D and enhancement of standardization. MIC has designated 2007 and 2008 as the Years of Enhancement of ICT International Competitiveness and has been committed to strengthening international competitiveness through the concentration and selection of policy resources and the enhancement of industry-academia-government collaboration.

4.7.5. ICT PRODUCTIVITY ACCELERATION

The ICT Productivity Acceleration Programme is a measure to increase productivity through the use of ICT. In formulated strategies it is essential to initiate a new growth path of the economy of Japan. In circumstances of declining population, the Ministry of Internal Affairs and Communications (MIC) formulated the ICT Reform

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Promotion Programme in April 2007 (under the New IT Reform Strategy) further extended to policy packages of the u-Japan, advocating development of a common ICT infrastructure to improve productivity through the use of ICT. The ICT Productively Acceleration Programme was developed in June 2007 to launch specific actions and to make efforts for:

 Development of a general code structure and common ICT infrastructure.  Development of the RFID usage environment that optimizes network characteristics.  Penetration and promotion of ASP (Application Service Provider) and SaaS (Software as a Service) models.

MIC has set up the ICT Productivity Improvement Committee under the Information and Communications Council to deliberate on listed above issues, and prepared a report on the direction of the development of a common ICT infrastructure.

4.7.6. CREATION AND FOSTERING OF ICT VENTURE BUSINESSES

ICT ventures create new businesses with innovative and indigenous technology and business models are expected to serve as the front-runners of innovation that enables the ICT industry of Japan to achieve further development in an era of increasingly fierce global competition.

The government of Japan advocates strengthening comprehensive support measures for R&D oriented ventures in the Third Science and Technology Basic Plan, as well as development of ventures that would create innovation in the 2007 Basic Policy for Economic and Financial Reform.

The Ministry of Internal Affairs and Communications also undertakes measures to promote the creation and growth of ICT ventures in cooperation with related ministries and agencies, covering various aspects from fund supply, securing and development of human resources, and information provision.

In specific terms, in order to support the development of human resources in ICT ventures, the MIC has developed the Manual for Formulation Business Plan and Venture Management and the Management of Courses on Support for Formulation of Business Plan and Points to Remember in Supporting Ventures.

It has also formulated the ICT Venture Leadership Programme and the Guidelines for Securing and Developing Human Resources in ICT Ventures.

4.7.7. DEVELOPMENT OF E-GOVERNMENT

The government has thus far been promoting improvements of usability and service quality, administrative reform to leverage IT, and establishment and enhancement of e-Government, based on the e-Government Construction Program, the Future Administrative Reform Policy, and the IT Policy Package 2005.

Also in the IT New Reform Strategy, realization of the most convenient and efficient e-Government in the world is specified as one of the IT structural reform policies. Based on the IT New Reform Strategy, the Liaison Conference for Chief Information Officers (CIO) of Respective Ministries formulated the e-Government Promotion Plan (August 2006) to implement future e-government plans properly and to achieve the expected results following the PDCA cycle (revised on August 2007). The Ministry of Internal Affairs and Communications (MIC) plans to conduct the steady promotion of the informatization of administrative services based on the plan.

Important aspect of the efforts in this regard concern implementation of e-Local Governments. The e-Local Governments aim to upgrade administrative services, simplify and streamline administration through the use

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of ICT by local governments. In March 2007, the Ministry of Internal Affairs and Communications (MIC) issued New Guideline for Promoting e-Local Governments in order to implement a useful, effective and vital e-local government by 2010. The MIC also conducts annual follow-ups of the progress of implementation, hence, using such infrastructure as Local Government Wide Area Networks, the Resident Registration Network System, and the Public Certification Service for Individuals, the MIC has been promoting effective e-Local Government and taking various measures from financial and human resource viewpoints to improve local services.

4.7.8. INFORMATION SECURITY POLICY

Within the governmental strategies stress is put on promotion of information security measures by establishing the National Information Security Center in the Cabinet Secretariat (NISC) in April 2005, as well as the central organization for information security measures, the Information Security Council in the Strategic Headquarters for Promotion of an Advanced Information and Telecommunications Network Society in May 2005.

The First Information Security Basic Plan was formulated by the Information Security Council in February 2006 as a strategy to cover information security issues in Japan during the three years starting from 2006. The Secure Japan 2007 is another formal policy compiled as a specific annual plan for 2007 based on the Basic Plan.

Based on the u-Japan policy and the First Information Security Basic Plan, the Ministry of Internal Affairs and Communication has been making efforts towards responding to diversified products and the improvement of human and organizational capacities that would lead to the enhancement and increased reliability of networks, being most important infrastructures, in order to develop an environment where people can use information and communications networks safely and securely.

In recent years, as IP networks progress, accidents and disturbances have been occurring more frequently on a larger scale and for longer periods. In order to respond to these changes, deliberations have been conducted at the Information and Communications Council, and the Ministry of Internal Affairs and Communications received partial reports entitled Safety and Reliability Measures for IP Based Networks in May 2007, as well as Safety and Reliability Standards for IP Based Networks in January 2008 from the Council. Based on these reports, the MIC reviewed ministerial ordinances to include a reporting criteria and control regulations for accidents and periodical reporting of accidents, as well as the revision of guidelines.

4.7.9. DEVELOPMENT OF ICT PERSONNEL

Development of human resources with highly advanced knowledge and skills in the rapidly advancing ICT field is a key strategy for Japan to maintain its status of one of the world’s leading ICT based country and to maintain and improve international competitiveness.

The Ministry of Internal Affairs and Communications has been implementing a support scheme for ICT human resources development programmes since 2001 to assist the quasi-public organizations and public-interest corporations which develop human resources in the information and communications field.

To deal with the urgent issue of securing human resources with research and development capabilities who can plan and promote innovation strategies in line with the latest technological trends and market needs, the MIC has held meetings of the Study Group on R&D Human Resources Development in the ICT Sector since November 2006 and the report of the Study Group was issued in June 2007.

Furthermore, the Study Group on Development of Advanced ICT Human Resources was set up with the aim of conducting deliberations on fully-fledged measures for developing advanced ICT human resources, including advanced ICT human resources organizations and their functions that are required for strengthening

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international competitiveness (the report was released in May 2008). The strong commitment of the Japanese government to support of ICT and IT education is a positive circumstance for the export development.

Since it is important for children who are the main players in the future of Japan, to become familiar with ICT at an early stage of their life, to improve their information utilization ability, and to build a society where new intellectual and cultural values are created, the Ministry of Internal Affairs and Communications has formulated a manual that describes model plans for establishing networks in schools, entitled the Manual for Installing School LAN. In order to support ICT use in elementary and junior high-schools, the MIC has been conducting a large scale demonstration test, entitled the Oasis Project. This project is to transmit content owned by the NHK, such as programmes and video clips for schools, to elementary and junior high-schools throughout the country free-of charge, on a demand basis, for three years from November 2006, in cooperation with the Ministry of Education, Culture, Sports, Science and Technology.

4.7.10. PROMOTION OF TELEWORK

Telework (i.e. work performed at a distance by utilization of modern ICT) is expected to provide a solution for various issues such as an ageing population with a declining birthrate, regional revitalization, reduction in environmental load, while at the same time improving business efficiency and productivity in an effort to strike a proper work and life balance.

The government of Japan raised the target for a telework population accounting for 20% of the working population by 2010 in the Telework Population Doubling Action Plan (current nation-wide average levels account for up to 10% of teleworkers).

The Ministry of Internal Affairs and Communications has undertaken effort to promote telework in cooperation with relevant ministries and agencies. Specifically, working with the Ministry of Health and Welfare, the MIC started demonstration experiments on telework model projects and also implemented pioneering telework system model experiments to verify and present the various effects of telework on society.

Telework constitutes an important aspect of professional career especially to women, as they are largely responsible for raising children and performing home duties. MIC is aware of this fact and performs comprehensive analyses in regard to women situation and expectations towards models of telework.

In relation to telework, appropriate ICT competencies constitute very important matter. All strategies for development of telework are aligned with strategy of the company with sharing some of the Japanese ICT training market. New technologies of RCT (Real-Time Collaboration) systems and distributed work management require sophisticated skills in order to maximize efficiency of their use.

4.7.11. PROMOTION OF ICT R&D

In view of enhancing of the international competitiveness of Japan, the Information and Communications Council released the ICT R&D and Standardization Strategy to Enhance Japan’s International Competiveness in June 2008.

The R&D activities of the Ministry of Internal Affairs and Communications (MIC) will be promoted based on the UNS R&D Strategic Programme II (UNS: Universal Communications, New Generation Networks, Security and Safety for the Ubiquitous Network Society), as part of the R&D strategy of the above mentioned report.

The UNS R&D Strategic Programme II consists of three areas:

 New-generation network area

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o Future networks are the foundation of the ICT industry and are expected to meet emerging needs flexibly and accurately. In order to support such future networks, the Ministry of Internal Affairs and Communications (MIC) has been promoting research and development of the new-generation network technology o Specifically, the following have been undertaken: . R&D concerning new-generation network infrastructure technology, . R&D concerning next-generation photonic network technology . R&D concerning next-generation backbone . R&D concerning next-generation network infrastructure technology.  Safe and secure ICT area o As ICT Safe and secure Technology aimed at establishing a safe and reliable society, the Ministry of Internal Affairs and Communications (MIC) promotes research and development activities to overcome issues in various fields including disaster prevention, natural environment, and welfare as well as research and development activities to provide a dependable ICT infrastructure so that anyone can use ICT effectively. Specifically, the R&D activities encompass scopes of: . Space communication technology . Remote sensing technology . Next-generation advanced network infrastructure . Ubiquitous platform technology . Information security technology . High-speed, large capacity satellite communication technology . Integration between robots and ubiquitous networks.  Universal communications area o With regard to the field of Universal Communications for boosting intellectual energies, the Ministry of Internal Affairs and Communications (MIC) promotes research and development activities to realize communications technologies that promote intellectual creativity and communications technologies friendly to people, including the elderly and the disabled who can then overcome age, physical, language and cultural barriers through the use of the most advanced ubiquitous networks in the world. o Specifically, the research and development activities include: . Automatic speech translation technologies . Super High Reality Video and Sound System.

Furthermore R&D measures in the field of global environmental conservation (anti-global warming technologies) that covers all of the three areas are embraced by the UNS R&D Strategic Programme II, under the following points:

 Global environment conservation (anti-global warming technology) o R&D in ICT, which has thus far been conducted with the aim of improving services and business operations and reducing costs, has a positive effect on the reduction of CO2 emissions. o Now that global warming issues are getting more serious by the day, it is necessary to promote R&D that will contribute proactively to the reduction of CO2 emissions. o The Ministry of Internal Affairs and Communications (MIC) is resolved to promote R&D activities for such technologies as the management of consumption and supply of power through informatization of energy flows, technology to realize a paperless society, fully- optical networks, energy-saving ICT devices and measurement of CO2 emissions.

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In the future, it will be increasingly necessary to implement R&D activities effectively and efficiently based on the UNS R&D Strategic Programme II, through further enhancement of cooperation among industry, academia and government, lead by the National Institute of Information and Communications Technology (NICT).

In order to promote effective and efficient research and development activities it is essential to create an open, flexible and competitive R&D environment. The Ministry of Internal Affairs and Communications (MIC) is now developing an advanced test-bed network for research and development (JGN2), utilizing competitive research funds.

4.7.12. INTERNATIONAL COOPERATION STRATEGY

With the aim of strategically supporting the international business activities of private companies in the fields of digital broadcasting, next-generation IP networks and wireless communications in which Japan has a particular strength, the Ministry of Internal Affairs and Communications (MIC) set up the ICT Office for International Promotion in January 2007.

Specific activities of this Office in the three fields mentioned above include:

 Comprehensive support and a contact point for launching the international activities of ICT companies  Implementation of various dissemination and enlightenment activities  Collection and organization of useful information from other countries and sharing of such information among industry, academia and government

The MIC has also been making efforts to strengthen the presence of Japan internationally to gain an advantage in negotiations for technological standardization, as well as to develop a competitive environment for telecommunication markets in Asia and others in bilateral and multilateral negotiations.

For instance the Ministry of Internal Affairs and Communications (MIC) has been undertaking many efforts concerning the promotion of international policy in the Asia/Pacific region, which included cooperation with the member countries of APEC (Asia Pacific Economic Cooperation), the Asia Pacific Telecommunity (APT) and the Association of South East Asian Nations (ASEAN). With regard to cooperation with ASEAN countries, at the second ASEAN-Japan ICT ministers meeting, Japan proposed the ASEAN-Japan ICT Work Plan 2007-2009 as a work plan concerning cooperation between Japan and ASEAN during the period between 2007 and 2009, which was then deliberated and accepted. Japan also proposed to hold an Asia Information Security Policy Conference (provisional) to enhance information security which is of importance in conducting smooth economic activities (the proposal was accepted).

In order to enhance Japan’s international competitiveness in the ICT field, it is essential to elucidate target technologies and systems for international business activities based on the needs of relevant countries and to proceed with strategic activities in cooperation with industry, academia and government, covering a range of activities from international standardization, to the production of technologies and sales of systems in international markets. Hence, in August 2007, the Ministry of Internal Affairs and Communications (MIC) consulted the Information and Communications Council about ICT R&D and the Standardization Strategy to Enhance Japan’s International Competitiveness, and a report was released in June 2008 with the following three measures for enhancing international standardization activities:

 ICT standardization strategy map in the prioritized technological areas where Japan should make efforts toward international standardization and a policy for formulating an ICT patent map  Method for developing human resources engaged in international standardization activities  Establishment of a center for ICT standardization and intellectual properties that controls these standardization activities through cooperation between the government, industry and academia.

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The International Telecommunication Union (ITU) is a specialized agency in the United Nations in the telecommunication field. Japan is making a positive contribution to the work of the ITU; for example, Japan has accepted the assignments of chairman and vice-chairman to study groups in different sections and submitted various recommendations. Besides these, Japan participated in the second meeting of the Internet Governance Forum held in Rio de Janeiro in November 2007 and also takes an active part in the New Round Negotiations of the World Trade Organization (WTO).

Japan has participated in multifaceted discussions with the United States every year since June 2001, based on US-Japan Economic Partnership for Growth, which was created to promote sustainable growth through dialogue. In June 2007, as a result of 6th year dialogue on the U.S.-Japan Regulatory Reform and Competition Policy Initiative, a report concerning regulatory reform and competition policy in various fields including telecommunication was summarized and announced. Then in October 2007, petitions were exchanged during the 7th year dialogue. As well, the Ministry of Internal Affairs and Communications is having consultations on policy with other countries ministries and agencies of information and communication, including bilateral policy dialogues with China and with the European countries. Also, the Ministry is making active effort to conclude FTA (Free Trade Agreements) and EPA (Economic Partnership Agreements).

Recently, the information gap (digital divide) has been growing internationally, and there is an increasingly recognized need to build information and communications networks on an international scale, including developing countries. The Ministry of Internal Affairs and Communications provides support, including ICT proficient human resources development, support for ICT policy and system formulation through policy dialogue with the information and communications ministries of developing countries, support for the development of information and communication infrastructure by implementing international joint experiments and support for the international and regional organizations that promote international cooperation in eliminating the digital divide. The Ministry also contributes to sustainable development in the information and communications field in developing countries through Official Development Assistance (ODA) in cooperation with various agencies and organizations, including the Ministry of Foreign Affairs, Japan International Cooperation Agency (JICA), and Japan Bank for International Cooperation (JBIC).

4.7.13. OFFICIAL ICT DEVELOPMENT ASSISTANCE OF JAPAN

As mentioned in the previous chapter of recognized importance are governmental strategies of ICT development assistance towards emerging societies and markets in order to bridge the information (digital) gap between developed states and yet raising countries. The framework for implementation of those actions is the Official Development Assistance of Japan (ODA). There are four pillars of the ODA policy in relation to implementation of ICT projects internationally:

 Raising awareness and contributing intellectually to policy and institution-building;  Developing and training human resources;  Building infrastructure and providing assistance for networking; and  Promoting the use of IT indevelopment assistance

Examples of ICT assistance projects following the four pillars listed above are as follows (a note should be made that the Polish-Japanese Institute of Information Technologies is an important element of the ODA policy implementation, which has a strong positive implication as a basis for the projected export development of IT training services to the Japanese market leveraged on the experiences of Polish-Japanese cooperation in IT education field):

 Raising awareness and contributing intellectually to policy and institution-building o Dispatch of experts to support the formulation of IT policies in Indonesia

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o Provision of technical support to expand Internet use in local communities in Malaysia o Assistance in the formulation of a telecommunications master plan in Laos  Development and training human resources o Provision of technical assistance to the Vietnam Information Technology Training Institute . dispatch of Japanese experts . training of Vietnamese participants in Japan . provision of IT equipment o Organizing the training programme for e-commerce in the Philippines . participation of trainees from other Southeast Asian countries such as Cambodia, Laos, Myanmar, and Vietnam o Provision of equipment and conduct of training in the Polish-Japanese Institute of Information Technologies  Building infrastructure and providing assistance for networking o Provision of radio broadcasting equipment in Tanzania o Provision of television equipment to Afghanistan o Rehabilitation of a telephone network in Angola  Promoting the use of IT in development assistance o Provision of yen loan for the New Communication, Navigation, and Surveillance/Air Traffic Management Project in the Philippines o Provision of communications equipment and conduct of IT training in the University of the South Pacific, Fiji

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5. BUSINESS STATE OF THE ART AND DEVELOPMENT PROGNOSIS DUE TO EXPORT

5.1. ASSUMPTIONS

In the following chapters the CompSecur sp. z o.o. business state of the art and development prognosis due to export will be taken under consideration. This financial forecast of CompSecur sp. z o.o. company applies to the base variant of growth taking into account the following assumptions:

 Increase in sales of primary services (e-learning courses for individual customers and employees of enterprises and public administration institutions) in 2010 due to EU grant acquired for the years 2009-2010 for development for these services and planned export activities to the Japanese target market within the next years of company operation.  Already signed 3 long-term (18-42 months) contracts with public administration entities.  Acquisition within the next years of additional contracts with public administration entities with an average value of 70 thousand EUR a year (including 10% of those acquisitions from Japanese administration).

5.2. SALES FORECAST

The following table presents projected results for the sales of primary services, taking into account considered share of the export in sales of IT training services:

Projected sales forecast of primary information technologies training services including planned export in Japan in EUR Item name 2009 2010 2011 2012 2008 (forecast) (forecast) (forecast) (forecast) Net sales of primary services 37 479,68 40 978,67 122 936,00 245 872,00 368 808,00 Sales expenses 35 166,29 34 238,74 85 596,85 154 074,33 215 704,06 Profit (loss) on sale 557,65 1 624,67 9 000,64 22 127,92 36 905,86

Source: Accounting and prognosis data of CompSecur sp. z o.o. company

The above forecast was based on the current (including the business operation in the previous legal form) trend of increase in revenues from the sales of primary services and directly related expenses, taking into account the continuation of current cost optimization strategies and expected sales increase in 2010 due to UE development grant acquired for the years 2009-2010 and planned export activities.

5.3. PROFIT AND LOSS ACCOUNT FORECAST

Profit and loss account forecast including planned export to Japan of the CompSecur sp. z o.o. company in EUR Number Item name As on 2009 2010 2011 2012 2008 31.07.2009 (forecast) (forecast) (forecast) (forecast) A Net revenues from sales and 37 20 920,75 40 978,67 122 245 368 equivalent 479,68 936,00 872,00 808,00 B Operating expenses 91 126 640,10 341 447 551 454 754,21 147,59 173,32 808,45 344,53 I Amortisation and depreciation 6 452,93 5 095,82 11 182,36 14 657,73 10 703,03 10 703,03 II Consumption of materials and energy 5 324,64 4 370,74 6 781,25 8 888,81 5 291,26 5 291,26 III External services 24 20 765,57 40 170,18 52 654,72 27 170,83 27 170,83 190,97 IV Taxes and charges 2 101,62 1 426,53 1 715,80 2 249,05 6 225,59 6 225,59

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V Payroll 47 88 378,12 245 322 30 658,84 30 658,84 598,25 942,04 378,71 VI Social security and other benefits 344,23 2 530,53 29 354,78 38 478,00 3 971,68 3 971,68 VII Other costs by type 5 741,57 4 072,78 6 001,19 7 866,30 12 206,75 12 206,75 VIII Value of goods and materials sold 0,00 0,00 0,00 0,00 0,00 0,00 C Profit (loss) on sales (A-B) -54 -105 -300 -324 -305 -85 274,53 719,35 168,92 237,32 936,45 536,53 D Other operating revenues 56 168 143,91 306 378 416 249 587,92 908,85 267,88 094,66 656,80 E Other operating expenses 192,84 0,00 0,00 0,00 0,00 0,00 F Profit (loss) on operating activities 2 120,55 62 424,55 6 739,93 54 030,55 110 164 (C+D-E) 158,22 120,27 G Financial revenues 50,76 61,82 61,82 76,20 83,82 50,29 H Financial expenses 365,34 373,50 924,98 4 194,29 6 749,43 5 785,22 I Profit (loss) on business activities 1 805,98 62 112,88 5 876,77 49 912,47 103 158 (F+G-H) 492,61 385,34 J Result on extraordinary events 0,00 0,00 0,00 0,00 0,00 0,00 K Gross profit (loss) (I +/- J) 1 805,98 62 112,88 5 876,77 49 912,47 103 158 492,61 385,34 L Income tax 1 299,75 3 310,11 1 116,59 9 483,37 19 663,60 30 093,21 M Other statutory reductions in profit 0,00 0,00 0,00 0,00 0,00 0,00 (increases in loss) N Net profit (loss) ( K-L-M ) 506,23 58 802,76 4 760,19 40 429,10 83 829,01 128 292,12

Source: Accounting and prognosis data of CompSecur sp. z o.o. company

Persisting negative profit on sales (row C) results from accounting under the "Operating expenses" (row B) also expenses within the projects financed by development grants (row D – “Other operating income"). Actual costs directly related to the sales are listed in the table in Part 2 – “Sales forecast".

Relatively low net profit for 2009 results from delays in transferring of advance payments for the expenses within the projects financed by development grants by external parties, and the consequent need to fund these expenditures from company’s own resources – the return will take place in the beginning of 2010. The following graph illustrates the forecast dynamics of sales income, total operating income and net profit for years 2009-2012:

700,00 600,00 500,00 400,00 thousands EUR thousands 300,00 200,00 100,00 0,00 2008 (2009) (2010) (2011) (2012) Sales revenues Operating revenues Net profit

Source: Accounting and prognosis data of CompSecur sp. z o.o. company

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5.4. ASSETS AND LIABILITIES CHANGE FORECAST

Forecats of values of assets including planned export to Japan of the CompSecur sp. z o.o. company in EUR

ASSETS 2008 As on 2009 2010 2011 2012 31.07.200 (forecast) (forecast) (forecast) (forecast) 9 A Fixed assets 55 858,74 50 762,93 168 729,50 227 074,36 313 482,61 354 037,08 I Intangible assets 48 511,51 45 558,64 135 695,87 182 957,70 231 167,89 279 378,09 1 R&D expenses 0,00 0,00 90 137,23 137 399,06 185 609,26 233 819,45 2 Goodwill 0,00 0,00 0,00 0,00 0,00 0,00 3 Other intangible assets 48 511,51 45 558,64 45 558,64 45 558,64 45 558,64 45 558,64 4 Advances for intangible assets 0,00 0,00 0,00 0,00 0,00 0,00 II Tangible fixed assets 7 347,23 5 204,29 33 033,63 44 116,67 82 314,72 74 658,99 1 Tangible fixed assets in use 7 347,23 5 204,29 33 033,63 44 116,67 82 314,72 74 658,99 2 Tangible fixed assets under 0,00 0,00 0,00 0,00 0,00 0,00 construction 3 Advances for tangible fixed assets 0,00 0,00 0,00 0,00 0,00 0,00 under construction III Long-term receivables 0,00 0,00 0,00 0,00 0,00 0,00 I Long-term investments 0,00 0,00 0,00 0,00 0,00 0,00 V V Long-term prepayments 0,00 0,00 0,00 0,00 0,00 0,00 B Current assets 240 596,12 424 912,63 571 663,16 661 028,54 805 356,67 836 933,93 I Inventory 2 161,40 3 100,01 3 100,01 4 455,79 8 478,56 15 072,96 II Short-term receivables 224 934,24 341 605,06 467 649,32 515 711,75 571 687,67 467 558,07 1 Receivables from related parties 0,00 0,00 0,00 0,00 0,00 0,00 2 Receivables from other entities 224 934,24 341 605,06 467 649,32 515 711,75 571 687,67 467 558,07 III Short-term investments 13 139,61 79 822,82 100 529,09 140 306,70 224 135,72 352 427,84 1 Short-term financial assets 13 139,61 79 822,82 100 529,09 140 306,70 224 135,72 352 427,84 2 Other short-term investments 0,00 0,00 0,00 0,00 0,00 0,00 I Short-term prepayments 360,88 384,74 384,74 554,30 1 054,72 1 875,06 V Total assets 296 454,87 475 675,56 740 392,66 888 102,91 1 118 839, 1 190 971, 28 01

Source: Accounting data of CompSecur sp. z o.o. company

Forecast of values of liabilities including export to Japan of the CompSecur sp. z o.o. company in EUR

LIABILITIES 2008 As on 2009 2010 2011 2012 31.07.200 (forecast) (forecast) (forecast) (forecast) 9 A Equity 63 179,49 121 993,59 125 803,25 166 221,01 250 050,02 378 342,15 I Share capital 62 673,26 62 673,26 121 031,72 121 031,72 121 031,72 121 031,72 II Called up share capital (negative 0,00 0,00 0,00 0,00 0,00 0,00 value) III Own shares (negative value) 0,00 0,00 0,00 0,00 0,00 0,00 IV Supplementary capital 0,00 0,00 0,00 4 760,19 45 189,29 129 018,30

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V Revaluation reserve 0,00 0,00 0,00 0,00 0,00 0,00 VI Other reserve capitals 0,00 11,34 11,34 0,00 0,00 0,00 VI Previous years profit (loss) 0,00 506,23 0,00 0,00 0,00 0,00 I VI Net profit (loss) 506,23 58 802,76 4 760,19 40 429,10 83 829,01 128 292,12 II IX Write-off from net profit during the 0,00 0,00 0,00 0,00 0,00 0,00 financial year (negative) B Liabilities and provisions for 233 275,38 353 681,97 614 589,42 721 881,90 868 789,26 812 628,86 liabilities I Provisions for liabilities 0,00 0,00 0,00 0,00 0,00 0,00 II Long-term liabilities 206 253,97 6 312,25 28 874,62 52 015,52 90 583,67 72 466,94 III Short-term liabilities 3 508,09 12 692,12 12 692,12 18 285,63 34 794,23 61 856,21 IV Accruals 23 513,32 334 677,59 573 022,67 651 580,75 743 411,36 678 305,71 1 Negative goodwill 0,00 0,00 0,00 0,00 0,00 0,00 2 Other accruals 23 513,32 334 677,59 573 022,67 651 580,75 743 411,36 678 305,71 Total liabilities 296 454,87 475 675,56 740 392,66 888 102,91 1 118 839, 1 190 971, 28 01

Source: Accounting data of CompSecur sp. z o.o. company

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6. SWOT ANALYSIS OF EXPORT TO JAPANESE TARGET MARKET

The SWOT analysis of Strengths, Weaknesses, Opportunities and Threats associated with export development of IT training services to target Japanese market has been presented below as neutral towards target market sectors, as well as in regard to three target sectors of the economy:

 Consumers sector within the sales model of B2C (business to consumer),  Enterprises sector within the sales model of B2B (business to business),  Public administration sector within the sales model of B2G (business to government),

It is important to note, that however the SWOT analysis is divided into three target market sectors, nevertheless their points (strengths, weaknesses, opportunities and threats) are in no way independent from each other. They are as a matter of fact strongly related, and mutually affecting each other (as schematically presented on the graph below).

Sector neutral SWOT

B2C B2B SWOT SWOT

B2G SWOT

The general outline of the performed SWOT analysis is that despite of the economic crisis, circumstances for export development of IT training services remain positive due to the fact that ICT related human resources development align with the most optimal strategies for corporations to successfully undergo economic perturbations, as advised by the government on national and local levels in Japan. Additionally Japanese governmental level policies strongly support further ICT development, treating this industry, which is already the largest one, making up 10% of the whole economy, as well as 40% of GDP growth, as absolutely strategic. This optimistic view is complemented by possibilities of international cooperation (e.g. within funding of the European Union 7th Framework Programme for development or Japanese national funding programmes), that will be attempted upon foundation of business presence of the company on the Japanese target market.

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6.1. SECTOR NEUTRAL SWOT ANALYSIS

The graph below shortly presents most important outline of the sector neutral SWOT analysis results, while following chapters introduce detailed considerations.

Strenghts Weaknesses Opportunities Threats

IT training offer Japanese Advanced High business modification organizations expertise in IT operation costs neccessity partnerhips

Well developed Complexities of International R&D Limited initial business support administrative cooperation capital infrastructure procedures

No brand Problems with IT training offer Japanese market recognition on securing ready overall potential target market personnel

Advanced Lack of expertise Closed character learning on Japanese IT R&D cooperation of Japanese technologies terminilogy market

Certification Short lifespan of Very well standards Information developed conformity Technologies education sector

Differentiated Environmental IT Strict legal strategy for target policty regulations market sectors

General IT High society Labor force training informatization protection experience

Business protection legal High taxes provisions

6.1.1. STRENGTHS

 Advanced expertise of the company in relevant IT fields o Focus on IT security consulting and training services as one of the most important fields in future development of information society in Japan

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. Expertise well be aligned with technical directions of strategies implementation of the National Information Security Center in the Cabinet Secretariat (NISC) and the Information Security Council in the Strategic Headquarters for Promotion of an Advanced Information and Telecommunications Network Society, as contained within:  First Information Security Basic Plan and its subsequent revisions  Secure Japan 2007 policy framework  Safety and Reliability Measures for IP Based Networks reports  Safety and Reliability Standards for IP Based Networks 2008 standards formulations o Academic background of the company resulting in high quality level of the offered advanced IT training services and focus on the perspective technologies in area of quantum information . There are few companies worldwide with expertise in quantum information processing and quantum cryptography o Focus on delivering a comprehensive training offer that encompass many different IT disciplines with complexity levels ranging from fundamental to highly advanced . Relations with international academic research institutions enabling fast reaction for changing trends in ICT  Sustained cooperation with academic institutions o Expertise in IT security as one of the most perspective and important fields of a developing IT sector o High level IT expertise in company’s management (academic co-founders) will support accurate assessments and choices of development directions in regard to new technologies alignment as well as assessment of appropriate IT skills in recruitment of new coworkers  Participation of the company in international R&D cooperation projects o Participation of the staff and company in cooperation within advanced ICT R&D projects will enable initiating and scaling cooperation with Japanese private and public entities . Company and its staff have experience in international cooperation R&D projects including the European Union Framework Programmes STREP and Network of Excellence projects participation o Experience in international level ICT R&D allows for preparation of highly advanced ICT training services offered in different sectors and especially aligning with Japanese government policies in terms of development of ICT R&D capabilities of human resources  Availability of broad IT training services offer ready for export deployment o The company is already in possession of an up to date and high quality education IT offer which is ready for deployment in Japanese export target market with minor market-specific modifications and translations . All of the didactical material (including lectures, syllabuses, exercises and software laboratories) prepared in the special e-learning form compliant with the Sharable Content Object Reference Model (SCORM) are available . Offered curriculum vary from basic and fundamental problems and qualifications up to advanced domains of technologies not even commercialized as of yet  Availability of advanced technologies for learning o The company is in possession of new and advanced ICT infrastructures (including high end server cluster equipment, network devices and broadband Internet connections, as well as hardware VPN security solutions and specialized software for distant learning applications) that enables high level of efficiency in case of need for infrastructure outsourcing (due to cost reduction policies on initial stages of Japanese market operations) o The company develops highly advanced software distant learning solutions

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. The company received funding for development of a new technology e-learning platform within the Operational Programme Innovative Economy (POIG) with budget over 720 thousand PLN (i.e. $250 000) o The real-time group collaboration functionalities of the e-learning platforms determine high quality of delivered educational value  Conformity of offered IT training services with international qualification assessment and certification programmes o The company will offer IT training programmes compliant with international standards for IT skills assessment and certification . The company has been accredited by the European Information Technologies Certification Institute in Brussels, Belgium in regard to some programmes of the CompLearn offered IT training services  In particular the company is accredited to license the EITCA Information Security programme, EITCA Business Information programme and the EITCA Key Competencies Programme  Training services offered by the CompLearn IT Training Center, both in distant and stationary models, enable individuals to pass EITCI examination and certification procedures and obtain EU internationally approved formal IT qualifications confirmation in a certain domain of specialization  Available offer range allows for differentiating target Japanese market sectors o Separate strategies to development of business operations for: . Consumers sector in B2C sales model . Enterprises sector in B2B sales and B2B cooperation models . Public administration sector in B2G sales and B2G cooperation models  General IT training services experience o Organizational structure of the company planned and implemented in regard to conformity with international norms of quality management (ISO 9000:2005) o Long term strategy of balanced growth combined with seeking areas of cooperation with advanced IT and education institutions, as well as universities . Focus put on the quality of IT training services and building valuable relations and consortia with added value to customers rather than relying on marketing  High level of business protection within legal regulations on Japanese market o Trademark, design (including also web design in terms of screen design system), as well as intellectual property protection system is based upon strict provisions contained within the Trademark Act (Act No. 127 of April 13, 1959) the Copyright Act (Act No. 48 of May 6, 1970) and the Patent Act (Act No. 121 of April 13, 1959) o Provision of equality between foreign and Japanese nationals in this regard (same procedures and same protection)

6.1.2. WEAKNESSES

 Educational offer modifications necessity o Launching of IT training services export according to the programme already implemented by the company will require applying Japanese translations and Japanese market specific modifications . Beyond simple localization concerning front-ends of web-based e-learning platforms interfaces, most important are difficult and complex translations of contents of the IT training programmes

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. Specific contents modifications concerning different national standards in information technologies will also be necessary  However information technologies are currently internationally standardized on even very low level of abstraction, there will be several fields in the existing programmes that will need appliance of minor corrections and reformulations, especially in the national sensitive matters, such as legal regulations concerning Information Technologies, mandatory standards and norms for information security, etc.  All the translations (due to their highly technical nature) and specific programme modifications will require engagement of Japanese IT professionals, specialized in adequate fields of computer science  Limited entering capital and low level of initial investment o Enquiring external funding could turn out to be necessary . Eventual sources include publicly supported international cooperation programmes, publicly supported business development programmes (according to provisions of the Public Assistance Act, Act No. 144 of May 4, 1950), business ventures capital investments, initial public offering, etc.  No market recognition of the company on Japanese market o Efforts towards efficient and innovative promotional campaigns will be necessary  Lack of company’s expertise on information technologies related terminology on Japanese market o Different languages have different terminology in relation to many specific fields Information Technologies (e.g. in many languages network security is more common than information security and regards almost the same as computer security in yet different languages in terms of direct translations to English) . Expert consulting services will be required that concern such language oriented particularities, which are however of the key importance for successful market positioning, and simultaneously determine quality of IT training programmes

6.1.3. OPPORTUNITIES

 Building new partnerships towards participation in industrial and administration clusters, as well as cooperation with largest Japanese business groups and corporate conglomerates (Keiretsu), while maintaining company’s control and independence o Opportunities related to new business partnerships and large scale enterprises resulting from actions aligning with provisions of the Act on Formation and Development of Regional Industrial Clusters through Promotion of Establishment of New Business Facilities (Act No. 40 of May 11, 2007) o Building partnerships with administration and business will result in: . Sales reinforcement (e.g. partnership with local government and labor offices towards implementation of educational programmes for unemployed, partnerships with companies to outsource their training operations associated with new IT solutions deployment, etc.) . New products and new services encompassed IT training (partnerships with Japanese innovative IT vendors) . Upgrading capacity for production and service delivery . Diversification of business models increasing endurance for certain sectors crises . Perspectives for establishing advanced R&D operations in Japan o Opportunities related to non-governmental organizations partnerships . Access to expertise of commerce and industry development networks and chambers

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 Planned membership in the Polish Chamber of Commerce and Industry in Japan and European Business Council as a company associated under the national chamber, PCCIJ . Administration support programmes of the European Union and Japan (international cooperation projects can be supported in terms of funding by governments of both European Union and Japan) o Taking active part in increasing dynamics of ICT growth and ubiquitous information society development in Japan as an important step to globalize further operations  Well developed Japanese business support system for initial organization efforts o Support of JETRO services free of charge within IBSC (Invest Japan Business Support Center) . Free of charge consulting services in a limited scope and detail, nevertheless important as a first contact point . Free of charge domiciliation for registration address and free of charge office space rental for initial 50 days (deposit only)  Japanese economy overall great potential o Japanese market is the 2nd biggest and matured markets in the world just after the United States, with approximately $5 trillion of nominal GDP o It is the 3rd biggest consumer market (after the United States and China markets) in terms of purchasing power parity of population o Japan ranks high at 12th of 178 countries in the Ease of Doing Business Index 2008 o Due to high level of technological advancement Japan constitutes a great platform to launch business for further expansion in the Asia region o Japan due to its high technological advancement and high level of education is a great location for establishing an R&D center . Among foreign companies operating in Japan more than 20% of these entities perceives Japan as a their strict center for research and development and as a base for business activities in Asia  Japanese ICT market sector being a driving force for a whole economy of Japan o In Japan ICT market is the most important industry, accounting for approximately 10% of nominal GDP, being the largest industry in Japan o Its contribution to growth of the real GDP is over 40% (it is the main and dominating driving force of the whole Japanese economy) . There are undertaken further initiatives on the side of government to increase even more the share of the ICT sector in domestic, as well as international economy  R&D cooperation opportunities o Favorable provisions of Industrial Technology Enhancement Act (Act No. 44 of April 19, 2000) and Act on the Promotion of Technology Transfer from Universities to Private Business Operators (Act No. 52 of May 6, 1998) in regard to initiating and conducting R&D cooperation o The company is already cooperating in international plane in advanced IT R&D projects. The company might be able to leverage its presence in Japan to extend R&D operations in partnership with advanced Japanese ICT corporations in funding of projects within the 7th Framework Programme of the European Commission (especially in the ICT and FET themes)  Short lifespan of Information Technologies, resulting in sustained high level of demand for IT training services in emerging fields of applications o The technology progress in computer science and engineering is so fast, that life cycle of new solutions is very short (they become obsolete in a short time after release and market adoption, which results in a sustained investment necessity, which on the other hand determines sustained and growing demand for associated IT training services)  Environmental policy related IT opportunities

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o Due to Japanese adherence to highly proactive policy in regard to environmental protection and rational energy management there are many opportunities that arise in the scope of IT . Provisions in this regard are contained within Industrial Order for Enforcement of the Act on Special Measures for the Promotion of New Energy Use (Cabinet Order No. 208 of June 20, 1997), Act on Promotion of Global Warming Countermeasures (Act No. 117 of October 9, 1998), Act on the Rational Use of Energy (Act No. 49 of June 22, 1979), Basic Act on Energy Policy (Act No. 71 of June 14, 2002) . There will be increasing all-sectors market interest in both Education and Research and Development in terms of IT related to balanced energy management, thus increasing opportunities with news specialized environmentally and energetically oriented directions of study within Information Technologies  High level of Japanese society informatization and intensive governmental information society development initiatives and strategies o Strongly supporting legal regulations on development of information society as contained in the Basic Act on the Formation of an Advanced Information and Telecommunications Network Society (Act No. 144 of December 6, 2000), that will result in a long term increasing demand for IT training services in all sectors of Japanese economy . Initiatives towards bridging international digital divide and promotion of society increasingly based on information processing and communication . Promotion of government and private sector partnership in pursuit of information society development . Efforts towards equal opportunities for use of information and telecommunications technology that are caused by geographical restrictions, age, physical barriers and other factors  This especially concerns positive intervention in area of skills IT education and assessment among many different social groups, that will determine increased demand in all sectors . Regulation stipulate that especially important matter is support of “learning of the skills that are necessary for utilization of information and communication technology considering that these factors are all indispensable and closely interlinked”, as contained within the article 16. (ICT Basic Act) . Promotion of education and learning as well as development of human resources are also further strongly stressed in relation to Information Technologies (article 18.) . The law also assures promotion and support for international cooperation initiatives as allocated in the scope of ICT development (article 24.) . Regulations directly support digital literacy by explicitly employing electronic distant learning based techniques and methodologies in conjunction with electronic marketing and sale channels with teaching information technologies skills o The legally constituted leading role in shaping of the Japanese information society by a private sector assures generally good environment for export development of IT training services in all sectors o Specific regulations of the legal system in provisions to security issues as stipulated in the Act on Electronic Signatures and Certification Business (Act No. 102 of May 31, 2000) and the Electronically Recorded Monetary Claims Act (Act No. 102 of June 27, 2007) that together constitute foundation of electronic commerce, which very dynamically gains share in the whole Japanese economy, thus resulting in increasing demand in terms of security related services of consulting and advanced education o Intensive government support on a strategic level of policy formulation, supervised by the Ministry of Internal Affairs and Communication (MIC)

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. Continuation of the strategic programmes initiated by the e-Japan strategy in 2001 . New IT Reform Strategy formulation in 2006  Introduction of a number of IT related reforms in strategic sectors (healthcare, energy and environment, public administration, etc.) that increase demand for new IT investments and associated IT education  Introduction of universal IT standards that also result in increased demand for standardized technologies proficiency development and assessment  Cultivation of human resources high level skills in IT with special adherence to conformity with international assessment and certification standards . The u-Japan (ubiquitous society) policy formulation in 2007  Pointing IT as a best answer for increasing scale of problems associated with the ageing society of Japan  Development of IT networking infrastructure for ubiquitous access to information resources and further enhancing IT use in all sectors of Japan’s economy  Aiming for ICT to penetrate all aspects of individuals’ life, thus increasing potential demand on IT related education (especially in consumer sector) . The ICT Productivity Acceleration Programme (element of implementation of the New IT Reform Strategy) . Development of e-government providing opportunities for IT increased education demand in B2G sector . Support schemes for human resources IT skills development in form of public administration programmes assisting quasi-public organizations and public-interest corporations developing human resources in ICT fields, and overall commitment of the government towards improvement of ICT proficient human resources  Especially important are programmes of R&D ICT skills of personnel in both enterprises and public administration sectors, thus driving demand for highly advanced IT training services o The Ministry of Internal Affairs and Communication constituted a special study group in this regard (the Study Group on R&D Human Resources Development in the ICT Sector) issuing its first report in June 2007 o Also a study group of Advanced ICT Human Resources was formed aiming to conduct all necessary measures for development of advanced ICT skills among human resources in enterprises and public administration in order to increase competitiveness of Japan

6.1.4. THREATS

 High level of business operations costs o Subsidiary office space renting costs o Basic infrastructures and services costs . Enquiring external funding may turn out necessary in this respect . Possible sources include publicly supported international cooperation programmess, publicly supported business development programmes (according to provisions of the Public Assistance Act, Act No. 144 of May 4, 1950), business ventures capital investments, initial public offering, etc.  Complexities of administrative procedures

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o Some minor organizations obstacles are to be settled . Company’s employees social security related registration is difficult due to the fact that in Japan there is no social identification numbers system (all individuals are identified and processed on a basis of name, which leads to disambiguation and potential mistakes . The tax registration system is also complicated in relation especially to corporate local taxes (municipal and prefectural types) . Residential status system registrations (alien registration office, etc.)  Difficulties in securing personnel o High cost of labor force (especially concerning senior IT professionals, required to reshape and accordingly modify the IT training offer of the company)  Average annual rates for manager type positions over $80 000  For IT professionals on the level of engineer average is $50 000 up to over $100 000 on the level of highly educated and experienced specialists . High levels of taxes regarding individual incomes (scaling up to 40% with incomes exceeding $200 000) combined with residential taxes (up to 9% due to municipal and prefectural residential taxes) . Relatively high levels of social security insurance costs (welfare pension over 7%, health pension over 4%) . Countermeasures: initially implementing strategy of cost minimization (i.e. only a virtual office and the ISBC supported presence in Japan during first stages of export development, etc.), as well as introducing external funding as described previously  Closed character of Japanese market o Japan has a very hermetic market and closed culture for outside influence and integration, reluctant attitudes towards foreign services (especially within a sphere of education) . Partnering with domestic organizations (both ICT sector or other outside sectors related in order to find business opportunities and new business models), as well as with European organizations that are strongly present in Japan with already established business connections and dependencies might be the only way to successfully operate on the market, while offering a competitive edge in terms of costs, due to high quality outsourcing advantages  Already very well developed sector of education in Japan o Fierce competition of well developed Japanese educational businesses . Similar levels of experience among corresponding Japanese competing companies  The company’s competitive edge lies in high level of advanced IT expertise as well as in possibility to minimize cost of operations through outsourcing thus reducing end prices for services (average price lower from 20% to 30%) o Exceptionally high quality standards for products demanded by contractors of all sectors o High level of information accessibility . Information centric market within ubiquitous access to Internet . Consumer evaluation sensitiveness with business operations as executed in Internet channels combined with exceptionally high level of Japanese consumers quality demand may pose threats to successful operations  Strict adherence to highest possible quality of service will be necessary  Potential threats to export interoperation due to strict regulations regarding foreign exchange and conformity regulations (not yet greatly affecting IT sector, but a subject to change) o Already introduced regulations and their possible revisions in Act for Implementation of the Mutual Recognition between Japan and Foreign States in Relation to Results of Conformity Assessment Procedures of Specified Equipment (Act No. 111 of July 11, 2001), as well as

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Foreign Exchange and Foreign Trade Act (Act No. 228 of December 1, 1949) , Foreign Exchange Order (Cabinet Order No. 260 of October 11, 1980) and Import Trade Control Order (Cabinet Order No. 414 of December 29, 1949) o Concerns on legal representation of the company in matters of a legal dispute in Japan . Required adherence to strict regulations of the Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers (Act No. 66 of May 23, 1986), regarding company representing domestic attorneys and lawyers  Restrictive labor force protection system in Japan o Potential threats related to Japanese legal system high level of labor force protection in regard to eventual disputes or dishonesty on the side of personnel . Strict legal provisions stipulated in the Employment Security Act (Act No. 141 of November 30, 1947), Ordinance for Enforcement of the Employment Security Act (Ordinance of the Ministry of Labor No. 12 of December 29, 1947), Human Resources Development Promotion Act (Act No. 64 of July 18, 1969), Labor Union Act (Act No. 174 of June 1, 1949) . Obligations in regard to part-time employment as stipulated within the Act on Improvement of Employment Management for Part-Time Workers (Act No. 76 of June 18, 1993)  High tax rates in Japan o Effective corporate income taxation scaling from 25% up to 40% (including corporate tax, corporate inhabitant taxes of municipal and prefectural types, enterprise tax and special local corporate tax), to be increased since 1st April 2011 to scales from 30% up to 40% . There are imposed also consumption taxes, however these are not applicable for education related services . There are treaties for no double taxation in regard to foreign companies operations, but procedures for international transfer of capital are legally restricted

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6.2. CONSUMER SECTOR (B2C) SWOT ANALYSIS

The graph below shortly presents most important outline of the consumer sector (B2C) SWOT analysis results, while following chapters introduce detailed considerations.

Strenghts Weaknesses Opportunities Threats

Already No mobile distant Consumer market Exceptionally high developed B2C learning volume quality demand sales model technologies opportunities

Lack of services Consumers IT Economic crisis Low interest Japanese training related towards technical localization experience opportunities education expertise

Necessity for Intensive EU related added High level of ICT educational offer consumer sector value use modification competition

Small scale only Products and IT strategic Ageing society promotion services liability to partnerships problems feasibility consumers

Advanced Formal education learning system related technologies opportunities available

International Governmental ICT certification qualifications standards promotion conformity

6.2.1. STRENGTHS

 Already developed and tested consumers sector B2C sales model o The company has already developed a functioning business model for B2C sales in consumers sector, which will allow to partially implement simple strategy within economy of scale . However due to higher level of development of Japanese consumers sector in terms of ICT utilization, modifications of business model will have to applied, especially in regard to stronger focus put on more advanced IT skills and qualifications training . Target group in the consumer sector will increasingly encompass IT professionals, while non IT professionals in Japan will still have higher general ICT skills in relation to domestic market

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o Analysis of competing companies offer has been performed which will enable to reconstruct offerings with, if not competitive edge over Japanese IT training institutions, then at least of a complementing and differentiated character appealing to consumers o Analysis of formal system education offers in didactic forms competing with offerings of the company (additional short-term specialized IT courses types) has been performed as well, which will guide programme tailoring in regard to complexity levels matching even with most advanced IT courses of Japanese universities or technical colleges . The offer will be aimed as a budget cost alternative to university based supplementary education and life-long learning with substituting of Japanese ministry accredited formal educational diplomas with European Union accredited international ICT skills assessment and confirmation standards or certifications o In B2C model focus will be put on Internet marketing channels reaching standard computer terminals, as well as mobile Internet device, which uniquely to Japan constitute large part of the Internet consumer sector  Consumers provisioned IT training services experience o The company has a deep experience with different forms of IT training services sold directly to individual consumers . It had already over 4000 IT training services customers (with over 200 thousand of programme training hours realized) . It is well prepared for consumer service (automated workflows, helpdesks, etc.) . It has experience in Internet marketing channel usage (almost 90% of current company sales is generated by Internet marketing channels)  Due to integration of all customer service related operation on the Internet platforms, offering of services on the Japanese market will not follow with necessity for introducing any qualitative change (all operations will be implemented on the same platforms, only expanded towards Japanese language localization)  European Union related added values for consumer education o The company is operating a large-scale IT professionals collaboration platform that serves few thousands of individuals working in the IT sector of the European Union . The European IT Professionals Database (ITPD) networking platform will be extended to Japanese market bringing added value to offered IT training services for customers in the consumer sector  As the driving motivation for the consumers of IT training services is the attitude towards increasing job prospects and competiveness on job market external programmes will respond well to projected demand  After training and passing appropriate IT examinations individuals will be registered at the platform as certified IT professionals in certain areas of specialization. This would widen their career perspectives, opening also European jobs market (the platform serves as an advanced IT professionals recruitment solution for many companies in Europe)  Technology centered strategic partnerships o The fact that the company partners with many world leading IT corporations (including Microsoft, IBM, Cisco, Symantec, Juniper Networks, Internet Security Systems, Sun Microsystems, Hewlett Packard, Novell Networks, Red Hat and MySQL) gives it access to most advanced technologies and solutions technical specifications enabling flexible and prompt update of IT training programmes, to be actual and valuable, meeting latest hardware and software technology advances in international terms  Advanced learning technologies for consumers

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o The company is using advanced distant learning technologies and highly integrated IT management infrastructures (in regard to marketing and clients relationships management) that will allow to effectively offer services in B2C sales model in reduced costs for onsite management (most of the operations will be outsourced to Poland thus enabling significant reduction in costs) . Outsourcing of both managing operations and partially IT training distant services connected with cutting costs will allow significant reduction of prices in relation to competition with sustained adherence to high standards of quality o The form of training services provision in an advanced distant learning model (implemented within Internet e-learning platforms) results in high availability and elasticity characteristic that are important to many individuals . This allows for elastic time organization of teaching and learning (with asynchronous classes for students ongoing on-demand all the time during both day and night) . The offer is especially appealing to full-time employed individuals seeking to improve their qualifications and skills in IT due to their own initiative . Such employees may only take part in such specialized courses in a distant model due to the fact of daytime working hours  Conformity with international qualification assessment and certification programmes o Conformity of offered IT training programmes with external assessment procedures and certifications is especially important in view of a pressure on the jobs market in regard to formal confirmation of IT skills, present in many sectors of Japanese economy, thus increasingly important to consumers

6.2.2. WEAKNESSES

 Lack of dedicated distant learning technologies for mobile devices o As in the consumer sector in Japan, great part of the Internet users are based on mobile devices o The company lacks dedicated solutions in respect to mobile devices e-learning platforms conformity . Taking into account that increase of use of mobile devices as Internet terminals will be one of major trends in future (expanding from Japan also to other countries) the company will undertake efforts towards development of suitable solutions and to tailor IT training programmes in a way allowing it offer mobile devices based distant education services  Lack of expertise for proper localization of IT training services o Within Japanese consumers sector B2C sales model especially important is a proper localization of the services already offered . The company has no deep expertise in Japanese conditionings for localization, both professional terminology oriented and technology oriented  Employment of expert professional consulting services for proper location of services is necessary  A deepened analysis of competition offer o In order for the programmes to be up to date efforts mentioned above must be sustained on a continuous basis . This will require sustained expert cooperation or employment  Appropriate educational offer modification as necessary for success on the consumers sector

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o For the consumers sector the IT training services programmes subject to B2C sales model must be ready as a commercial offer (no customized training programme preparation is feasible as it is the case with B2B and B2G sales models) o Launching of IT training services sales in a B2C model in adherence to programmes already implemented will require applying Japanese market specific modifications beyond translation . Of key importance are difficult and complex translations of contents of the IT training programmes, requiring Japanese native IT professional expert assistance . Specific contents modifications concerning different national standards in information technologies will also be necessary  However information technologies are currently internationally standardized on even very low level of abstraction, there will be several fields in the existing programmes that will need appliance of minor corrections and reformulations, especially in the national sensitive matters, such as legal regulations concerning Information Technologies, mandatory standards and norms for information security, etc.  All the translations (due to their highly technical nature) and specific programme modifications will require engagement of Japanese IT professionals, specialized in adequate fields of computer science  Small scale only promotional action feasibility due to limitation in capital o For the consumers sector it is natural that wide marketing actions are of a key importance . Large scales Internet based campaigns in Japan are beyond the reach of initial operations and export development launch  To increase sales enquiring external funding for promotion activities could turn out to be necessary  Eventual sources include publicly supported international cooperation programmes, publicly supported business development programmes (according to provisions of the Public Assistance Act, Act No. 144 of May 4, 1950), business ventures capital investments, initial public offering, etc. o In relation to promotional activities, an important drawback is associated with the lack of company’s expertise on information technologies related terminology on Japanese market . Different languages have different terminology in relation to many specific fields Information Technologies (e.g. in many languages network security is more common than information security and regards almost the same as computer security in yet different languages in terms of direct translations to English) . Expert consulting services will be required that concern such language oriented particularities, which are however of the key importance for successful market positioning, and simultaneously determine quality of IT training programmes o Feasibility of only small scale marketing campaigns undertaking will not significantly increase of market recognition of the company in Japan . Efficient and innovative promotional campaigns will be necessary as complementing marketing actions

6.2.3. OPPORTUNITIES

 Consumer market volume related opportunities o Consumer Japanese market in general terms is the second most developed market in the world

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o The average amount of savings per household (excluding single-person households) exceeds $120 thousand, illustrating well an averagely high consumption potential among Japanese households o The level of consumer spending in Japan during the last decade has reached that of USA (i.e. approximately $8000 per person), nearly twice as much as the third and fourth country in terms of retail sales per person (Germany and UK with approximately $4600 per person) . This indicates a high potential demand for IT training services sold in B2C model  Economic crisis related opportunities o The crisis in economy of late 2008 and decrease of employment rate which reduces purchasing power in the society might paradoxically turn out to be a positive circumstance . Due to increasing unemployment rare participants of the job market are seeking additional ways to increase and confirm their ICT qualifications, as of key importance in modern Japanese economy . Especially important will be added value of the offered IT training services with additional perspective of abroad job market participation presented to Japanese individuals  This will be achieved through the conformity with external IT skills assessment and certification institutions (especially in the European Union) o Due to economic prolonging downturn, aging and maturation of society and the onset of social disparity in Japan there emerges increasingly conservative attitude of Japanese consumers . Increasing dependency on high level of education is observed in society . Increasing demand for lifelong learning is also a confirmed trend o Dependency on authority, norms and standards in education are growing more important as perceived by the society  High level of ICT use in the consumer sector opportunities o Increasing use of Internet by consumers . Majority of consumers in the target age of 18-30 years old use Internet as primary information source (checking headlines, reading news, looking for products and services)  Increasingly more individuals change their primary source of media to the Internet (a survey confirmed tendency among all age groups with percentage of over 50% more individuals increasing their usage of Internet as the media source than those decreasing) . Decreasing trust for other traditional media (e.g. radio, TV) while increasing trust in Internet o Japan has a very high percentage of consumers using Internet on a day basis . 88 million people have access to Internet, which makes 69% of the whole population (40% has a broadband access, i.e. 79% of all Internet users) o The above tendencies of Internet as media usage increase combined with its high penetration in Japanese society indicates significant potential for targeting individual customers with IT training offer within Internet marketing and operation channels which will be the main strategy of sales in B2C model  Japanese society problems related opportunities o There are many social related issues that the Japanese ageing society will need to tackle with in upcoming decades . As an answer to some of most important of these issues (e.g. increasing of individual barriers of different types, productivity losses, risk of digital exclusions, etc.) IT skills and key competencies will be promoted (especially by public administration)

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 Important part of demand for consumer sector based IT training services within B2C sales model will be driven by those problems and governmental counteraction measures and programmes o Social exclusion countering programmes relating to persons with disabilities . The company has experience in programmes for ICT key competencies providing for persons with disabilities . These problems will be increasingly taken into account in public administration policies, thus opening new frameworks for cooperation, according to legal provisions of the Services and Supports for Persons with Disabilities Act (Act No. 123 of November 7, 2005) and its novelizations, as well as of the Basic Act on the Formation of an Advanced Information and Telecommunications Network Society (Act No. 144 of December 6, 2000), especially of article 8. concerning necessity of efforts towards correction of gaps in opportunities and skills for use of information and communications technology that are caused by geographical restrictions, age, physical circumstances and other factors) o In Japan there is a very strong divide in regard to men and women participation in development of information society . Women make only 15% of higher education students in science and technology (and there is only 39% women among all undergraduates of Japanese universities) . In engineering disciples of study there is even less women (just few percent) . This situation will need to change eventually aligning with international horizontal policies for equality of chances in society . The company has high level of experience in implementing large scale ICT key competencies educational programmes that enable women to increasingly take active part in information society grow  It is expected that international cooperation opportunities will rise in regard to execution of similar projects in Japan within control and support of public administration, especially in regard to national level implementation of provisions of the Act on Securing, of Equal Opportunity and Treatment between Men and Women in Employment (Act No. 113 of July 1, 1972) and the Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave (Act No. 76 of May 15, 1991)  Advanced formal education system related opportunities o Japan has a well developed formal education system that results in following opportunities: . Generally well educated Individuals perceive and understand the real value of high level of possessed IT skills and qualifications . Rate of advancement of upper secondary schools students to universities also increases significantly (36% in 1990 as compared with 50% in 2002) . Graduate individuals are very well educated thus they could be targeted with more advanced IT training services  High level of technical education results in necessary background to understand and comprehend more advanced IT training services o As the cost of Ministry approved formal education on the university and postgraduate levels increases in Japan, individuals are becoming more interested in other forms of qualification gaining and confirming . Private courses with programmes corresponding to universities level graduate and postgraduate courses constitute for undergraduates and graduates a cost-effective alternative for further education and lifelong learning

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 International statutory organizations for standardization of quality level of such educational services provide qualifications confirmation and certification programmes competing with national-level formal education system ministry approved diplomas o In Japan there are 87 national universities (including The Open University), 86 local public universities, founded by prefectures and municipalities and 553 private four-year colleges . This creates a wide opportunity for cooperation with many entities in terms of collaborative launch of most advanced IT training services (e.g. in fields of which particular entities of formal higher education system do not have appropriate expertise, but still find those areas of education offer development perspective and strategic for further growth) . Among many entities the most important potential partner is the Open University of Japan (former University of the Air) with a national coverage and highly advanced technologies for distant learning  Particular field of potential cooperation would encompass distant learning expertise of the University of the Air, as well as specialized advanced IT expertise of the company (to be potentially included in the collaborative international scale projects carried out in larger consortia) o Annually there are over 2.5 million of students in Japanese universities and 0.9 million students in specialized training colleges, which constitute broad target groups for advanced e-learning IT training based offers for students, complementing their higher education with key competencies of modern economy . Over 250 thousands of students undertake distant learning courses at Universities in Japan and over 130 thousands of individuals take part in Ministry certified distant education in different fields  This indicates high popularity of the distant learning models in Japan and will align well with Internet based marketing of IT training services o Each year over 250 thousands of students graduate from universities in Japan, and these individuals enter the job market . Due to high level of competition this is a potential group for advanced IT training courses providing additional qualifications that could help to enter graduates a job market with a greater chance in finding appropriate position with a higher salary o Not least important are liberal legal regulations concerning formal education system in Japan . Opportunities will arise to develop educational activities in consumer sector towards governmental accreditation and formal establishment of higher education offer in accordance to provisions contained within the Standards for Establishment of Universities (Ordinance of the Ministry of Education, Science and Culture No. 28 of October 22, 1956)  Governmental level promotion of ICT qualifications development, especially in regard to promotion of telework, as a driving force for important part of consumer IT training services demand o Governmental policies find telework as a solution for many issues of ageing society and reduction of environmental degradation (due to reduction in commuting and transportation) o Public administration plans to increase telework factors in society from current 10% up to 20% until 2010 . This will require considerable effort towards providing personnel with appropriate IT qualifications regarding management and execution of tasks distantly performed (especially including dedicated telework management and real-time collaboration systems, communication corporate intranet technologies, projects planning and management systems, sales force management systems, etc.)

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o The ICT Productivity Acceleration Programme (element of implementation of the New IT Reform Strategy) will affect enterprises sector with technological evolution towards cloud computing . The programme, being implementation of the New IT Reform Strategy, promotes especially use of SOA (Services Orient Architecture) and SaaS (Software as a Service) models, that have potential to change all existing formulas of IT services offerings within standard proprietary infrastructures, thus resulting in major investments for increased productivity, driving demand for IT education in the enterprises sector

6.2.4. THREATS

 Exceptionally high level of quality of services demand by consumers o Japanese consumers are very strict when it comes to quality of services and are known as the most difficult consumers in the world in this regard . This is particularly important as concerning the form of training services offerings (design and a virtual form of packaging related quality of service are of primary importance to Japanese consumers) . Due to high availability of similar services strict adherence to quality of service will need to be undertaken . On the other hand Japan has highly developed IT infrastructure (in terms of broadband access and device layer presentation capabilities) which appropriately taken advantage of will allow to offer a high level quality of service in terms of presentation form in Internet operations model of distant education  Low interest in technical education among students in Japan o In the formal education system of Japan there is considerably smaller interest in engineering faculties in university level education . Only 18% of all students are doing majors on faculties falling under the category of engineering or technology related . On the other hand 39% students are on social sciences faculties and 17% study humanities  Fortunately social sciences are not completely detached from modern ICT but encompass less technical approach . This situation could however generally indicate that lower percentage of individuals will be interested in development of ICT skills and qualifications as considered a technical education  On the other hand, certain ICT skills become increasingly less technical and less engineering type of skills, and in some fields become strongly aligned with disciples of social sciences  Very intensive consumer sector competition and widely available lifelong learning offerings within formal education system o Over 1.2 million of individuals in Japan annually undertake university extension courses and over 7,4 million of individuals annually take part in courses of private institutions offering for lifelong learning which indicates that extended education is well established in Japan . Balanced measures to remain competitive and increase shares in already existing and well established market rather than promotional actions towards creating demand will be a key to success  Strict legal regulations in terms of product and services liability to consumers

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o The Product Liability Act (Act No. 85 of July 1, 1994), Consumer Contract Act (Act No. 61 of May 12, 2000) and Consumer Product Safety Act (Act No. 31 of June 6, 1973) and Act on Specified Commercial Transactions (Act No. 57 of June 4, 1976) assure very high level of protection to customers which is generally good but can have some negative impact on business in terms of potential dishonesty of the consumers o Strict regulations on unfair competition (within Unfair Competition Prevention Act, Act No. 47 of May 19, 1993) that limit scope of innovative marketing campaigns especially important to build recognition within the well developed IT educational market within the consumer sector o Strict regulations concern also consumers protection in terms of privacy and personal information processing . Strict regulations on personal information protection as stipulated in the Act on the Protection of Personal Information (Act No. 57 of May 30, 2003) . Strict regulations on data retention and identification of consumers (primarily affecting telecommunication carriers but imposing some connections with Internet based IT services as well) in terms of limitations in customers related information processing in adherence to the Act on Identification by Mobile Voice Communications Carriers of their Subscribers and for Prevention of Improper Use of Mobile Voice Communications Services (Act No. 31 of April 15, 2005)

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6.3. ENTERPRISES SECTOR (B2B) SWOT ANALYSIS

The graph below shortly presents most important outline of the private enterprises sector (B2B) SWOT analysis results, while following chapters introduce detailed considerations.

Strenghts Weaknesses Opportunities Threats

Already Focusing High potential of Business culture developed B2B expertise mainly enterprises sector differences sales model on IT security

Lack of Japanese Financial crisis Threat of further B2B IT training localized IT related economic sales experience training services opportunities breakdown

High ICT Confirmity of Limited initial investment level Dynamic growth expertise with funds of Japanese of IT projected needs companies

Partnerships with Enterprise sector A key role of ICT leading intensive IT sector for Japan's international IT training economy corporations competition

Distant learning Advanced IT Contracts and technologies expertise related services liablilities availability opportunities strict regulations

Formal education system entities cooperation

6.3.1. STRENGTHS

 Developed enterprises sector B2B sales and cooperation model o Providing customized IT training offers responding to diagnosed needs of new ICT technologies investment and deployment o Offering programmes for employees of IT training consistent with international standards for IT qualifications confirmation . Providing custom IT training programmes that could be leveraged by customer companies to increase staff loyalty and retention simultaneously increasing IT proficiency o Providing complementary advanced IT consulting services as an added value to offered ICT training services o High level of quality of service for businesses with adherence to business customers retention . Separate customer services for businesses

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. Broad communication interfaces . Responsive customer service staff o Adherence to best practices of customer relationship management . High efficiency of such processes with application of CRM systems . Implementation and automation of workflows o Insurance strategy for implementation of B2B large-scale projects contracted by enterprises (insurance costs qualified as direct costs of projects implementation) o Mutual cooperation on a basis of common projects implementation . Cooperation with vendors of new ICT technologies in order to embrace their solutions with training services offerings o Seeking for mutual offer complementation instead of direct competition with local IT training companies . Partnering with many private IT training related companies, especially private universities in launching advanced educational programmes (e.g. in terms of postgraduate study courses compliant with international standardization of qualifications assessment and certification)  Enterprises sector IT training services sales experience o High level of experience in B2B sales model (the company has been contracted for IT training services by many large corporations, including leading international IT companies, such as Panda Security, Safe Computing, Spin, as well as banks such as Lukas Bank and Nordea) . The company had already contracted several dozen of enterprises in regard to providing advanced IT training services and consulting . The company is well prepared for business dedicated consumer service as a key importance factor in B2B sales model  It has developed B2B platforms for business customers dedicated helpdesks and information centers, automated workflows, etc.  It has experience in Internet marketing channel usage targeting enterprises (almost 90% of current company sales within B2B model is generated by Internet marketing channels) o For enterprises sector sales of a primary importance are direct mail marketing approaches  Integration of all business customers services related operations within B2B Internet based platforms . The company as already executing this type of sales and operations on the enterprises sector will be able to partial employ the economy of scale approach  There will be no need for significant change of operations as they will be implemented on same platforms expanded towards Japanese language localization  Conformity of expertise with current needs of Japanese enterprises o IT security specialization of the company is well aligned with both the short and a long term needs of Japanese enterprises . The second most important foreign IT investment for an average Japanese company is investment in advanced systems for encryption and authentication (this results from the fact that companies shift most of its operation and sales to Internet risking confidentiality and trust endangering, especially in terms of sensitive electronic financial operations) . Over 68% of companies declare their investment in foreign technology for encryption and authentication in a short and long term

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. Such investments will inevitably determine the need for employees to be adequately trained and skilled in security related areas of Information Technologies . The most advanced encryption technologies based on unconditionally secure symmetric cryptosystems within the quantum key distribution protocols are subject of special expertise of the company  In the long term this will allow to position company as one of the leaders in advanced IT training services in IT security domain on Japanese market o High level of expertise in Web 2.0 and open source systems for Internet social platforms aligns with trends of high anticipation for these solutions among many Japanese enterprises . This results in interest of companies to train their personnel in regard to deployment and administration of such technologies and solutions (appropriate education offer is prepared and available by the company and projected to B2B sales model)  Partnership with leading international IT corporations o The fact that the company already partners with many world leading IT corporations (including Microsoft, IBM, Cisco, Symantec, Juniper Networks, Internet Security Systems, Sun Microsystems, Hewlett Packard, Novell Networks, Red Hat and MySQL) enables for an appropriate technologies choice dedicated for certain needs of an enterprise consultation in a form of additional service preceding customized IT training of the personnel  Distant learning and sales support technologies o The company has developed advanced e-learning solutions dedicated to B2B sales model in the enterprises sector . The company is able to deploy Internet subdomain based dedicated e-learning platforms for larger enterprises, which are integrated within corporate intranets, enabling Japanese enterprises to more efficiently use distant learning model IT training offer for their personnel  The company operates deployed e-learning platforms and IT professionals provide asynchronous and synchronous training services by their mediation . Such platforms are also an added value of IT training and consulting services, as they remain after completion of service execution, constituting an important knowledge resource that can be used by the enterprise’s staff anytime in the future o The company has also developed advanced B2B sales platforms, integrated with complex CRM systems, which allow for smooth integration of training content provision and business operation with adherence to dedicated high quality customer service for enterprises

6.3.2. WEAKNESSES

 Focusing IT training services B2B sales model and cooperation offer in IT security domain o Enterprises sector sales and cooperation are planned primarily basing on advanced expertise in regard to IT security . Due to high reliability, social trust and confidence in Japan, IT security issues may turn out not a very important matter for Japanese enterprises  There is a low confirmed level of security issues and resulting damage . Despite optimistic results in JETRO surveys (as described in opportunities chapter below) it may turn out that Japanese companies will not pay attention to IT security after all, and thus will not be interested in B2B purchase of advanced IT training and consulting services regarding IT security  The company will need not to focus only in the domain of IT security, but take into consideration advancing in other perspective and more Japanese

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market adequate domains of IT (e.g. Internet marketing systems, real time collaboration systems, open source software, SOA and SaaS technologies)  IT training and consulting services programmes and contents not available in Japanese language o Japanese enterprises will need IT training and consulting services in Japanese language o All associated services (including main content of the delivered service, as well as additional customer service, such as helpdesks, etc.) will also need to be available in Japanese language o Therefore preparing customized services for potential customers in the enterprises sector will require applying of Japanese translations, as well as Japanese market specific modifications to programmes and contents that are already implemented and planned be utilized as a basis . Preparation and execution of most of B2B offered services will require engagement of expert Japanese IT professionals, specialized in adequate fields of IT (high costs of such operations will initially significantly hamper B2B sales and cooperation efforts) . It is however possible to commence with Japanese companies cooperation on external markets, prior to increasing activities in Japan  Limited capability for initial investment in B2B operations o In regard to advanced human resources, as well as required facilities for B2B operations, significantly the company will have to bear high costs for establishing and operating B2B sales and cooperation activities within the enterprises sector . Therefore external funding will be needed in order to launch B2B operations in Japan  Eventual sources include publicly supported international cooperation programmes, publicly supported business development programmes (according to provisions of the Public Assistance Act, Act No. 144 of May 4, 1950), business ventures capital investments, initial public offering, etc.

6.3.3. OPPORTUNITIES

 High potential of enterprises market sector o 4.72 million enterprises of all sizes function in Japan . There are 5.5 thousand large companies with capitalization over 1 billion yen  Annual sales of these companies accounted to $6.5 billion in 2008 . There are 28.3 thousand medium companies with capitalization between 100 million and 1 billion yen  Annual sales of these companies accounted to $2.59 billion in 2008 . There are 1.09 million small companies with capitalization between 10 to 100 million yen  Annual sales of these companies accounted to $6.26 billion in 2008 . There are over 3.60 million micro companies with capitalization below 10 million yen  Annual sales of these companies accounted to $1.30 billion in 2008 . Altogether the SMEs in number of 4.69 million constitute 99.7% of all companies and employ over 70% of all employees in Japan o The ICT market sector along with the electronics sector constitutes over 10% of the whole Japanese economy output in terms of nominal GDP . In 2008 sales of manufacturing ICT industry alone were equal to $380.11 billion (2.3% of the economy), while sales of nonmanufacturing ICT (service relates) industry alone were equal to $635,31 billion (3.8%) o In regard to above facts, as stipulated in reports by the NikkeiNet and Nomura Research Institute, current macroeconomic circumstances in relation to ICT sector, even despite significant economic downturn are favorable

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 Financial crisis related opportunities o Paradoxically, similarly as is the case with consumer sector, the economic crisis introduces opportunities in enterprises sector as well o Financial crisis is causing difficult circumstances for Japanese enterprises, but at the same time due to economic survival necessity it drives implementation of strategies of innovation and human resources development, as well as encourages undertaking actions towards increase of export and presence on developing countries markets . Innovation is fueled mainly by ICT (which enables knowledge sharing and increased creativity) and thus also requires human resources development in proficiency of ICT . On the other hand ICT skills also increase proficiency of human resources which align with governmental strategies for companies to overcome their difficult situation during economic breakdown  Above points constitute excellent opportunity to offer ICT training for the enterprises human resources at appropriate ratios of price to quality, with provision of distant learning which maximizes availability of employees for business operations even during conduction of their course of training o Promotional model of B2B sales of IT training services for Japanese companies’ workforce will focus on offerings within premises for preparation of Japanese companies to better compete on overseas developing markets . In this respect offerings of IT training will aim to encompass advanced technologies and solutions not native to Japan, but gaining increasing share in IT operations in foreign developing markets, as well as those internationally standardized and adopted in global scale . In this regard not only contents will be important but also international standards of knowledge certification appropriate for the target markets (especially in European Union, with focus on the Central Eastern Europe)  Opportunities related to high ICT investments of Japanese companies despite the economic crisis o Despite financial crisis according to analysis of short to long term development strategies of Japanese companies the projected enterprises sector investment in ICT is quite considerable o On a basis of late 2008 large-scale national survey by JETRO (dated September thus already accounting for negative influence of the economic crisis) it has been found that Japanese corporations aim for ICT investment in foreign products and technologies . This comes as no surprise as ICT investment is a necessary strategy to increase competiveness and successfully lead company through economically difficult time (gain in productivity, reduced costs, increased innovation in all areas of operations through access to distributed knowledge and know-how resources)  75% of Japanese companies are interested in Web 2.0 ICT investments (45% in short term and 30% in long term) enabling improvement of marketing in Internet channels  68% of Japanese companies are interested in encryption and authentication investments (35% short term and 33% long term), thus revealing needs for electronic operations risk reduction (especially in domain of electronic financial operations, that are increasingly endangered by attacks and confidentially compromise)  61% of Japanese companies would like to invest in Internet security measures additionally improving their networking safety o The percentage numbers above indicate interest at two high positions (2nd and 3rd) of information security related technologies deployment

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o This will result in significant increase of demand from enterprises for appropriately prepared personnel in terms IT security general and advanced knowledge and qualifications thus increasing demand for IT security training services . Quantitative analysis of volumes for such investments surpasses optimistic estimations  According to statistical data by the Ministry of Finance, Japanese companies spent following amounts on IT software investments in 2008 (even though the last quarter of 2008 corresponding to a peak period of a recent economic crisis is reduced by almost 50% it still is characterized by immense spending): o In 1st quarter 2008 $14.7 billion were invested o In 4th quarter 2008 $8.51 billion were invested o The volumes of investments, although recorded significant drop, still remains on an exceptionally high level in absolute measure o It should be stressed that IT software investment by Japanese enterprises constitutes approximately 10% of total investment in Japan’s economy (which is a separate characteristic to the fact that the ICT industry makes up approximately 10% of the total real GDP in Japan) o High level of Japanese companies investments will trigger: . Proportional human resources IT skills development, thus increasing demand for IT training services . Pressure on the job market in regard to high level of IT skills among potential employees . The most important IT skills will be related to disciplines of novel web technologies (Web 2.0) and open source as well as cryptography and IT security (company’s expertise)  Opportunities due to the role of ICT sector in Japanese economy o Nominal domestic product of the ICT industry in Japan in 2006 was 95.2 trillion yen (i.e. approximately $1 trillion) o This makes the ICT industry the largest industry in Japan, accounting for 9.8% of total Japanese nominal economic product o Real domestic production has been increased consistently since 1995, recording an average growth rate of 5.2% from 1995 to 2004 . During 1995 to 2006 the averaged growth of the real GDP of the ICT industry was 7.1%, i.e. highest level of all other industries o Recent data from 2008 point that ICT industry has slightly decreased its value to 91.2 trillion yen, i.e. below $1 trillion o The ICT industry is a driving force of Japanese economy . In 2006, the degree of contribution of the ICT industry to the real GDP growth rate of 2.7% was 1.0%, with a contribution rate of nearly 40% (exact value 37%) o In the Japanese ICT industry there is 3.85 million people employed (an increase of 1.9% during just one year), which accounts for 6.8% of all employees in the whole economy o The size of Japanese ICT market accounts for over 10% of sizes of the whole global ICT market (remains with consistent shares over 10% in relation to all sectors of ICT) o The subsector of the ICT market, i.e. the IT market (without telecommunication technologies) has projected investment value of over $108 billion until 2011

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. Within this value $36.4 billion is due to SMEs sector investment and $53.2 billion is due to large companies investment (while remaining $19.3 billion characterizes value of IT public sector investment) . Also within this value $22.2 billion is due to software sector, $44.2 billion is due to services sector, while remaining 42.5 billion is due to hardware sector investments . It is expected that a substantial part of IT projected investment in all sectors in Japan will be allocated in IT training services  Increasing competencies is a necessary part of new technologies development and implementation, thus providing opportunity for development of export subjected services o The ICT sector is expected to further expand in directions of: . Ubiquitous access to networks everywhere and by anyone . New Generation Media Devices (handheld mobile devices with capabilities converging with notebook computers) . Security services (as demanded response to increasing entities participation in open networks)  The ICT security sector currently estimated at value of $4 trillion is projected to growth up to $6 trillion, the highest level of growth among different ICT sectors o A 66% growth in course of 5 years will trigger immense increase of demand for ICT security related training (a broader aspect of training regarding not only ITs but also telecommunication security issues, in which the company is also highly specialized)  Other sectors of ICT will also grow significantly (second position in terms of growth intensity is held by Internet advertising ICT sector) . The whole e-commerce sector (embracing retailing in networks) in 2008 was worth $68 trillion, but is projected to growth almost twice to $128 trillion  This sector employs many IT professionals, and such robust grow will trigger many business opportunities aligning with strategies for human resources development  Opportunities related with advanced IT expertise of the company o The company took part in the first international workshop for quantum cryptography commercialization organized and certified by the IdQuantique company and Geneva University in Les Diablerets, Switzerland. The company establish cooperation with the IdQuantique company, a leading European Union (Swiss) company specializing in commercial quantum cryptography systems o The company is cooperating with the Laboratory of Quantum Cryptography (LKK) at Wroclaw University of Technology and the national scientific network, the Laboratory for Physical Foundations of Information Processing (LFPPI), grouping several leading public research institutions in the country, on the plane of research and development of new and advanced quantum information processing and communication technologies (especially quantum cryptography) . This cooperation is enabling company to access some of the most advanced technology laboratories in the European Union (and also in international terms) . On this plane the company could be valuable technological partner even for advanced leading Japanese ICT corporations and largest conglomerates . The company’s staff had participated in many international R&D projects within the European Union Framework Programmes, and is currently engaged in a national R&D project related to advanced IT security in scope of securing IP communications

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of public administration offices by quantum cryptography based on QKD (Quantum Key Distribution) integrated within the IPsec protocol library of IKE (Internet Key Exchange)  The company has partnered with the Quantum Cryptography Laboratory at Wroclaw University of Technology, one of the advanced European research centers in this field o The results of the project will constitute a platform for cooperation with advanced ICT Japanese corporations o Providing training services in domain of quantum information processing will position company as one of the leading high-level IT education providers among SMEs in Japan, and will allow for valuable partnership and cooperation possibilities with much more developed R&D corporations, research organizations and educational institutions . In terms of a long-term strategy, the company will seek cooperation with most advanced Japanese vendors of quantum information technologies, to become a strategic partner in education and dissemination of future IT development directions, both of private corporations and research centers, bridging and converging ideas and conceptions from different viewpoints internationally . The company already cooperates with research networks and commercial early adopters of quantum information processing technologies in the European Union . Currently on the global market there exist only few companies that are actively developing commercial technologies of quantum computation and cryptography  Important part of B2B model will be focused on cooperation with Japanese formal education system entities of private types (especially with private universities) o The company is experienced in initiatives of launching cooperative IT training programmes with private statutory educational entities (such as universities), enabling provided education to be formally accredited by the Ministry of Education in terms of postgraduate studies programmes and lifelong learning services

6.3.4. THREATS

 Business culture differences, as well as closed and hermetic operations characteristics of the Japanese enterprises and business groups (Keiretsu) o Possible threats for successful cooperation and B2B sales model with Japanese corporations will be due to eventually high levels of culture differences o Japanese societal interactions and etiquette are very complicated and sensitive . Japanese culture experts will need to advise and appropriate attitude will have to be taken to built positive relations with Japanese enterprises representatives . Japanese managing personnel will be employed for business operations in Japan o Obstacles to deepening of mutual cooperation could be posed by hermetic and closed business culture in Japan . Domestic corporations could be simply be not interested in extending cooperative relations or B2B sales agreements with foreign companies entering Japanese market  Efforts will be undertaken to gain trust and interest of potential Japanese partners by mutually exchanging viewpoints and perspectives with ideals towards building of international society  Further breakdown and deepening of economic crisis o If there will occur another strong international breakdown in global economy, affecting all countries and resulting with economic downturn there will be a risk, that after exceeding a certain threshold B2B sales models will be strongly affected

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. Companies will be forced to cut all investments, including IT investments, which until the economic crisis doesn’t escalate are indeed a key to economic survival  However a drastic worsening of economic conditions may result in simple lack of possibility invest strongly reducing operations and causing bankruptcy of many enterprises  Dynamic growth of Information Technologies threatening invalidation of cooperation benefits for private enterprises sector o As in the case with remaining sectors there is a risk of IT expertise becoming obsolete thus invalidating potential benefits for . Japanese market is specially characterized by dynamic development of innovative IT  Therefore the company will seek to offer certain narrowly specialized area of very high, relevant and up to date in international terms expertise in regard to quantum information processing and quantum based IT security  Other than that the company will also seek to fulfill a role of a mediating layer between international and Japanese advanced IT solutions vendors and other sectors enterprises interested in IT investment and associated consulting and personnel training o In that regard a sustained observation and expertise gaining within new fields of emerging technologies is necessary to offer up to date expertise for enterprises sector within B2B sales model  Enterprise sector intensive competition in area of IT training services o On the Japanese there are many companies specialized in providing full range of IT training services for enterprises personnel . The chance to effectively compete after entering Japanese market will lie within ability to offer improved ratios of price to quality due to outsourcing related reduction of costs . Another aspect of the differentiation of B2B sales offer will be based upon introduction on Japanese market of internationally standardized systems for qualifications assessment and  Strict legal regulations in terms of product and services liability to enterprises o The offerings must be conforming with regulations of the Product Liability Act (Act No. 85 of July 1, 1994) and Act on Specified Commercial Transactions (Act No. 57 of June 4, 1976) o Also the company will have to be cautious not to abuse regulations on unfair competition (within Unfair Competition Prevention Act, Act No. 47 of May 19, 1993) that limit scope of innovative marketing campaigns also targeted at enterprises within B2B sales model o The company will have to be aware for inappropriate direct mailing activities as in regard to regulations for protection against SPAM (contained within the Act on Regulation of Transmission of Specified Electronic Mail, Act No. 26 of April 17, 2002)

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6.4. PUBLIC ADMINISTRATION SECTOR (B2G) SWOT ANALYSIS

The graph below shortly presents most important outline of the public administration sector (B2G) SWOT analysis results, while following chapters introduce detailed considerations.

Strenghts Weaknesses Opportunities Threats

Lack of Governmental Already appropriately promotion of HR Possibile tenders developed B2G detailed analysis ICT skills restrictions operations model of cooperation development

Public Public sector ICT Risk for already B2G cooperation administration market saturated offer focused on services investment public-private IT security experience opportunities partnership

B2G formally Public No localized Possible evolution regulated administration Japanese version towards closed cooperation promotion of IT of services ICT standards experience security

Social Cooperation Dynamic growth responsibility opportunities of Information projects towards e- Technologies experience government

Cooperation opportunities towards IT R&D

6.4.1. STRENGTHS

 Developed public administration sector B2G sales and cooperation model o Sustained monitoring and responding to tenders in field of administration entities staff IT training, especially in relation to new ICT technologies deployment and investment . On the national level of ministries . On the local level of prefectures and municipalities o Low price strategy towards tenders with conformity to national and international standards . Efforts towards obtaining accreditation for Japanese standardized IT training services assessment . Introduction of international IT training services assessment programmes o Negotiating refunding of internationally assessed IT key competencies training services for unemployment with municipal labor bureaus o High level of quality of service for administration with adherence to public contracts retention and new cooperation opportunities . Separate customer services for public administration . Broad communication interfaces . Responsive customer service staff, dedicated to public administration sector

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o Insurance strategy for implementation of B2G large-scale projects contracted by public administration (insurance costs qualified as direct costs of projects implementation) o Seeking cooperation in areas of e-administration . Specialized IT training offers for public administration personnel within implementation of international scale cooperation projects in regard to  ICT key competencies enabling public administration officers to become valuable personnel of e-administration o Solutions and technologies for increased productivity and efficiency in public e-administration o Solutions and technologies for security in public e-administration o Solutions and technologies for improved communications, service and cooperation within public e-administration  IDABC programme of European Commission for European e-administration  International exchange of knowledge and experience in regard to technologies deployment for e-adminstration and e-government  Public administration sector IT training services sales experience o The company has extensive experience in contracting for IT training projects implementation with many governmental entities . On the level of local government  The company has been contracted for providing basic to advanced IT training services to over 3000 individuals . On the level of national government  The company has been contracted by the Ministry of Internal Affairs and Administration for advanced IT security training of over 1000 national public administration officers under the project aligning with the IDABC strategy of European Commission for e-administration and e-government development in the country  The company has won the contract by the Ministry of Education for providing specialized IT training (in terms of post-graduate IT study in cooperation with Wroclaw University of Technology) of over 400 Information Technologies vocational school teachers in the whole country o The company has won many public administration tenders for IT training services contracted by the public administration . The overall sum the company was contracted with public administration exceeds 4 million PLN ($1.4 million) . The company cooperated with government on the level of ministries (contracted by Ministry of Education, Ministry of Internal Affairs and Administration) . The company has been also contracted by local level governments (e.g. Warsaw and Wroclaw Municipal Governments, Marshal offices, Labor bureaus, etc.)  Experience within B2G formally regulated cooperation o The company has experience in meeting public administration qualification programmes imposed on educational institutions . The company has been qualified and listed in the state educational institutions registry at no. 2.02/00095/2008 (later on reassigned to 2.02/00147/2009). . The company has been accredited by the Polish Agency for Enterprise Development (accreditation no. 1588/2007) within the European Commission approved Sector Operational Programme: Development of National Enterprises (SPO-WKP 2.1) as an expert consulting and training company in the field of Information Technologies

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 The company implements many social responsibility projects that align with implementation of governmental strategies o The company has been contracted for advanced ICT R&D related training of over 500 university students o The company has been contracted for IT technical competences training of over 1000 students and IT programme modernization project, mainly related to e-Learning technologies introduction in IT vocational schools and directing changes in educational programmes o The company has been twice contracted for key IT competencies training programme of over 1000 unemployed individuals with aim to enable their requalification and employment in IT related job positions

6.4.2. WEAKNESSES

 Lack of appropriately detailed analysis for possible cooperation areas with public administration o No deep expertise on execution of possible cooperation and public support domain projects has been performed . Such information is not easily accessible and adequate expertise is necessary . Limited budget for analysis did not allow to perform required expert consultations  These consultations will constitute elements of export strategy implementation as described in further chapters  B2G cooperation offer focused on IT security domain o Especially within the R&D plane most valued offering of the company is focused in information security domain . There is a risk that Japanese public administration will not consider a potential collaboration as important and required (as it also could be the case in regard to enterprises sector and B2B sales and cooperation model) in domain of IT security issues, due to high level of reliability of Japanese society and high levels of trust and confidence among citizens  Such governmental attitude will find reflection in support programmes and tenders for IT related services, but as mentioned in above point, a detailed analysis in this respect was not performed as requiring additional consulting o From official data as contained in Japanese security policies and reports published by governmental bodies it follows that Japanese public administration nevertheless does care for security issues (more details in following chapter concerning opportunities) o There is a risk however that too little resources are being allocated in themes of IT security for international R&D or dedicated training projects to be appealing and economically rational o Such situation would result in devaluation of the company’s main asset in form of advanced IT security expertise that should be determining value for aimed B2G cooperation . In such circumstances the company will need to shift focus in B2G cooperation and sales efforts from IT security to other domains of Information Technologies . The company plans to undertake efforts as an important part of B2G sales and cooperation towards realization of general IT training projects, as well as social responsibility education projects not limited only to IT security, but encompassing many more currently important issues in IT

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(e.g. Internet marketing systems, real time collaboration, open source software, SOA and SaaS technologies, etc.)  IT training and consulting services programmes and contents not available in Japanese language o Similarily as in the case of two remaining sectors, public administration sector also requires all cooperation and B2G sales to be implemented completely in Japanese language (with possible exception concerning international projects implementation) . All public administration entities will demand any services in Japanese language . Preparation of cooperation projects documentation proposals, as well as tenders offers, etc. will be necessarily accepted only in Japanese language . All public administration related IT training services will also have to be implemented in Japanese language  This will require applying of Japanese translations, as well sustained expertise of Japanese expert in the IT field . Preparation and execution of B2G planned operation will require engagement of expert Japanese IT professionals, specialized in adequate fields of computer science, but associated costs to be bear will be significantly lesser than in case of B2B operations, thus will be in reach of the planned initial budget of operations establishment

6.4.3. OPPORTUNITIES

 Strong governmental promotion for development of ICT advanced human resources o In assessments by the Ministry of International Affairs and Communication of Japan, Japanese corporations still lack human resources able to add higher value to their products through ICT . This results in public administration governed projects of large-scale labor force human resources ICT skills development with funding available for subcontracting companies focusing on IT training services o The Ministry of International Affairs and Communication is promoting training of advanced ICT human resources by such means as developing practical teaching materials for learning the techniques and skills needed to address challenges through support and training projects aimed at human resources . This indicated overall increase of demand for IT training services within the public administration sector o The company export development strategy aligns with Japanese government level strategies for information society development in Japan . According to e-Japan strategy currently extended beyond the New IT Reform Strategy up to the u-Japan strategy, one of just four main policy goals is to nurture high-quality human resources (the remaining three are establishment of the ultra high-speed network infrastructure and competition policies, facilitation of electronic commerce and realization of electronic government) . The goal of nurturing high quality human resources has been established in assumption that global competition in terms of excellence of intellectual capital will take place in 21st century . In order for Japan to take active and leading part in international society development it must fulfill following goals:  All citizens need to acquire key IT competencies and skills to gain possibilities for further self development and increased creativity and innovation due to access to globally distributed knowledge resources

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o Governmental support actions towards improvement of digital literacy among individuals public, with due considerations to seniors and disabled will be undertaken, aiming also to drastically increase estimated Internet diffusion rates o Efforts towards digitalization of education should be accomplished earlier than originally scheduled . Increased effort towards enabling broadband Internet access from all education related institutions and thus enable fully IT driven education . IT driven lessons should be promoted in each education subject with combining instructions on IT related ethics . Education of English must be significantly reinforced as the fundamental language in the Internet era enabling more complete utilization of distributed knowledge resources . More stress should be put on technical and science education in subjects such as mathematics and physics to foster ability of logical thinking . All educations institutions will be encouraged to interact via Internet both in the national, as well as in the international level, thus fostering human resources capable of collaboration despite different cultures and viewpoints . IT courses in vocational schools that are allowed to flexibly respond to changes in curriculum should be strengthened, so that, in addition with college graduates, the society will be able to produce many advanced IT technical experts and researchers in accordance to social needs  Human resources responsible for IT training must be secured to increase citizens digital literacy o School teachers will be given more opportunities for additional IT training by means of funding programmes (especially in regard to international standards for qualifications assessment and certification) o Registration and dispatch system of IT instructors will be introduced, so that human resources in businesses and colleges can be utilized as IT instructors o Not-for-profit organization activities based on volunteers trainers efforts will be supported in collaboration with the local governments and businesses to improve the level digital literacy education they provide o Governmental support will be undertaken towards reinforcement of teachers in regard to IT driven education systems at elementary, junior and senior high schools, colleges and universities, as well as actions towards enrichment of the lifelong IT education providers for all adult citizens beyond formal education system  Conditions for development of technical IT experts and researchers will be further enhanced to maintain Japanese leading role in IT innovation

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o Governmental support action will be undertaken towards increasing numbers of masters and PhDs in IT related fields both in number and quality to secure advanced technical experts and researchers at private or public colleges and universities o There will be implemented actions towards further increase of numbers of outstanding foreign IT experts exceeding several tens of thousands in total, with the aim to exceed the level of IT expert and research human resources of the United States o Universities and college systems will be reviewed and actively reformed . Market mechanisms will be introduced, so that universities and colleges will be able to exercise more autonomous and agile management on their own (this including authorities over personnel and budgetary matters, establishment of faculties, departments and curriculum, exchange of researchers with private businesses, as well as other private sector based cooperative projects) . Government expects to achieve through these actions increasing universities and colleges motivation for demonstrating original initiative towards increasing efficiency of IT higher level education  IT certification systems will be standardized internationally  Regulations on foreign residential statuses for foreign IT experts will be promptly revised to accept more human resources from abroad  Public sector ICT market investment opportunities o The projected investment in IT in public sector in Japan is estimated by the IDG to be worth $19.3 billion until 2011  Public administration promotion of information security measures o As social and economic activities become increasingly dependent on information and communications networks, the Information and Communications Bureau is comprehensively promoting measures for information security including: . Elimination of malware software, viruses and Trojan horses . Countering unauthorized access attacks . Conducting research and development in this regard . Increasing competencies of human resources in this regard . Strengthening international cooperation between IT security related organizations of private and public origin  Cooperation opportunities in programmes of development of e-government o Increased public administration demand for education in IT fields related to e-administration o Based upon the e-Government Construction Program, the Future Administrative Reform Policy, and the IT Policy Package 2005, as well as March 2007 the New Guideline for Promoting e-Local Governments, following actions are being undertaken: . Implementation of effective and vital e-Local government by 2010  Thus constituting an effective plane for cooperation and IT training sales in B2G sector with local government entities (both on the levels of municipalities and prefectures in Japan) . Developing IT skills in human resources employed within public administration

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 Thus directly increasing demand for IT training services sales in B2G sales model within the public administration sector  Cooperation opportunities in IT R&D and educational projects o Japanese government provides comprehensive support and network of contact points for support in initiating and launching international activities of ICT companies . It undertakes dissemination and educational activities in areas of international mutual cooperation within the spheres of private and public sectors . It organizes information and knowledge exchange between many different countries and shares such information among industry, academia and government for implementation of needed international cooperation projects . The Ministry of Internal Affairs and Communications (MIC) Information and Communications Council formulated ICT R&D and the Standardization Strategy to Enhance Japan’s International Competitiveness accompanied by a report released in June 2008 with the following measures:  ICT standardization strategy map in the prioritized technological areas where Japan should make efforts toward international standardization and a policy for formulating an ICT patent map o In this regard the company will seek opportunities for cooperation in areas of international standardization by mediation of European Standardizing bodies and advanced IT prototypes development road maps  Method for developing human resources engaged in international standardization activities o In this regard the company will seek opportunities in areas of educational projects implementation in conformity to international standardizations for qualifications assessment . The company already participates in international cooperation projects in the European scale that embrace IT security proficiency training and assessment among public administration officers with conformity to the European Commission IDABC programme for development of e-administration  Establishment of a center for ICT standardization and intellectual properties that controls these standardization activities through cooperation between the government, industry and academia o The company will seek cooperation opportunities in this respect within European Union and Japanese public-private consortia o Possibility to cooperate on the plane of ICT R&D projects contracted by public administration . Japanese government strongly promotes development of R&D efforts concerning ICT  The Ministry of Internal Affairs and Communications (MIC) will promote R&D projects based on the UNS R&D Strategic Programme II (UNS: Universal Communications, New Generation Networks, Security and Safety for the Ubiquitous Network Society) o The safe and secure ICT area of R&D is especially well aligned with the company’s expertise o Establishing of a safe, secure and reliable society, requires the Ministry of Internal Affairs and Communications (MIC) to promote research and development activities to overcome issues in various

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fields, and thus possible themes for co-funded R&D projects related to IT security encompass: . Secure space communication technology and next- generation advanced network infrastructure, high-speed, large capacity satellite communication technology . Secure remote sensing technology and ubiquitous platforms technology, integration between robots and ubiquitous networks . Information confidentiality and authenticity technologies o Possibility to initiate cooperation within social based educational projects in an international scale under support of governmental organizations (possible patronages and partial funding) . The company will seek cooperation in regard to implementation of social responsibility projects with JISA (seeking for its strategic patronage) and leading Japanese ICT corporations enabling adequate IT training programmes to suit the advanced products, solutions and technologies for information and communication applications of domestic vendors in Japan . Projects targeted at countering digital divide and digital exclusions by providing people affected with barriers appropriate IT skills that help to overcome these barriers  The company has experiences in implementation of IT educational projects targeted at reduction of different types of barriers affecting individuals and aiming to improve their job perspectives due to adequate ICT skills . Possibility to initiate international cooperation within projects targeted at promotion of telework and corresponding IT competencies among women in different countries  The company has extensive experience in implementation of this types of projects dedicated to women in Poland and partially in the European Union (the company has been contracted to provide over 3000 thousand women with key IT competencies training and qualification assessment) o Experience in cooperation with formal educational system entities . The company has initiated partnership with series of higher education universities across Poland and launched a nation-wide scale postgraduate studies on information security for individuals holding a Master of Science university degree in computer science major o Governmental contracting and public funding will reduce negative effects of economic downturn due to eventual escalation of the recent financial crisis . Special measures are undertaken by the government (on national and local levels) to support Japanese enterprises sector development, including public aid support programmes

6.4.4. THREATS

 Threats to B2G sales model due to tenders restrictions in Japanese public administration sector o Important threat for assumed B2G sales model concerns restrictions imposed within governmental tenders offers, which could require similar services experience based in Japan only (not taking into accounting similar services successful implementation in other countries) . If such national level expertise tenders restrictions will be imposed in all offers, the company will need to first enter B2B cooperation to be subcontracted for tender subject implementation in order to gain formally acknowledged experience  Already very intensive partnership between enterprises and governmental sectors in Japan

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o The threat of saturation of private-public partnerships and cooperation initiativs in regard to IT sector is highly probable in terms of regional and even national scale clusters . However small size of the company and its unique expertise in terms of highly advanced IT are expected to allow for building associations and relations in public administration sector . The company will eventually seek for partnership in already launched national and international scale cooperation projects  Evolution towards closed character of ICT standards development by Japanese government o If Japanese government chooses to develop closed and proprietary national standards in ICT in a short to long term then cooperation possibilities will be affected and limited . Nothing points however for future cultivation of this approach, on the contrary Japanese public administration is currently aiming for openness in regard to international standardization IT and cooperation . Naturally strategic sector standards such as IT security due to obvious implications towards national defense will be imposed to restrictions and closed standardization, nevertheless there will certainly be areas for effective cooperation on highly advanced technologies applicable fundamental research and initial efforts for commercialization  Dynamic growth of Information Technologies threatening invalidation of cooperation benefits for public administration sector o Sustained external innovation in educational models is especially present on Japanese market, but in order to offer competitive benefits in terms of public sector cooperation, the company must provide expertise on the international level of advancing IT . Sustained observation and expertise gaining within new fields of emerging technologies is necessary to offer up to date expertise for B2G cooperation and sales

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7. EXPORT DEVELOPMENT STRATEGY GOALS

The strategy goals of the export development could be divided within three groups of goals regarding different sectors of the target Japanese market, as well as a sector neutral group of goals.

Following chapters present details of the goals planned to be achieved in implementation of the export development strategy of the CompSecur sp. z o.o. offered IT training services.

The graph below shortly illustrates outline of the structure of the planned export development strategy goals.

Business

•Branch office operations •Increasing registration market share •Staff •Nurturing HR employment Business Business establishment development

Sector Adapting IT neutral Tenders training offer monitoring

Internet Social promotion projects Export Commercial International projects B2C strategy B2G cooperation goals Social Partnerships projects

Individuals Officers IT training IT training B2B

Increasing • Exhibitions expertise •Adherence to • ICT vendors high quality acquaitance • Embracing •Growing sales ICT training Increasing Partnerships market share

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7.1. SECTOR NEUTRAL EXPORT DEVELOPMENT STRATEGY GOALS

Export development strategy goals in terms of target sector neutrality encompass:

 Establishing business presence in Japan o Obtaining domiciliation address o Registering business entity and meeting all formal procedures and prerequisites . Meeting formal tax procedural requirements . Enabling financial interoperation  Launching business operations in Japan o Obtaining funding sources . Meeting target goals in sales sectors . Successful initiation of government funded social programmes  Local government level o Contracting labor offices for unemployed skills development, etc.  National government level . Obtaining external funding sources (venture capital, initial public offering, etc.) o Renting office space o Employing operations staff . Initially temporary part-time employment . With time shift to dedicated staff within the personnel centric business development model  Developing business operations o Enriching company value by integration of operations in domestic and Japanese market o Increasing market shares in target sectors on Japanese market o Providing personnel with development highly favoring work environment . Launching internal exchange programmes between branches  Inviting Polish personnel to work in Japan  Inviting Japanese personnel to work in Poland  Achieving positive effect of team building and increased company identification of domestic and foreign personnel o Increasing sales volumes and investing in organic growth of the company . Employing domestic sales and marketing models in Japan within economy of scale approach o Pursuing innovative business operations models . Leveraging Japanese high competitive business environment for innovation culture

Business •Branch office operations •Increasing registration market share

•Staff •Nurturing HR employment Business Business establishment development

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7.2. CONSUMER SECTOR (B2C) STRATEGY GOALS

Export development strategy goals towards consumers sector and B2C operations encompass:

 Adapting a consumer IT training offer to Japanese market o Implementing appropriate translations to already available IT training services . Deploying localized interfaces of e-learning platforms o Implementing required modifications for contents specific to Japanese market . Employing native expert IT consulting services o Launching services to the consumer sector of market . Integrating B2C platforms for sales operations  Commencing Internet based promotional campaigns o Establishing marketing presence on Japanese market . Deploying localized websites and internet services . Integrating services with sales and e-learning platforms o Building market recognition within promotional campaigns o Drive sales in the consumer sector  Launching commercial projects of IT training services for consumers o Increase sales and consumer market share in IT training business o Introducing to Japanese market external international standardizations for IT qualifications assessment and certification . Providing added value for IT training programmes for consumers . Certifications especially important for job market participants  Launching social responsibility projects o Non-commercial IT training services aimed at large-scale international cooperation establishment in relation society important aspects, such as digital literacy of disfavored groups, and digital exclusion threats o Seeking government cooperation and support in terms of co-funding and patronage o Leveraging experience and extending already co-funded projects within the Human Capital Operational Programme approved by the European Commission  Implementing individuals IT training services o Assuring adherence to highest quality of standards o Increasing credibility in information-centered market

Internet Social projects •Translation promotion •Consumer IT •High quality •Modification •Building training sales •Government of services •Launching market •Certifications support •Credibility recognition •Funding Adapting IT Commercial Individuals IT training offer projects training

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A comment is required in regard to B2C strategy goals encompassing implementation of non-commercial, social responsibility projects. Within these projects the company aims to initiate and cooperate within a larger scale, international programmes between Japanese and European markets as a basis for further development of commercial services.

The social responsibility projects will generally encompass rather fundamental IT skills development within society groups that are especially endangered by digital exclusion. Disfavored groups of society are facing many types of different individual barriers, some of which could be leveled by gaining adequate key IT competencies. This primarily concerns unemployed, disabled, or even women, also in Japanese society.

Similarly as in Western culture, women in Japan are primarily engaged with home duties and children care. This does not allow most women to undertake careers in sectors that have a strategic importance to development of information society in national and international terms.

The company plans to implement similar actions that were launched in Europe within the Human Capital Operational Programme supported by the European Comission. The company could leverage results and experiences from operating a large scale programmes for increasing IT skills among women in order to support telework model employment and better reconciliation of work with home duties and children care.

The company as one of the strategy goals of export development plans to launch and initially operate the similar models for social IT digital literacy development support programmes with possibly broad international cooperation. The company will seek for patronages and funding for similar initiatives within Japanese public administration support programmes. The company will also seek to increase Human Capital Operational Programme implementation scope to encompass cooperation with adequate Japanese not-for-profit organizations, thus achieving knowledge and experiences exchange between European Union and Japan with financial support from the European Social Fund budget. For instance in terms of women support projects, especially valued would be cooperation with dedicated educational institutions, such as the Japan Women's University (oldest such type institution in Japan), which could be interested in assisting with its expertise on the European Union market, and as well in implementation of similar project in Japan.

On plane of social projects implementation and related international cooperation the company will seek to build mutual connections between public administration and non-profit organizations networks in both Europe and Japan. A strategy to increase the area of IT skills driven social positive influence within the initiated programmes, will be to seek a patronage and organizational, as well as financial support from European Commission and adequate organizations in Japan such as the Japanese International Cooperation Agency.

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7.3. ENTERPRISES SECTOR (B2B) STRATEGY GOALS

Export development strategy goals towards enterprises sector and B2B operations encompass:

 Establishing partnerships with innovative Japanese ICT vendors and private educational entities o Participating in IT related trade exhibition fairs and conferences . Acquainting with advanced ICT vendors as potential partnering companies  Seeking for mutual cooperation on a basis of common interest projects implementation  Seeking for international R&D cooperation (especially in areas of new computing paradigms and advanced IT security) o Partnering with private IT training related institutions, especially private universities in launching advanced educational programmes (e.g. in terms of post-graduate study courses compliant with international standardization of qualifications assessment and certification) o Seeking for mutual offer complementation instead of direct competition with Japanese IT training companies . Seeking partnership in areas of mutual benefit and interest  Increasing expertise in regard to new Information Technologies o Embracing partnering ICT vendors solutions with provided IT training offerings  Increasing Japanese enterprises sector market share o Growing B2B sales . Employing appropriate marketing channels and techniques (including direct mailing) in combination with advanced Internet based B2B sales and operations platforms . Providing enterprises with customized IT training offers responding to diagnosed needs of new ICT investments and deployments . Providing programmes for companies employees of IT training consistent with international standards for IT qualifications formal assessment and certification  Providing custom IT training programmes that could be leveraged by customer companies to increase staff loyalty and retention simultaneously increasing IT proficiency . Providing complementary advanced IT consulting services as an added value to offered ICT training services o Assuring high level of quality of service for businesses with adherence to business customers retention (separate and responsive customer services staff for businesses, broad communication interfaces) . Adherence to best practices of customer relationship management (application of CRM systems, implementation and automation of workflows) . Increasing credibility and building long term relationships with business customers

Increasing • Exhibitions expertise •Adherence to • ICT vendors high quality acquaitance • Embracing •Growing sales ICT training Increasing Partnerships market share

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7.4. PUBLIC ADMINISTRATION SECTOR (B2G) STRATEGY GOALS

Export development strategy goals towards public administration sector and B2G operations encompass:

 Sustained public administration tenders monitoring in regard primarily to IT training services o Responding with offerings on the national (ministerial) and regional (municipal) levels o Winning tenders by employing strategy of the lowest costs balancing price adherence  Seeking for social projects support that will be primarily implemented within B2C operations model o Negotiating options and programmes for unemployed vocational IT skills training conforming with international qualification assessment and certification standardization refunding by municipal and prefectural labor bureaus o International extending of already implemented social programmes, and scaling international cooperation within a plane of these projects implementation to other fields and issues  Seeking for international cooperation in areas of e-government (e-administration) and IT security o Offering specialized IT training services for public administration personnel within implementation of international scale cooperation projects . Training of public administration officers and personnel in regard to IT key competencies enabling proficiency within specific e-administration programmes implementations, embracing solutions and technologies for increased productivity and efficiency, IT security solutions and improved communications, service and distributed cooperation technologies o Promoting knowledge and experience exchange in relation to programmes implementing electronic administration and electronic government applications in Japan and in European Union (cf. IDABC Programme of the European Commission for e-administration deployment in European Union member states)  Seeking for establishment of partnership relations with government on a national and regional levels o Partnerships with formal education systems entities, common educational projects . Aiming towards establishment of operations within Japan’s formal education system o Conformance with public administration educational services regulations, registries, etc. o Participation in regional clusters in relation to IT sector  Implementing public administration personnel IT training services o Assuring adherence to highest quality of standards . Providing separate customer services for public administration, as well as broad communication interfaces, and responsive customer service staff, dedicated to public administration sector . Increasing credibility in partnership with public administration . Retaining public contracts and finding new cooperation opportunities

Social projects Partnerships •Offerings support •Electronic •High quality •National level •Labor bureau government •Formal of services •Local level •Unemployed •IT security education •Credibility IT training •Clusters Tenders International Administration monitoring cooperation staff IT training

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8. EXPORT RECOMMENDATION TO JAPANESE MARKET

In view of presented SWOT analysis and definition of strategic goals the export of CompSecur sp. z o.o. IT training services to Japanese target market is recommended.

Implementation of the strategy of export development, as well as preliminary indication of time schedule and estimated cost associated with proposed actions is described in the following chapters (correspondingly in chapter 9. and in chapter 10.).

Japanese enterprises sector export B2B Japanese Japanese public consumer administration sector export sector export B2C B2G

IT training services export recommended

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9. IMPLEMENTATION OF EXPORT DEVELOPMENT STRATEGY

This chapter contains detailed description for implementation of the planned strategy for CompSecur sp. z o.o. export development of IT training services to the target Japanese market, including indication, justification and particularization of actions to be undertaken by CompSecur sp. z o.o. in a timeframe from January 2010 to December 2011.

Implementation of CompSecur sp. z o.o. IT training services export development strategy has been planned as according to execution of the following actions:

 Obtaining further consultation and settling formal procedures associated with establishing of business presence and operations in Japan (actions justified and described in detail in chapter 9.1.) o Obtaining necessary documents and formal requirements enabling sales access of the CompSecur sp z o.o. IT training services to the target Japanese market . At stage of preparation for meeting formal requirements for business establishment  Consultation on formalities for establishing of business presence in Japan  Consultation on financial operations and Japanese taxes formalities  Consultation on office and incubation facilities formal prerequisites  Information and advice on formal requirements for temporary staff employment within human resource consultancy  Consultation on formal prerequisites and legal options on initiating cooperation and partnership with external organizations in Japan  Consultation concerning formal requirements and regulations for travel and living in Japan for company representatives . At stage of formal procedures actions execution  Settling visa and residence status formalities for company representatives  Formally establishing presence on Japanese target market  Formally conducting employment  Settling formalities for living in Japan of full-time company representatives  Organization and participation in business missions to Japan (actions to be undertaken justified and described in detail in chapter 9.2.)  Participation in Japanese business expositions and conferences in a role of exhibitor and participant (actions justified and described in detail in chapter 9.3.) o Exhibitor role . Presenting company’s advanced Information Technologies expertise and services on Information-Communication Technologies related exposition fairs and conferences . Presenting company’s solutions and services in area of Information Technologies training within distant learning (e-learning) models on education related exposition fairs and conferences o Participant role . Establishing contacts with possible partners in areas of Information Technologies seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes during participation in ICT related exposition fairs and conferences . Establishing contacts with possible partners in areas of education technologies seeking to embrace exhibiting vendor e-learning solutions with company’s distant learning operations during participation in education related exposition fairs and conferences

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 Establishing partnerships with external organizations (actions to be undertaken justified and described in detail in chapter 9.4.) o Inquiries to not-for-profit organizations in domains of . Commerce and industry promotion  Contacting with Japanese senior professionals of high level management and business administration for possible cooperation, employment or share in planned business operations . Education  Contacting with Japanese senior professionals in areas of information technologies education for possible cooperation, employment or share in planned business operations . Information Technologies  Contacting with Japanese senior professionals in field of information technologies research and development for possible R&D cooperation, employment or share in planned business operations . International cooperation promotion o Inquiries to governmental departments and agencies in areas of . Education (formal education system, lifelong learning policies, etc.) . Information Technologies promotion and development strategies o Inquiries to commercial companies related to . Advanced Information Technologies . Education distant learning technologies  Obtaining consulting services in regard to establishing export subjected IT training services as offered by the IT Training Center CompLearn with marketing and public relations identification profile on the target Japanese market (actions to be undertaken justified and described in detail in chapter 9.5.) o Preparation of promotional campaigns and necessary translations of the CompSecur sp. z o.o. information materials . Translating promotional and information materials . Publishing Japanese website and promotional brochures o Promotion of export subjected services in 3 models of sales to target Japanese market sectors . Consumers (B2C sales model)  Primarily Internet market channel . Enterprises (B2B sales model)  Internet marketing channel  Direct marketing channel . Public administration (B2G sales model)  Obtaining consulting services in area of possible external funding of operations and public financing support programmes to expand business (justified and described in detail in chapter 9.6.) o Within international cooperation programmes . 7th Framework Programme of the European Commission . Japanese International Cooperation Agency programmes . European Union Gateway to Japan Programme o Within Japanese governmental support fund programmes of public ministries and agencies . Subsidy programmes of the Tokyo Metropolitan Small Business Center . Programmes of the Ministry of Internal Affairs and Communication . Programmes of the Ministry of Education, Culture, Sports, Science and Technology o Within cooperation with externally funded ICT and education not-for-profit organizations o Within cooperation with private large-scale enterprises in ICT sector o Within investors relations (venture capital funds and initial public offerings)

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All of the undertaken actions for implementing of export services development to Japanese target market will be supported free of charge within public funding support programmes for promotion of foreign direct investments and new business operations establishment (the support will be provided in areas of company registration and startup, tax and accounting issues, human resources, labor regulations and social insurance issues, visas, innovations, expansion, social benefits and services, subsidies, equipment leasing, intellectual property, commerce, utilization of facilities, etc.) by the following offices, which will be contacted upon initiation of the planned export development strategy implementation:

 JETRO (Japan External Trade Organization) and ISBC (Invest Japan Business Support Center) o Japan External Trade Organization Ark Mori Building 6F 12-32, Akasaka 1-chome, Minato-ku, Tokyo 107-6006 Japan Tel: +81-3-3582-5511 Fax: +81-3-3582-5512 http://www.jetro.go.jp http://www.jetro.org  TBEP (Tokyo Business Entry Point) o Tokyo Metropolitan Government Bureau of Industrial And Labor Affairs 30th floor of the Tokyo Metropolitan Government Main Building No. 1. 8-1 Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo 163-8001 Tel: +81-3-5320-4889 Fax: +81-3-5388-1465 http://www.tokyo-business.jp  TMSBC (Tokyo Metropolitan Small Business Center) o Tokyo Metropolitan Small Business Center Bureau of Industrial and Labor Affairs, Akihabara Office 1-9, Sakuma-Cho, Kanda, Chiyoda-Ku, Tokyo 101-0025 Tel: +81-3-3251-7897 Fax: +81-3-3251-7796 http://www.tokyo-kosha.or.jp

Preliminary time schedule with indication of estimated costs of the implementation of export development strategy has been presented in chapter 10.

Cooperation Formal Business Exhibitions Partnerships Promotion & and external procedures missions participation establishment information funding

Formal and legal Exhibitions issues consultations and conferences Branch registration participation

Business missions

Sales operations and Partnerships and promotional campaigns international cooperation establishment estabilishment

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9.1. FORMAL PROCEDURES

The formal procedures are of the key importance to initiating and further executing of implementation of export development strategy to Japanese target market. In order to establish its business presence in Japan and commence export of IT training services the company needs to file necessary documents and fulfill formal requirements enabling sales operations on Japanese market. Indispensible formal procedures concern registering an office and obtaining working residential status and a visa for a formally necessary company representative.

The following points implement actions leading to business registration and visa status regulation:

 First stage: preparation for implementation of actions within the scope of required formal procedures to establish business presence and exported services sales operations in Japan o Obtaining further consultation on formal aspects of establishing business operations presence in Japan . Further consultation on the selection of business operation form based on their suitability for projected model of operations  Initially recommended form of business operations is a branch office but additional consideration is advised  Further consultation on the realistic costs of establishing a branch office, a kabushiki gaisha (joint-stock corporation) or a godo kaisha (limited liability corporation)  Contacting lawyer firm providing consulting services in this regard . Filing all formal documents necessary for establishing a company to official registering offices . Obtaining information on procedures for acquisition of the ISO quality certification (ISO 9001,14001) for a newly registered office in Japan o Obtaining further information on formal requirements for financial operations and taxes in Japan . Handling of foreign currency . Banks with English capability for opening a business account . Banks with internet operation capability to distantly control and manage financial operations . Obtaining consultation of professional associations such as the Tokyo Certified Public Tax Accountant's Association . Obtaining referrals to an English-speaking judicial scrivener and certified public tax accountant as experts in company registration, financial operation and taxation . Conducting interview with the referred certified tax accountant and judicial scrivener o Obtaining information on offices and incubation facilities and formal requirements for becoming a tenant . Obtaining information on availability of free office space and formal company domiciliation and registration addresses for initial 50 days of operations using ISBC (Invest Japan Business Support Center) office services free of charge in a JETRO supported programme . Obtaining referrals to properties managed by the Tokyo Metropolitan Small Business Center for changing free office after allowed renting time . Obtaining information on formal requirements for tenancy applying screening of applicants

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 Obtaining consultancy on formal prerequisites for passing document screening and for conducting of interview for office tenant application  Obtaining consultancy on formal requirements for arranging company branch in the rented office space (including ICT infrastructure) o Obtaining information and advice on formal requirements for temporary staff employment within human resource consultancy . Consultation on formalities and legal regulations associated with hiring staff . Obtaining information on the options of using the public labor bureaus ("Hello Work") or a private job placement company for recruiting of temporary staff . Obtaining referrals to English counseling services of the Labor Standards Supervision Office and Social Insurance Office of Japan o Obtaining consultation on formal prerequisites on initiating cooperation and partnership with external organizations in Japan . Further consultation in the field of legal options for cooperation between industry, academia and government sectors in Japan . Obtaining consultancy in regard to information technologies training services official registrations, as well as optional formal proprietary permits or licensing procedures within external organizations in Japan o Consultation concerning formal requirements and regulations for travel and living in Japan for company representatives . Obtaining further consultation for working residential status and visa at Embassy of Japan in Poland . Obtaining consultancy about formal and legal aspects of everyday life for foreign residents representing company in Japan  Consultation centers for foreign residents . Formalities connected with medical facilities and health care and insurance programmes  Formal prerequisites for various compensation programmes for sickness or injury (group insurance vs. individual subscriptions) . Obtaining information about formalities associated with housing . Obtaining information about formalities associated with educational institutions . Consultation on company’s staff formal prerequisites for participation in social health, insurance and benefits programmes  Second stage: execution of actions within the scope of required formal procedures to establish business presence and exported services sales operations in Tokyo, Japan o Settling formal issues with visa and residence status system for company representatives . Company representative entry to Japan on a temporary visitor visa or contracting a proxy holder for formal settlements with visa and Immigration Bureau in Japan . Application for Certificate of Eligibility for an appropriate working residence status submitted to Immigration Bureau in Japan by a company representative or a proxy holder . Receiving of the Certificate of Eligibility issued by Immigration Bureau in Japan by a company representative or a proxy holder in Japan  If a company representative applied for a Certificate of Eligibility is already in Japan on a temporary visitor status of residence when the Certificate of Eligibility is issued, that it is possible to change temporary visitor status of residence to the status of residence approved in the Certificate of Eligibility while still in Japan, without the need to apply for and receive a visa at a Japanese diplomatic mission outside Japan

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 If a company representative is outside Japan and the proxy holder was contracted than following workflow is relevant o Company representative visa application accompanied by Certificate of Eligibility at Japanese diplomatic mission abroad o Visa issued at Japanese diplomatic mission abroad o Entry into Japan (landing permission) on a working residence status o Presentation of passport and visa o Submission of Certificate of Eligibility (at port of debarkation) o Establishing business operations presence on Japanese target market . Acquiring consulting support from IBSC (Invest Japan Business Support Center) and JETRO (Japan External Trade Organization) . Acquiring legal support from a local law firm in regard to business operations  Consulting shape of B2C and B2B services agreements templates . Formally establishing office of the company  For initial 50 days of operations using ISBC office services free of charge with allowance for formal registration address domiciliation of company . Registering appropriate business entity at regional legal affairs bureau  With assumption for a most adequate branch office registration o Determination of branch office information to be registered o Examination at the Legal Affairs Bureau of similar corporate names o Establishment of branch office (date of branch office establishment is at the branch office's discretion) o Preparation of affidavit on establishment of branch office o Certification of affidavit by embassy or a consulate in Japan (if corresponding embassy does not provide notary services, certification by a public notary in a home country is required) o Application to the Legal Affairs Bureau for registration of branch office establishment; registration of a company seal with the Legal Affairs Bureau o Acquisition of certificate on registered information and company seal registration certificate (approximately two weeks after application for registration) . Registering banking account for financial operations in Japan with Internet management capability and English interface . Registering for taxes duties . Acquiring appropriate information technologies infrastructure o Formally conducting agreements for employment of temporary staff for necessary operations . Part-time Japanese office manager . Part-time English-speaking judicial scrivener and certified public tax accountant or contracting a specialized accounting company . Consultants and translators for proper market positioning and promotional campaign of exported IT training services o Settling formal issues concerning living in Japan of full-time company representatives . Settling formalities with company representatives registration as foreign representatives . Settling formalities with medical facilities and social insurance for company representatives . Settling formal prerequisites and contracting housing for company representatives

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9.2. BUSINESS MISSIONS

Business missions constitute the most important aspect of the planned export development strategy, because they will enable formal execution of all other actions encompassed by implementation plan of the export development strategy.

Business missions are initially planned to be undertaken within groups of 3 representatives of the company. Main goals for undertaken business missions will be as follows:

 Settling initial formalities associated with establishing business presence of the company in Japan o Consulting within scopes of office domiciliation use, legal aspects of business operations, financial operations, tax duties, information technologies infrastructures, employment of temporary staff, accounting, promotion, living in Japan of company full-time representatives o Details described in the previous chapter  Participation in events of exposition and conference o In a role of exhibitor presenting company’s advanced Information Technologies expertise and services on Information-Communication Technologies related exposition fairs and conferences , as well as solutions and services in area of Information Technologies training within distant learning (e-learning) models on education related exposition expositions and conferences o In a role of participant establishing contacts with possible partners in areas of Information Technologies and education technologies seeking to embrace exhibiting vendor specific solutions and products with company’s IT training programmes during participation in ICT related exposition fairs and conferences o Details of potentially adequate expositions and conferences is presented in the next chapter  Establishing contacts and cooperation on meetings with potential partner organizations or companies o Not-for-profit organizations in domains of commerce and industry promotion, education, Information Technologies and International cooperation promotion o Governmental departments and agencies responsible for education (including formal education system, lifelong learning policies, etc.) and Information Technologies promotion and development strategies o Inquiries to commercial companies related to advanced Information Technologies, as well as education distant learning technologies o Initially it is planned to undertake cooperation establishment efforts only in relation to not- for-profit organizations. Details of potentially adequate partnering organizations (of non-for- profit) are presented in chapter 9.4.

The table below illustrates a preliminary draft of the planned business missions to Japan (this outline will be subject of change according to detailed preparations for meetings and formalities settlement).

Preliminary draft of planned business missions to Japan Date Business mission description May 2010  Three company representatives will visit Japan in order to: o Fulfill required formalities as described in detail in the previous chapter, connected with establishment of business presence in Tokyo, Japan (details described in the previous chapter 9.1.): . Settle formalities associated with utilization of IBSC facilities (free of charge domiciliation office and consulting services) . Meetings with law firms and obtaining legal consultation in regard to business operations . Consulting on registering Japanese business operations at

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regional legal affairs bureau in Tokyo . Consulting on registering Japanese banking account for financial operations . Consulting on registering for tax duties . Consulting on providing information technologies infrastructures . Consulting on conducting preliminary employment of temporary staff for necessary operations . Consulting of specialized accounting company . Consultating for promotional campaign of exported IT training services . Consulting settling formal issues concerning living in Japan of company full-time representatives o Take part in following expo fairs and conferences: . I-Security Expo and Conference in Tokyo  Role: exhibitor  Date: 12th-14th May 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Presenting offer of services in area of advanced quantum cryptography consulting and expertise  Establishing contacts with possible partners in fields of IT security seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . Data Warehouse and Customer Relationship Management Expo and Conference in Tokyo  Role: participant  Date: 12th-14th May 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of CRM and data warehousing seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . Software Development Expo & Conference in Tokyo  Role: participant  Date: 12th-14th May 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of software engineering seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . RFID Solutions Expo & Conference in Tokyo  Role: participant  Date: 12th-14th May 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of RFID (radio frequency identification) seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . Embedded systems Expo & Conference in Tokyo  Role: participant

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 Date: 12th-14th May 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of RFID (radio frequency identification) seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes o Visit and establish cooperation with following organizations: . Polish Chamber of Commerce and Industry in Japan . Japan External Trade Organization . Information Technology Promotion Agency . Information Processing Society of Japan . National Institute of Informatics  The term of stay will be 14 days as required by expositions participation and subsequent meetings with potential partners  All necessary preceding formal preparations (fair participation, meetings appointment) will be executed remotely June 2010  Three company representatives will visit Japan in order to: o Take part in following expo fairs and conferences: . Interop Tokyo 2010  Role: participant  Date: 9th-11th June 2010  Place: Chiba (Makuhari Messe), near Tokyo  Establishing contacts with possible partners in fields of green ICT, NGN, cloud computing seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . Exhibition on Sensing via Image Information  Role: participant  Date: 9th-11th June 2010  Place: Yokohama (Pacifico Yokohama), near Tokyo  Establishing contacts with possible partners in fields of Image processing, seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . Industrial Virtual Reality Expo & Conference  Role: participant  Date: 23rd-25th June 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of Web3D, GIS, VR, seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes . Design Engineering & Manufacturing Solutions Expo  Role: participant  Date: 23rd-25th June 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of CAD, CAM, CAE, e-PDM, seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes o Visit and establish cooperation with following organizations: . European Business Council

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. Japan International Cooperation Agency . Japanese Information Technology Services Industry Association . Japan Electronics and Information Technology Industries Association . Japan Science and Technology Agency  The term of stay will be 21 days as required by expositions participation and subsequent meetings with potential partners  All necessary preceding formal preparations (fair participation, meetings appointment) will be executed remotely July 2010  Three company representatives will visit Japan in order to: o Take part in following expo fairs and conferences: . e-Learning World Expo & Conference in Tokyo  Role: exhibitor  Date: 28th-30th July 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Presenting offer of services in area of advanced distant education technologies and e-learning services  Establishing contacts with possible partners in fields of distant learning technologies for education in order to expand training services delivery channels . Expo Comm Wireless Japan  Role: participant  Date: 14th-16rd July 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Establishing contacts with possible partners in fields of distant learning technologies for wireless communication seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes o Visit and establish cooperation with following organizations: . Center for Educational Computing . National Institute of Multimedia Education . Japan International Training Cooperation Organization . Association for Overseas Technical Scholarship  The term of stay will be 14 days as required by expositions participation and subsequent meetings with potential partners  All necessary preceding formal preparations (fair participation, meetings appointment) will be executed remotely October 2010  Three company representatives will visit Japan in order to: o Take part in following expo fairs and conference: . Security Solution 2010  Role: exhibitor  Date: 18th-20th October 2010  Place: Tokyo Big Sight - Tokyo International Exhibition Center  Presenting offer of services in area of advanced quantum cryptography consulting and expertise  Establishing contacts with possible partners in fields of IT security seeking to embrace exhibiting vendor specific technologies with company’s IT training o Visit and establish cooperation formalities with partners initially acquainted at conferences and expositions . Further acquaint with partners technologies and laboratories

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. Establish formal frameworks for partnership and cooperation  The term of stay will be 7 days as required by expositions participation and subsequent meetings with potential partners  All necessary preceding formal preparations (fair participation, meetings appointment) will be executed remotely

The above planned business missions (subjected to change) will be executed upon beginning of export development strategy implementation.

Subsequent business missions for the year 2011 will be planned in later stages of execution of the export development strategy in order to be adequately aligned with ongoing operations, projects implementations and partnerships.

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9.3. EXHIBITIONS AND FAIRS PARTICIPATION

Participation in Japanese Information Technologies related business exhibitions and events in a role of an exhibitor or a visiting company is an important part of the outlined export development strategy. It will be undertaken on the course of business missions listed in the previous chapter. Most important aspects of presence in this kind of events are as follows:

 Presenting services concerning training, consulting and R&D prototype technologies in areas of highly advanced IT: quantum cryptography, quantum computation and quantum communication  Embracing new, vendor-specific IT technologies and integration of new disciplines and areas of specialization with offered IT training services (Information Technologies related events)  Integration of new learning technologies in export subjected IT training services (e-learning education related events)  Acquainting with new partners and collaborators to extend business operations in Japan (in terms of both the core business of IT training services export, as well as in terms of new cooperative projects implementing within an international scale)  Gaining a comprehensive overview of the ICT sector competition and competing IT services offers  Building a positive image and strengthening of a company’s trademarks and public relations image both in terms of B2B and B2C models of operation

In Asia (and even in a worldwide scale) Japan is a leading center, where most of the largest expositions and conferences regarding Information Technologies are being held. Below the listing of the most relevant and important events has been presented in relation to the planned export development strategy, as indicated for company’s participation and exhibition in the previous chapter (most but not all of the presented events have been initially planned for participation in course of undertaken business missions – details of the preliminary outline have been given in the previous chapter).

7TH INFORMATION SECURITY EXPO & CONFERENCE IN TOKYO (IST)

 Description o I-Security Expo and Conference in Tokyo is recognised as one of the most important and specialized trade exhibition including hacking, virus countermeasures and other products/services related to information security. Concurrently with SODEC/ESEC/DWH & CRM EXPO Expo and Conference/RFID Solutions and Conference.  Exhibition theme o Hacking o DoS Attacks o Virus Countermeasures o Leaking Information o Internal Intrusion Countermeasures o Arrogation o Alteration o Electrical Interception Countermeasures o IT Asset Management o Integration, Consulting, Audit Service o Physical Security Countermeasures  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates

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o 12th-14th May 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1416 o Attendees: 113824  Exhibition management o Reed Exhibitions Japan Ltd. Tel: +81-3-3349-8504 Fax: +81-3-3349-8500 [email protected] http://www.ist-expo.jp

E-LEARNING WORLD 2010 EXPO & CONFERENCE

 Description o e-Learning World Expo & Conference is the Asia's largest tradeshow and conference dedicated to e-Learning technologies. Theme of the events in 2009 and 2010 focus on different aspects of electronic distant learning currently utilized in personnel training of companies’ staff, individuals and within the formal education system at universities and schools. The event brings together hardware and software technology suppliers with educational institutions. Appropriate steering committees assure high quality of the programme.  Exhibition theme o Contents o Platforms o Operation and evaluation o Learning management o System integrator o Network security o Broad-band streaming o Live-system (TV conference, virtual classroom) o Performance support (knowledge management) o On-line school o Publishing, information service o Equipment & furniture  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 28th-30th July 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 72 o Attendees: 14956  Exhibition management o e-Learning World Executive Committee, Fuji Sankei Business, CNT Inc. Tel: +81-3-5297-8855 Fax:+81-3-5294-0909 [email protected] http://www.elw.jp

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DATA WAREHOUSE & CRM EXPO (D&C)

 Description o Data Warehouse and Customer Relationship Management Expo and Conference (D&C) is a leading Japanese trade fair for exhibitions of the CRM solutions and data warehouse tools and technologies. Concurrently with IST/SODEC/ESEC Expo and Conference/RFID Solutions and Conference.  Exhibition theme o Servers and DBMS o Data search and analysis tools o Data retrieval and report creation tools o Other DWH related tools o CRM solutions o ERP solutions o SCM solutions o EIP solutions o Web-basis solutions o SFA solutions o Consulting and the like required for building data warehouses  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 12th-14th May 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1416 o Attendees: 113824  Exhibition management o Reed Exhibitions Japan Ltd. Tel: +81-3-3349-8504 Fax: +81-3-3349-8500 [email protected] http://www.dwh-crm.jp

DIRECT MARKETING EXPO

 Description o Direct Marketing Expo is a Japanese leading trade fair for direct marketing IT solutions. Concurrently with SODEC/ESEC/DWH & CRM EXPO Expo and Conference/RFID Solutions and Conference  Exhibition theme o Direct Mail Marketing o E-mail Marketing o Database Marketing o Telemarketing o Fax Marketing o Area Marketing o Marketing Research Service o Consulting o SP Related Tools,

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o Other related Marketing Support Tools and Services  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 12th-14th May 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1416 o Attendees: 113824  Exhibition management o Reed Exhibitions Japan Ltd. Tal: +81-3-3349-8504 Fax: +81-3-3349-8500 [email protected] http://www.dme-expo.jp

18TH INDUSTRIAL VIRTUAL REALITY EXPO & CONFERENCE (IVR)

 Description o The Industrial Virtual Reality Expo & Conference is the world's largest trade fair for the virtual reality IT industry (conference also concurrently held).  Exhibition theme o 3D Display, 3D CG software o Motion Capture o Web3D o 3D Modeling Support Tool o Sensor, Digitizer o Visual input system o GIS system o Simulator, VR network system o Graphic accelerator o Video conferencing  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 23rd-25th June 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1589 o Attendees: 75266  Exhibition management o Reed Exhibitions Japan Ltd. Tel: +81-3-3349-8506 Fax: +81-3-3349-8500 [email protected] http://www.ivr.jp

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DESIGN ENGINEERING & MANUFACTURING SOLUTIONS EXPO (DMS)

 Description o Design Engineering & Manufacturing Solutions Expo Japan's largest trade show and conference focusing on IT solutions for the manufacturing industry.  Exhibition theme o CAD/CAM, viewer, 3D digitizer o CAE outsourcing service o e-PDM (web-applied PDM) o Components management system o Document management system o Rapid prototyping o ERP o Supply chain management o Production management system  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 23rd-25th June 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1589 o Attendees: 75266  Exhibition management o Reed Exhibitions Japan Ltd. Tal: +81-3-3349-8506 Fax: +81-3-3349-8500 [email protected] http://www.dms-tokyo.jp

5TH RFID SOLUTIONS EXPO & CONFERENCE IN TOKYO (RIDEX)

 Description o RFID Solutions Expo & Conference is one of the internationally leading exhibition and conference in the world in theme of RFID. Concurrently with IST/SODEC/ESEC/DWH & CRM EXPO Expo.  Exhibition theme o RFID Solutions manufacturing and logistics o RFID distribution/services/retail/government & public/healthcare/amusement/others o RFID System Development Services/Consulting o RFID Tag o RFIDReader/Writer o RFID Printer o RFID Middleware o RFID Chip o Other products and services related to RFID  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 12th-14th May 2010 (annual)

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 Exhibition size (previous edition) o Exhibitors: 1416 o Attendees: 113824  Exhibition management o Reed Exhibitions Japan Ltd. TEL +81-3-3349-8504 FAX +81-3-3349-8500 [email protected]

19TH SOFTWARE DEVELOPMENT EXPO & CONFERENCE IN TOKYO (SODEC)

 Description o Software Development Expo & Conference in Tokyo (SODEC) has been firmly established itself as one of Japan's most inportant software development trade shows serving a market that has thousands of high-quality products, services and the latest technologies. Concurrently with IST/ESEC/DWH & CRM EXPO Expo and Conference/RFID Solutions and Conference  Exhibition theme o Application Development Tools o Architecture Management Tools o Documentation and Reverse Engineering Tools o GUI Front Ends Builders/Visual Programming Tools/Testing, o Debugging, Tuning Tools/Project Management Tools/Operation Management o Support Tools/Generators/Database o Linking Tools/Web Linking Tools/Software Components, o Libraries/Application Servers/Object Oriented Development Tools . JAVA Based Development Tools . LINUX Based Development Tools . Web Based Development Tools . ActiveX Based Development Tools . CORBA Based Development Tools . XML Tools . UML Tools . CASE Tools . Application Development Languages . Software Outsourcing, Consulting . System Building, Consulting . Other Tools Related to Software Development.  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 12th-14th May 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1416 o Attendees: 113824  Exhibition management o Reed Exhibitions Japan Ltd. TEL +81-3-3349-8504 FAX +81-3-3349-8500

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[email protected] http://www.sodec.jp

13TH EMBEDDED SYSTEMS EXPO & CONFERENCE IN TOKYO (ESEC)

 Description o Embedded systems Expo & Conference in Tokyo (ESEC) has been firmly established itself as the Japan's most important embedded system trade show serving a market that has thousands of high-quality products, services and the latest technologies. Concurrently with SODEC/IST/DWH & CRM EXPO Expo and Conference/RFID Solutions and Conference.  Exhibition theme o Hardware . Micro Processors, DSP . EDA, System Design Tools o Interface . Bluetooth . IEEE1394 . USB o Software . Software Development Support Tools . Software Consulting & Integration Services  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 12th-14th May 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 1416 o Attendees: 113824  Exhibition management o Reed Exhibitions Japan Ltd. Tel: +81-3-3349-8504 Fax: +81-3-3349-8500 [email protected] http://www.esec.jp

EMBEDDED TECHNOLOGY 2009 (ET)

 Description o "Embedded Technology 2010" is the largest trade show and conference in Asia for embedded system designers and managers. "Embedded Technology 2010" introduces advanced technologies and solutions for emerging embedded applications, including digital consumer electronics, automotive and wireless / ubiquitous communication.  Exhibition theme o Hardware . CPU, DSP . System LSI . IP Core, FPGA . PLD, IC Card, Embedded Platforms . Board computers

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. Wireless Networks, Interface technologies o Software Solution . RTOS . Device drivers . Firmware, Middleware . Internet related technology o Development Environments . Tools Organization . Media  Location o Yokohama (Pacifico Yokohama)  Dates o 1st-3rd December 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 384 o Attendees: 22117  Exhibition management Japan Embedded System Technology Association Tel: +81-3-5821-7973 Fax: +81-3-5821-0444 [email protected] http://www.jasa.or.jp/et

10TH EXHIBITION ON SENSING VIA IMAGE INFORMATION

 Description o The Exhibition on Sensing via Image Information symposium, joined by over 1000 participants, is one of the largest Japanese conventions on image processing and will discuss the subjects, emphasizing “contributions to the society.” It has been highly evaluated as a symposium where one can come into contact with the up-to-date technologies designed for practical use. The Image Sensing Show exhibits practical image processing products and technologies widely used at the production sites such as appearance inspection and measurement, centering around a machine vision, and a variety of image processing products used in the fields associated with daily live such as automobiles, ITS (Intelligent Transport System), security, education, entertainment, service, medicine, and the research and development fields such as the universe, the Earth, sports  Exhibition theme o Light sources o Cameras o Image-processing equipment o Image measuring instruments o Image processing software o Output instruments o Image recorder, compression equipments o Image transfer equipments o Virtual reality  Location o Yokohama (Pacifico Yokohama)  Dates

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o 9th-11th June 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 186 o Attendees: 17552  Exhibition management o Advanced Communication Media Co., Ltd. Tel: +81-3-3367-0571 Fax: +81-3-3368-1519 [email protected] http://www.adcom-media.co.jp/sensing

EXPO COMM WIRELESS JAPAN 2010

 Description o Currently, technologies and services centering on wireless networks have proliferated widely throughout business, and they have become essential in promoting business efficiency, customer responses and management capacities in a range of fields ranging from primary to tertiary industry. Also, wireless technologies have played a role in communication infrastructure for important information to facilitate a ubiquitous society where people can connect to the networks any time anywhere in their everyday life. Expo Comm Wireless Japan will continue to promote around the world the cutting-edge wireless and mobile technologies, services and solutions created through Japan's technologic expertise.  Exhibition theme o Telecom service o Mobile terminal o Embedded technology o FMC o High Speed Wireless LAN, IEEE 802.1x (11/16), WiFi, WiMAX, Mesh Networks, M2M, Beyond 3G/4G Technology, iBurst, ZigBee o Visible Wideband (UWB) Technology o RFID o Bluetooth o Measurement, analysis tool o ITS, Home network o PHS Infrastructure, Disaster Measurement, Emergency Medical Network Technology  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 14th-16rd July 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 186 o Attendees: 17552  Exhibition management o Rikkuterekomu Convention Planning, Inc. Tel: +81-3-3834-8134 Fax: +81-3-3834-8009 [email protected] http://www8.ric.co.jp/expo/wj

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INTEROP TOKYO 2010

 Description o The Interop 2010 Conference is an important event for optimization of ICT use by companies. The Programme Committee held extensive discussions to determine which skills are really needed for engineers today, and which area is critical in foreseeing future IT and demanded skills. Results of these discussions constitute framework for the conference within a broad lineup of over 50 programmes, especially focusing on cloud computing.  Exhibition theme o Cloud Computing o Virtualization on server network o Green ICT o NGN o Next Generation Data Center o Next Generation Wireless o IPv6 Platform o Application Performance o VoIP & Unified Communication o Smart Office solution o Home and Town Network  Location o Chiba (Makuhari Messe)  Dates o 9th-11th June 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 336 o Attendees: 110784  Exhibition management o Interop Tokyo 2009 Steering Committee, NANO OPT Media, Inc. F2F Forum Tel: +81-3-5207-3200 Fax: +81-3-5207-3250 [email protected] http://www.interop.jp

SECURITY SOLUTION 2010

 Description o The Security Solution exhibition is the second most important Japanese event in an area of IT security. Exhibitors introduce latest security technology products and solutions The theme focuses on products and related technology solutions in regard primarily to e-mail and DLP (data leak prevention) or web threat protection systems. As e-mail became the company's core business tool, infrastructure threats and problems play increasing importance for corporate activities. Viruses, spam, and phishing attacks from outside risk management is become an urgent matter. On the other hand data flow information leakage is also becoming an issue of concern for corporations. Companies seek measures to counter threats for the both company’s web and information it processes.  Exhibition theme o Network security o Attestation and code security

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o ON leaving management o Individual discernment system and equipment o Solutions threat . Virus (worm) Anti, anti-spyware, anti-spam, anti-phishing, DDoS attack measures, filtering . Anti intrusion, Vulnerabilities. Firewall, VPN Devices, VPN Service, IPS, IDS . UTM products (unified threat management), Quarantine network, database security o Information leakage protection solutions . Encryption Tools, Security content, document management, forensic, log management . Mail archive, DLP (data leak prevention), PCI DSS, Security Smartphone . Notebook PC Security brought o Access control solutions . Biometrics, Time Password, Single sign, Device authentication . PKI (Public Key Infrastructure), Identity Management . Access Management Network o Security Management . Security consulting, Security audit service . Qualifications security, Data protection (backup) o Physical security . Racks, Exit management system . Image transmission system monitoring . Equipment . Cameras o SaaS . Security SaaS Type . Newspapers . Publishing . Web Media . Association . Group  Location o Tokyo (Tokyo Big Sight - Tokyo International Exhibition Center)  Dates o 18th-20th October 2010 (annual)  Exhibition size (previous edition) o Exhibitors: 70 o Attendees: 18671  Exhibition management o Nikkei Business Publications, Inc. Tel: +81-3-6811-8083 Fax: +81-3-5421-9170 [email protected] http://expo.nikkeibp.co.jp/secu-ex

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9.4. PARTNERSHIPS ESTABLISHMENT

An important aspect of implementation of the export development strategy as compiled herein lies in initiating and commencing partnerships with not-for-profit organizations and institutions (of both private and public types), as well as governmental entities of public administration.

Partnerships with commercial business companies will be eventually undertaken in further stages of export development (especially with business companies already cooperating with the partnering not-for-profit organizations and with companies acquainted during attended IT industry expositions and conferences).

Initially it is planned to contact and investigate partnership or cooperation possibilities with organizations of the following types:

 International trade and cooperation related organizations o Partnership in terms of membership and participation in committees related to IT education o Possibility of implementing educational projects under the patronage of such organizations . Concerning both commercial and social responsibility B2C sales projects o Gaining access to an efficient channel for B2B IT training services sales model in cooperation with such organizations o Seeking new business opportunities in the field of planned export subjected services, but also in the expanded field of the company’s expertise (i.e. advanced IT security solutions and consulting) o Seeking for commercial companies business type partnerships among companies already associated as members or cooperating entities of the partnering organizations  Education related organizations o Seeking a membership access to association types of organizations o Seeking for partnership and subcontracting possibilities in educational types of projects executed by those organizations in terms of IT training services o Possibility of partnerships in educational projects implemented on an international plane . Especially concerning social responsibility education projects with an international reach . Seeking for implementation of commercial IT education projects targeted at individuals, including projects aimed at schools and students (in disciplines of basic and medium advanced key IT skills and competencies) o Providing consulting and expertise for ICT distant model educational implementation o Seeking for cooperation with other not-for-profit organizations, as well as education related business entities associated with partnering organizations o Mediating cooperation of Polish and European corresponding organizations with the Japanese partnering educational organizations  Information technologies related organizations o Partnership in terms of membership in association type organizations, seeking possibilities for participation in IT security related chapters and expert panels o Seeking partnerships in implementing international expert level educational projects (in topics of advanced IT security, novel computational models based on quantum paradigms) o Seeking for cooperation with other not-for-profit organizations, as well as computer science and ICT related business entities associated with partnering organizations

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o Mediating cooperation of Polish and European corresponding organizations with the Japanese partnering educational organizations  Governmental organizations (ministries departments and agencies) o Seeking for external public funding of social responsibility educational projects (e.g. women IT skills dissemination, telework IT competencies, digital exclusions counteracting educations, etc.) o Establishing contacts with municipal and national level governmental entities, investigating possibilities of participation in public ICT development programmes implementations and subcontracting for implemented ICT education related actions and programmes o Taking part in tenders for IT educational services for public administration in B2G sales models o Mediating cooperation projects in scope of personnel IT skills advanced IT security knowledge and technology exchange between corresponding Polish, European Union and Japanese administration entities

The chapters below describe in detail chosen organizations to seek partnership with and present their contact data. The organizations will be contacted upon beginning of the export development strategy implementation during the courses of undertaken business missions, as initially outlined in the chapter 9.2.

9.4.1. INTERNATIONAL TRADE AND COOPERATION RELATED ORGANIZATIONS

9.4.1.1. POLISH CHAMBER OF COMMERCE AND INDUSTRY IN JAPAN

The Polish Chamber of Commerce and Industry in Japan has been founded by signing of the Articles of Incorporation on 1 February 2007, with acceptance from Japan's Ministry of Economy, Trade and Industry.

The main aim and mission of the Polish Chamber of Commerce and Industry in Japan is to foster economic exchanges between the nations of Japan and Poland, particularly in the area of trade. In order to realize this aim the PCCIJ chamber of commerce works toward to establishing ties with the governments of Japan and Poland, key parties in the EU and prominent business leaders.

The main activities of the Polish Chamber of Commerce and Industry in Japan are as follows:

1. Promote economic exchange between Japan and the Republic of Poland. 2. Collect and analyze relevant materials, analyze the Japanese economy, economic trends and dynamics, collect and edit materials significant for the economic development of both countries. 3. Conduct educational activities. 4. Conduct political activities targeting the governments and economic organizations of Japan and the Republic of Poland. 5. Promote the mutual exchange of information with other chambers of commerce in Japan regarding economic conditions and market environments. 6. Provide Japanese economic organizations and corporations with information about trade with the Republic of Poland.

As the bilateral type organization between Polish and Japanese business environments, the PCCIJ will be the natural partner of the company to assist in the process of the planned export development. An important step in the process of implementing the strategy for export development will be joining of the company as a Regular member of the PCCIJ, further engaging in activities related to export attempts. The Chairman of the Polish Chamber of Commerce and Industry in Japan is Mr. Piotr Suszycki-Tanaka and the Honorary Vice-Chairman of

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the organization is H.E. Jadwiga Rodowicz, Ph. D. Ambassador Extraordinary and Plenipotentiary of the Republic of Poland.

The PCCIJ in particular will be able to assist CompSecur sp. z o.. in execution of the actions planned as fundamental for succeeding of export development strategy implementation in the Japanese target market of the export subjected services. The PCCIJ is the member of the EBC (the European Business Council in Japan or the European Chamber of Commerce in Japan).

Contact details of the PCCIJ are as follows:

Polish Chamber of Commerce and Industry in Japan S&L Bldg., 8F, 1-10-8 Higashi-gotanda Shinagawa-ku, Tokyo 141-0022, Japan Tel: +81-3-5793-7902 Fax: +81-3-5793-7903 http://www.pccij.or.jp

The previous PCCIJ office address: Kawai Bldg., 1F, 2-1-10 Kodai, Miyamae-ku, Kawasaki-shi, Kanagawa-ken 216-0007, Japan

9.4.1.2. JAPAN EXTERNAL TRADE ORGANIZATION

Japan External Trade Organization (JETRO), is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximize their global export potential.

JETRO is operating under an authorizing law of Japan External Trade Organization Incorporated Administrative Agency Act (December 13, 2002, Law No. 172). The organization has been established on 1st October 2003. Current representative is Mr. Yasuo Hayashi, the Chairman of JETRO.

According to the Chairman’s speech, JETRO has been founded as a response to problems of the era of rapid globalization and increasing economic integration (e.g. Japan facing the added challenges of an ageing population and declining birthrate). Against this backdrop, Japan, as a trading nation, must achieve increased trade and investment, develop closer economic relationships with other countries and expand its involvement in international economic cooperation, which constitutes the mission of the organization.

This goal of JETRO organization will allow CompSecur to initiate contact and mutual partnership with JETRO. Entering Japanese market the export development strategy will be in line with primary goals defined by JETRO, i.e. working to further boost foreign direct investment (FDI) in Japan and promote cross-border business tie-ups and dependencies.

The company’s FDI (although of small scale initially) with assistance of JETRO will also bring with it some advanced technologies, know-how and intellectual assets, which according to Mr. Hayashi is increasingly important to Japan, helping revitalize the country's economy and keeping Japan at the forefront of the global economy. Facilitating international business and technology partnerships between Japanese and foreign firms in high-tech fields is another important activity for JETRO that could be a great start point for development of the company’s operation in Japan.

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In Japan JETRO has its headquarters in Tokyo (JETRO Tokyo), JETRO Osaka and Institute of Developing Economies (IDE) and 36 other regional offices. Overseas the organization has 71 offices in altogether 54 countries. It employs approximately 1580 (800 domestic and 780 overseas) workers.

Contact details of JETRO are as follows:

Japan External Trade Organization Ark Mori Building, 6F 12-32, Akasaka 1-chome, Minato-ku, Tokyo 107-6006 Japan Tel: +81-3-3582-5511 Fax: +81-3-3582-5512 http://www.jetro.go.jp http://www.jetro.org

9.4.1.3. JAPAN INTERNATIONAL COOPERATION AGENCY

Established as an independent administrative institution under the law concerning the Independent Administrative Institution Japan International Cooperation Agency (Law No. 136, 2002), JICA aims to contribute to the promotion of international cooperation as well as the sound development of Japanese and global economy by supporting the socioeconomic development, recovery or economic stability of developing regions.

Marking its launch as a renewed organization, New JICA has announced an all-new Vision. Together with this Vision it has defined four Missions, to be achieved through four main Strategies. It has also declared a set of Guiding Principles meant to help advance its Strategies.

"Inclusive development" represents an approach to development that encourages all people to recognize the development issues they themselves face, participate in addressing them, and enjoy the fruits of such endeavors. The role of New JICA is to effectively provide backing for this process.

"Dynamic development" refers to the creation of self-reinforcing virtuous cycles of mid- to long-term economic growth and poverty reduction in a constantly changing environment of developing countries where a variety of issues arise simultaneously and get entangled each other. New JICA will provide creative, highly effective support toward this end, at times moving swiftly and at times acting from the longer-term perspective as the situation calls for.

 Mission 1: Addressing the global agenda o The advance of globalization brings positive effects, sparking economic development and providing people with new opportunities. It also has its negative side, though, including such effects as uneven wealth distribution and the cross-border issues of climate change, infectious diseases, terrorism, and expanding economic crises. These effects pose a threat to the stability and prosperity of Japan—which depends on resources from around the world— and the rest of the international community. The threat is particularly dire for developing countries. New JICA will make full use of Japan's experience and technologies as it works in concert with international society to address the various globalization-related issues developing countries face in a comprehensive manner.  Mission 2: Reducing poverty through equitable growth o Impoverished people in developing countries are particularly susceptible to the effects of economic crisis, conflict, and disaster and are constantly exposed to the risk of even deeper poverty. Moreover, growing wealth gaps are a destabilizing factor in societies. Helping people to escape poverty and lead healthy, civilized lives is a vital task not only for the growth of

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developing countries but also for the stability of the international community. To reduce poverty, employment opportunities must be expanded through equitable growth that gives proper consideration to impoverished members of society, and public services like education and healthcare must be enhanced. New JICA will provide support for human resources development, capacity building, policy and institutional improvements, and provision of social and economic infrastructure, thereby pursuing sustained poverty reduction through equitable growth.  Mission 3: Improving governance o A state's capacity for governance refers to its status as a society that can take the resources available to it and direct, apportion, and manage them efficiently and in ways that reflect the will of the people. Improving governance is of vital importance to the stable economic growth of developing countries. However, these states often have underdeveloped legal and judicial systems and administrative organs, which present obstacles to efforts to reduce poverty through economic growth. New JICA will offer support aimed at improving the fundamental systems needed by a state, as well as systems for effectively providing public services based on the needs of people, and at fostering the institutions and human resources needed to manage those systems appropriately.  Mission 4: Achieving human security o The advance of globalization causes an increase in various cross-border dangers and exposes many people in developing countries to civil strife, disasters, poverty, and other humanitarian threats. The concept of human security places individual human beings at its core, seeking to defend them from fear and want: fear of things like conflict, terrorism, disaster, environmental destruction, and infectious disease, and want in the face of poverty and in social services and infrastructure. By building up people's abilities to address these issues themselves, this approach aims to build societies in which they can live with dignity. In order to defend the weakest members of society from these various threats, New JICA will support efforts to bolster social and institutional capacity and to increase people's ability to deal with threats themselves.  Strategy 1: Integrated assistance o New JICA will undertake the integrated management of three modalities of assistance— technical cooperation, ODA loans, and grant aid—to offer comprehensive support that organically combines such elements as policy and institutional improvements in developing countries; human resources development and capacity building; and improvements in infrastructure. Organization will also make use of diverse approaches and take advantage of the expanded scale of operations to tackle issues that go beyond borders and affect entire regions or that span multiple sectors. Through such integrated assistance, New JICA will pursue international cooperation with even more development impact in terms of both its quality and scale.  Strategy 2: Seamless assistance o New JICA brings together a wide variety of aid approaches to provide seamless assistance that spans everything from prevention of armed conflict and natural disasters to emergency aid following a conflict or disaster, assistance for prompt recovery, and mid- to long-term development assistance. Among developing countries are states at various stages of development, from the least developed countries where most of the population lives in poverty to middle-income countries that are on the growth track but are still wrestling with the problems of wealth gaps in society. New JICA will provide assistance in ways that best match the level of development in each recipient nation, taking a long-term perspective and offering seamless assistance to ensure sustainable development into the future.  Strategy 3: Promoting development partnerships

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o New JICA aims to be a good partner for developing countries, accurately grasping their changing needs through a focus on the field and promoting their own self-help efforts swiftly and effectively through a focus on results. Organization will also promote public-private partnerships, pooling the experience, technologies, and resources of local governments, universities, nongovernmental organizations, and other actors. Furthermore, to fulfill responsibilities as one of the largest donor organizations in the world with more than 40 years of experience, organization will strengthen partnerships with international organizations and other donor institutions, leading the creation of a broad framework for development assistance in a global community that is seeing growing numbers of players in the international cooperation field and increasingly diverse forms of aid to developing countries.  Strategy 4: Enhancing research and knowledge-sharing o In the face of the advance of globalization and the rise of new international cooperation actors, global trends in the issues affecting developing countries are undergoing sweeping change. Through the establishment of the JICA Research Institute, New JICA will put its wisdom gained in the field to work, building broad networks of academics from Japan and elsewhere around the world to create new knowledge value in the field of international development assistance not just for Japan but also for the entire world. To play a leading role in guiding the newest development trends, organization will enhance research and knowledge-sharing capacities. Organization will also actively carry out surveys and research grounded in actual assistance projects, focusing on the subjects in both regional and issue- based contexts.  Activity Guiding Principles o Achieving synergies of the merger . By smoothly combining diverse aid modalities, organization will make use of synergies by speeding up the aid process, scaling up pilot and model projects, and spreading them out in other regions and communities. o Tackling complex, difficult issues flexibly with the field-based approach . By accurately grasping the development needs on the ground and designing activities with their focus on the field, organization will deal flexibly with complex, difficult and intertwined development issues. o Fostering expertise for providing professional solutions . As an organization specialized in international cooperation, organization will perform internationally competitive work, putting experience and wisdom gained in the field to work and using expertise and knowledge-sharing capabilities to quickly and accurately address a wide range of development issues. o Efficient and transparent operations . By managing and evaluating operations efficiently and transparently, organization will remain constantly committed to renewing and streamlining organization, thereby maintaining a high level of accountability.

JICA is a large scale organization employing over 1600 persons in staff. The representative of the JICA is Ms. Sadako Ogata, the President.

Contact details of JICA are as follows:

Japan International Cooperation Agency 1-6th floor, Nibancho Center Building 5-25, Niban-cho, Chiyoda-ku, Tokyo 102-8012, Japan

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Tel: +81-3-5226-6660 Fax: +81-3-5226-6662

9.4.1.4. EUROPEAN BUSINESS COUNCIL

The European Business Council in Japan (EBC) is the trade policy arm of 17 European National Chamber of Commerce and Business Associations in Japan.

It has been established in 1972 and since then it has been working to improve the trade and investment environment for European companies in Japan. Just very recently in 2008 the EBC was registered with the Ministry of Economy, Trade and Industry (METI) as the European (EU) Chamber of Commerce in Japan. The EBC emerged against a background of growing trade between Europe and Japan at a time of nascent desire to capture the spirit of a relationship greater than just trade. The establishment coincided with burgeoning investment by a rapidly industrializing Japanese economy into the EU economy that itself, was undergoing a significant new development phase. Despite the rapidly growing interest of European companies in the Japanese market, the high level of regulatory and non-regulatory barriers posed a serious impediment to market entry, business development and investment. Accordingly, the trade and investment balances were very much skewed in favour of Japan. In response to this situation, The Council of the European Business Community was officially established in 1983 after it was decided that a more formal structure was needed to adequately address these common trade and investment issues facing European businesses in Japan. An Executive Operating Board consisting of elected representatives from the member Chambers replaced the steering committee and a secretariat was established to coordinate the work of various committees. The EBC is now a major player in the Japanese trade and investment policy environment. The EBC has established strong ties with the European Commission, the EU Member States, the Japanese Government and other business organizations. The EBC is committed to Japan and continues to work towards improving the business environment for European firms doing business in this important market.

The core mission of the EBC is to promote an impediment-free business and investment environment that will make it less difficult and costly to do business in Japan. The main advantage of Japan is an impediment-free market that will serve as a catalyst for global trade liberalization and prosperity. Unified markets are needed to create a business environment which will stimulate innovation and economic growth, more investment and create new jobs.

According to EBC Japan’s decade-long economic slump, globalization, regulatory reform, and aging population have been slowly forcing welcome changes in the Japanese market. Therefore European companies now have greater opportunities for direct investment, strategic alliances, and other tie-ups than at any other time. Accordingly, the EBC's work to encourage beneficial structural and regulatory changes has become all the more important, not only for European companies doing business here, but for Japanese consumers as well

The core mission of the EBC aligns well with the goals of export development strategy of the CompSecur company. Therefore it is expected that the EBC will be able to assist in implementation of most of the actions foreseen in the planned export activities of a dynamically growing European IT company. The EBC currently represents over 2,500 local European companies and individuals who are affiliated with the EBC through their respective national chamber of commerce. Some 300 of these companies participate directly in one or more of the EBC's 29 industry committees, whose work covers a wide variety of economic sectors. The EBC works closely with the Delegation of the European Commission in Japan, the national European Embassies, and other business organizations to co-ordinate policy proposals and make suggestions to the Japanese Government on how to create an open environment for trade and investment in Japan.

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The representative of the organization is Mr.Tommy Kullberg, Chairman of the EBC. According to the Chairman the EBC believes that now is the optimum time for the EU and Japan to face the challenges and to work together in a more synergetic way.

It is recommended for the company to join the EBC organization as a regular member which will further increase effectiveness of undertaken actions in regard to company’s export business activity development in Japan.

Contact details of the EBC are as follows:

European Business Council in Japan Sanbancho POULA Bldg. 2F, 6-7 Sanbancho, Chiyoda-ku, Tokyo 102-0075, Japan Tel: +81-3-3263-6225 Fax: +81-3-3263-6223 http://www.ebc-jp.com

9.4.2. EDUCATION RELATED ORGANIZATIONS

9.4.2.1. JAPAN INTERNATIONAL TRAINING COOPERATION ORGANIZATION

The Japan International Training Cooperation Organization (JITCO) contributes to the human resource development in developing countries by supporting international trainees and technical interns in coming to Japan.

Founded in 1991, JITCO is a charitable organization with a shared jurisdiction among five Ministries: the Ministry of Justice, the Ministry of Foreign Affairs, the Ministry of Health, Labor, and Welfare, the Ministry of Economy, Trade and Industry, and the Ministry of Land, Infrastructure and Transportation.

JITCO's fundamental purpose is to contribute to international training and internship programmes by assisting them to run smoothly and appropriately.

JITCO’s mission statements:

 Provide overall support and assistance along with advice and instructions for organizations that intend to host or are currently hosting trainees and interns.  Support and advise trainees and interns on legal issues such as immigration and labor as well as general concerns and inquiries.  Support both sending and hosting organizations, trainees, and interns to conduct and successfully complete training and internship programmes.

Activities

 Collection of information about foreign nationals wishing to receive training in Japan mainly by information exchange with foreign governments, and supply of this information to companies/organizations who are able to accept trainees (hereinafter referred to as "accepting organizations").  Advice and assistance with procedures for entry into and residence in Japan on the part of the trainees.  Assessment and evaluation of individual industrial training programmes for each accepting organization.

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 Research, development, and publication of educational materials and manuals for Industrial Training Programme for foreign nationals.  Advice and assistance aimed at ensuring the Health and Safety of the trainees, including arrangements for private accident and health insurance programmes.  Assistance to facilitate utilization of public vocational training facilities and assessment of technology, skills, and knowledge.  Besides the above 2 provisions mentioned, advice and assistance concerning implementation of industrial training for foreign nationals.  Advice regarding return of trainees to the home countries (countries of nationality or habitual residence) and investigation of their employment status and other such factors after their return.  Public information activities including lectures and seminars regarding Industrial Training Programmes.  Collection, analysis, and publication of various data concerning the implementation of Industrial Training Programmes.  Mission activities of the government of Japan to promote the Technical Internship Programme and other activities concerning Industrial Training Programme.  Other activities necessary to the attainment of this foundation's objective.

Two most important programmes governed by the JITCO are the Industrial Training Programme (ITP) and the Technical Internship Programme (TIP).

In order to enter and reside in Japan for the purpose of receiving industrial training, foreign nationals must first obtain the necessary "trainee" status of residence. The first point to note in connection with a "trainee" status of residence is that it disqualifies the holder from engaging in any activity for remuneration. Although Industrial Training Programmes may include training through actual performance of job duties, this must fall within the scope of OJT (on-the-job training) and must, as such, be necessary in order to fully acquaint the trainee with the practical side of the techniques he or she is studying. Trainees are not to be used to compensate for shortages of local labour. To this end, both the trainee and the accepting company or organization must fulfill a number of conditions. "Industrial Training Programmes" must be designed to secure the "transfer of technology, skills, and/or knowledge of industry as a means of contributing to the development of the human and industrial resources of other countries" in the manner outlined above. In order to ensure that this objective is fulfilled, corporate plans for the accepting of overseas trainees must meet the following conditions:

1. The technology, skills, and/or knowledge that the trainee is to obtain in Japan must not be of the type that could be obtained mostly through the repetition of simple work. 2. The trainee is expected to engage in a job requiring the technology, skills, and/or knowledge obtained in Japan after returning to his or her country of nationality or habitual residence. 3. The trainee must be at least 18 years of age. 4. It must be impossible or difficult for the trainee to obtain the desired technology, skills, and/or knowledge in the country where he or she resides.

Industrial Training Programmes are divided into two broad categories:

1. Not including OJT (on-the-job-training) In the case of Industrial Training Programmes that do not include OJT, there are no specific conditions imposed either on trainees or on sending organizations (corporate or otherwise) other than the basic conditions mentioned above. 2. Including OJT In the case of Industrial Training Programmes that include OJT, a number of conditions are imposed both on trainees and on sending and accepting organizations (corporate or otherwise) in addition to

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the basic conditions mentioned above. Arrangements for the acceptance of trainees fall into a number of typically acceptable patterns.

The above explanation provides a simple outline of the essential features of the system whereby Japanese organizations or companies may offer Industrial Training Programmes for overseas nationals. Training in Japanese companies may or may not include a period of on-the-job training (OJT). In cases in which OJT is included as part of a training programme, the criteria for acceptance by companies which have a capital or business relationship with the sending organizations or companies and those which do not may vary significantly.

Another main programme, the Technical Internship Programme (TIP, as instituted in April, 1993) is positioned as a training system of broader cooperation with transfer of more practical technology, skills, and/or knowledge to developing countries and with the cultivation of human resources to lead their economic advancement.

TIP concerns practice of the same category of skills and at the same company as in the Industrial Training. To become interns, trainee must have undergone:

1. Evaluation of training results. 2. Evaluation of residence conditions. 3. Evaluation of technical internship plan.

As the result of these three evaluations, applicants have been recognized as having attained a certain level of skills. The status of residence is changed from "trainee" to "designated activities". An important matter in the programme is a period of stay:

1. Technical internship will not be recognized if the period of Industrial Training is too short. 2. The period of technical internship must be no more than about 1.5 times the duration of the period of Industrial Training. 3. The combined period of stay for Industrial Training and technical internship must not exceed three years. 4. In the case of three year program, the period of Industrial Training should exceed nine months. Ruling of no more than 1.5 times the duration of the preceding training need not to be applied.

Evaluation systems for training results consist of two general types:

1. National assessment examinations of skills etc. based on the Human Resources Development Promotion Law. 2. Other skill evaluation systems authorized and publicized by JITCO.

Contact details of JITCO are as follows:

Japan International Training Cooperation Organization Sumitomo Hamamatsucho Bldg. 4F 1-18-16 Hamamatsucho, Minato-ku, Tokyo 105-0013 Japan Tel: +81-3-6430-1100 Fax: +81-3-6430-1112 http://www.jitco.or.jp

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9.4.2.2. CENTER FOR EDUCATIONAL COMPUTING

The Center for Educational Computing (CEC) was set up in order to promote the use of computers in school education in Japan, particularly in elementary, middle and high schools, and is under the joint control of the Ministry of Education, Culture, Sports, Science and Technology (MEXT) and the Ministry of Economy, Trade and Industry (METI). The CEC conducts various surveys and research and development projects every year. CEC's management includes members from academic circles, educational organizations, the computer and software industries, and representatives from corporations and individuals that support CEC's work.

The CEC has been founded in 1986. A year after the educational software library of CEC has been established and CEC organized its first symposium about educational computing. The same year it hosted a competition to develop the “CEC Concept Model '87”. In 1989 CEC published a dictionary of standard educational computing terms and in 1990 the CEC '90 specification Model was released. CEC has also published “A research report on functions of computing systems essential to schools”. Since 1991 CEC actively researches on applied technologies for educational information processing and during 2 decades hosts many symposia and conferences in this regard. In 1994 CEC starts playing a major role of “System engineer school dispatch program”(CEC discontinues it in July 2005) and releases the first issue of “CEC Circle”. In 1994 CEC launches the 100-School Networking Project in Japan (the project continues with success in II phase). In 1998 the “School Informatization Program” begins and in 1998 the E Square (e2) Project begins. Later on in 2000 and 2001 two news projects are launched accordingly: “Building of educational digital contents” and “Information Economy Platform Development”. In 2001 CEC launches the Site of educational digital contents starts and in 2002 the E Square Advance(e2a) project begins, while at the same time CEC starts “Educational Informatization Promotion Programme in partnership with local industries”. In 2003 CEC starts a regional symposium on Education utilizing Advanced IT and in 2004 the “Information education in industrial cooperation” project is launched. The same year a symposium “Toward new development of IT-use Education” is held by CEC.

Since 1998 the informatization of schools has been regarded as one of the most important policies of the government of Japan and a lot of related projects and activities have been implemented. The E square(e2) Project, which was carried out under the achievement of the 100-School Networking Projects(PhaseⅠ&Ⅱ), conducted researches and surveys on how to use the Internet in the educational scene through the projects, looking towards 2002. The E square(e2) Project achieved a lot of results, such as rapidly spread use of the Internet at schools which were planning projects work to use advanced technology and methods on the network. But aiming at the realization of the target- in 2005 every classroom has PCs and projectors connected with the high-speed Internet - which was set by the government, the problems as follows still remain:

 Encouraging much more schools and teachers to use IT  Studying further on the requirements and methods of the use of IT  Expanding the network of schools, boards of education, etc.  Evaluating and analyzing educative effects of the use of IT

Although computerization in elementary and secondary education has been making progress with the activities of the government and the educators toward the final target year of the Millennium Project “Digitization of education“ and e-Japan Strategy, the realization of educational IT environment, which is practical and educationally effective, seems to be still a difficult task.

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The E-square Evolution (e2e) Project is designed to realize the effective and continuously available IT environment according to the needs and actual situation of teachers and schools in order to improve the situation in Japanese formal education system.

The E square Evolution(e2e) Project consists of the following three projects.

 Open Schools Platform Implementing of survey research and demonstration test on the usefulness, robustness, operability and samples to support etc. of Open Source Software(OSS) for the progress of IT in education on the multi platform basis.  Security Implementing of some research and information gathering in order to promote IT security measures.  Plans for Schools Practicing new ideas and measures or improving the approaches and contents that have been worked out so far,in order that the results of those activities could be spread widely among other teachers and schools

Contact details of the organization are as follows:

Center for Educational Computing Shirokanetakanawa Station Building 3F, 1-27-6 Shirokane Minato-ku, Tokyo 108-0072 Japan Tel: +81-3-5423-5911 Fax: +81-3-5423-5916 http://www.cec.or.jp

9.4.2.3. ASSOCIATION FOR OVERSEAS TECHNICAL SCHOLARSHIP

The Association for Overseas Technical Scholarship (AOTS) is an economic cooperation organization under the jurisdiction of the Japanese Ministry of Economy, Trade and Industry (METI). For about half a century, it has been active as a training organization providing technical cooperation to developing countries and regions on a private sector basis. Since its establishment, AOTS has been steadily achieving excellent results all around the world with the understanding and support of METI, industry, academia as well as prefectural and municipal governments.

The Association for Overseas Technical Scholarship was established in 1959 with the support of the Ministry of International Trade and Industry (which is the present Ministry of Economy, Trade and Industry: METI) as the first technical cooperation organization on a private basis in Japan. Its main purpose is to promote international economic cooperation and enhance mutual economic development and friendly relations between those countries and Japan.

The mission of AOTS is to promote international economic cooperation and enhance mutual economic development and friendly relations between overseas countries and Japan through training activities for engineers and managers of these countries both in Japan and abroad

Main activities to achieve AOTS's purpose:

 Training of engineers and managers from developing countries in Japan  Training of engineers and managers in overseas countries  Management and operation of the facilities required for the above-mentioned training  Other activities necessary to achieve AOTS's purpose

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In the year of its establishment, AOTS accepted only 43 trainees. At present, however, it receives more than 5,000 trainees in Japan, and, including those who attend overseas training programmes as well as distance training programmes, AOTS offers training to more than 14,000 people annually. The total number of returned trainees amounts to almost 122,000. These people are actively engaged in the industrial development of their respective nations. The returned trainees have voluntarily formed Alumni Societies in many countries. These Alumni Societies have organized the World Network of Friendship, through which trainee exchange programmes are being undertaken.

Our four Kenshu Centers, located in Tokyo, Yokohama, Kansai (in Osaka), and Chubu (in Aichi), can accommodate up to 1,000 trainees in total so as to be able to deal with the further expansion of AOTS activities.

Features of AOTS Activities are as follows:

 Utilization of the ODA Fund under the Japanese government’s policy for technical cooperation  Lending support to HRD in the industrial sector and establishment of industrial infrastructure such as Industrial Property Rights  Lending support to the overseas business development of Japanese private companies which in turn helps to promote economic development in developing countries  Promotion of cross-cultural exchange for mutual understandings

AOTS Training Activities are as follows:

 Training Programmes in Japan o Technical Training Programmes After introductory training (General Orientation Course) to acquire Japanese language ability and knowledge of Japanese society, specialized technical training is carried out under the relevant training programmes at host companies for the participant to acquire skills or techniques in specific fields. o Management Training Programmes These programmes are group training designed for top and middle managers to meet an urgent need to have people with excellent managerial abilities as well as those with proper skills and techniques. o Japanese Language Lesson during General Orientation Course  Overseas Training Programmes The training programmes are group training carried out in overseas countries with instructors dispatched from Japan. It is divided into two types: overseas training for participants from the country where it is held, and third-country type for participants from neighboring countries. Some programmes are organized based on applications from companies or organizations that wish to implement them, and others are planned and conducted by AOTS itself.  Distance Training Programme To widen training opportunities and upgrade regular training programmes, AOTS carries out distance training programmes such as conducting lectures by using a Video Conference System, implementing WBT (Web-Based Training) via the Internet, etc.  Training Programme for SMEs To assist the global business activities of Japanese SMEs (small and medium-sized enterprises), AOTS provides engineers and managers of SMEs with training courses both in Japan and overseas countries.

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As of March 2006, there were 70 AOTS Alumni Societies in 43 countries. Those Alumni Societies have established “World Network of Friendship (WNF)”, a network promoting world-wide cooperation amongst the alumni societies in the field of HRD based on self-help and the mutual cooperation.

The representative of AOTS is its Chairman, Mr. Tsutomu Kanai.

The activity of AOTS for fiscal 2008 was as follows:

o Training Programme in Japan 253 courses 6,843 participants o Overseas Training Programme 125 courses 4,410 participants

Endowment of the Association is of 100,000,000 yen and the total budget for fiscal 2008 was 11,700,000,000 yen. The organization employs 187 members of staff.

Contact details of the organization are as follows:

Association for Overseas Technical Scholarship 30-1, Senju-azuma 1-chome, Adachi-ku, Tokyo 120-8534, Japan Tel: +81-3-3888-8255 Fax: +81-3-3888-8428 http://www.aots.or.jp

9.4.3. INFORMATION TECHNOLOGIES RELATED ORGANIZATIONS

9.4.3.1. NATIONAL INSTITUTE OF INFORMATICS

Founded in April 2000, the National Institute of Informatics (NII) marked its new beginning in April 2004 as a member of the Research Organization of Information and Systems.

The National Institute of Informatics (NII) has designated the following missions and roles: To create future value (create scholarship) as Japan's sole comprehensive academic research institute in the field of informatics; to attain the status of a national center for informatics research activities; and to spearhead and develop service operations related to the academic information infrastructure (academic networks and contents) ― a task vital to the research and education activities of today's academic community overall. Through the above efforts, the NII aims to realize the effective contributions internationally as well as to domestic society.

These missions have now reached a particularly important stage, after the ten-year history from the IT boom to IT bubble collapse. The field of informatics thus needs to demonstrate new theories, methodology, and applications (future value) that can generate new types of actual value for human and society. In addition, needs are growing as regards the formation of a Cyber Science Infrastructure (CSI) that organically combines elements such as shared ultra-high-speed networks, research resources, and science software and databases, as well as human resources, in order to realize global competitiveness in broader-ranging research and industrial and education activities. The need is therefore urgent to develop academic information infrastructure that will lead seamlessly to that of the next generation. Science Information Network (SINET3) that launched in 2007, and next generation science contents infrastructure formation by cooperation with universities is parts of the concrete result.

As Japan's only general academic research institution seeking to create future value in the new discipline of informatics, the National Institute of Informatics (NII) seeks to advance integrated research and development activities in information-related fields, including networking, software, and content. These activities range from

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theoretical and methodological work to applications. As an inter-university research institute, NII promotes the creation of a state-of-the-art academic-information infrastructure (the Cyber Science Infrastructure, or CSI) that is essential to research and education within the broader academic community, with a focus on partnerships and other joint efforts with universities and research institutions throughout Japan, as well as industries and civilian organizations.

NII provides graduate education under the three main forms in its efforts to train leading researchers capable of combining a broad view with advanced specialization. Students develop the ability to address challenges by capitalizing on NII's unique strengths, including comprehensive informatics research systems and a practical environment in which theoretical research and practical development are combined.

NII joined the Graduate University for Advanced Studies and established the Department of Informatics to provide graduate education (5-year and 3year Ph.D. programmes). The National Institute of Informatics in its role as the Department of Informatics in Sokendai undertakes the role of training and teaching at the NII in Chiyoda-ku, which is in central Tokyo.

The NII’s 2008 operational budget was 10,7 million yen with 143 full-time employed staff.

The representative of the organizations is its General Director, Mr. Masao Sakauchi.

Contact details of the organizations are as follows:

National Institute of Informatics 2-1-2 Hitotsubashi, Chiyoda-ku, Tokyo 101-8430, Japan Tel: +81-3-4212-2000 Fax: +81-3-4212-2001 http://www.nii.ac.jp

9.4.3.2. JAPANESE INFORMATION TECHNOLOGY SERVICES INDUSTRY ASSOCIATION

Japanese Information Technology Services Industry Association (JISA) was established back in 1984. Main members include leading software developers and information processing and database/VAN service suppliers. Associate members are predominantly leading Japanese hardware vendors, bankers, insurers, manufacturers, traders and common carriers, etc.

The mission of JISA is to maintain the growth of Japan's information services industry and to contribute to the overall growth of the country's economy, through promoting skill development, improving the business environment, and enlarging IT products and services availability.

According to JISA its members account for around 10% of the companies in the Japanese IT services market and around 40% of the staff employed (237,000 employees). JISA members have a 50 percent share in the country's ICT revenues, with total sales amounting to $70 billion.

The primary objectives of JISA include market expansion, enhancing industry reliability, providing information on public policies, promoting industry-academia partnerships, protecting personal data from piracy, collaborating with domestic overseas and international organizations and promoting international affiliations.

Although JISA is a large scale organization, primarily engaged in a large enterprise market sector, it is expected that cooperation with this organization will turn out very beneficial in regard to export of IT training services. In particular it is expected that by indirect role of JISA the company will be able to initiate small-scale cooperation and partnership with leading Japanese ICT corporations. This will allow to tailor IT training programmes (being

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the subject of the export strategy) to suite the domestic technologies, solutions and products in ICT and so to increase sales of the exported services in future.

The primary goals of JISA are as follows:

 Basic Policy o Reform the industry to be more attractive; o Establish value of software and service; o Promote activities in consideration of whole ICT market; o Enhance activities to suggest policies to the government;  Priority Issues o Improve quality/security of information system design and operation, improve customer satisfaction; o Establish strategic human resources/employment system; o Explore new market including embedded software; o Promote compliance of management; o Establish CTO system in the industry.

JISA activities on the other hand include:

 Responding to government initiatives, including domestic/international public policy issues;  Offering basic computing skill courses for training based on ITSS to nurture IT professionals with ondemand skills;  Conducting research and surveys to study industry trends, issues, markets and cutting-edge information technology;  Promoting quality control, standardizing and promoting security measures for information systems;  Studying workforce issues and intellectual property rights issues;  Holding meetings, seminars and symposiums covering various topics; introducing the "privacy mark" certificate;  Taking part in international activities business seminars, and multilateral meetings.

It is important to stress that although JISA is itself engaged in IT training services in the framework of the ITSS programme, it is not a disadvantage in partnering this organization. By partnering with JISA the company will gain opportunity to expand the scope of IT training services by the new standards and programmes, particularly gaining ITSS accreditation in Japan that will allow for further extension of exported services in the target market characterized by the closed attitude to new standards. It is expected that CompSecur could become one of the companies implementing the ITSS formal training programme in Japan, and perhaps also introduce its qualities outside of Japan in strict cooperation with the JISA.

Contact details of JISA are as follows:

Japanese Information Technology Services Industry Association 9th Fl, Nittobo Bldg, 2-8-1 Yaesu, Chuo-ku, Tokyo 104-0028, Japan email: [email protected] http://www.jisa.or.jp

9.4.3.3. JAPAN ELECTRONICS AND INFORMATION TECHNOLOGY INDUSTRIES ASSOCIATION

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Japan Electronics and Information Technology Industries Association (JEITA) main objective is to promote the healthy manufacturing, international trade and consumption of electronics products and components in order to contribute to the overall development of the electronics and information technology (IT) industries, and thereby further Japan's economic development and cultural prosperity. Although the scope of activity of the organization is also beyond IT (with the whole electronics sector), JEITA is paying increasing attention to ITs, understanding its leading role in shaping future high technology sector of the world economy.

According to JEITA we are facing the world now connected via the Internet, and electronics technologies and IT have become widespread everywhere. With the evolution of electronics and progress of IT, technologies in information, communications, imaging and audio are converging to create new systems and products, which are bringing enormous changes that go beyond conventional frameworks, not only in economic society, but also in living and culture.

JEITA's mission is to foster a digital network society for the 21st century, in which IT advancement brings fulfillment and a higher quality of life to everyone. The Association is also actively promoting environmental preservation countermeasures, including those to combat global warming.

JEITA activities concern primarily:

 Development of new fields o Building strategies, such as the e-Japan programme, and making proposals on government policies to further development of an advanced knowledge information society o Conducting industry research and promoting products using new technologies, including TV receiving equipment for digital satellite broadcasting, mobile computing equipment, Intelligent Transport System (ITS) equipment and solutions businesses o Supporting technological development in areas such as system large-scale integrated circuits (LSIs), ultrahigh-density system integration (SI) and flat-panel displays (FPDs)  Promoting International Cooperation o Interacting with overseas industry associations through the arranging of and participation in international conferences and related events; releasing industry-related information globally; implementing joint programmes in fields such as environmental preservation measures; and dispatching and receiving trade missions o Hosting and participating in meetings worldwide, including the World Electronics Forum (WEF), International Information Industry Conference (IIIC) and World Semiconductor Council (WSC)  Working on Environmental Preservation and Safety Measures o Promoting countermeasures for global environmental and safety issues, and collecting and disseminating related information  Advancing Technical Standardization and Technological Development o Promoting the standardization activities of the International Electrotechnical Commission (IEC) and International Standards Organization (ISO); cooperating in the formation of Japan Industrial Standards (JIS); establishing JEITA standards o Promoting research and development related to the field of IT  Implementing Surveys and Analyzing Statistics o Collecting, organizing and analyzing statistics from within and outside of the industry o Publishing and distributing reports and reference materials on trends in and analyses of the industry, production forecasts, technological trends in a variety of fields, and mid- to long- range projections o Exchanging statistics and information with trade associations in other countries

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o Improving understanding of the status of electronics and information technology industries worldwide through the dispatching of study missions and other activities  Reinforcing the Industry's Operating Environment o Representing the opinions of the industry and its proposals to the government; informing JEITA members of government policies o Supporting the business environment, including activities for legal and intellectual property issues  Maintaining Effective Public Relations and Staging Exhibitions o Publishing periodicals; holding press briefings by the chairman of JEITA; implementing internal and external public relations activities; sponsoring exhibitions, including CEATEC JAPAN, and lectures and seminars

The representative of the organization is Mr. Fumio Ohtsubo, the President of Panasonic Corporation.

Contact details of the JEITA are as follows:

Japan Electronics and Information Technology Industries Association Chiyoda First Bldg. South Wing, 3-2-1, Nishi-Kanda, Chiyoda-ku, Tokyo, 101-0065, Japan Tel: +81-3-5275-7263 Fax: +81-3-5212-8122 http://www.jeita.or.jp

9.4.3.4. JAPAN SCIENCE AND TECHNOLOGY AGENCY

Japan Science and Technology Agency (JST) is an organization established in October 2003, but continuing operation of related associations founded during 1950s. As the core executive organization of the Science and Technology Basic Plan, JST promotes creation of intellect, sharing of intellect with society, and establishment of its infrastructure in an integrated manner and supports generation of innovation.

Japan Science and Technology Agency comprehensively promotes all of the process from creation of knowledge, which leads to innovation in Japan, to return of research results to the society and nation. As the bases of such process, JST also provides scientific and technical information, increases understanding of science and technology (S&T), and promotes strategic international activities.

Under the administrative framework of the JST organization there are some sub-organizations functioning in domains of interest for the planned export development strategy.

An especially important role could be assigned to the CRDS, which is the Center for Research and Development Strategy, striving persistently to advance science and technology (S&T) toward fulfillment of societal needs and realization of an excellent vision of future society.

The above stated mission of the CRDS is being fulfilled within undertaking of the following actions:

 Promoting dialogues between S&T policymakers and academia,  Surveying S&T fields and drawing their "bird's-eye view maps",  Selecting important R&D subjects to be funded by the Government, and investigating effective methods for performing R&D on the selected subjects,  Comparing the technology levels of Japan with those of other counties,

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 Proposing R&D strategies that can contribute to realization of an excellent vision of future society, enrichment of S&T base, and expansion of research frontier.

Contact details of the JST are as follows:

Japan Science and Technology Agency Kojimachi Square Bldg., 3, Nibancho Chiyoda-ku, Tokyo 102-0084, Japan Tel: +81-3-5214-7481 Fax: +81-3-5214-7385 http://www.jst.go.jp http://crds.jst.go.jp

9.4.3.5. INFORMATION TECHNOLOGY PROMOTION AGENCY

Information Technology Promotion Agency (IPA) has been established originally as a Specially-Approved Corporation, based on the Law on Promotion of Information Processing (enacted in 1970). By amendments enacted on 2002, IPA was reorganized to become an lncorporated Administrative Agency dated January 2004. The Agency operates in order to promote the sound development of the IT industry. It strives to build a society where the benefits of IT reach all citizens.

IPA’s mission is to offer creativity and security to an information-based society and to raise Japan’s competitiveness. Committed to creating an economy and society where all citizens can utilize IT with a sense of security, IPA works to raise the security and reliability of IT within the sphere of software. While promoting the greater use of IT among small-and medium-sized enterprises (SMEs), which underpin the foundation of Japan’s industry, IPA also strives to develop well-rounded, highly skilled IT human resources, enhance Japan’s structural reform capabilities and raise the nation’s international competitiveness. Ensuring that Japan becomes a country where people enjoy enriched lives with a sense of security is predicated on the healthy development of the nation’s IT industry. Its sound development will thus assure that all citizens benefit from IT and enjoy convenient and comfortable lifestyles. As the core organization for promoting the development of Japan’s software industry, IPA responds flexibly to changes in the current era of globalization and push forward with reforms and the healthy development of Japan’s IT industry. IPA undertakes activities in four principal fields that form the pillars of its operations: IT Security, Software Engineering, IT Human Resources Development and Open Software. Specific activities in these fields are undertaken with a keen awareness of “all citizens.” IPA continually strives to provide information in easy-to-understand formats, offers SMEs and the general public easy-to-use tools and actively promotes collaborative activities in local communities. Looking to the future, IPA will continue to proactively undertake operations from all perspectives to ensure that all can contribute to the realization of an IT-based society where IT benefits extend to all members of society.

IPA is engaged in realization of its mission, summarized in free following fields:

 Assuring the security and reliability of IT in the social infrastructure  Strengthening international competitiveness  Cultivating highly skilled world-class IT human resources

These missions IPA seeks to achieve by its activity in the 4 following fields:

 IT Security: The evolution of an IT-based society has been accompanied by an increase in crimes involving computer viruses and unauthorized access. Moreover, IT security vulnerability is bringing

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such unintended consequences as confidential information leaks. By devising comprehensive IT security measures, IPA is supporting the security of an IT-based society.  Software Engineering: Used widely in people’s daily lives, software helps realize an enriched society with a wealth of conveniences. To ensure efficiency and improve the development of highly reliable software, IPA works on numerous fronts, focusing on fields with a major impact on society.  IT Human Resources Development: As competition in the global economy intensifies, developing capable IT human resources is becoming an urgent priority for Japan’s IT industry. Through such initiatives as preparation of the Information Technology Engineers Examination (ITEE) and the Skill Standards for IT Professionals (ITSS), together with the promotion of industry-academia collaboration, IPA is solidifying the foundation necessary for developing as well as identifying capable IT human resources.  Open Software: Open standards for interoperability and open software created jointly rather than by relying on exclusive designated vendors provide a host of advantages that are not limited only to costs. IPA undertakes numerous activities in promoting the use of open software.

In terms of IT Human Resources Development activities it is very important in the context of planned export development strategy to mention the ITEE programme (Information Technology Engineer Examination).

The ITEE is according to IPA its most widely known activity. Further according to IPA the ITEE boast a history of 40 years and approximately 1.5 million successful applicants, and is a highly trusted standard by numerous people and companies as an indicator in the development of IT engineers. A drastically revised examination was introduced starting with the spring 2009 examination. There are hopes that numerous people will use ITEE as a vital indicator in the IT industry.

ITEE was first administered in 1969 by the Ministry of International Trade and Industry (currently METI). ITEE is becoming one of the largest-scale national examinations in Japan, and to date more than 13 million people have taken this examination and approximately 1.5 million have passed. The large scale of ITEE offers ample evidence that people take this examination to measure their own IT capabilities.

The objectives of ITEE are:

 to create goals for IT engineers and provide motivation to improve individual technical competence;  to set clear skill criteria for IT engineers, thereby contributing to the establishment of educational standards in school education, vocational education and corporate in-house education  to establish objective criteria for companies and government agencies to evaluate IT engineers’ skills and competence upon employment, with the aim of raising the social status of qualified engineers.

ITEE is widely used and highly valued by businesses and schools as a way to ascertain and improve one’s skill levels.

ITEE was extensively revised starting with the spring 2009 examination. The purpose of this revision was to build objective human resource evaluation mechanisms based on the Common Career/Skill Framework and to also ensure consistency with the three types of skill standards. Along with this revision, IPA has established the Information Technology Passport Examination that tests the basic IT knowledge of regular workers.

A total of 12 examination categories, ranging from entry-level tests to examinations covering comprehensive technologies, have been established. Passing the examination allows for the objective certification of IT knowledge.

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The new ITEE can be used as a criterion for determining Common Career/Skill Framework levels. Basically, the new ITEE can determine capabilities from levels one to three, while level four can now be determined by the combination of new ITEE and business experience.

The Information Technology Passport Examination was established as a level-one examination.

The human resources categories of user and vendor, which were separate categories under the former examination system, have been revised and a unified examination system has been instituted.

In response to the rising importance of embedded systems, the examination incorporates a wide range of testing categories related to knowledge and skills about embedded systems, which were included within a specific examination classification in the previous examination.

To enhance convenience for exam takers, for the Information Technology Passport Examination organization aims to introduce a method that allows the examination to be taken using a personal computer.

For the advanced-level examination, there was an reorganization and consolidation of the number of exam classifications to nine compared with 11 categories in the previous examination.

The scope of questions was revised to reflect the latest technology trends.

ITEE is mutually recognized as equivalent to that in each of 11 economies of India, Singapore, Korea, China, the Philippines, Thailand, Vietnam, Myanmar, Taiwan, Malaysia and Mongolia. This is one of the Japanese policies aimed at supporting IT human resources development in each economy and raising mobility and promoting effective use of IT human resources. The objectives of mutual recognition are as follows:

 To evaluate the competence of IT engineers in Japan and respective economies using common criteria  To provide an indicator of competence of IT engineers to show when they join companies outside their own economy  To enable IT companies in operation overseas to reduce costs and risks when they employ local engineers  To make it easier for IT companies in operation overseas to form business alliances for software development

Based on this mutual recognition, work visa requirements for entry into Japan are relaxed to the passers of the examination in respective economies. Since April 2006, the common exam has been conducted in the six Asian economies of the Philippines, Thailand, Vietnam, Myanmar, Malaysia and Mongolia. This examination comprises the same questions and is equivalent to the Fundamental Information Technology Engineer Examination in Japan, along with being conducted at the same time on the same day. In addition, the Information Technology Passport Examination is scheduled to start in these six economies in 2010.

The representative of Information Technology Promotion Agency is Chairman, Mr. Koji Nishigaki.

Contact details of IPA are as follows:

Information Technology Promotion Agency 16th Floor, Bunkyo Green Court, 2-28-8, Hon-Komagome, Bunkyo-ku, Tokyo, Japan 113-6591 Tel: +81-3-5978-7501 Fax : +81-3-5978-7510 http://www.ipa.go.jp

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9.4.3.6. INFORMATION PROCESSING SOCIETY OF JAPAN

Founded in April 1960, the IPSJ, Information Processing Society of Japan, has been a leading authority in technical areas of information processing and computer science for professionals and students. IPSJ aims to provide a leadership for sound evolution of the computer science and technology in an increasingly computerized society and will contribute to creation of new ideas to cope with the accountability for evolving information technology. Through its authoritative publications, conferences, and other activities, the IPSJ aims to play a critical role in the world for the global prosperity.

The actions of IPSJ focus on the following areas:

 Publications o Magazine "Information Processing" o Journal, Transaction  Special Interest Groups o The Special Interest Groups issue technical reports, hold conferences and edit transactions.  Education Activities o IPSJ Education Committees study principles, curricula, methods, and estimation for improving education quality of information processing.  National Convention and Forum on Information Technology o IPSJ helds the annual National Convention and also helds Forum on Information Technology (FIT) co-sponsored by the Institute of Electronics, Information and Communication Engineers(IEICE) for discussions of state of the arts, cutting-edge ideas, and research products.  Other Technical Activities o Symposiums o Topical Seminars  Partnership with Overseas affiliated Organizations o IPSJ is the Japan representative member of IFIP since IFIP was founded and also is a member of SEEARCC, South East Asian Regional Computer Confederation. In addition, IPSJ co-sponsors with IEEE, IEEE-CS, ACM, KISS and other organizations for computer science and technology to provide its members with chances of overseas cooperation.  Standards Development o IPSJ develops drafts of international standards, drafts of Japanese Industrial Standards and so on subject to contract for international standardization of information technology with Japanese Industrial Standards Committee.  Cooperation with Affiliated Organizations o IPSJ cosponsors various symposiums and tutorials with organizations under Science Council of Japan and Japan Federation of Engineering Societies to provide members with state of the arts of different fields.  IPSJ Awards o IPSJ donates prizes to members for their outstanding papers, presentation, and contribution in information processing fields.  Local Activities o There are eight regional sections, Hokkaido, Tohoku, Tokai, Hokuriku, Kansai, Chugoku, Shikoku, and Kyushu district, all over Japan. Each regional section does its own research activities and services depending on its regional features

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It is recommended for the company to partner with the IPSJ as a Supporting Member (i.e. an organizations that support IPSJ activities). This will allow a critical consultation and perhaps additional business opportunities in the company export development implementation. As of recent statistic the association had over 20 thousand Members (including Honorary Members) and over 300 Supporting Member (as well as 57 Associate Members).

The representative of the organization is Mr. Norio Shiratori from Tohoku University, the IPSJ President.

Contact details of the IPSJ are as follows:

Information Processing Society of Japan Kagaku-kaikan (Chemistry Hall) 4F 1-5 Kanda-Surugadai, Chiyoda-ku, Tokyo 101-0062, Japan Tel: +81-3-3518-8374 Fax: +81-3-3518-8375 http://www.ipsj.or.jp/english

9.4.3.7. NATIONAL INSTITUTE OF MULTIMEDIA EDUCATION

The National Institute of Multimedia Education (NIME) has became registered as an independent administrative institution in April 2004 (previously existed as an inter-university research institute). NIME was governmentally evaluated for the first time in 2005, earning considerable praise for the way it had managed to continue with its original work and at the same time launch some new activities.

An important role of NIME was improvement and optimization of the capabilities of NIME-glad, a gateway to learning for ability development where university e-learning courses and other educational materials can be searched for. The English language version of NIME-glad, which classifies and arranges the English pages of Japanese universities’ websites and educational information in English overseas, was launched in December 2005. This English language version enables users to search for university information in English using terms such as university name, region, prefecture, specialist field and so on, making it an extremely convenient tool for overseas students wishing to study in Japan. The English version also features the ability to conduct federated searching with ARIADNE, the European Union’s educational information gateway and MERLOT, the national gateway to university education in the US. This enables both users in Japan to search universities in the EU, and users in the EU to search Japanese universities with the utmost ease. NIME plans in the near future to use the international organization GLOBE to extend the systematic collaboration and include educational information gateways in Canada and Australia.

NIME has been also engaged in a number of other activities, including development of a learning management system (LMS) designed to respond to the various needs of different types of learning styles, the production of a pamphlet and hosting of a forum about copyrights, field surveys of higher education using Information and Communication Technology (ICT) in Japan and overseas, and research into quality assurance-related measures.

NIME also developed and launched a learning contents provision system that allows young people and those in irregular employment to learn at their own pace, a project commissioned by the Ministry of Education, Culture, Sports, Science and Technology(MEXT). NIME’s numerous new projects also included empirical research into improving academic ability through the use of ICT and the hosting of a meeting at which the results of the research were unveiled. NIME also considers how it could continue to develop these projects and the Space Collaboration System (SCS), an inter-university collaboration network.

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The SCS projects has been launched in order to help universities collaborate easily with each other. NIME provides a collaboration Network for different university classrooms to indulge in face-to-face dialogue and to conduct the following collaborative activities:

 Distance education, allowing students to receive tuition from campuses or universities far away from their own,  Large scale symposium with speakers at distant universities,  Study group meetings allowing researchers or teaching staffs from different universities to debate without having to gather in a single location.

The SCS is operated and has been designed so that teaching staff can conduct distance education without any specialist operator. Anyone can learn how to use it quite quickly. Any numbers of universities can join a session with equivalent functions including transmission and chairmanship. Unlike the Internet, even if the number of universities participating increases, the signals do not become congested and the visual and aural quality is not impaired. Dialogue, lessons and courses can be conducted in a natural environment, as if everyone was in the same room. Any place can be an equivalent SCS facility to join collaboration activities by using the mobile SCS station. SCS has been used for a variety of collaboration activities for more than 126,000 site-hours up to now.

NIME is also studying a new system merging the Internet and the satellite network. Based on the test system organization developed in 2005, NIME is providing universities with information about the functions that are feasible in the new system, its capabilities and introductory costs, and considering the launch of the system with an emphasis on the views and needs of the universities. Parallel to these efforts, NIME is also looking at the construction of a new network system that centers on the Internet.

In the scope of its statutory operations, NIME is a key organization to partner in view of development of export subjected services (i.e. information technology distant training services). The company could also become one of technological assistants in some of the projects that NIME will continue or launch.

The representative of the NIME is its President, Mr. Yasutaka Shimizu.

Contact details of the organization are as follows:

National Institute of Multimedia Education 2-12, Wakaba, Mihama-ku, Chiba-shi, 261-0014, Japan Tel : +81-43-276-1111 Fax: +81-43-298-3472

9.4.3.8. POLISH-JAPANESE INSTITUTE OF INFORMATION TECHNOLOGY

The Polish-Japanese Institute of Information Technology (PJIIT) is one of the best non-state institutions of higher education in Poland, often praised by employers, students and the media. It was founded in 1994 on the basis of a bilateral agreement between the governments of Poland and Japan. It places special emphasis on the curriculum, which is continuously reviewed and updated to meet the requirements of the job market, widely accepted academic standards, both Polish and European, advancements in computer science and its applications.

The PJIIT focuses on practical skills. Owing to that, students and graduates do not have problems finding a job. They are well equipped to work in many areas in which the practical knowledge of IT is the prerequisite. The PJIIT employs outstanding specialists, researchers and academic teachers from Poland, as well other countries and is active on the international scene, cooperating with academic centers from Europe – within the

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framework of the Socrates programme – and from other continents (North America, Asia, Australia). The students of the PJIIT can participate in exchange programmes and take courses at renowned foreign universities.

The PJIIT Has been founded in 1994 by Foundation for Computer Technologies Development, which was implementing agreements between governments of Poland and Japan signed in the year 1993. By the decision of the Polish Ministry of Education the PJIIT Has been recorded in the national higher schools registry by the number 51 and had been granted the competency to formally entitle its graduates as computer science engineers. The students of the PJIIT have the same rights as students of the public higher schools in Poland (including public transportation discount fares, free healthcare and delay in a mandatory military service). Since 1997 the PJIIT is the officially accredited testing center of London Chamber of Commerce and Industry Examinations Board (LCCIEB) and since 1998 the high school have been granted the competency to formally entitle its graduates master of science in the field of computer science. Later on the PJIIT has been designated as the information technologies training center under the programme of JICA (Japanese International Cooperation Agency) for countries of Central and Eastern Europe and had also opened the first Polish CISCO networks academy. In 2001 PJIIT has contracted with SONY within the European Union funded project SPEECON for creation and development of Polish language database (600 speakers in different acoustical environments). In 2002 the PJIIT has been authorized to formally grant the title of PhD in computer science discipline and had been the only private high school in the country to obtain categorization of the National Science Committee. Since 2002 the PJIIT is also running the programme of distant learning education within non-stationary studies. In the academic year of 2003/2004 the high school had coorganized series of advanced lectures in the area of artificial intelligence (the lectures were held at the Tokyo University retransmitted by teleconference means to the PJIIT). Education faculties of the PJIIT were positively verified by the National Accreditation Commission. Since 2004 the PJIIT is taking part in the United Nations Development Programme (UNDP) being responsible for organization on the territory of Ukraine centers for Internet based distant education. The high school has received funding from the National Science Committee for development of its own Center of Excellence of Distant Education (employing e-learning technology). In 2004 the PJIIT is also accredited as the official examination center for formal certification of Japanese language proficiency (Noryoku-shiken), the only one such center in the Central-Eastern Europe. The PJIIT has also commenced cooperation with the Prometric, by launching the Prometric Testing Center for examinations on TOEFL, GRE GMAT and the PMI over the Internet. In 2004 the PJIIT signed the cooperation agreement with the High School of Arts in Warsaw resulting in launching a new direction of studies (the Art of New Media). In 2006 the Research Center of the PJIIT has been granted with the highest category of the national Science Council in the information technologies and electronics disciplines. In 2006 the PJIIT has been implementing the project of development of a new distant learning studies programme within the computer science faculty (the project has been financed from the European Union funds, the European Social Fund). In 2007 the high school had also received support from the Polish Ministry of Science in launching and operating of the academic entrepreneurship incubation center. In 2007 the PJIIT has been responsible for implementing of two projects within the official Polish Help programme under the Ministry of Foreign Affairs, which were aiming to support Ukrainian education system within the discipline of information technologies and support of distant learning education development in Vietnam. Currently the PJIIT is operating branches in Warsaw, Bytom and in Gdansk. In 2009 the National Accreditation Committee has once again positively verified the quality of education provided by the PJIIT.

The representative of the PJIIT is Mr. Jerzy Pawel Nowacki, Rector of the PJIIT. In 2008 Mr. Nowacki has been distinguished by the government of Japan with one of the highest official designations of honor, the Order of the Rising Sun, for outstanding achievements within international cooperation of Poland and Japan.

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The company should partner with the PJIIT, which has an extensive experience in Polish-Japanese international business relationships within the sector of information technologies education and could guide the company for successful implementation of the planned export development strategy.

Polish-Japanese Institute of Information Technology ul. Koszykowa 86 02-008 Warszawa, Poland Tel: +48-22-58-44-500 Fax: +48-22-58-44-501 http://www.pjwstk.edu.pl

9.4.4. GOVERNMENTAL ORGANIZATIONS

9.4.4.1. JAPANESE GOVERNMENT

Japan is a constitutional monarchy under government by the Emperor and the Prime Minister. The power of Emperor is very limited (fulfilling rather ceremonial and diplomatic roles, with definition in the constitution as the symbol of the state and of the unity of the people). Majority of power is held by the Prime Minister of Japan and other members of the Diet, democratically elected by the Japanese people. The current Emperor of Japan is Akihito (with Naruhito as a successor, currently the Crown Prince of Japan) and the current Prime Minister is Yukio Hatoyama of the social liberal Democratic Party of Japan (which took power after over half a century lasting rule of the conservative Liberal Democratic Party). The Prime Minister fulfills the role of the head of the Cabinet with duties to appoint the Ministers of State (majority of whom must be Diet members).

Government legislative organ is the National Diet, which is a bicameral parliament. The Diet consists of a House of Representatives (with 480 seats elected by popular vote every four years or after dissolution) and a House of Councillors (with 242 seats, whose popularly elected members serve six-year terms).

The table below presents current appointing of the Ministers of State in Japan:

List of Ministers in Japanese Government (as of September 16, 2009)

Prime Minister Yukio Hatoyama

Deputy Prime Minister Naoto Kan Minister of State for National Policy Minister of State for Economic and Fiscal Policy Minister of State for Science and Technology Policy

Minister for Internal Affairs and Communications Kazuhiro Haraguchi Minister of State for Promotion of Local Sovereignty

Minister of Justice Keiko Chiba

Minister for Foreign Affairs Katsuya Okada Minister of Finance Hirohisa Fujii

Minister of Education, Culture, Sports, Science and Technology Tatsuo Kawabata

Minister of Health, Labour and Welfare Akira Nagatsuma Minister of State for Pension Reform

Minister of Agriculture, Forestry and Fisheries Hirotaka Akamatsu Minister of Economy, Trade and Industry Masayuki Naoshima

Minister of Land, Infrastructure, Transport and Tourism Seiji Maehara Minister of State for Okinawa and Northern Territories Affairs, and Disaster

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Management Minister of Environment Sakihito Ozawa

Minister of Defense Toshimi Kitazawa

Chief Cabinet Secretary Hirofumi Hirano

Chairman of the National Commission on Public Safety Hiroshi Nakai Minister of State for the Abduction Issue

Minister of State for Financial Services Shizuka Kamei Minister of State for Postal Reform Minister of State for Consumer Affairs and Food Safety, Social Affairs, and Mizuho Fukushima Gender Equality

Minister of State for Government Revitalization Yoshito Sengoku Minister of State for Civil Service Reform

Source: Japanese Prime Minister Cabinet, 2009

The table above presents a list of Deputy Chief Cabinet Secretaries and Director-General of the Cabinet Legislation Bureau.

List of Deputy Chief Cabinet Secretaries Director-General of the Cabinet Legislation Bureau (as of September 16, 2009) Deputy Chief Cabinet Secretary Yorihisa Matsuno Koji Matsui

Kinya Takino

Director-General of the Cabinet Legislation Bureau Reiichi Miyazaki

Source: Japanese Prime Minister Cabinet, 2009

9.4.4.2. MINISTRY OF EDUCATION, CULTURE, SPORTS, SCIENCE AND TECHNOLOGY

The Ministry of Education, Culture, Sports, Science and Technology (MEXT) has been established by merging of the Ministry of Education, Science, Sports and Culture and the Science and Technology Agency of Japan in 2001. The revised Basic Act on Education was promulgated and enacted on December 2006. In order for all individuals to realize rich lives and for Japan to achieve further development and contribute to the peace and development of the international community, the revised Basic Act on Education established the basis of educational objectives, principles, and implementation which government hopes for today, as well as clarified the responsibilities of the country and local governments, and determined the Basic Plan for the Promotion of Education, etc., while valuing the universal principles of the original Basic Act on Education.

The MEXT goal is to accomplish a lifelong learning society in which any citizen can have an opportunity to study at any time, in any place as they like, where their results will be properly evaluated. MEXT enhances function of facilities at The University of the Air, in which people can study university subjects at home through television and radio. MEXT promotes a policy for specialized training colleges that provide practical vocational education, in addition, implementing Lower Secondary School and Upper Secondary School Equivalency Examination for those who did not graduate from lower secondary school or upper secondary schools. MEXT especially supports providing an opportunity to exchange experiences of learning and communication with Information Technologies.

Structure of the Ministry is following:

 Minister's Secretariat

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The Minister's Secretariat is responsible for general administrative duties, such as personnel affairs, general affairs and accounting. Other responsibilities of the Secretariat include policy coordination and evaluation for the Ministry as a whole, public relations and information technology development related to the administrative functions, organization of international work, implementation of international aid and cooperation, and work on the development of educational facilities.  Lifelong Learning Policy Bureau In order to promote educational reform, the Lifelong Learning Policy Bureau plans and drafts basic policy, conducts research and analysis on domestic and overseas education, and strives to promote policies on information technology. The Bureau also promotes social education, supports education in the home, and develops various lifelong learning opportunities such as gender equality. The Bureau is also responsible for the maintenance and enhancement of the University of the Air and advancement of specialized training college education and miscellaneous school education.  Elementary and Secondary Education Bureau In order to advance elementary and secondary education, the Elementary and Secondary Education Bureau is responsible for establishing curriculum standards in elementary schools, lower and upper secondary schools, secondary schools, schools for the blind, schools for the deaf, and schools for the otherwise disabled children and kindergartens. It is also responsible for the enhancement of student guidance and career guidance, the promotion of education for Japanese children living overseas, and the free provision and authorization of textbooks. Lastly, the Bureau is responsible for the system for local education, systems related to government employees working in education, legal standards for class size and staffing numbers for schools, and the payment of school staff.  Higher Education Bureau In order to advance higher education, the Higher Education Bureau is responsible for the formulation of basic policies for higher education, the establishment and approval of universities, junior colleges and colleges of technology, university entrance examination and the conferring of degrees, duties related to student welfare guidance, the scholarship loan program, and the promotion of student exchanges. In addition, to promote private education, the Bureau is also responsible for approving the establishment of school corporations, guidance and assistance on the management of school corporations, and the subsidization of private schools.  Science and Technology Policy Bureau The Science and Technology Policy Bureau is responsible for the planning and drafting of basic science and technology policies. The Bureau is also responsible for the formulation of research and development programmes, the promotion of research evaluation, the training of researchers and specialists, regional science and technology promotion, promoting the understanding of science and technology, the promotion of a comprehensive policy on international research exchange, duties related to safety regulations, and environmental surveys for nuclear reactors for experimental research and radioactive isotopes, etc.  Research Promotion Bureau The Research Promotion Bureau is responsible for promoting a wide range of scientific research, from the humanities and the social sciences to the natural sciences, by establishing academic research institutions and provision of assistance for academic research. It is also responsible for promotion of research and development in such areas as life sciences, information and communications, nanotechnology and materials, and quantum and radiation research, as well as for strengthening coordination between industry, academia, and government and Japan's intellectual property and development of research foundations.  Research and Development Bureau The Research and Development Bureau is responsible for promoting research and development centered on large-scale projects, such as research and development on earthquakes, disaster reduction, the ocean, the earth, and the environment; the promotion of Antarctic observation, the

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International Space Station (ISS) Programme and other research; the development and utilization of space; and research and development on nuclear power, nuclear fusion promoting the International Thermonuclear Experimental Reactor (ITER) project and nuclear fuel cycle including the prototype fast breeder reactor "Monju". The Bureau is also responsible for areas related to nuclear energy policy, including the peaceful use of nuclear energy.  Sports and Youth Bureau The Sports and Youth Bureau is responsible for promoting policies to encourage sports and improve children's physical strength. These policies include enhancement of physical education in schools, realization of a lifelong sports society and the improvement of international competitiveness in sports. The bureau is also responsible for the enhancement of health education, including education on dietary habits, enhancement of school safety and mental care, promotion of school health, etc., and promotion of fostering health in youth, including promotion of experiential activities for youth, measures to deal with problem behavior, promotion of children's reading activities, etc.  Director-General for International Affairs Acting as the Secretariat for the Japanese National Commission for UNESCO, in accordance with the Law Concerning UNESCO Activities, the Director-General for International Affairs is responsible for promoting UNESCO activities. The Office also works on negotiations concerning Free Trade Agreements, Economic Partnership Agreements, and services trade in the World Trade Organization (WTO). As the international contact point for MEXT, it promotes exchange activities and cooperative projects with a variety of countries.  Agency for Cultural Affairs The Agency for Cultural Affairs is responsible for activities aimed at the promotion of culture, as well as international cultural exchange. These include cultivation of artists and support of creative artistic activities; support for the promotion of culture in communities; designation of national treasures, important cultural properties, important tangible and intangible folk cultural properties, historic sites, places of scenic beauty and natural monuments; preservation and passing down of intangible cultural properties; maintenance and dissemination of copyright systems; improvement and dissemination of the Japanese language and Japanese language education; promotion of international cultural exchange; maintenance and establishment of cultural facilities; and advancement of Ainu culture. The Agency is also responsible for religious affairs.

Contact details of the Ministry are as follows:

Ministry of Education, Culture, Sports, Science and Technology 3-2-2 Kasumigaseki, Chiyoda-ku, Tokyo 100-8959, Japan Tel : +81-3-5253-4111 Tel : +81-3-5253-4112

9.4.4.3. MINISTRY OF INTERNAL AFFAIRS AND COMMUNICATIONS

The Ministry of Internal Affairs and Communications (MIC) has jurisdiction over various systems involved in the fundamental framework of the Japanese nation, including administrative organizations, the public service personnel system, local administration and finance, electoral systems, fire fighting and disaster prevention, information and communications, postal services, and other systems fundamental to the people's economic and social activities.

The MIC's administrative functions are closely involved in the infrastructure of people's lives in Japan. In today's severe domestic and foreign environment, the MIC is striving to promote the reform of the socio-economic system and to build and install a new foundation for development in order to shape the nation for the 21st

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century. For this purpose, the MIC is committed to promoting administrative reforms, disclosing administrative information, advancing regional decentralization, ensuring stable sources of local tax, promoting municipal mergers, activating regional economies, securing people's safety, and building increasingly sophisticated systems for information and communications. All this is being achieved by adequately segregating the duties of the national government, local governments, and the private sector under supervision of the MIC.

The structure of the MIC is as follows:

 Ministry of Internal Affairs and Communications o Minister for Internal Affairs and Communications . Senior Vice-Minister for Internal Affairs and Communications . Parliamentary Secretary for Internal Affairs and Communications . Vice-Minister . Vice-Minister for Policy Coordination (Vice-Minister for Policy coordination and International Affairs) . Secretary to the Minister  Minister's Secretariat o Personnel and Pension Bureau o Administrative Management Bureau o Administrative Evaluation Bureau o Local Administration Bureau o Local Public Finance Bureau o Local Tax Bureau o Global ICT Strategy Bureau o Information and Communications Bureau o Telecommunications Bureau o Statistics Bureau o Director-General for Policy Planning  Institutes and other organizations o Local Autonomy College o Institute for Information and Communications Policy o Statistical Research and Training Institute o Fire and Dispute Management College  Special organizations o Central Election Management Council o National Committee for the Management of Political Fund o Commissioner for Local Dispute Management  External Agency o Environmental Dispute Coordination Commission o Fire and Disaster Management Agency

In perspective of Information and Communication Technologies there are three important organizational structures of the MIC, functioning within the Minister’s Secretariat. These are:

 Global ICT Strategy Bureau In order to enhance the international competitiveness of Japan's Information and Communication Technologies industry and handle the fusion and collaboration of communications and broadcasting, the organizations involved in telecommunications were restructured and the Global ICT Strategy Bureau (GISB) was established. Due to this organizational change, the functions for planning policy and research, research policy and international policy previously divided among three divisions were

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consolidated under a single division to lead the comprehensive promotion of ICT strategies through integrated collaboration with other divisions. Important division of the Global ICT Strategy Bureau is the International Affairs division under Director Mr. Shigeo Tani.  Information and Communications Bureau The Information and Communications Bureau promotes the digitalization of broadcasting and advanced use of Information & Communications Technology (ICT). The Information and Communications Bureau also works for ensuring the success of postal service privatization that began in October 2007.  Telecommunication Bureau According to the use of both broadband and mobile IP networks, rapid structural changes have been proceeding in the information and communications field, which has reached a major turning point. The Telecommunications Bureau works to promote competition in the telecommunications business, the development of a secure and reliable environment for using information-communications infrastructure, efficient use of radio waves and establishment of a globally-advanced wireless broadband environment to handle such changes.

The structure of these 3 bureaus is following:

 Global ICT Strategy Bureau o Director-General of the Global ICT Strategy Bureau . Director-General for International Affairs, Global ICT Strategy Bureau o ICT Strategy Policy Division o Technology Policy Division o Standardization Division o Space Communications Policy Division o International Policy Division o International Economic Affairs Division o International Cooperation Division o Counselor  Information and Communications Bureau o Director-General of the Information and Communications Bureau . General Affairs Division . Promotion for Content Distribution Division . ICT Accessibility and Human Resources Development Division . Advanced Information Systems and Software Division . Regional Communications Development Division . Broadcasting Policy Division . Broadcasting Technology Division . Terrestrial Broadcasting Division . Satellite and International Broadcasting Division . Regional Broadcasting Division o Postal Services Policy Planning Department . Director-General of the Postal Services Policy Planning Department . Planning Division . Postal Policy Division . Postal Savings and Postal Life Insurance Policy Division . Correspondence Delivery Business Division  Telecommunications Bureau o Director-General of the Telecommunications Bureau

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. General Affairs Division o Telecommunications Business Department . Director-General of the Telecommunications Business Department . Telecommunications Policy Division . Tariff Division . Computer Communications Division . Telecommunication Systems Division . Advanced Network Division . Telecommunications Consumer Policy Division o Radio Department . Director-General of the Radio Department . Radio Policy Division . Fixed Radio Communications Division . Land Mobile Communications Division . Mobile Satellite Communications Division . Electromagnetic Environment Division

Another important MIC dependent structure is the Institute for Information and Communications Policy (IICP). It had been newly established in April 2003 with the purposes of both "basic research activities of Information and Communications Policy" and "specialized training activities for the staff who engage to Information and Communications Administration in Ministry of Internal Affairs and Communications (MIC) Japan.

IICP had been established as merger of both "Information and Communications department of Institute for Posts and Telecommunications Policy" (IPTP: established in 1988) and "Information and Communications training institute" (established in 1950). The main tasks of IICP are:

 Basic research activities of Information and Communications Policy o IICP has been conducting 1) economic analysis on the Information and Communications related industries, 2) research on the market trend of the amount of Information traffic and contents, 3) basic research activities of Information and Communications. o And IICP has been making effort for contributing to the policy making with 4) distribution of research results, 5) in cooperation / collaboration with persons of learning and experience as well.  Training activities for the staff who engage working in Information and Communications Administration o In order to promote accurate and appropriate administration with adaption of development and advancement of Information and Communications field, IICP has been making effort for human resource development with conducting training courses for the purpose of enhancing policy formation ability and giving highly expertise knowledge and skill on advanced Information and Communications Technologies (ICT) to the staff of MIC. o IICP has been conducting more than 30 training courses with more than 500 MIC trainees every year.

Contact details of the Ministry are as follows:

Ministry of Internal Affairs and Communications 1-2 Kasumigaseki 2-chome, Chiyoda-ku, Tokyo 100-8926, Japan Tel: +81-3-5253-5111 Fax: +81-3-5253-5112

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9.4.4.4. MINISTRY OF FOREIGN AFFAIRS

The Ministry of Foreign Affairs of Japan (MOFA) is responsible for coordination of foreign policy, as well as international relations on many planes of Japan with other states overseas. The structure of the ministry, and the functions of structured entities are as follows:

 Minister's Secretariat The Minister's Secretariat takes charge of overall coordination and administration under the Ministry and other ordinary functions of the Minister's Secretariat. The functions relating to public information consist of the following: dissemination in Japan of information and knowledge concerning the international situation and diplomatic policies; dissemination abroad of information on Japan's domestic situation and diplomatic and foreign policies as well as collection of the information and data necessary to fulfill the above functions. o Management and Coordination Division o Personnel Division o Information and Communicaitons Division o Financial Affairs Division o Overseas Establishments Division o Press Division o Domestic Public Relations Division o Protocol Office o Assistant Press Secretary/Director of the International Press Division  Public Diplomacy Department The Public Diplomacy Department takes charge of the following matters; implementation of international agreements to promote cultural exchange; cooperation with international cultural organizations, and; the introduction of Japanese culture abroad and promotion of cultural exchange with foreign countries as well as supervision of the Japan Foundation. o Public Diplomacy Planning Division o Cultural Affairs Division.  Foreign Policy Bureau The Foreign Policy Bureau takes charge of the planning of basic and middle- or long-term foreign policy from wider points of view and the coordination of policies formulated by other bureaus. Special emphasis are put on national security issues and issues related to the United Nations. It also plays a leading part in a serious emergency. o Policy Coordination Division o National Security Policy Division o United Nations Planning and Management Division o United Nations Policy Division o Human Rights and Humanitarian Affairs Division  Disarmament, Non-proliferation and Science Department The Disarmament, Non-proliferation and Science Department takes charge of the following matters: arms control and disarmament; non-proliferation; nuclear energy, and; science cooperation and other scientific affairs. o Arms Control and Disarmament Division o Non-proliferation, Science and Nuclear Energy Division.  Asian and Oceanian Affairs Bureau The Asian and Oceanian Affairs Bureau takes charge of the following matters: planning work connected with the formulation of policies concerning Asian and Oceanian countries and overall coordination of the implementing of such policies; political affairs concerning Asian and Oceanian

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counties (including the protection of Japanese nationals and their property in these countries) and collection of necessary information as well as conducting of necessary research and surveys on them. o Regional Policy Division o Northeast Asia Division o China and Mongolia Division o Oceania Division.  Southeast and Southwest Asian Affairs Department The Southeast and Southwest Asian Affairs Department takes charge of the following matters: planning work connected with the formulation of policies concerning the Southeast and Southwest Asian countries and overall coordination of implementing such policies, and; political affairs concerning the Southeast and Southwest Asian countries, and collection of information relating to these countries as well as research and surveys on them. o First Southeast Asia Division o Second Southeast Asia Division o Southwest Asia Division  North American Affairs Bureau The North American Affairs Bureau takes charge of the following matters: planning work connected with the formulation of policies concerning the North American countries and overall coordination of implementing such policies, and; political affairs concerning the North American countries and collection of information relating to these countries as well as research and surveys on them. o First North America Division o Second North America Division o Japan-US Security Treaty Division.  Latin American and Caribbean Affairs Bureau The Latin American and Caribbean Affairs Bureau takes charge of the following matters: planning work connected with the formulation of policies concerning the Latin American and Caribbean countries and overall coordination of implementing such policies, and; political affairs concerning the Latin American and Caribbean countries and collection of information relating to these countries as well as research and surveys on them. o Mexico, Central America and Caribbean Division o Caribbean Division o South America Division.  European Affairs Bureau The European Affairs Bureau takes charge of the following matters: planning work connected with the formulation of policies concerning the European countries and overall coordination of the implementing of such policies, and; political affairs concerning the European countries and collection of information relating to these countries as well as research and surveys on them. o European Policy Division o Western Europe Division o Central and South Eastern Europe Division o Russian Division.  Middle Eastern and African Affairs Bureau The Middle Eastern and African Affairs Bureau takes charge of the following matters: planning work connected with the formulation of policies concerning Middle Eastern and African countries and overall coordination of implementing such policies, and; political affairs concerning Middle Eastern and African countries and collection of information relating to these countries as well as research and surveys on them. o First Middle East Division o Second Middle East Division

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o First Africa Division o Second Africa Division.  Economic Affairs Bureau The Economic Affairs Bureau takes charge of the following matters: protection and promotion of Japan's interests relating to foreign commerce and navigation; cooperation with international economic organizations and matters concerning treaties of commerce and navigation and other commercial and economic agreements, and; survey of the international economic situation and compilation of statistics and collection of data concerning the international economy. o Economic Policy Division o International Economy Division o International Trade Division o Economic Partnership Division o Economic Security Division  International Cooperation Bureau The International Cooperation Bureau takes charge of the following matters: policy formulation and implementation of Official Development Assistance; foreign policy on economic cooperation and cooperation with international organizations concerning economic cooperation; issues related to human security foreign policy on UN and other specialized agencies concerning social and economic affairs; issues related to global environment and climate change; protection and promotion of interests relating to Japanese investments overseas; survey of the international economic cooperation situation and compilation of statistics and collection of data concerning international economic cooperation; supervision of the Japan International Cooperation Agency; matters concerning humanitarian assistance and enforcement of the law concerning dispatch of Japan disaster relief teams; assistance to NGO's as well as other matters relating to economic cooperation. o Aid Policy and Management Division o ODA Evaluation and Public Relations Division o Non-Governmental Organizations Cooperation Division o Development Assistance Policy Coordination Division o Development Assistance Policy Planning Division o Development Administration Division o Global Issues Cooperation Division o Specialized Agencies Division o Global Environment Division o Climate Change Division o Humanitarian Assistance and Emergency Relief Division o First Country Assistance Planning Division o Second Country Assistance Planning Division o Third Country Assistance Planning Division  International Legal Affairs Bureau The International Legal Affairs Bureau takes charge of the conclusion of treaties and other international agreements, and matters of international law and legal matters concerning foreign relations. o International Legal Affairs Division o Treaties Division o Economic Treaties Division o Social Treaties Division.  Consular Affairs Bureau The Consular Affairs Bureau takes charge of the following matters: protection of Japanese nationals and their property abroad (except matters dealt with by other bureaus); matters relating to the civil

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status of Japanese nationals abroad; certification of documents issued by Japanese or foreign authorities with regard to matters relating to civil status or other matters related to both Japan and a foreign country; issuance of passports and other documents necessary for travel abroad; visas; general policies of a diplomatic character regarding foreign nationals residing in Japan; planning and handling of emigration affairs; assistance and protection of emigrants and promotion of emigration programmes, etc., liaison and coordination with other governmental organizations connected with emigration and supervision of the relevant function of the Japan International Cooperation Agency. o Consular Policy Division o Japanese Nationals Overseas Safety Division o Passport Division o Foreign Nationals' Affairs Division.  Intelligence and Analysis Service The Intelligence and Analysis Service takes charge of the following matters: general management of information on the international situation; general administration of research affairs; research and surveys on foreign countries (except matters under the charge of other bureaus), and; general analysis of the international situation and collection of necessary information. o First Division o Second Division o Third Division o Fourth Division  Foreign Service Training Institute The Foreign Service Training Institute takes charge of providing training programmes that can be classified into three main categories: Training for Newly-recruited Foreign Ministry Officials, Training for Overseas Pre-Postings, and Training for Mid-career Personnel. o Lectures Section o Language Section o Accounting / General Affairs Section

Contact details of the Ministry are as follows:

Ministry of Foreign Affairs of Japan Kasumigaseki 2-2-1, Chiyoda-ku, Tokyo 100-8919, Japan Tel: +81-3-3580-3311 Fax: +81-3-3580-3312

9.4.4.5. MINISTRY OF ECONOMY, TRADE AND INDUSTRY

The Ministry of International Trade and Industry (METI) was established on the basis of the Ministry of Commerce and Industry after reorganization taking place in 1949. Its internal subdivisions consisted of eight bureaus: Minister’s Secretariat, Trade Bureau, Trade Promotion Bureau, Enterprise Trade Bureau, Textile Trade Bureau, General Merchandise Trade Bureau, Machinery Trade Bureau, Chemical Trade Bureau, and Iron and Steel Trade Bureau. In addition, four agencies, Resources Agency, Small and Medium Enterprise Agency, Industrial Technology Agency, and Patent Office; eight regional trade and industry bureaus; and four regional coal bureaus were established as external subdivisions.

The current structure of the Ministry is following:

 Main structure o Minister of Economy, Trade and Industry

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o Senior Vice Minister of Economy, Trade and Industry o Senior Vice Minister of Economy, Trade and Industry o Parliamentary Secretary for Economy, Trade and Industry o Parliamentary Secretary for Economy, Trade and Industry o Vice-Minister of Economy, Trade and Industry o Vice-Minister for International Affairs o Executive Assistant to the Minister o Executive Assistant to the Minister  Minister's Secretariat o Deputy Vice-Minister of Economy, Trade and Industry o Director-General for Policy Planning and Coordination o Deputy Director-General for Policy Evaluation o Director-General for Technology Policy Coordination o Deputy Director-General for Policy Coordination o Director for Technology Affairs o Personnel Division o Policy Planning and Coordination Division o Diet Relations Division o Administrative Affairs and Disaster Manage Division o Economic Policy Unit o Budget and Accounts Division o Policy Evaluation and Public Relations Division o Public Relations Office o Information Disclosure Promotion Office o Information Systems and Welfare Division o Information Systems Office o Personal Information Protection Office o Welfare Planning Office  Economic and Industrial Policy Bureau o Trade Policy Bureau o International Trade Policy Division o International Regional Policy Division o Trade Policy Division o Policy Planning and Research Office o International Economic Affairs Division o APEC Office o Councilor for APEC o Economic Partnership Division o Director for Economic Partnership o Tariff Planning Office o Americas Division o Latin America and Caribbean Office o Europe Division o Russia, Central Asia and Caucasus Office o Middle East and Africa Division o Asia and Pacific Division o Office for Economic Development and Integration in East Asia o Northeast Asia Division o Multilateral Trade System Department

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. Office for WTO Compliance and Dispute Settlement  Trade and Economic Cooperation Bureau o Trade Finance and Economic Cooperation Division o Financial Cooperation Division o Technical Cooperation Division o Trade and Investment Facilitation Division o Office of Trade and Investment Ombudsman o International Investment Office o Trade Insurance Division o Policy Planning and International Affairs Office o Trade Control Department . Trade Control Policy Division . Origin Certification Policy Office . Trade Licensing Division . Agricultural and Marine Products Office . Office for Trade Remedy Investigations . Security Export Control Policy Division . Technology Exchange Control Office . Office of Intelligence and Analysis for Export Control . Office of International Affairs for Security Export Control . Senior Analyst for Security Export Control . Security Export Inspection Office . Security Export Licensing Division  Industrial Science and Technology Policy and Environment Bureau o Industrial Science and Technology Policy and Environment Bureau o Technical Regulations, Standards and Conformity Assessment Policy Division o Environmental Affairs Division o Industrial Science and Technology Policy Division o Innovation Strategy Planning Division o Technology Evaluation Office o Achievement Dissemination and Collaboration Promotion Office o International Affairs Office o Technology Research and Information Office o Academia-Industry Cooperation Promotion Division o Technology Promotion Division o Office for AIST o Office for NEDO o Research and Development Division o Technical Regulations, Standards and Conformity Assessment Policy Division  Manufacturing Industries Bureau o Manufacturing Industries Policy Division o Office for Intellectual Property Right Infringement and International Trade o ITS Promotion Office  Commerce and Information Policy Bureau o IT Strategy Division o Information Policy Division o IT Project Office o Information and International Policy Office o Information Economy Division

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o Senior Analyst for Global Strategy Information Industry o Office of IT Security Policy o Information Service Industry Division o Local Informatization and Human Resource Development Office o Information and Communication Electronics Division o Commerce and Distribution Policy Group . International Exhibitions Division  Training Institute of Economy, Trade and Industry  Agency for Natural Resources and Energy o Agency for Natural Resources and Energy o Energy and Environment Policy Division o Counselor for International Energy Negotiation o Energy Conservation and Renewable Energy Department . Policy Planning Division . New Energy Creation Office . International Cooperation Office . Energy Efficiency and Conservation Division . Office for Energy Conservation Law Implementation . New and Renewable Energy Division . Photovoltaic Deployment Policy Office . Office of Renewable Portfolio Standard . Hydrogen and Fuel Cell Promotion Office  Nuclear and Industrial Safety Agency o Nuclear and Industrial Safety Policy Division o Nuclear Fuel Cycle Division o Nuclear Power Division o Nuclear Safety Affairs Division o Industrial Safety Division  Small and Medium Enterprise Agency o Small and Medium Enterprise Policy Division o Director-General's Secretariat . Policy Coordination Division . Administrative Affairs Office . Public Relations and Business Counseling Office o Business Environment Department . Policy Planning Division . Research Office . Office for Business Stability . International Affairs Office . Finance Division . Corporate Finance and Tax Affairs Division . Fair Trade Division o Business Support Department . Business Support Division . Office for Small Enterprise Policy . New Business Promotion Division . Startup and Technology Division . Retail and Wholesale Commerce Division  Japan Patent Office

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o Commissioner o Deputy Commissioner o General Affairs Department o Trademark, Design and Administrative Affairs Department o First Patent Examination Department o Second Patent Examination Department o Third Patent Examination Department o Fourth Patent Examination Department o Appeals Department  Regional Bureaus of Economy, Trade and Industry

Contact details of the Ministry are as follows:

Ministry of Economy, Trade and Industry Kasumigaseki 1-3-1, Chiyoda-ku, Tokyo 100-8901, Japan. Tel: +81-3-3501-1511 Fax: +81-3-3501-1512

9.4.4.6. EMBASSY OF POLAND IN JAPAN

Currently the Polish Ambassador in Japan is Ms. Jadwiga Maria Rodowicz, PhD.

The Embassy of the Republic of Poland in Tokyo has the following structure:

 Defense, Military, Naval and Air Attaché Tel.: + 81-3-5794-7025 Fax: + 81-3-5794-7043 e-mail: [email protected]  Political Section o First Counsellor - Head of Political Section Tel.: + 81-3-5794-7026 Fax: + 81-3-5794-7024 First Secretary - Press Affairs Tel.: + 81-3-5794-7028 Fax: + 81-3-5794-7024  Economic Section o Counsellor - Head of Economic Section Tel.: + 81-3-5794-7051 Fax: + 81-3-5794-7024 o Second Secretary - Economic Section Tel.: + 81-3-5794-7052 Fax: + 81-3-5794-7024 o Desk Officer - Economic Section Tel.: + 81-3-5794-7054 Fax: + 81-3-5794-7024  Cultural and Scientific Section o Counsellor - Head of Cultural and Scientific Section (fine arts & film) Tel.: + 81-3-5794-7029 Fax: + 81-3-5794-7024

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o Second Secretary - Cultural and Scientific Section (music & theatre) Tel.: + 81-3-5794-7030 Fax: + 81-3-5794-7024 o Adviser - Cultural and Scientific Section (Polish studies & NGO) Tel.: + 81-3-5794-7041 Fax: + 81-3-5794-7024  Consular and Administrative Section o First Secretary - Head of Consular and Administrative Section Tel.: + 81-3-5794-7037 Fax: + 81-3-5794-7024 o Third Secretary Tel.: + 81-3-5794-7086 Fax: + 81-3-5794-7022  Trade and Investment Promotion Section: Orix Meguro Bldg. 2F, 1-24-12 Meguro-ku, Tokyo 153-0063 Tel.: + 81-3-5437-5050 Fax: + 81-3-5437-5040 e-mail: [email protected] http://tokyo.trade.gov.pl o Counselor - Head of Trade and Investment Promotion Section o First Secretary - Trade and Investment Promotion Section o Second Secretary - Trade and Investment Promotion Section  Polish National Tourist Office: Keio Nishi Shinjuku Minami Bldg. 7F 3-4-4 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023 Tel.: 03-5908-3808 Fax: 03-5908-3809 e-mail: [email protected] http://www.poland.travel/ja o Polish National Tourist Office Director

Contact details of the Embassy are following:

Embassy of the Republic of Poland in Japan Mita 2-13-15, Meguro-ku, Tokyo 153-0062, Japan. Tel: +81-3-5794-7020 Fax: +81-3-5794-7024 http://www.tokio.polemb.net

9.4.4.7. EMBASSY OF JAPAN IN POLAND

The current Ambassador of Japan in Poland is Mr. Yuichi Kusumoto.

In 2009, Embassy of Japan in Poland celebrated 90th anniversary of bilateral diplomatic interactions establishment between Poland and Japan. The Embassy of Japan stated that it is determined to further dedicate its actions towards deepening of mutual connections in terms of culture, education and economy.

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Japanese companies already cooperate economically in large numbers with Poland. As Embassy of Japan data point 230 Japanese enterprises already located their investments in Poland, nevertheless there it assesses that there is still considerable potential for further cooperation..

There are following departments of the Embassy of Japan in Poland:

 Information and Culture Department Al. Ujazdowskie 51, 00-535 Warszawa Tel:+48-22-584-73-00 Fax: +48-22-584-73-01  Consular Department ul. Szwolezerow 8, 00-464 Warszawa Tel: +48-22-696-50-05 Fax: +48-22-696-50-06

Contact details of the Embassy of Japan in Poland are as follows:

Embassy of Japan in Poland ul. Szwolezerow 8, 00-464 Warszawa Tel: +40-22-696-50-00 Fax:+48-22-696-50-01 http://www.pl.emb-japan.go.jp

9.4.4.8. TOKYO METROPOLITAN GOVERNMENT

The Governor of Tokyo is Mr. Shintaro Ishihara.

For administrative purposes Japan is divided into areas called local public entities. There are two types of local public entities: ordinary local public entities and special local public entities. Tokyo Metropolis, and each of the municipalities which are a part of Tokyo, are ordinary local public entities; the 23 special wards in Tokyo are special local public entities.

 Ordinary Local Public Entities Ordinary local public entities are general in terms of organization and functions, and consist of two tiers: prefectures, and the municipalities that make up the prefectures. o Prefectures Japan is made up of 47 prefectures that are regional authorities comprising municipalities. Most of these prefectures are called "ken" in Japanese - for example, Akita-ken, or Hiroshima-ken - although there are exceptions. Tokyo is slightly different, and is known as Tokyo-to in Japanese. Although it is usual to think of Tokyo as a city, strictly speaking it is a metropolitan prefecture. This distinction is important because there are a number of cities within the metropolitan prefecture of Tokyo. o Municipalities Municipalities are local public entities which have a strong and direct relationship with local residents. They are classified as "shi, cho or son" in Japanese; these generally correspond to city, town or village respectively. Prefectures and municipalities are both local public entities of equal status, with the prefectures in charge of broader regional administration and the municipalities handling affairs directly related to the residents. Both prefectures and municipalities cooperate in local administration according to their share of duties. At present (as of October 1, 2007) there are 782 cities (including

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Designated Cities), 823 towns and 195 villages in Japan; in Tokyo there are 26 cities, 5 towns and 8 villages.To be recognized as a city, a municipality must have a population of 50,000 or more, as well as meeting various other requirements. Towns must also meet certain conditions prescribed by prefectural ordinances. . Designated Cities Cities with a population of at least 500,000 can be designated by the national government as "designated cities." In order to cope with the challenges faced by large cities, designated cities have more powers than ordinary cities to enact special measures or regulations. As of April 1, 2007, there are 17 designated cities in Japan: Osaka, Nagoya, Kyoto, Yokohama, Kobe, Kitakyushu, Sapporo, Kawasaki, Fukuoka, Hiroshima, Sendai, Chiba, Saitama, Niigata, Shizuoka, Hamamatsu, and Sakai. . Core Cities Cities with a population of at least 300,000 can be designated by the national government as "core cities." Core cities are delegated with all duties that can be carried out by designated cities, with the exception of services which can be more effectively undertaken by the prefectures. As of April 1, 2007, 35 cities have been designated as core cities. . Special Cities Cities with a population of 200,000 or more can be designated by the national government as "special cities." They are authorized to take charge of some of the administrative work delegated to core cities. As of April 1, 2007, 44 cities have been designated as special cities.  Special Local Public Entities Special local public entities have been established for specific objectives relating to local government. They differ from ordinary local public entities in regard to their area, their organization, and the authority they carry. They consist of the following: o Special Wards Tokyo has 23 special wards (known as ku in Japanese). They are special local public entities found only in Tokyo. The ward area of Tokyo in some respects functions as a single administrative area comprising the center of the capital. It is divided into the 23 wards that are, in principle, subject to the same regulations which apply to cities, but actually come under a special system designed to meet the needs of the large metropolis. The Tokyo Metropolitan Government (TMG), as a regional government, carries out some of the administrative work which would usually be carried out by cities - for example, levying and collecting a portion of municipal taxes. o Other Special Local Public Entities . Cooperatives These are formed by local public entities to jointly carry out some of their work. . Public property districts These manage and dispose of public property or facilities . Regional associations These will be formed for regional conduct of some of the affairs of local public entities . Public corporations for local development These carry out public works projects jointly with the local public entities concerned.

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In view of area of appliance of the planned export of IT training services, the subject of interest within the organization structure and operations of the Tokyo Metropolitan Government is except of the secretariat, the Board (Office) of Education.

 Headquarters of the Governor of Tokyo Secretariat Division o Policy Division Planning and Coordination Division Assistance with top management operations in the Governor's office, planning and total coordination of important policies, liaison with the press, promotion of city diplomacy. o Office for Youth Affairs and Public Safety Division of Youth Affairs and Public Safety Promotion of comprehensive policies regarding youth development, public safety, and traffic safety.  Board of Education (Office of Education) Establishment and management of public schools; appointment and dismissal of teachers; promotion of social education and physical education; protection of cultural property. The Board of Education has 6 divisions and 727 employees as administrative personnel. Teaching and support staff counts 62 005 people. o General Affairs Division o School Affairs Division o Personnel Division o Benefits and Welfare Division o Curriculum and Guidance Division o Lifelong Learning Division

Local governments, in performing their duties in the fields of education, science and culture, are always required to maintain political neutrality and administrative stability while reflecting the opinions of the citizens. In compliance with these requirements, a Board of Education was established in each prefecture in 1948, and in each municipality in 1950, as an enforcing body independent of its governor or mayor. Prefectural Boards of Education may coordinate liaisons between Municipal Boards of Education, and may conduct necessary surveys of as well as provide guidance, advice and support for the management and administration of the affairs of Municipal Boards of Education.

The Tokyo Metropolitan Board of Education is to consist of six Board members appointed by the Governor with the concurrence of the Metropolitan Assembly. The policies and measures concerning education are decided after consultation at a meeting of these Board members.

The duties of the board of education are as follows:

 The establishment, management and closure of public schools and other educational institutions.  The management of educational property.  The management of personnel affairs including the appointment and dismissal of teaching and clerical staff of Boards of Education, public schools and other educational institutions.  Duties concerning the attendance of school age pupils and students, and entrance, transfer or withdrawal of infants, pupils or students.  The organization of public schools, school curriculum, guidance in studies, guidance of students and vocational guidance.  Handling of textbooks and other teaching materials.  The maintenance of school buildings, equipment, teaching aids and other facilities.  The training of principals, teachers and other staff related to education.

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 Duties relating to the health, safety and welfare of principals, teaching staff and other education- related personnel, and pupils and students.  Ensuring of environmental hygiene of public schools and other educational institutions.  Provision of school lunches.  Social education including youth education and woman’s education, and activities at community centers.  Sports.  Protection of cultural properties.  UNESCO activities.  Educational foundations.  Surveys, designated statistics, and other statistics on education.  Public relations and consulting services regarding educational administration.  Other duties related to education.

Education implemented by the Tokyo Metropolitan Board of Education aims to realize an affluent society with culture that is both universal and individual. The TMB aims to enhance school and social education in order to realize a society that will support all kinds of learning opportunities throughout the lives of all the citizens of Tokyo

To achieve its educational goals, the Tokyo Metropolitan Board of Education cooperates with related municipal and private sector groups and organizations. TMB aims to enhance citizens’ opportunities to participate in society by using lifelong learning in order to familiarize them with the idea of voluntarily engaging in study, sports and culture in line with the following fundamental ideas:

 Promotion of Tokyo citizens’ learning activities  Promotion of Tokyo citizens’ cultural and sports activities  Promotion of education on human rights  Support of educational abilities at home and in the community, collaboration and cooperation with educational institutions, etc.

TMB supervises some of principal projects for Social Education for:

 Youths Serious problems continue to face children and youth - the weakening of home influence in the educational process, decreased motivation to learn, and the lack of practical learning opportunities, for example. There is a need for a mechanism in which schools, homes and local communities cooperate in an integrated effort to rebuild the educational process and develop children capable of contributing to the development of Tokyo in the 21st century. Since 2005, the metropolitan government has been moving forward with its Local Education Platform program. To be expanded throughout the metropolitan area, this programme aims to utilize the Tokyo Networking Committee for the Promotion of Community Education established by the metropolitan government, corporations, universities and NPOs to support efforts to restructure the educational process with the cooperation of schools, families and local communities in Tokyo, and to provide children and youth with a variety of venues and opportunities for self-directed and proactive learning experiences in the community.  Handicapped TMB holds educational seminars for those with impaired vision or hearing and community exchange meetings for the handicapped, in order to provide them with opportunities for study and exchange meetings. Furthermore, seminars for the handicapped to enhance the well-being of people with

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disabilities in the community and encourage their participation in society, and other community activities involving the handicapped, are promoted in metropolitan special schools.  Adult Education o Open Lecture Courses of Metropolitan Schools This programme is implemented to offer Tokyo residents an opportunity to learn, making use of the personnel, facilities and teaching materials of metropolitan schools. Open lectures that make the most of the curriculum and other characteristics of the schools are held in metropolitan senior high schools. And in metropolitan special schools, volunteer training courses are held as a way of developing human resources to support the handicapped in schools or in the community. o Open Facilities of Metropolitan Schools to the Public The educational, cultural and sports facilities of metropolitan schools are open to the public as much as possible without interfering with school education, in order to facilitate the promotion of educational, cultural and sports activities as well as community development.

Contact details of the Tokyo Metropolitan Government are as follows:

Tokyo Metropolitan Government 8-1 Nishi-Shinjuku 2-chome Shinjuku-ku, Tokyo 163-8001 Tel: +81-3-5321-1111 Fax:+81-3-5321-1112 http://www.metro.tokyo.jp

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9.5. PROMOTION

An important aspect of the planned export development strategy is promotion and information regarding IT training services offered on the Japanese target market.

As outlined in the analysis in chapter 2.1.1. Japanese consumer sector is characterized by a shift towards Internet marketing channels and the sales process is becoming increasingly information centric. This aligns well with the model of export subjected IT training services provision as distant education implemented on Interned based e-learning platforms integrated with company’s sales web services (a primary model of planned services provision in Japan in all sectors: consumers, enterprises and public administration within sales models of B2C, B2B and B2G).

The promotion related actions within implementation of the export development strategy will focus on:

 Obtaining consulting services in regard to establishing export subjected IT training services as offered by the IT Training Center CompLearn with possibly high level of marketing recognition and identification profile on the target Japanese market, through: o Preparation of promotional materials and necessary translations of the CompSecur sp. z o.o. information materials . Translations of promotional and information materials also in technical aspects (as in regard to planned company’s exhibitions on fairs and conferences for education and Information Technologies) . Publishing Japanese website and promotional information (with information concerning the ERDF European Regional Development Fund part-financing support) o Further consultation on the information technologies training market participation . Consulting by external experts and advisers . Extending identification of competitive enterprises and investigated possible cooperation or appropriate modification of business operations . Listing of potential customers and partners . Arranging appointments with potential customers and partners . Obtaining monitoring surveys (evaluation of products and services) o Consulting on the promotion actions and campaigns o Promotion and information disseminating actions aimed at proper positioning of export subjected IT training services on Japanese market . Information provision of European Union financing support enabling reduction of IT training services pricing . Focus on promotion of IT training services compliant with international standards for IT qualification assessment and confirmation (added value to consumers and companies employees with internationally recognized formal certification, increasing correspondingly value on domestic and foreign job markets, as well as value to company), and special focus put on training services expertise in IT security . Application of separated promotion campaigns towards three target sectors:  Consumers sector (B2C sales model) o Promotion of basic and less advanced IT training services . Especially compliant with international certification assessments, enabling consumers to increase their job market perspectives o Promotion through Internet marketing channels . PC and mobile devices separate campaigns

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. CPC (Cost per click) campaigns . CPA (Cost per action) campaigns . Conversion analysis and optimization . SEO and SEM (Search Engine Optimization and Marketing)  Enterprises sector (B2B sales model) o Promotion of more advanced IT training services . Preparation of personnel for new highly advanced technologies of communication security and new computational models o Promotion of Japanese specific IT products and solutions embraced IT training as resulting from partnerships established with IT vendors in Japan o Provision of special business offers as connected to new IT investments o Provision of special business offers of IT training services certified programmes within loyalty sustaining projects for retention of personnel o Promotion through Internet marketing channels . Similar campaign types as in B2C sales model (CPC, CPA, SEO/SEM) o Direct marketing channel . Investigating attitude towards direct e-mail marketing, especially in accordance to the Act on Regulation of Transmission of Specified Electronic Mail (Act No. 26 of April 17, 2002) regarding SPAM . Direct marketing with companies associated with partnering not-for-profit organizations  Public administration sector (B2G sales model) o Promotion of most advanced IT services o Promotion of international cooperation within advanced projects o Tenders participation and promotional information for IT training projects demand standard

B2C B2B B2G

. • Basic ICT skills • Basic and • Advanced ICT

training advanced ICT training and • Certification skills training consulting

• Internet • Special offers • International channels • Partnerships cooperation

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9.6. EXTERNAL FUNDING

Due to identified threats of high costs for necessary expert IT personnel employment and securing of facilities during initial operations stages of export development strategy implementation, it is expected that obtaining external funding will be necessary.

In this regard, of primary importance are competent consulting services concerning evaluation of possible sources for capitalization of export development strategy implementation in Japan.

The company will obtain consulting services evaluating possible external funding sources which will be most adequate for planned export development (regarding differentiation for investment and operational expenses):

 Evaluation of possible external funding within international cooperation programmes of public administration, in regard to both Japanese and European programmes, including: o Consulting on the 7th Framework Programme of the European Commission o Consulting on Japanese International Cooperation Agency programmes o Consulting on European Union Gateway to Japan Programme  Evaluation of possible Japanese governmental support fund programmes administered on the central (national) and regional (municipal or prefectural) level, including: o Consulting on the social funding programmes of government agencies, ministries and support projects administered by public institutions (especially concerning education and society ICT skills improvement support programmes, also within non-commercial projects) o Consulting on subsidy programmes of the Tokyo Metropolitan Small Business Center o Consulting on programmes of the Ministry of Internal Affairs and Communication o Consulting on programmes of the Ministry of Education, Culture, Sports, Science, Technology  Evaluation of external funding due to cooperation with ICT and education related not-for-profit organizations and education support institutions  Evaluation of external funding due to cooperation with private large-scale enterprises in ICT sector  Evaluation of possible external funding due to direct investors relations (such as venture capital funds or initial public offering)

7th Venture Framework capital Programme ICT corporations Social projects

Subsidies

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10. EXPORT DEVELOPMENT TIME SCHEDULE AND COST ESTIMATION

This chapter contains a preliminary time schedule and an estimation of costs associated with implementing of the actions planned within the CompSecur sp. z o.o. export development strategy to Japanese target market between 2010 and 2011, as described in detail in the chapter 9. Table below presents detailed listing

No Action to be implemented Estimated Date cost 1. Obtaining consultation Settling visa and residence status formalities for 1 200 Euro April 2010 and settling formal company representatives: procedures associated  Certificate of eligibility by proxy (1000 Euro) with establishing of  Three general entry visas (150 Euro) business presence and  Re-entry permits (500 Euro) operations in Japan Consultation on formalities for establishing of 300 Euro May 2010 (partly executed during business presence in Japan first business mission on Consultation on financial operations and Japanese 300 Euro May 2010 May 2010) taxes formalities Consultation on office and incubation facilities formal 200 Euro May 2010 prerequisites Consultation and advice on formal requirements for 200 Euro May 2010 temporary staff employment within human resource consultancy Consultation on formal prerequisites and legal 400 Euro May 2010 options on initiating cooperation and partnership with external organizations in Japan Consultation concerning formal requirements and 300 Euro May 2010 regulations for travel and living in Japan for company representatives Consultation on conducting of employment service of 500 Euro May 2010 contracting HR agency and labor office Formally establishing presence on Japanese target 1 500 Euro May 2010 market (assumption for a branch office establishment)  Registration of company in legal affairs bureau in Tokyo, licenses, taxes, obtaining official copies, etc. (500 Euro)  Name seals for company and personal use (200 Euro)  Company registration and notices through proxy (400 Euro)  Tax notices through proxy (400 Euro)  Social insurance notices through proxy (500 Euro)  Registering Japanese banking account for financial operations (100 Euro) Consultation on settling formalities for living in Japan 300 Euro May 2010 of full-time company representatives Subtotal estimated cost for obtaining consultation and settling formal 5 200 Euro April 2010 – procedures associated with establishing of business presence and operations in May 2010 Japan and preliminary schedule dates 2. Organization and 1st business mission to Japan of 3 company representatives 10 800 Euro May 2010 participation in (within 14 days long duration as required by expositions (not including business missions participation and subsequent business meetings) expositions to Japan  Travel costs, including air tickets, Japanese railway participation)

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tickets and other domestic transport (4 500 Euro)  Living and accommodation costs for 14 days o Living diets: 50 Euro * 14 days * 3 persons = 2100 Euro o Hotel diets: 100 Euro * 14 * 3 p. = 4200 Euro  Business mission outline o Participation in expositions and conferences (3500 Euro) . I-Security Expo and Conference . Data Warehouse and Customer Relationship Management Expo and Conference . Software Development Expo & Conference Solutions Expo & Conference . Embedded systems Expo & Conference o Establishing cooperation with following organizations . Polish Chamber of Commerce and Industry in Japan . Japan External Trade Organization . Information Technology Promotion Agency . Information Processing Society of Japan . National Institute of Informatics 2nd business mission to Japan of 3 company representatives 13 950 Euro June 2010 (within 21 days long duration as required by expositions (not including participation and subsequent business meetings) expositions  Travel costs, including air tickets, Japanese railway participation) tickets and other domestic transport (4 500 Euro)  Living and accommodation costs for 21 days o Living diets: 50 Euro * 21 days * 3 persons = 3150 Euro o Hotel diets: 100 Euro * 21 * 3 p. = 6300 Euro  Business mission outline o Participation in expositions and conferences (4000 Euro) . Interop Tokyo 2010 . Exhibition on Sensing via Image Information . Industrial Virtual Reality Expo & Conference . Design Engineering & Manufacturing Solutions Expo o Establishing cooperation with following organizations . European Business Council . Japan International Cooperation Agency . Japanese Information Technology Services Industry Association . Japan Electronics and Information

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Technology Industries Association . Japan Science and Technology Agency 3rd business mission to Japan of 3 company representatives 10 800 Euro July 2010 (within 14 days long duration as required by expositions (not including participation and subsequent business meetings) expositions  Travel costs, including air tickets, Japanese railway participation) tickets and other domestic transport (4 500 Euro)  Living and accommodation costs for 14 days o Living diets: 50 Euro * 14 days * 3 persons = 2100 Euro o Hotel diets: 100 Euro * 14 * 3 p. = 4200 Euro  Business mission outline o Participation in expositions and conferences (3000 Euro) . e-Learning World Expo & Conference in Tokyo . Expo Comm Wireless Japan o Establishing cooperation with following organizations . Center for Educational Computing . National Institute of Multimedia Education . Japan International Training Cooperation Organization . Association for Overseas Technical Scholarship 4th business mission to Japan of 3 company representatives 7 650 Euro October 2010 (within 7 days long duration as required by expositions (not including participation and subsequent business meetings) expositions  Travel costs, including air tickets, Japanese railway participation) tickets and other domestic transport (4 500 Euro)  Living and accommodation costs for 7 days o Living diets: 50 Euro * 7 days * 3 persons = 1050 Euro o Hotel diets: 100 Euro * 7 * 3 p. = 2100 Euro  Business mission outline o Participation in Security Solution 2010 exposition (3000 Euro) o Visiting and establishment cooperation formalities with partners initially acquainted at conferences and expositions . Further acquainting with partners’ technologies and laboratories . Establishing formal frameworks for partnership and cooperation Subtotal estimated cost for organization and participation in business missions 43 200 Euro May 2010 – to Japan and preliminary schedule dates (not including October 2010 expositions participation) 3. Participation in  I-Security Expo and Conference in Tokyo 5 500 Euro May 2010 Japanese business o Role: exhibitor expositions and o Date: 12th-14th May 2010 conferences in a o Place: Tokyo Big Sight - Tokyo International

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role of exhibitor Exhibition Center and participant o Presenting offer of services in area of advanced quantum cryptography consulting and expertise o Establishing contacts with possible partners in fields of IT security seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Data Warehouse and Customer Relationship Management Expo and Conference in Tokyo o Role: participant o Date: 12th-14th May 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of CRM and data warehousing seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Software Development Expo & Conference in Tokyo o Role: participant o Date: 12th-14th May 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of software engineering seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  RFID Solutions Expo & Conference in Tokyo o Role: participant o Date: 12th-14th May 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of RFID (radio frequency identification) seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Embedded systems Expo & Conference in Tokyo o Role: participant o Date: 12th-14th May 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of RFID (radio frequency identification) seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Interop Tokyo 2010 6 000 Euro June 2010 o Role: participant o Date: 9th-11th June 2010 o Place: Chiba (Makuhari Messe), near Tokyo o Establishing contacts with possible partners in fields of green ICT, NGN, cloud

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computing seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Exhibition on Sensing via Image Information o Role: participant o Date: 9th-11th June 2010 o Place: Yokohama (Pacifico Yokohama), near Tokyo o Establishing contacts with possible partners in fields of Image processing, seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Industrial Virtual Reality Expo & Conference o Role: participant o Date: 23rd-25th June 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of Web3D, GIS, VR, seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  Design Engineering & Manufacturing Solutions Expo o Role: participant o Date: 23rd-25th June 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of CAD, CAM, CAE, e- PDM, seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes  e-Learning World Expo & Conference in Tokyo 5 000 Euro July 2010 o Role: exhibitor o Date: 28th-30th July 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Presenting offer of services in area of advanced distant education technologies and e-learning services o Establishing contacts with possible partners in fields of distant learning technologies for education in order to expand training services delivery channels  Expo Comm Wireless Japan o Role: participant o Date: 14th-16rd July 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Establishing contacts with possible partners in fields of distant learning technologies for wireless communication seeking to embrace exhibiting vendor specific technologies with company’s IT training programmes

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 Security Solution 2010 5 000 Euro October 2010 o Role: exhibitor o Date: 18th-20th October 2010 o Place: Tokyo Big Sight - Tokyo International Exhibition Center o Presenting offer of services in area of advanced quantum cryptography consulting and expertise o Establishing contacts with possible partners in fields of IT security seeking to embrace exhibiting vendor specific technologies with company’s IT training Subtotal estimated cost for participation in Japanese business expositions and 21 500 Euro May 2010 – conferences in a role of exhibitor / participant and preliminary schedule dates October 2010 4. Establishing Meetings for establishment of cooperation with following No cost May 2010 partnerships with organizations: external  Polish Chamber of Commerce and Industry in Japan organizations  Japan External Trade Organization  Information Technology Promotion Agency  Information Processing Society of Japan  National Institute of Informatics Meetings for establishment of cooperation with following No cost June 2010 organizations:  European Business Council  Japan International Cooperation Agency  Japanese Information Technology Services Industry Association  Japan Electronics and Information  Technology Industries Association Meetings for establishment of cooperation with following No cost July 2010 organizations:  Center for Educational Computing  National Institute of Multimedia Education  Japan International Training Cooperation Organization  Association for Overseas Technical Scholarship Meetings for establishment of cooperation with partners No cost October 2010 initially acquainted at conferences and expositions  Further acquainting with partners technologies and laboratories  Establishing formal frameworks for partnership and cooperation Establishing partnerships with external organizations preliminary schedule dates No cost May 2010 – October 2010 5. Obtaining Promotional activities, including: 26 700 Euro July 2010 – consulting  Preparation of promotional materials and necessary December 2011 services in regard translations of the CompSecur sp. z o.o. information to establishing materials export subjected o Translations of promotional and IT training services information materials also in technical as offered by the aspects (as in regard to planned company’s IT Training Center exhibitions on fairs and conferences for CompLearn with education and Information Technologies) marketing and o Publishing Japanese website and public relations promotional information (with information

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identification concerning the ERDF European Regional profile on the Development Fund part-financing support) target Japanese  Promotion and information disseminating actions market aimed at proper positioning of export subjected IT training services on Japanese market o Information provision of European Union financing support enabling reduction of IT training services pricing o Focus on promotion of IT training services compliant with international standards for IT qualification assessment and confirmation (added value to consumers and companies employees with internationally recognized formal certification, increasing correspondingly value on domestic and foreign job markets, as well as value to company), and special focus put on training services expertise in IT security o Application of separate promotion campaigns towards three target sectors: consumers (B2C), enterprises (B2B) and public administration (B2G) Subtotal estimated cost and preliminary implementation dates of promotional 26 700 Euro July 2010 – activities December 2011 6. Obtaining Obtaining consulting services regarding evaluation of 2 200 Euro July 2010 – consulting possible sources for capitalization of export development December 2011 services in area of strategy implementation, including: possible external  International cooperation programmes funding of o 7th Framework Programme operations and o Japanese International Cooperation public financing Agency programmes support o European Union Gateway to Japan programmes to Programme expand business  Governmental support fund programmes in terms of export o Subsidy programmes of the Tokyo development Metropolitan Small Business Center strategy o Programmes of the Ministry of Internal Affairs and Communication o Programmes of the Ministry of Education, Culture, Sports, Science and Technology  Cooperation with externally funded ICT and education not-for-profit organizations  Cooperation with private large-scale ICT enterprises  Investors relations (venture capital funds and IPO) Subtotal estimated costs and preliminary implementation dates of consulting 2 200 Euro July 2010 – services in regard to external funding evaluation December 2011 ∑ Total preliminary budget and implementation dates of the planned export 98 800 Euro April 2010 – development strategy (subject to change) December 2011

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REFERENCES

1. White Paper on Small and Medium Enterprises in Japan, JSBRI, 2009 2. International Trade and Foreign Direct Investment, JETRO, 2008 3. Emerging Business Opportunities in Japan, MIPRO, 2009 4. IT Services Industry in Japan, JISA, 2009 5. Report on the Current Status of Information and Communications, MIC, 2008 6. Information and Communications in Japan, MIC, 2007 7. Social Education Survey, MEXT, 2008 8. Secure Japan 2008, Information Security Policy Council, 2008 9. The 2nd National Strategy on Information Security, National Information Security Policy Council, 2009 10. Research Study on Women's Employment and the Possibilities of Telework, MIC, 2009 11. New IT Reform Strategy, IT Strategic Headquarters, 2006

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