Global Goes Local

JUNE 2017 VOL. 54, ISSUE 6 ¥800 JUNE JUNE 2017

JOURNAL.ACCJ.OR.JP

THE AUTHORITY ON GLOBAL BUSINESS IN JAPAN JOURNAL.ACCJ.OR.JP

GLOBAL GOES LOCAL Cronut inventor adapts New York flavors to Tokyo THE AMERICAN CHAMBER OF COMMERCE IN JAPAN IN COMMERCE OF CHAMBER AMERICAN THE 毎月一日発行第五十四巻 6 号ジャーナル二〇一七年六月一日発行 Masters of flavor

Find your zen with Japan’s favorite dishes—sushi at Hamashiba, tempura at Tenshiba, yakitori at Torishiba—or enjoy traditional Japanese food with a contemporary twist at Shibazakura.

The Prince Park Tower Tokyo 4-8-1 Shibakoen, Minato-ku, Tokyo 105-8563 | 03-5400-1111 | www.princehotels.com/parktower

PrinceParkTower_v2.indd 1 5/23/17 1:31 PM CONTENTS

VOL. 54, ISSUE 6

5 EDITOR'S DESK 22 REAL ESTATE Tastes and Tourists Port of Luxury C Bryan Jones Developers aim to keep tourist yen flowing 7 SOCIAL MEDIA C Bryan Jones Trending 27 SURVEY 8 FOOD Clear Change Art of the Meal FCIJ survey finds Crowdsourced cooking platforms great optimism in Japan link the world 28 J-MEDIA John Amari Diet Dailies Experts hold first meeting on 12 WORKPLACE infrastructure of integrated Go Home! resorts (IRs) Japan attempts to boost economy Fifty-one straight months of and work–life balance economic expansion recalls Anthony Fensom the 1980s translation of news 16 ALTERNATIVE FOODS from Keizaikai Green Grub PARTNER CONTENT Bugs and algae set the stage 29 for alternative foods Private Tech? Maxine Cheyney Voice-based AI raises privacy and ethical concerns 20 ENTREPRENEUR Nikkei Asian Review Global Goes Local Cronut inventor adapts 37 ACCJ MEMBER NEWS New York flavors to Tokyo Julian Ryall DISCLAIMER

Custom Media and the ACCJ will not accept liability for any damages caused by the contents of The Journal, including, but not limited to, any omissions, errors, facts or false statements. Opinions or advice expressed in the The Journal are not necessarily those of the ACCJ or Custom Media.

COVER Chef Dominique Ansel CREDIT: THOMAS SCHAUER – Page 20

THIS PAGE Ginza Six – Page 22 JOHN AMARI ANTHONY FENSOM MAXINE CHEYNEY

Art of the Meal Go Home! Green Grub page 8 page 12 page 16 MEET THE AUTHORS MEET THE

Hometown: Oxford, England Hometown: Brisbane, Australia Hometown: Nairobi, Kenya

Languages: English, Luo, Languages: English and Languages: English, French, conversational Japanese conversational Japanese Kiswahili, and Creole

Years in journalism: Five Years in Japan: Six Years in Japan: One Years in journalism: Most memorable interviews: Years in journalism: 16 Four Ari Horie, founder of Women’s Most memorable interview: Most memorable interview: A friend Startup Lab, and Akiko Naka, founder Inspirational people such as of the late Loughborough alumni, of Wantedly Japanese astronaut Mamoru Mohri journalist and cancer survivor Lisa Lynch, who became an editor Who inspires you? Entrepreneurs and “Clean Up Australia” founder Ian Kiernan. at 26. Her story is one of the reasons and freethinkers I stayed in journalism. One change you would like to see One change you would like to see Who inspires you? My grandmother. in Japan by 2020? Make English in Japan by 2020? More Japanese She was the definition of a strong compulsory from primary school students majoring in English living in independent woman. through university, with a high level of an English-speaking country for a year proficiency required for graduation. One change you would like to see in Thoughts on the importance of Japan by 2020? Something that really Thoughts on the importance of print journalism and its future? grates on my nerves is excess food print journalism and its future? packaging. I would love to see fewer If print journalism can adapt to the Journalism is as important as ever for non-recyclable plastics being used. digital revolution then it will be fine. democracy, whether in print or online. What are you reading? What are you reading? What are you reading? A God in Ruins by Kate Atkinson Thinking, Fast and Slow by The Big Short by Michael Lewis Daniel Kahneman One surprising thing people may What is one surprising thing that not know about you? I enjoy combat Favorite podcast that our readers people may not know about you? sports, especially when I’m put in a should be listening to? StarTalk Radio I’m a fan of Japanese craft beer and an difficult position and I have to fight by Neil DeGrasse Tyson even bigger fan of Japanese whisky. my way out.

Publisher Advertising Sales Director To advertise or subscribe: Simon Farrell Anthony Head [email protected] [email protected] Account Managers Editorial: President Andrew Williams [email protected] Robert Heldt Reiko Natsukawa Custom Media Editor-in-Chief Edvard Vondra Publishers of The Journal for the American Chamber Christopher Bryan Jones Client Services Director www.custom-media.com of Commerce in Japan. Specialists in bilingual brand Masako Inagaki Studio Manager strategy/visual communications, corporate bespoke Paul Leonard Business Development solutions. Producers of Business in Japan TV. Graphic Designers Adrien Caron Michael Pfeffer Kotaro Toda Ximena Criales Kaori Kobayashi Daiwa Azabudai Bldg. 6F Staff Writer Project Coordinators 2-3-3 Azabudai, Minato-ku, Maxine Cheyney Yoshiki Tatezaki Tokyo 106-0041 Ayako Nakamura Head of Project Tel: 03-4540-7730 Management Media Coordinator Megumi Okazaki Kiyoko Morita © 2017 Custom Media K.K.

The Journal is printed on paper certified by the US Forest Stewardship Council with vegetable oil ink certified by the Japan Printing Ink Makers Association.

4 THE JOURNAL n JUNE 2017 TASTES AND DESK EDITOR'S TOURISTS

FUTURE FOOD rise in shopping—represented most The ingredients used in those recipes notably by the explosive spending of could be changing. As the world’s Chinese tourists in recent years—is population grows, straining limited slowing. Japanese developers aren’t resources, new sources of protein are resting on their laurels, however, and Christopher Bryan Jones needed to feed everyone. Innovative on page 22 we talk to Mori Building [email protected] companies are turning to insects and Co., Ltd. Executive Officer Koichi algae, and finding a way to make Kurihara and Mitsui Fudosan Co., Ltd. them more palatable to the masses. Planning Group Project Leader Aya Our June issue of The Journal On page 16, we find out why your next Sakamoto about how the new Ginza Six focuses on food, travel, and bowl of pasta might be made from complex, Coredo Muromachi, and shopping as we explore future crickets, and how alternative food other properties are attracting the ingredients, the social aspects of sources can help the environment. wallets of inbound tourists. cooking, and how luxury brands are turning a fresh eye toward Japan. PREMIUM FRIDAY And, if you’re feeling hungry after all A new opportunity for dining and travel this food talk, turn to our cover story SHARING DINNER comes in a government initiative to foster for some snack-time inspiration as we Technology has given each person work–life balance. The first Premium talk to Chef Dominique Ansel about a way to share their thoughts with Friday—which encourages employees his new bakery endeavor in Ginza. the world. Through social media to leave the office at 3:00 p.m.—took There’s much more in this issue, and app-based platforms, ideas place on February 24, and on page 12 including insight into data security, and opinions are just a click or tap we talk to travel agencies, hotels, and tax issues, attracting the right talent, away. The same holds true for food. others about the results they’ve seen. and how to address environmental, Stalwarts Cookpad Inc. and YouTube Could Premium Friday be a boost to social, and governance issues at your provide ways for foodies to share the well-being of both workers and the company. Turn to page 37 for the their favorite recipes and show others Japanese economy? latest from the American Chamber of how to make them. On page 8, we Commerce in Japan’s Tokyo, Kansai, talk to Cookpad Division Manager SHOPPERS INBOUND and Chubu chapters. n of Branding and PR Takako Kotake Also important to the Japanese A flagship publication of the American and YouTube creator Ami Nishimura economy is a stable flow of tourists Chamber of Commerce in Japan (ACCJ), to find out how tech is transforming with money to spend. Visitor numbers The Journal (formerly the ACCJ Journal) is a the kitchen. are increasing steadily, but the rapid business magazine with a 54-year history.

the first and only bilingual video channel on Business in Japan

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valued by executives visit a % vendor 65 after viewing Sources: Forrester Research; Nielsen; Forbes; Tubular Insights; Comscore; Cisco; YouTube Interviews The Power of Video Events Video has never been as powerful and important in business as Reports it is today. Making up about 80% of Internet traffic, video will increase the chances of your company’s content reaching and Podcasts impressing a wide, varied and influential audience.

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BIJ_FP.indd 1 3/29/17 4:47 PM SOCIAL MEDIA TRENDING

IN THE NEWS FROM JAPAN TOP HASHTAGS LINKEDIN Tweets from Tweets in Japanese This month: Popular tags Discussions from media outlets from people and media from the top 30 list global leaders

@business

Wage gains are set to split Japan’s companies into winners and losers

http://bloom.bg/2qGTNfi

PHOTO: KRITCHANUT / 123RF

Rank

7 #job @japantimes 12 #TrumpRussia Tokyo weighs staggered @reuters shifts, teleworking in bid to 20 #Trump Japan cabinet approves bill curb traffic congestion in to allow emperor to abdicate 2020 Olympics 22 #Eurovision http://reut.rs/2rl2Hlp http://jtim.es/6ReG30bR5Zw 30 #BBMAs BY STATE DEPARTMENT PHOTO BY WILLIAM NG / PUBLIC DOMAIN EAST ASIA AND PACIFIC MEDIA HUB [PUBLIC DOMAIN], VIA WIKIMEDIA COMMONS PHOTO BY WILLIAM NG / PUBLIC DOMAIN EAST ASIA AND PACIFIC DEPARTMENT BY STATE PHOTO: KAZOKA30 / 123RF

日本経済新聞五輪運営費、地方負担は400億円東京都が試算電子版 @Nikkei Tokyo Metropolitan Government estimates the operational costs for the Tokyo 2020 Olympic and Paralympic Games to be covered by regions outside Tokyo at ¥40 billion.* * Translation of original content in Japanese

PHOTO: RIXIE / 123RF

Sarah Kauss, Founder and CEO of S’well Bottle

DELEGATE OPPORTUNITIES, NOT BUSY WORK Delegation can sometimes come off as negative — like you’re just pushing off work on someone else — but it doesn’t have to be perceived that way. Think of the opportunity you are giving others. If you show that you trust someone else with an opportunity — such as establishing your company’s brand reputation — you may be surprised by the positive reactions you’ll receive.

PHOTO: JIRSAK / 123RF

THE JOURNAL n JUNE 2017 7 ART OF THE MEAL Crowdsourced cooking platforms link the world

By John Amari

With the rise of blogs, video platforms, and social networking services, more people than ever can connect and share common interests.

But they are not just meeting and sharing online. apps, website, and a growing network of cooking schools, Increasingly, Internet-based communities have found an the company is connecting food lovers who share their outlet in the physical world—via dedicated spaces where recipes and culinary insights. enthusiasts can gather and share interests. Speaking to The Journal, Takako Kotake, division Crowdsourced cuisine platform Cookpad is among the manager of branding and PR at Cookpad, highlighted leading providers of such online and offline services in the company’s services and shared her thoughts on its Japan and, increasingly, internationally. Through its mobile current plans.

YouTube creator Ami Nishimura, better known as Ochikeron

8 THE JOURNAL n JUNE 2017 FOOD 9 JUNE 2017

PHOTO: COOKPAD THE JOURNAL Japanese food bloggers bloggers Japanese food their recipes who share in English, but I think this should change There still aren’t many aren’t still There “I usually look for desserts—especially that look for usually the ones “I is Japan, and Italy, in France, lived who has Jones, Richard and family connecting of a way is cooking the end, In of means a great is full stomach added: “A Mori and YouTube, Cheapo, Tokyo Tasty, to Thanks Cookpad, “What you sometimes get with English-language food English-language with get sometimes you “What a classic are about—sushi comments of—or Descriptions is menus of library Their Cookpad user. a huge am “I national Italian and resident Scotland former Like Mori, Meatballs (Japanese recipe)—Staff Takako is managed by US media company BuzzFeed, Inc. BuzzFeed, US media company by managed is blog or upload foods. I don’t international look cute—and groups. cooking Facebook some to I do belong but anything, each other.” with recipes I also friends share and My the use of main “My said: he chef, A trained view. a similar of following than recipes rather specific for searching is Internet use to just I tend background, my Given a particular writer. methods.” than rather proportions for recipes those cook for both they said mainly Mori and friends. Jones party,” dinner a good like old-fashioned “I close to. they are friends to my of one the only much pretty I’m “but said, Jones them.” throw an recipes I find So, happiness. and communication life.” my part of indispensable fingertips. everyone’s at cuisine is of a world others, the local customs or the domestic language. the domestic or the local customs is non-Japanese or tourists at targeted drink content and local the of cuisine, the nuances over misunderstandings the restaurant.” of terminology even thelocation used, and so are because there notes, he occur, mistakes where example them apart. tell to be able not may novices and kinds many who Nishimura, and Kotake of Lane echoes the sentiments a characteristic as food culture mature Japan’s to all point about advice crowdsourced for quality ensures generally that meals. preparing NO FOOD, NO LIFE such entrepreneurs and Cheapo, Tokyo of goal The Cookpad, food. of a love with folk ordinary connect to is Nishimura as based in who currently is Rie Mori, globetrotter Japanese For Cookpad been has States, in the United lived has but India cooking. home for website go-to her where “Especially in a country India, like said. she amazing,” home for long food, we Japanese to access little is there daily.” cooking her In platforms. cooking online also of is a fan Marino Nicla which Tasty, as such websites and Ochikeron follows case, she information is coming from users who are not familiar with familiar not whousers are from coming is information , “and if there is a Cookpad recipe, I click on it; it; on I click a Cookpad is recipe, if there , “and also sat down with online cuisine enthusiasts cuisine enthusiasts online with down also sat However, Lane warns that some crowdsourced websites websites crowdsourced some that Lane warns However, Due to an increase in demand from inbound visitors, visitors, inbound from in demand increase an Due to told he online,” it for search I just ramen, I want “If Nishimura notes that while many more people than before before than people more while many that notes Nishimura food watch to like just people many that noticed “I’ve Has she noticed any trends in Japanese food content on on food content in Japanese trends any noticed she Has foodshare who bloggers Japanese many “Therestill aren’t Nishimura loves home-cooked Japanese fare, but is also is but fare, Japanese home-cooked loves Nishimura save to out dine to I love food. Of course, mom’s my love “I For Nishimura, websites such as Cookpad and video- Cookpad as and such websites Nishimura, For The Journal The source.” a reliable they are because I know especially if the information, poor-quality to becan prone travel, and dining in the metropolis. dining and travel, video guides started YouTube recently has the platform the growth welcoming While in the city. food hotspots for should users that Lane warns platforms, crowdsourced of quality. for look out always CROWDSOURCED CUISINE a growing among Lane is Greg resident Japan Long-term quench to platforms who use people online of number of ideas. the Lane founder is new menu for their thirst accommodation, budget guide to online an Cheapo, Tokyo are interested in cooking in general, few are acting on that that acting on are few in general, in cooking interested are up. taking it by interest actually few try fun, but cook something to for channels do as cooking take up many as that is wish My themselves. example.” for tutorials, makeup vegetarian, and organic dishes online.” dishes organic and vegetarian, the platforms? change I think this should but in English, their recipes fun.” easy and pretty meals are home-cooked because Japanese channel now has more than 800,000 subscribers. than more has now channel States. in the United lived having dishes, American of fond to and home at eat to comfortable always is it but housework, “Speaking explained. she cooking,” usedfor you what know good vegan, many are there food, I found American of persona, Ochikeron. persona, as indispensable become have YouTube platform sharing started posting food. She for passion her sharing for conduits in 2011 began and ago, 13 years Cookpad to about menus YouTube Her YouTube. to tutorials cooking publishing COOKING CREATOR COOKING Journal The YouTube Japan-based including the world, around from online her by known Nishimura—better Ami creator PHOTO: OCHIKERON BEYOND EXPECTATIONS

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n Cookpad's Takako Kotake Cookpad's Takako THE JOURNAL

cooking schools—beginning in Japan and Indonesia. and schools—beginningcooking in Japan Cookpad the recipes. to just than is more there So, the site, to fundamental are eating cooking, and recipes, While meet and to opportunity an as use it can users our hope we to mean it does food?What is What is cooking? What reflect. ask we can that questions are These family? with be together lives. our enjoy and eat, cook and we as on local foods. In Japan, which has a mature food culture, food culture, a mature which has local Japan, on foods. In example—and for dishes—pasta, fusion of a lot are there Japanese based traditional on not is cuisine homemade our the world around foods from and breads, Sweets, only. recipes cooking. The home Japanese into been incorporated have embrace too, Japan—Americans, to similar is States United world. the around cuisines from different of lots is uploaded? in what trends noticed any you Have is what to sensitive and very informed Our well are users media—so in other the trends and television on trending real-time gain to able are we However, changing. keep can We for. searching are people what analyzing by insight past analyzing levels, stratified more on also identify trends seen, We've gender. and age, geography, to according data vary in seasoning regions— tastes across that instance, for Japan. even within Cookpad spaces. physical say Can is opening you that? about something our turned have we recipes, focus on is current our Although cooking, after and occur that before moments to attention that connections and the sharing include would too—that way One meal a together. or enjoy they cook after have people of network a operating by is offline users connecting are we What drives people to share recipe people ideas? drives share to What see to others food, they want delicious make people Whenever and countries different from users true this is across Actually, it. people ordinary from are uploads of the majority and cultures; tasty. theyor are thosethink recipes, that own their off showing Cookpad posted on cultures? similar across the content Is not cuisine has foreign where places are there Asia, In a focus has the content in those areas and verypenetrated far, Simmered Glossy Teriyaki Chicken—Munkun Glossy Teriyaki Simmered 2 3 2

Grated Carrot Salad (Japanese recipe)—Staff Takako recipe)—Staff Salad (Japanese Grated Carrot Takako Kishida Rinrin and Yuko Spinach & Nectarine Salad—Yuuki 1

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Thank God it’s Friday—now leave the office early. GO HOME! That is the message of the Japanese government’s Premium Friday campaign, which encourages the Japan attempts to boost economy nation’s overworked employees to take a few extra and work–life balance hours to relax on the last Friday of the month.

By Anthony Fensom Launched in February, the public-private initiative aims to spur a consumption boost—and potentially boost the birth rate—as Mr. and Mrs. Watanabe get to spend a few more precious hours together. While the retail and travel sectors are seen as the main beneficiaries, there could be longer- lasting productivity benefits—particularly if the campaign builds momentum. The economic impact of a single Premium Friday could be as much as ¥124 billion (around $1 billion), assuming all Japanese workers clock out at 3:00 p.m., according to Dai-ichi Life Research Institute Inc. Mizuho Research Institute Ltd. (MRI) has predicted a boost to travel consumption of ¥200–300 billion, with surveys showing increased demand for weekend trips—although both forecasts noted the need for broader implementation. The initiative, which was among the 10 strategic projects the Ministry of Economy, Trade and Industry (METI) listed in its 2016 Japan Revitalization Strategy, follows public outcry

12 THE JOURNAL n JUNE 2017 WORKPLACE 13 JUNE 2017

found little little found The Journal The THE JOURNAL While welcoming the campaign, Hilton Tokyo Tokyo Hilton the campaign, welcoming While afternoons, Friday on busy is already “Thehotel An informal survey informal An by marketing discussed every our it at week “We’ve General Manager Michael Williamson said he had he said Williamson Michael General Manager results. see to any yet explained. he busy,” are in Tokyo weekends and the message gets if [the campaign] “However, is in itself that overtime, limiting about across cause.” a worthy 2 percent of those with less than 100 employees. those than less with of 2 percent workers. Tokyo among the campaign of take-up still only are we but started, it since meeting society penetrated think it’s don’t we as it, monitoring at director communications Iizuka, Kanna said yet,” friends and our “Among Tokyo. Shangri-La Hotel, leave to able is one no in Tokyo, whowork families seen haven’t we a Friday; and on 3:00 p.m. at work the opportunity]. [of taking guests advantage any toward targeted offers introduce may we However, when right.” the time is Friday Premium Yet, a survey by marketing firm Intage Inc. found less less found Inc. Intage firm a survey marketing by Yet, around early, the office leave to those who managed Among Retailers have held a range of promotions coinciding with coinciding promotions of a range held have Retailers the campaign, into also tapped have companies Travel and Hankyu Travel International Co. Ltd. tripled its bookings its tripled Ltd. Co. International Travel Hankyu and South as such countries nearby to the day on departures for Korea and Thailand. on early work left employees Tokyo of 4 percent than by being encouraged 10 percent about 24, despite February do so. to their companies out while they said went a third home, went theyhalf said just than more with companies survey The that eat. to found also 6 percent with some participants, biggest the were 1,000 staff just with compared policy, Friday Premium official an having Premium Friday, from makeup seminars at the Takashimaya the Takashimaya at seminars makeup from Friday, Premium beer Lion halls. Sapporo beers half-price at to store Shinjuku Ltd., Airways Co. All Nippon by specialwith promotions been have results The others. and Company, Railway East Japan a cited agency, travel largest Japan’s JTB Corporation, positive. 24, February bookings on hotel in domestic increase 20 percent

Better work–life balance helps strengthen families. Better work–life balance helps strengthen PHOTO: LUFIMORGAN / 123RF / LUFIMORGAN PHOTO: (death from overwork), overwork), from (death newspaper noted that lights were were lights that noted newspaper Nikkei karoshi The private sector has also seen mixed results, despite despite has also results, sector seen mixed private The However, the However, Trade the Ministry Economy, of of the exception “With “There is still a strong cultural norm in Japan Japan in norm cultural still“Thereis strong a Another government study found that Japanese Japanese that found study government Another

A chance to relax can boost worker productivity. A chance to relax Daiwa House Industry Co. Ltd., confectionary maker confectionary maker Ltd., Co. Industry House Daiwa telecommunications and Ltd., & Company, Morinaga group SoftBank Corp. and Industry, which is the champion of the Premium Friday Friday the Premium of thechampion which is Industry, and taking not are agencies ministries and government campaign, daily. financial toldthe official a senior seriously,” part in it the campaign. to on signing 4,200 companies than more builder home include and industries many span Participants Hiroshige Seko, minister of Economy, Trade and Industry, Industry, and Trade Economy, of minister Seko, Hiroshige . . . today early office the ministryalso urged to “leave staff operations.” your so affect does not doing as long as Kasumigaseki in Tokyo’s night at late brightly still burning district. administrative LIFE-ENRICHING FebruaryMinister Prime 24, Friday, Premium On the first office his leaving reportedly by the front led from Abe Shinzo by a followed was This a temple. visit to p.m. 3:00 around experience described an he concert, brief “life-enriching.” as workers took their allocated leave, it could boost could it their allocated leave, took workers according ¥16 trillionper by year, the economy estimate. one to a good as thing,” hours working sees long that Sakakibara. Sadayuki Chairman Keidanren said this.” to end an put somehow must “We 80 hours of overtime per month. overtime of 80 hours leave—less annual of 8.8 days use only employees with half the allocated amount—compared than in Hong workers by take-up the 100 percent all Japanese If in Singapore. 78 percent and Kong over the death of a 24-year-old advertising agency advertising a 24-year-old of the death over from employee of all quarter a that estimates official amid than more working employees have companies PHOTO: PAYLESSIMAGES / 123RF / PAYLESSIMAGES PHOTO: Oakwood Apartments Azabudai Oakwood Premier Tokyo

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PHOTO: SHOOTDIEM / 123RF Extra shopping hours could boost the economy.

GO BIG OR GO HOME “I don’t see a GDP impact from Premium Friday, but more Both hotel managers suggested greater effort is needed people are taking holidays by using this excuse or eating out, to ensure Premium Friday delivers on its goals, amid a so I think this is positive,” he said. traditional corporate culture of long hours in the office. “Another effect may be as a talking point between labor “The government obviously has influence over its own unions and management . . . so the effects will be coming people, with campaigns like Cool Biz being followed very quite gradually.” quickly. But people in their forties and fifties need to lead by Should Premium Friday take hold, there could be even bigger example, because if the head of department is not doing it benefits for a nation with a declining labor force and an urgent then nobody else is going to do it—and that’s absolutely key,” need to boost productivity—particularly in the service sector. Williamson said. But CEO Jesper Koll of exchange-traded product sponsor Paul Kraft, chair of the Food and Agriculture Committee and asset manager WisdomTree Japan K.K. pointed out the at the American Chamber of Commerce in Japan (ACCJ), realities for small businesses: “For a mom-and-pop shop to said the campaign had been “a bigger news story than its implement it, it’s always going to be tricky, as there’s always initial results.” that customer who turns up at 4:30 p.m. on a Friday who Oakwood Apartments Azabudai Oakwood Premier Tokyo “Hats off to the organizers; however, the execution has makes the difference. But for companies that employ 200 staff been a little lacking,” he said. “As we say in the States, the or more, having this order from the government forces government has to either go big or go them to rethink the way they’ve always home—put in tax breaks, put in an done things. With the Premier, Residence, and Apartments brands of official government recommendation It is a step in the “Forcing change in the way people do so the large labor unions can use it right direction for a things is exactly the right signal in boosting fully serviced apartments in different prime locations in Tokyo, as a negotiating point in their annual service sector productivity, which typically in negotiations. Something like that government that’s Japan is one-third to one-quarter the level of Oakwood has a home and lifestyle for you. would be far more effective than a willing to think other advanced economies.” Oakwood Premier Tokyo Midtown policy where only a small number outside the box to As well as benefiting the retail and travel of companies are able or willing industries, Koll said it could aid Japan’s boost productivity. Introducing our newest property. to take part.” nonprofit sector. Kraft pointed to companies that have “Japan’s nonprofit sector is surging, and Oakwood Apartments Azabudai flexible working policies in place, such now accounts for almost 10 percent of GDP. Brand new apartments opened on 15 May 2017 as allowing staff to go home by 7:00 p.m. So, if people don’t have to work until 7:00 p.m. on a Friday, “It’s that thing where everyone does it or no one does it, this could definitely allow for some more volunteer activities.” and if not every company can do Premium Friday, then I The shift toward an improved work–life balance could 3 min walk to Tokyo Tower and Shiba Park Oakwood Apartments Shirokane 10 min. walk Kamiyacho St. (Hibiya) / Akabanebashi St. (Oedo) don’t see it taking hold. But in a company where everyone has help reduce excess industrial capacity in an age of increasing permission to leave by 7:00 p.m.—no matter who your boss automation and growing debate over the proper balance 5 min. walk to the Tokyo American Club is—it works.” between leisure and office time, Koll added. Kraft suggested an initiative of greater potential benefit “Right now, Premium Friday is a gimmick, but I haven’t yet Discover Oakwood living in Tokyo Midtown, Roppongi, Tokyo Station, could be the introduction of daylight saving time— met a Japanese manager or executive who isn’t intrigued or Aoyama, Ariake, Akasaka, Shirokane, and the Azabu areas. “a far-reaching effect that would benefit everyone, and annoyed by it. Is it going to turn into a monthly mini-Golden *short term stays available in Tokyo Station and Ariake. not just a few.” Week? Probably not, but it is a step in the right direction Oakwood Residence Aoyama for a government that’s willing to think outside the box to PRODUCTIVITY BOOST? boost productivity.” Naoki Kamiyama, chief strategist at Nikko Asset Management For Japan’s retail and travel sector, Premium Friday could Co. Ltd., has described Premium Friday as being among a deliver a longer-lasting boost than the Tokyo 2020 Olympic range of government measures to lift consumption, including and Paralympic Games. And, if managers are forced to rethink offering shopping coupons and travel vouchers, as well as traditional work practices, the Abe administration might just delaying the planned consumption tax hike until 2019. get that structural change it has been searching for. n

THE JOURNAL n JUNE 2017 15 GREEN GRUB Bugs and algae set the stage for alternative foods

By Maxine Cheyney

Eating insects is not everyone’s idea of tasty. Exo’s crickets are flash-frozen, dried, and milled into fine, protein-heavy flour. The production effects are notably different However, culinary creepy-crawlies and the from those of regular beef production, for example. Lewis said alternative food industry are making headway in that crickets produce 100 times less greenhouse gas than cattle, and require less water, space, and feed. the United States, Japan, and the wider Asia region. The company has five flavors of protein bars made from cricket flour. Protein bars are something the co-founders felt In addition to insects, algae-based foods are also growing. were familiar food for consumers, and thus a good product Three companies that are enticing the world with alternative with which to start. foods are Exo, which makes products made with cricket flour; “We wanted to introduce crickets in a way that was easy and Euglena Co. Ltd., which cultivates the microalgae from which accessible for most people. Lewis explained, “We worked with it takes its name; and Bugsolutely Ltd., which has found Chef Kyle Connaughton to figure out flavors.” success in Southeast Asia selling cricket pasta. Bugsolutely Founder Massimo Reverberi also chose Although these alternative food sources may not make your cricket flour to create a product that is recognizable and stomach growl, they are rich in nutrients, environmentally palate-friendly. “We chose to start with pasta, because pasta friendly, and can be made into everyday products. is a common food all over the world, and because the nutty taste of the cricket flour pairs quite well with the taste of the A WIDER PALATE wheat flour.” The burden of feeding the global population is already Reverberi echoed Lewis’s comments about the nutritional taking its toll on the Earth’s climate and natural resources. value of crickets, adding, “In brief, it’s a superfood.” According to the United Nations Food and Agriculture Powdered algae is Euglena’s central product, and is used Organization (FAO), there will be no let up as we race to a mainly for supplements. It has both plant and animal population of 9.7 billion by 2050. characteristics, and contains many of the vitamins and minerals Whether due to climate change or natural disasters, found in vegetables and fish. So far, the company has rolled out political instability or armed conflict, the likelihood of a its euglena-based cookies to supermarkets across Japan. food crisis in 2017 is high. An FAO Hunger Map for 2015 Mitsuru Izumo’s idea was to aid those countries—both rich shows that 795 million people—one in nine of the world’s and poor—that suffer from malnutrition. It all stems from a population—still lack sufficient food to live a healthy lifestyle. visit he made to Bangladesh as a student. “We believe that as Globally, 108 million people in 2016 were reported to be the population of Earth increases, many more people will suffer facing crisis-level food insecurity or worse, a 35 percent increase from 2015. Eating insects is not just The need to find other food sources that are both healthy and have a reduced a duty, it is a pleasure. environmental impact is increasing. Cricket flour is one such source. Exo CEO and Co-founder Gabi Lewis claims that cricket flour, 65 percent (by weight) of which is protein, provides iron, zinc, calcium, and other minerals, and “is one of the most sustainable protein sources in the world.”

16 THE JOURNAL n JUNE 2017 ALTERNATIVE FOODS

Dishes such as apple cricket salad are becoming more common on menus around the world.

from malnutrition. Alternative food has the potential to help Research Organization (NARO) insects are already used as a these people,” he explained. protein source in Japan. Nakashima mentioned inago—a type At an American Chamber of Commerce in Japan event of locust—as one such insect. He also suggested that insect hosted by the Alternative Investment Subcommittee in April, ramen is already making its way onto menus and algae-related Izumo explained that scientists in Japan and the United products onto supermarket shelves. States believe that seaweed and algae contribute to the longer “We think it will not be difficult to encourage the public to lifespans of Japanese people. try alternative food sources, such as insects and algae, because He added that Euglena’s “production cost is one-tenth they are already used to eating these kinds of foods as a side lower than how euglena microalgae was produced dish,” he suggested. when we first began, so everyone can afford to buy algae As with any new industry, there comes a point when products nowadays.” regulation is required to maintain standards and garner Although there are certainly successes in this young support, and the insect market is no different. The North industry, there are still other barriers to tackle. American Edible Insect Coalition was started in 2013, followed by the AFFIA ASEAN Food and Feed MARKET BUZZ 795 million people— Insects Association in August 2016; and Eating more insects could help fight one in nine of the world’s South Korea, Reverberi said, recently world hunger, or so says a 2013 regulated edible insects. report by the FAO and Wageningen population—still lack Another challenge arises in logistics University and Research Centre, sufficient food to live a costs. Online Japanese distributor of Edible Insects: future prospects for edible insects, Takeo, sells everything food and feed security. Although healthy lifestyle. from canned tarantula and giant water entomophagy—the practice of eating scorpions to larvae mix and chocolate- insects—is still taboo in many Western societies, it has been covered superworms. It also sells Bugsolutely’s cricket pasta. around for millennia. “In Tokyo, we have Takeo helping us test the market, The report highlights the benefits of insects to nutrition although with small quantities,” Reverberi explained. and the reduction of pollution. “The transportation costs highly affect the final price.” One of the main difficulties is what some find to be the Finding large retailers in Japan means that Bugsolutely will distasteful look of the ingredients. They are alien and not be able to have a much cheaper retail price, as shipping costs widely appreciated. will go down when they are able to ship in bulk. “People aren’t familiar with insects, so it can be difficult He added: “The product is designed for Western countries, to convince people that insects are a safe and tasty food with a few exceptions, like Japan, where the food culture product,” Lewis explained. “It’s [about] trying to change years is open to innovation and where quality, nutrition, and of public perception about insects.” sustainability have an audience.” And it’s not just insects that have a negative image. Although Exo has not yet “People associate algae with dirty swimming pools and made it to the Japanese market, stagnant water,” Izumo laughed. Lewis revealed: “We actually Speaking to The Journal he added, “Euglena has the do have a Japanese investor, meaning in Japanese of ‘green bug’—though it is not a bug— which is Dentsu—one of the so people refused to eat it at first.” largest advertising firms—so However, according to Nobuhiko Nakashima, director we’re confident that, if we were of the division of Insect Sciences at the Institute of to enter the Japanese market, Agrobiological Sciences National Agriculture and Food we’d have a great plan.”

THE JOURNAL n JUNE 2017 17 Appreciate kabuki theatre in English with free audio and live subtitles

PART 1 Discover Learn how to appreciate kabuki in English with the guidance of a kabuki actor and a TV personality

PART 2 KABUKI Uncover the mystery of Kenuki From the Kabuki Juhachiban—the 18 best kabuki plays NATIONAL THEATRE Featuring Nakamura Kinnosuke as Kumedera Danjo Friday, June 16, 2:30pm and 6:30pm and Kataoka Takataro as Koshimoto Makiginu

Book now! Price TEL. 03 3230 3000 1st Grade 3,900yen / 2nd Grade 1,500yen 10:00–18:00 in Japanese and English * A special discount price is available for students and http://ticket.ntj.jac.go.jp/top_e.htm disabled guests. Please inquire at the Box Office for details.

NationalTheater_ACUMEN_v4.indd 1 2017/05/11 10:03 ALTERNATIVE FOODS

Cricket flour . . . is one of the most Appreciate kabuki theatre sustainable protein in English with sources in the world. free audio and live subtitles

SAVE THE PLANET not see the need to invest in alternative food sources, as there Wider environmental benefits are a key driver for is no crisis on hand. If the need for alternative food becomes any green-conscious company looking at growing the inevitable, enough budget for research and development entomophagy industry. should be made available in the future.” Exo’s Lewis expressed belief that alternative food sources Reverberi mentioned the efforts of NARO, which in are vital. “In our current world, which is so greatly affected November 2016 hosted the international symposium, by climate change and the effects of unsustainable products, Perspective on the Utilization of Insects for Feed and Food it’s important to have alternative food sources to help effect in Tokyo. In addition, Bugsolutely is now part of a food change in the food system.” acceleration program in China to develop the first insect- Nakashima highlighted the environmental benefits based packaged product for the Chinese consumer market. of alternative food sources. Specifically, he said insects “As soon as we can optimize both the farming and the have “high feed conversion efficiency in comparison with processing of insects, the wholesale prices will be aligned

vertebrates, and lower CO2 and methane gas production in with those of other meats and it will be easier for insects to comparison with conventional domestic animals.” become mainstream,” he explained. Large quantities of insects can be reared in limited space, Lewis suggested that, one day, insect consumption will and mass production requires less water. “be dominating and hopefully be the main source of protein At Bugsolutely, Reverberi highlighted the efforts of for most people.” the French government, which has provided funding of Reverberi echoed this, adding: “Eating insects is not just €1 billion for alternative protein research. In Japan, however, a duty, it is a pleasure. People do not know that they are no budget for research into alternative foods has been yummy. Eating insects is a win-win solution.” allocated. According to NARO’s Nakashima, this is because Elsewhere, companies are beginning to investigate the it is not yet considered a major industry in Japan. prospect of eating insects, and how to do so. Innovations That could change, though. “If farmers and consumers such as The Hive from Hong Kong-based Livin farms—a realize the need for alternative food production—and if the contraption designed to grow protein-rich superfood government decides to provide research funding—NARO mealworms—is one example of a growing interest in PART 1 will contribute to, and pursue, research on alternative the industry. Learn how to appreciate kabuki in English with the Discover food sources,” he added. While not an immediate solution to the world’s food guidance of a kabuki actor and a TV personality When asked why Japan is not investing in alternatives such problems, insects and algae are healthy alternatives that may as insects, Nakashima explained: “At present, the cost of large- be agreeable to more people over time. Ultimately, they have KABUKI PART 2 scale production of insect powder is much higher than of fish the potential to aid in food crises and help create a more Uncover the mystery of Kenuki powder. Therefore, the government and private industries do sustainable food source for the planet’s growing population. n From the Kabuki Juhachiban—the 18 best kabuki plays NATIONAL THEATRE Featuring Nakamura Kinnosuke as Kumedera Danjo Friday, June 16, 2:30pm and 6:30pm and Kataoka Takataro as Koshimoto Makiginu GREENHOUSE GASES Beef Pork GHG from the production Book now! Price of 1 kg of protein Chicken TEL. 03 3230 3000 1st Grade 3,900yen / 2nd Grade 1,500yen Livestock emissions globally are Cricket (close to zero) 10:00–18:00 in Japanese and English * A special discount price is available for students and more than automobile emissions http://ticket.ntj.jac.go.jp/top_e.htm disabled guests. Please inquire at the Box Office for details. 0 750 1,500 2,250 3,000 grams of GHG

SOURCE: United Nations FAO publication: Edible insects: future prospects for food and feed security (with the collaboration of Wageningen University)

THE JOURNAL n JUNE 2017 19

NationalTheater_ACUMEN_v4.indd 1 2017/05/11 10:03 Chef Dominique Ansel—described as both “the most feted pastry chef in the world” and a GLOBAL “culinary Van Gogh”—opened the Dominique Ansel Bakery Japan in Ginza’s Mitsukoshi department store on March 29 of this year. GOES Named by Business Insider as one of its Most Innovative People Under 40, French-born Ansel opened his first shop in New York in 2011 and was quickly recognized for his LOCAL innovation and creativity in the pastry world. Perhaps his most famous contribution to the genre is Cronut inventor adapts the Cronut, a croissant-doughnut hybrid that was unveiled New York flavors to Tokyo at Ansel’s New York bakery in 2013 and was lauded by Time magazine as one of the best inventions of the year. Ansel has a bakery in London and opened his first Japan By Julian Ryall outlet in Tokyo’s Omotesando district in June 2015. The Journal talked to Ansel about the challenges and inspirations presented by the Japanese market.

Why did you choose Japan for your newest outlet? Japan is somewhere that has always been inspiring to me—the level of dedication and respect that people have for food and for food traditions is unlike anywhere else. I’ve always been amazed by the attention to detail and the level of craftsmanship in the food here, how there are people who spend decades of their lives perfecting a single thing.

PHOTO: THOMAS SCHAUER How much time did you spend researching Japan? What were your conclusions? Japan is somewhere that’s been on my mind for years—a dream of mine—and I always hoped that someday we would get there. The Omotesando shop was our very first international location, and we did quite of lot of research and spent a lot of time planning before it all came to life. The culture, the food scene, local tastes, learning how to work with all new ingredients, even the flour and butter are so different than what we’re used to in New York. There are so many bakeries in Japan, but I wanted to create a next-generation bakery, one that celebrates the new generation of chefs and pushes forward with creativity, rather than model it after the more old-school French-style bakeries that are quite common in Japan. For us, Omotesando is our SoHo, a really beautiful neighborhood where we greet our neighbors each day, and also people from all over Japan and around the world. We’re on a quieter street, just off the main road, and the shop is within its own standalone building—an entire three-story shop with a bakery on the main level, seated café on the second, and our kitchens on the third.

What have been the biggest challenges opening in Tokyo? Just being far away from the team, and 12 or 13 hours ahead, was something we quickly had to adapt to. I always want to be connected to our team, so we make sure to speak in the early mornings and in the evenings every day so we can keep on moving.

20 THE JOURNAL n JUNE 2017 ENTREPRENEUR

What are some of the joys of working here? I am, and always wondering and anticipating what’s next. Our team is incredible. Most of our team has been with us That really challenges us and inspires us. As for their tastes, since day one. That’s what matters most in the end—that we dialed back on the sweetness levels in our recipes for you surround yourself with a group of people who are as Japan and, in doing that, it led us to rethink our recipes in passionate and dedicated about what we do as you are, and the United States and reduce sugar levels there, too. have the talent and skill to maintain quality. And the produce and quality of ingredients in Japan is unlike any other. That Are you utilizing local flavors and ingredients? Hokkaido milk! And all the fruits and vegetables. I’ve tried so More than 40 percent of our Omotesando menu is dedicated to many new kinds of citrus alone that we just don’t even have items created just for the shop, inspired by local ingredients access to in the United States. It really helps us to get creative and traditions, like our Mr. Roboto Melonpan, filled with when it comes to developing new recipes and ideas. custard, or our Oden Buche de Noel, which we made during the holidays. It’s been about Why do you enjoy your job so much? two years since we opened in Japan, It’s a chance for me to express myself and we’ve learned that our guests are and to tell a story through food, and really excited about these exclusive- it challenges me to continue creating to-Japan creations inspired by Japan and pushing forward. And, at the and Japanese ingredients. So, for the end of the day, it’s about creating new Ginza shop, more than half of the something that makes people happy. menu is not available anywhere else. When I see someone eating one of our A few of my favorites are the Pull-Apart pastries—with a smile on their face— Blossom Cookie, made of rose honey it makes all of this worth it. tuile filled with lychee cream, and our Black Kokuto Sugar DKA [Dominique’s In what ways are the products you Kouign Amann]—a version of our make here different? I’ve tried so many new classic DKA, a flaky caramelized What’s important for us, in each kinds of citrus alone croissant—but with kokuto sugar from city that we open in, is that it’s not Okinawa for that extra depth and just a simple cut-and-paste. It’s not that we just don’t even richness in flavor. It’s delicious. just a carbon copy or a focus on one have access to in the product. We take care in developing a What Japanese ingredients do you unique menu and a space that really United States. particularly enjoy working with? speaks to that place. And while we The milk and butter! And all the fresh do have a few signature items from New York on our menus produce that you don’t have access to in the United States— in Omotesando and Ginza, the majority of the menus are incredibly fragrant and flavorful fruits. In the beginning, it dedicated to each location, with new creations that aren’t was interesting to learn about all the intricacies of the dairy available anywhere else, inspired by local ingredients and and the flour in Japan, how we had to adjust certain recipes traditions—items like our Square Watermelon Cake at to account for changes in fat content in the milk or how the Ginza, with pistachio raspberry ganache and watermelon flour is aged, for example. lime gelée. Do you have plans for another outlet in Japan in the future? In what ways are Japanese and US consumers different? Not at the moment, since we just opened the shop in I think in many ways, our guests in Japan and in the United Ginza. We will be opening our first restaurant this fall, in States are actually quite similar—they are curious, just like Los Angeles, so I am excited about that. n PHOTOS: DOMINIQUE ANSEL BAKERY JAPAN PHOTOS: DOMINIQUE ANSEL BAKERY

THE JOURNAL n JUNE 2017 21 TOURIST-POWERED Driving this surge are the more than 24 million tourists who PORT OF visited Japan in 2016, up from 19.7 million the year before, according to the Japan National Tourism Organization. Bain & Company’s research found that about 40% of sales for Japan’s most exposed brands are to tourists. In 2016, these LUXURY visitors spent ¥3.75 trillion—an increase of 7.8% from the year before. While positive, the increase represents a sharp Developers aim to keep tourist yen flowing drop compared with the jump from 2014 to 2015, when spending rose 71.5%. To keep the train going, Japan must By C Bryan Jones continue to evolve and make itself attractive to inbound shoppers—particularly as the yen appreciates. The Japanese government has set a goal of attracting 40 million overseas visitors annually by 2020, and is taking steps to hit this target through measures such as the easing The struggles of the Japanese economy are well of visa requirements for Chinese tourists. Meanwhile, real estate developers are doing their part to attract more inbound documented. Despite five consecutive quarters of shoppers through multi-use projects that center on world- growth—the longest stretch since 2005–2006— class brands and luxury experiences, but also tie in to the local community. domestic consumers continue to pinch pennies. But as a luxury market, and a destination for GINZA SIX Efforts to attract shoppers from abroad got a boost on inbound tourists looking to shop, the country is April 20 with the opening of Ginza Six, the massive mixed- clipping right along. use development on the site of the former Matsuzakaya Ginza department store and adjacent land. In 2015, Japan was the world’s second largest luxury goods A joint project involving Mori Building Co., Ltd., Sumitomo market at nearly $23 billion, as reported by consulting firm Corporation, J. Front Retailing Co., Ltd., and L Catterton Bain & Company. And in 2016—while the luxury market in Real Estate of the LVMH Group, the 148,000-square-meter, the Americas shrank 3%, Asia (excluding Japan) shrank 3%, 19-story structure covers two city blocks in the heart of and Europe shrank 1%—Japan grew 10%. Tokyo’s most prestigious shopping district.

22 THE JOURNAL n JUNE 2017 REAL ESTATE 23 JUNE 2017

THE JOURNAL Japanese architect Yoshio Yoshio architect Japanese the power to offer high-quality high-quality offer to the power reasonably by backed lifestyles, quality global-standard priced, service.” and designed the Taniguchi—who Art in New Modern of Museum and capturing City—made York beauty the history and out drawing his the heart of area the Ginza of is Six a Ginza of design. façade The “For tenants who take pride in operating in the prestigious in the prestigious in operating who take pride tenants “For performed at dramas festival and dance of out Growing the of the inclusion nearby, Kabukiza the famed With Of 241 stores in Ginza Six, 121 are flagship stores—and 121 are Six, in Ginza Of 241 stores about enthusiastic are that selected primarily brands “We TOURIST FOCUS TOURIST abroad, from shoppers of the importance Highlighting information provides that center a tourist includes Six Ginza 3,000 About disasters. during servesand a checkpoint as the Noh at Six—1,000 Ginza at take refuge can people in willprovided be information emergency Theater—and languages. multiple of Japan’s great loves. great Japan’s of stores—we their flagship with location—including Ginza by initiatives and them tacklewill new challenges help atmosphere,” and venue a world-class themwith providing said. Kurihara TOUCH CULTURAL most Japan’s of one makes Six Ginza shopping, to addition In visitors. to easily accessible art forms traditional important Noh Theater Kanze ofthe 480-seat home isthe new B3 floor The its from moved which was stage, cypress its houses and reassembled and area residential in a Shibuya home outdoor Six. Ginza inside Noh 13th in the centuries, 12th and temples and shrines of one is in the 14th century and art form became a distinctive art. Meaning performance of forms extant oldest the world’s in which plays of types five comprises Noh “skill,” or “talent” history. and culture Japanese to related stories convey actors opportunities the broadens Six Ginza in Theater Noh Kanze the marks and culture experience to Japanese tourists for from called the School district to it home the Kanze of return 1869. 1633 to In bringing together the tenants of Ginza Six, the partneringSix, Ginza of the tenants together bringing In will to appeal that brands attract to hard worked companies cutting-edge and trends Japanese current those for looking place. in one trends worldwide the entry their first into marks the location 12 brands for market. Japanese explained. Kurihara Six,” Ginza at stores flagship launching and identity strong with brands particularly for looked “We trends even as shoppers attract to retailers allows that canvas of Chuo-dori facing curtains array simplistic The change. a unique create to each store allowing becan easily replaced, reflect façade thealso times. The with can it update and image one visitors to conveying the thereby seasons, of the changing DESIGNED ATTRACTION . The Journal The Of 241 stores in Ginza Six, Of 241 stores stores—and flagship are 121 the location 12 brands for entry marks their first the Japanese market. into The nationalities of inbound shoppers also vary, he said, he said, also vary, shoppers of inbound nationalities The Inbound shoppers play an play shoppers Inbound “It is the largest redevelopment project ever conducted ever conducted project redevelopment the largest is “It drew Mori the complex, developing and planning In Six of the floors are below ground and 13 above. Retail above. 13 and ground below are the floors of Six market revenue in 2016. revenue market than 10% to around 25%,” Kurihara estimated. “We expect “We estimated. Kurihara 25%,” around 10% to than overall 20% of about for account to shoppers international Six.” Ginza sales at Kong, Hong those from including Chinese tourists, but Chinese as point important majority—an the up make the ¥3.75 trillion luxury 39.4% of for accounted visitors important role in the success role important properties, these Mori of continue to is the hope but “Theboosting the numbers. less from facility by varies visitors] overseas [of percentage upon its experiences from two of the company’s other large large other the company’s of two experiences from its upon expect “We mixed-use projects. advance to this [complex] Roppongi like area the Ginza Hills Omotesando and Hills areas,” their respective did for Kurihara. said in Ginza’s history of some 100 years,” Koichi Kurihara, Kurihara, Koichi 100 years,” some history of in Ginza’s told Ltd. Co., BuildingMori of officer executive with area an in redevelopment this kind of “Conducting rare.” extremely is high-level usage such spaces cover the second basement up to the sixth floor, the sixth to floor, up basement the second spaces cover through 12. seven on floors is space whilelocated office the 13th. share offices and Shops We design for ONE’S life and dreams.

Interior Design and Renovation in Tokyo

For more information, please email: [email protected]

TOKYO OFFICE: Ryoshin Onarimon Bldg. 7F, 6-17-15 Shinbashi, Minato-ku, Tokyo Tel: +81 (0)3 6758 3535 | www.koyou-onesd.co.jp/en REAL ESTATE REAL

In a tie-up with convenience store chain Lawson, Inc., the facility also serves locals through the first Travel Lawson. Unlike the average Lawson, this location sells food and goods curated from around Japan, putting We expect international local everyday items such as rice and soy sauce from the shoppers to account for nation’s 47 prefectures and territories within easy reach about 20% of overall of area residents—something that will also be attractive to visitors from abroad. Halal items for Muslim tourists are sales at Ginza Six. also available.

HEART OF TOKYO—AND BEYOND Mori isn’t the only developer connecting tourists with luxury brands and cultural immersion. Mitsui Fudosan Co., Ltd. has created a must-visit destination at the traditional center of Tokyo with Coredo Muromachi—whose name literally means “core of Edo” (the former name of Tokyo). Opened in 2010 and expanded in 2014, Coredo Muromachi is well-known to Tokyo residents and tourists. Unlike the demographics of Roppongi Hills and Omotesando Hills, Mitsui Fudosan told The Journal that the complex receives a majority of visitors from North America and Europe, followed by China, Taiwan, and South Korea. “The shops with ‘Made in Japan’ goods, accessories, and interiors are popular among tourists from abroad,” said Aya Sakamoto, planning group project leader in Mitsui Fudosan’s Nihonbashi Urban Planning and Development Department. “These shops provide easy access to masterpieces from across Japan—cutlery, lacquered works, gold-leaf crafts—as well aswashoku [Japanese cuisine] such as sushi, yakiniku, yakitori, pickles, obanzai cuisine from Kyoto, and traditional Japanese sweets known as wagashi.” Like Ginza Six, Coredo offers cultural experiences. Through the Nihonbashi Information Center, tourists can participate in tea ceremony, crafting classes, geisha entertainment, and culinary tours. Mitsui Fudosan is also making a play for tourist yen beyond Tokyo with its LaLaport and Mitsui Outlet Park shopping mall developments, which are located across the country. “We ask travel agencies to visit these properties as a part of their plans,” explained Sakamoto, “and we link up with hotels to help tourists.”

STAYING THE COURSE The addition of Ginza Six to Tokyo’s well-established destinations such as Coredo Muromachi, Roppongi Hills, and Omotesando Hills puts Japan in position to offer new luxury and cultural experiences to the influx of visitors expected between now and 2020. The ambitious thinking on the retail front is a needed weapon in the battle for shoppers in the region. Although tourist numbers are increasing, spend is slowing— particularly among the lucrative Chinese demographic. Thebakugai (explosive buying) that has made Chinese tourists famous in recent years may be over. Then again, there are many factors at play, such as the value of the yen and declining price differential of goods between Japan and China. Winds shift, and the evolving efforts of Japan’s real estate developers are charting a course to help meet the country’s ambitious goals. n

THE JOURNAL n JUNE 2017 25 Asia Strategy: Business Intelligence, Public Policy & Advocacy

Japan's leading political risk, policy research and business consulting company

Celebrating over 20 years of providing government relations, policy analysis, and business and political intelligence solutions in Japan to many of the world's best-in-class corporations and alternative investment funds with strategic stakes in Japan.

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Untitled-5 1 1/6/16 5:43 PM SURVEY 27 n

JUNE 2017

Other % 24 responses 20 responses 43 responses 26 responses 15 THE JOURNAL Exchanges rates Exchanges % Competition change

7 More/fewer resources More/fewer %

8 The survey also touched on Brexit and and the Brexit surveyon The touched also Identifying the reasons for a change in a change for the reasons Identifying % increase of two percentage points—and 15% points—and percentage two of increase factors. other cited how Asked (TPP). Partnership Trans-Pacific United will the affect agreement a bilateral 20% TPP, with compared Japan and States will both, it it be 18% said said good for Japan, bad for will the but US be good for and Japan, will it be3% said for good only business performance, 61% cited their own their own 61% cited performance, business key factor was a rate exchange The efforts. 19% in the from drop 7%—a big just for fall survey—while in resources a change in 9%. A shift 8% to from slightly rose 8%—an for a role played competition 9 The next surveynext The in willOctober 2017. be conducted When asked about the economic outlook for the next for outlook the economic about asked When 35% feel it will be bad for both. European chamber members members chamber will both. European it be35% feel bad for Kingdom will both be the United good for Brexit that said the UK, for good 9% see as only it Union, the European and will it 65% said a whopping and the EU, for 13% good only both. be bad for months was +0.70 compared with +0.34 in October, and and +0.34 in October, with +0.70 compared was months at +0.66 increase a similar showed performance profitability +0.38). (previously 82% and companies American North 85% of six months, their while see 63% of growth, companies European of such anticipate Zealand counterparts New and Australian the of four just and downsize, to a boost. 2% plan Only Japan. from withdrawal considering are respondents 19 296 valid responses Change FACTORS Total number of Total 287 responses: of commerce from members of members from chambers foreign FCIJin Japan optimism findsgreat poll . % Foreign Chambers in Japan Japan in Chambers Foreign Clear 61

Own efforts 174 responses Respondents also reported a rise in company performance. performance. also a rise reported in company Respondents Breaking this down by industry by this down Breaking On an index using a scale +2 using index from On an Since the last survey, conducted between conducted survey, the last Since 2017 21, the spring 12 and betweenConducted April Reasons for Change Reasons for finance (+0.38; previously +0.00), servicepreviously previously (+0.38; (+0.41; finance and +0.08), (+0.43; previously trading +0.19), sales and +0.03). (+0.26; previously manufacturing six the past over reported sales for performance index The months improved to +0.40 compared +0.40 compared to improved months Looking +0.10 in the fallwith survey. revealed increase: a similar out 12 months +0.27 in the with +0.55 compared survey. previous view for in the six-month changes noticeable uncovered October 18 and 28, 2016, the performance 28, 2016, the performance October 18 and risen. clearly has companies of -2 (strong to improvement) (strong in the growth for optimism decline), sixthe next over economy Japanese edition incorporates 296 valid responses from members members from 296 valid responses incorporates edition business and commerce of chambers 19 foreign of respondent A typical number. record organizations—a than more for been has in Japan company involved is and 40 employees, has 20 years, the service or trading in sales and industry. Views of the Japanese market continue to improve, improve, to continue market the Japanese of Views the latest to according Survey Confidence Business J-MEDIA

Japan policy updates translated DIET DAILIES from Keizaikai magazine

The tailwinds that have made MINISTRY OF LAND, CABINET OFFICE growth possible include a weaker yen INFRASTRUCTURE, TRANSPORT stemming from large-scale financial AND TOURISM FIFTY-ONE STRAIGHT MONTHS OF ECONOMIC EXPANSION deregulation, greater corporate profits, EXPERTS HOLD RECALLS THE 1980s and improvements in employment. FIRST MEETING ON Another factor was conspicuous foreign INFRASTRUCTURE OF demand through growth in exports to INTEGRATED RESORTS (IR) The economic indices released by the the United States and China. Cabinet office on April 7 show a rise However, individual consumption—a of 0.4 points over the previous month pillar of domestic demand—was In early April, a conference was to 115.5 (pegged to 2010 = 100), the sorely lacking. A survey of household held at which experts discussed the first correction in three months. This expenditure in February noted a year- infrastructure for IRs, which will marks 51 straight months of economic on-year decline in household outlays incorporate casinos and other facilities. expansion since the start of the third Abe for the twelfth consecutive month. The Serious deliberation has begun on cabinet in December 2012, equivalent to corrected value of the actual GDP for the adoption of measures to address the Bubble Economy of the mid-1980s. the October–December 2016 quarter issues such as gambling addiction. It is the third-longest period of sustained was nearly stagnant at 0.04 percent over The government is pondering the growth in Japan’s postwar history. the previous quarter. Weak domestic introduction to the Diet by this fall of a Nevertheless, domestic demand, demand alone poses a possible blow to bill to legalize IRs. The group of experts which is centered on individual Japan’s economy. should complete its recommendations consumption, has been weak. At a press conference on April 7, sometime in summer. Geopolitical risk has increased following Nobuteru Ishihara, the minister in The group seeks the creation of the US missile strike in Syria, and with charge of economic revitalization, appealing Japanese-style IRs, including it the possibility of a slackening of remarked that concerns over external “clean” casinos. In addition to measures economic recovery for Japan. factors have led the government to watch designed to prevent money laundering, The main factor contributing to developments closely, adding that “it systems will be put into place to the correction of indices for February will be vital to create an environment in designate IR areas, set up gaming was the rise in automotive-related which many people will be able to live commissions for oversight, and consider production. Bolstered by the Cabinet while holding hopes for the future.” the means by which the national and Office’s criteria, this 51-month period But with Japan’s latent economic local governments will collect revenue. of economic expansion matches the growth stagnating at 0.8 percent, it will Through the study of various overseas duration of the period from December be important to hammer examples, the aim will be to develop 1986 to February 1994, the so-called out more reforms to IRs that will be different from the dark, Bubble Economy. reinforce mid- to long- exclusionist image of casinos that has When the Cabinet Office determines term growth. n existed up to now. positive or negative growth, it convenes Prime Minister Shinzo Abe set up a a study group and sets the indicators promotional center comprising people of economic trends that appear on at the various ministries involved, with charts as mountains or valleys. At the instructions to strive for developments study group’s last meeting, in July 2015, that will present Japan’s traditions, it established a valley for the month of culture, and arts so that families can November 2012. From the following enjoy visiting together. month, the economy has continued Nevertheless, it may not be easy to dispel to expand. concerns about gambling addiction, money laundering, and other problems. But if the government can structure a business model that is different from the traditional casino, it will be in a more favorable position to alleviate the various matters of concern.

28 THE JOURNAL n JUNE 2017 IMAGE: FINTASTIQUE / 123RF IMAGE: FINTASTIQUE PARTNER CONTENT 29 JUNE 2017

THE JOURNAL AI in self-driving cars and In to prepare order a future for The chat app Line has more they are fed racist data, according to Microsoft Vice President David Heiner. robotic nurses perform may well, be not may so it but good at dealing with questions. people’s where voice-based AI is common, there should be a consensus as to will it how be used, and some areas should be off-limits. than 200 million users worldwide, creating a massive trove of The companyprovides corporate clients n level education, of said an executive with venturea US business that is working on interactive AI. with AI solutions customer for service. Its goal is to provide customers the best possible experience, the but system could amass sensitive personal data unintentionally. Line will release an AI speaker this summer. “We’ll put In the meantime, companies developing voice-based AI “People will“People stop using our app if they think something Microsoft got an earful it when an unleashedTay, safeguards. feelersout to see users how react Nakayama to it,” said. should engage with their customers and others to discuss issues concern. of This kindof transparency should ensure that the technology is used ethically as becomes it a part dailyof life. obscenities and racist posts, forcing Microsoftpull to the plug.lesson The is that AI systems will “turn racist” if private conversations among people from all walks life. of Messages are encrypted so that even Line employees cannot see what is being said. funny said is going on,” Takeshi Nakayama, chief Line’s privacy He officer. saidthe company examines its service weekly to ensure there are privacy no problems. has It also set a research up foundation to establish privacy YOU KNOWYOU TOO MUCH AI systems learn and become capable more as they accumulate data; what but is being learned and is how that knowledge being used? There good—and are not so good—answers to this. AI chatbot, a year Twitter on ago. In less than a day, the impressionable bot began rattling off a stringof

Koe no Ami TECH? ), Japanese), writer Shinichi Hoshi describes

Governments and companies are already vacuuming up Creepy, but still but Creepy, fiction. thisHowever, vision raises legitimate concerns: AI may Ten years afterTen the iPhone AI-based simultaneous translation systems have improved “Have you ever you been“Have to Japan?” I asked in Japanese. “Many times,” she—or rather the system—replied in exactlyNot a riveting conversation, this but is bound to The Voice Net Voice The Real-time translation of the spoken word using artificial using word the spoken of Real-time translation outperform can it before go to (AI) still a way has intelligence simple for passable already is it but linguists, human trying after impression my was that least At conversations. woman. Spanish a with system video conversation Microsoft’s Voice-based AI raises privacy and ethical concerns and AI ethical raises privacy Voice-based By Keiichi Murayama PRIVATE mountains personal of information, and voice-interactive AI will make this easier and thorough—interpreting more our feelings, determining our age, and approximating our Through constant surveillance, network the gradually intimidates the populace into keeping quiet. benot able to will itself into sentience, its but prevalence and sophistication could make a handy it abuse— tool for especially as regards privacy. EAVESDROPPER Some view this with development alarm, and their fears Inare his science new. not 1970 fiction classic ( a dark future networked of computers listening to phone conversations, gathering secrets, then blackmailing people. made its debut, touchscreens are everywhere. Sound is the next frontier user for interfaces, and there are only a few technological leaps before it,to go too, goes mainstream. Amazon.com’s Echo speaker, speaker, Echo Amazon.com’s which interfaces with its Alexa allowsapp, a user to give verbal commands music, to play read the news, give the weather forecast, and do other tasks. its system with “deep learning” technology, and the future looks bright. With the addition Japanese, of the system can speaknow languages. major 10 so sorapidly, much that Japan is planning to deploy one 2020 thefor Olympic Tokyo and Paralympic Games. And while not a translation system, perfect Japanese, after translatingherresponse Spanish.from change. Microsoft hasrecently improved the accuracyof Craftsmanship to last a lifetime Exquisite handmade knives since 1923.

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sontaku Leaders will not be automated anytime soon because areWe entering the new day of ruthless competition to The decline in the population is currently being addressed people skills are the new reality. Technical knowledge isn’t disappearing anytime soon in terms of importance, but hard skills alone won’t be enough. If that is all you are providing to your teams, then watch your staff jump ship to your rivals who have skilled up their leaders in how to apply staff, as a recruit andretain strategy. items in factories and on construction sites. of all the soft skills needed. Are we going to be facing a major “ will workers their what anticipating not are organizations want? Basic economics tells us that a dwindling supply of obedience? If your leaders are the product of OJT (on-the-job training) alone, then get ready for disruption. Their mediocre bosses as role models, and their own best efforts to repeat that low standard in their own leadership, will take your organization nowhere in this new world of work. The current crop of leaders expects the not the other way around. Brace for impact everyone, we are about to crash! recruit and retain staff. Leader’s soft skills of getting willing fostering innovation, real encouraging cooperation, creativity, being excellent persuaders and having supreme in two ways. One is moving businesses offshore or buying businesses in foreign climes, where there is a growing buyer base. The other is automation. will We replace people with robots and machinery of some sort to make up for the worker shortfall. Driverless vehicles make sense when you can’t hire enough drivers. Robotic attachments for our limbs are a reality now, to help the aged go upstairs. The same idea applies to giving workers the power needed to lift heavy

- Brace for impact impact for Brace are we everyone, crash! about to omotenashi restaurants can’t restaurants can’t soba —or means to surmise or THE LEADERSHIP JAPAN SERIES President, Dale Carnegie Training Japan Training Carnegie Dale President, By Dr. Greg Story Greg By Dr. Sontaku: Sauce Secret The in Japan Leaders for means supplying sontaku sontaku Sontaku —or superb levels of hospitality, for which Japan he Japanese word conjecture about someone else’s feelings or desires. Another biggie is staffing. Delivery companies can’tkeep What about leaders in Japan? There Steve Jobs did that with the iPhone. didn’t We realize youth population up to the age of 35 is going to drop by half between now and 2060. learn the craft, speaking Chinese will help when we go to the convenience stores because not enough Japanese want to work there. Farmers are aging, but there are not enough construction The industrysuccessors pipeline. the in is going to lose million 1.28 workers between now and 2025. thirtyIn 2015, percent of construction workers were over the age of 55—it is a physical job that doesn’t age well. The spending, potential collapse of the welfare system due to the aging population, government debt levels, and the fragility of the tourist boom. up with online retail purchase orders, get young people to spend the many years required to are many business challenges facing us currency movements, including here, North Korea regulations, government threatening our security, looming trade disputes with US President Donald oil Trump, price fluctuations, China’s military control of the sea lanes to Japan, weak consumer said, “Skate to where the puck is going to be, not where Garyit is now.” Vaynerchuk of Vaynermedia is famous for heading is attention” understanding “digital our where before we understand it ourselves. All these cases have a them. element—to conjecture style, high-level service before the customerhas realized they needs customer’s the service, anticipating that actually need based on the host’s conjecture about what they might be. we needed it when we were all happy with our Nokia or Blackberry, but now we can’t go back. Wayne Gretzky, the legendary ice hockey star, made the same point when he It is often associated with another Japanese word— omotenashi is rightly famous. T FULLY LICENSED SERVICED AND FURNISHED APARTMENTS, UNIQUE FUSION RESTAURANT, BOUTIQUE HOTEL IN THE HEART OF TOKYO

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Parent company information: シマダハウス株式会社宅地建物取引業/東京都知事(14)第12069号 http://shimadahouse.co.jp/corporate/overview/ CONTENTS VOL. 54, ISSUE 6

39 FROM THE BOARD ACCJ in a New Chapter of US–Japan Relations Christopher J. LaFleur

41 EVENTS ACCJ in pictures

42 ACCJ EVENT What are International Investors Looking for in ESG? Maxine Cheyney

43 ACCJ EVENT

2 Travel and the Airline Industry in Uncertain Times Maxine Cheyney

45 ACCJ EVENT Japanese Tax Reform An update on ACCJ activities Adam Becker and the Taxation Committee

47 KANSAI How to Attract Talent ACCJ–Kansai and universities build global mindset Makoto “Mark” Kawai

49 ACCJ LEADER Open-Source Risk 3 Legal, security, and operational dangers in your software Jonathan Hobbs 1 ACCJ–Kansai members Thomas Mayrhofer and Haibo Wang mingle during the 2017 Spring Meishi Exchange at The Garden Place Shoshuen in Kobe on April 13.

2 Yuka Nakamura, manager of the consumer experience team at Eli Lilly Japan, facilitates her group of participants at What is Truly Necessary to be Active Globally?—an ACCJ–Kansai External Affairs Committee event held on May 11 at Kansai Gaidai University, Nakamiya Campus.

3 The ACCJ DC Doorknock delegation, led by ACCJ President Christopher J. LaFleur (center), at the US Capitol Building on April 24.

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THE JOURNAL n JUNE 2017 37

ACCJ in a New Chapter FROM THE BOARD of US–Japan Relations By Christopher J. LaFleur ACCJ President

he fact that the American Chamber At the same time, they underlined described the importance of the of Commerce in Japan (ACCJ) the point that the business climate for US–Japan economic partnership to Thas reached its highest number US companies in Japan has improved their businesses in Japan, and urged of members in Chamber history is markedly and that, today, Japan offers a positive, forward-looking agenda a reflection of the positive climate US businesses and workers one of for the new dialogue. We asked for global business in Japan. It is their most valuable overseas markets. policymakers to include the private thanks to the leaders in business and In a subsequent meeting with sector in discussions, and offered the government whose efforts to transition Vice President Pence, I was invited ACCJ as a resource moving forward. the US–Japan relationship from an to lead a discussion among Japanese I returned to Tokyo from these atmosphere of trade friction to one of and ACCJ business leaders who engagements with two conclusions. shared prosperity that we are at a peak reviewed both current successes and The first is that, while many of the for US–Japan relations—as well as for opportunities for further growth in the specifics of the new administration’s the ACCJ. For many ACCJ members, US–Japan economic relationship. The trade policy remain to be decided, Japan has become a critical market Vice President, very familiar from his our interlocutors over these several built upon deeply valued partnerships time as Governor of Indiana with the weeks have been very interested in the with customers, communities, and contributions Japanese investment has “front lines” perspective of the ACCJ. other businesses. made to US growth and employment, The second is that senior leaders with On April 18, Japanese Deputy Prime made clear that he saw the new whom we met all understand the Minister Taro Aso and US Vice President dialogue as an opportunity to further value of the US–Japan relationship Mike Pence opened a new chapter in growth in both countries, and was in terms of jobs, investment, and US–Japan relations by launching the looking forward to the progress to be shared growth. In the months ahead, US–Japan Economic Dialogue in Tokyo. made on shared goals and interests. your ACCJ will be working to sustain As the representative of US companies Shortly after, an ACCJ delegation this dialogue with key US officials to doing business in Japan, the ACCJ went to Washington for the annual help ensure that the new economic applauds prioritization of Japan by ACCJ DC Doorknock. During dialogue can continue to fully the administration of US President the four-day visit, we met with a reflect the interests of US business Donald Trump, and is pleased to see a wide range of senior administration in Japan. n new framework develop for furthering officials and Members commerce between our two countries. of Congress concerned The ACCJ believes it is critical that with US–Japan relations. the private sector be included in these Our delegation, led by important policy discussions. It is, CEOs of some of our therefore, encouraging that the ACCJ leading member firms, has already been able to meet with key members of the Trump administration and the US Congress in the weeks following the launch of the dialogue. In a meeting hosted at the Embassy of the United States in Tokyo, on April 19, I chaired a discussion during which We asked policymakers ACCJ members were able to share to include the private with new US Secretary of Commerce Wilbur Ross the key issues their sector in discussions industries face in Japan—including the need for further progress on matters such as transparency, regulatory harmonization, and structural reform.

THE JOURNAL n JUNE 2017 39

ACCJ 1 ACCJ President Christopher J. LaFleur introduces EVENTS US Vice President Michael Pence to Japanese and US business leaders at Hotel Okura Tokyo on April 19.

2 ACCJ–Kansai Membership Relations Committee Co-chair Thomas Mayrhofer (left) presents a certificate of appreciation to Douglas L. Hymas, Japan country executive for the Bank of New York Mellon, after his presentation "Inclusive Leadership: The Times They Are A-changin’!" hosted by the Kansai Business Programs Committee on April 21 at Eli Lilly Japan K.K.

3 ACCJ members mingle with members from the Brazilian Chamber of Commerce in Japan at the 1 Barbacoa Grill Shibuya during the Nomu-nication: Brazil—the People and the Music, with Câmara de Comércio Brasileira no Japão on March 10.

4 Jesper Koll, CEO of WisdomTree Japan K.K. at Trump's America and Abe's Japan: A Match Made in Heaven, held at Hilton Nagoya on April 18.

5 Robert Heldt (left) and Carolyn M. Gaskins, vice-chairs of the Membership Relations Committee, make a toast during the 2017 ACCJ Spring Meet & Greet at The Park Prince Tower Tokyo on April 20.

2 6 ACCJ Walkathon Committee Chair Jeff Genet (left) and Erik Olson-Kikuchi appointed local girls' idol group “OS✩U” as Walkathon PR ambassadors at Shooters Sports Bar & Grill on May 8.

3 4

UPCOMING EVENTS

Please visit www.accj.or.jp for a complete list of upcoming ACCJ events or check our weekly e-newsletter, The ACCJ Insider. • JUNE 8 Bella Nova Night 5 (Women’s Networking Event—Chubu)

• JUNE 29 Early Summer Networking Party

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6 THE JOURNAL n JUNE 2017 41 ACCJ EVENT

What are International Investors Looking for in ESG?

By Maxine Cheyney

nvironmental, social, and “Without good governance, governance (ESG) issues are you are not going to have a E making their way into corporate company worth investing in,” she discourse, but understanding the explained. Japan’s first corporate importance of, and the various governance code, introduced in frameworks surrounding, ESG March 2015, looks to encourage are still unclear territory. New more transparency and better concepts, reporting standards, and management; but there is room indices are constantly being created. for further efforts when it On April 27, at an event comes to ESG. hosted by the American “Japan actually does very Chamber of Commerce in Japan well if you look broadly at (ACCJ) Alternative Investment sustainable development PHOTO: RIEKO WHITFIELD Subcommittee at Tokyo American goals—with the exception of Heather McLeish (center) with (clockwise) Alternative Club, Heather McLeish, senior Investment Subcommittee Vice-Chair Jenifer Rogers, diversity and supporting women,” manager for Climate Change & and Co-Chairs Frank Packard and Christopher P. Wells McLeish said. Sustainability Services at EY Japan, spoke about the benefits of investing JAPAN ESG in ESG as part of a long-term business reviews, and can “significantly impact Globally and in Japan, McLeish says strategy, and the value of this to key the company’s reputation and therefore there is a shift toward active ownership. stakeholders, including investors. profit and loss,” she explained. Issues of However, “In the past, Japanese labor and how something as broad as companies haven’t been comfortable ADDED VALUE climate change can impact a business with activist investors coming and “It’s actually a massive topic, and there were highlighted. trying to change the companies,” she is a lot of confusion,” McLeish began. McLeish also outlined studies that explained. Although this is changing ESG’s significance in company strategy have shown that Millennials (those and stakeholder dialogues are happening is becoming increasingly valuable, and born between the early 1980s and early more often with investors as well as it is no longer enough just to look at a 2000s) want to work for companies other stakeholders along the value chain, company’s financial disclosures to assess that support and share their values, companies and investors alike need a its value, she added. another reason that companies need to strategy to best deal with the issues that According to McLeish, one be investing in ESG. arise, she stressed. reason companies should care about There are various frameworks and “You need your C-suite and your ESG in their investment portfolio standardizations that companies can board to explicitly say, ‘We believe in is money. “That’s it, plain and simple.” use to help with their ESG disclosures, this. This is what we are going to do: The amount of capital invested in and help create an environment in We’re going to mitigate those risks responsible investing strategies which investors can compare their and we’re going to take advantage of between 2012 and 2016 was nearly performance in these areas to their those opportunities’.” $23 trillion. But there is room for own values and investment strategy. In addition, it’s important for Japanese more, and the United Nations- The sustainable development companies to find out how their return supported Principles for Responsible goals—comprising 17 written goals, on equity is impacted by ESG. To do this, Investment (PRI) has $60 trillion 169 targets, and 23 indicators—are one they need to disclose any ESG issues. committed to this. avenue where McLeish says companies “People are interested in ESG, but Addressing ESG considerations can use a common dialogue. they are not exactly sure how it impacts is crucial to maintaining a good Along with this, the COP21 [them],” she concluded. Using the reputation. Not addressing these issues commitments from the Sustainable available disclosure standards, can leave a company open to attacks Innovation Forum 2016 in Paris have companies can begin to make the shift from NGOs, resulting in bad press or had global support. towards becoming truly sustainable. n

42 THE JOURNAL n JUNE 2017 ACCJ EVENT

Travel and the Airline Industry in Uncertain Times

By Maxine Cheyney

viation as we know it is changing. visitors in 2016 arrived by An unstable political landscape, plane,” Juniac explained, A economic shifts, global security predicting that growth in issues, and natural disasters are greatly air travel to the country will affecting the industry. continue leading up to the The aviation industry On March 19 at Tokyo American Tokyo 2020 Olympic and Club, Alexandre de Juniac, director Paralympic Games. is sensitive to shocks general and CEO of the International and uncertainty Air Transport Association (IATA) TRACKING TRENDS and former CEO of Air France-KLM, The aviation industry spoke on these topics at an event is sensitive to shocks jointly hosted by the Tourism Industry and uncertainty in the form of and Transportation & Logistics political and environmental changes, Committees of the American Chamber however Juniac believes it has PHOTO: GEORGE OHYAMA of Commerce in Japan. remained robust. “The industry has Juniac is the seventh person to lead done very well in restructuring itself IATA, and has nearly three decades of in recent years, and it has significantly experience in private and government improved aviation resilience.” sectors, including 14 years at French He referred to steadily rising that are meeting the needs of passengers aerospace and defense company profitability—particularly from 2011 to and offer the industry a natural Thales Group. 2014—when airlines were profitable even partnership with Japan—which he said as the price of crude oil was spiking. is “a clear world leader in the application OPEN BORDERS “In 2015, for the first time in of self-service technology for travel.” As a first point, Juniac expressed history, airlines earned a profit in Juniac sees progress and suggested concern over political developments excess of the industry’s average cost of more collaborative thinking for airport that could lead to a future of more capital,” he said. infrastructure between Japanese airports restricted borders and protectionism. Juniac explained there have been and the IATA is on the horizon. Kansai “This denies the benefits of globalization, major investments in the industry, International Airport recently adopted which is the product of aviation.” notably by airlines from North America, the IATA’s Smart Security principles, Global trade is heavily reliant on which account for more than half the and these will soon make their way maintaining open borders, and the industry’s total profit. These airlines to Haneda and Narita international air transport industry even more so. are earning an average of $20 per airports as well. In addition, Sendai “Aviation is the business of freedom. passenger, double the global average. and Kansai international airports [It] is critical to any modern economy.” By comparison, in Asia–Pacific the have agreed to a reduction in charges, Freedom of movement and global margin is $5.5 per passenger. key to reducing costs for airlines standards are critical to global Due to political and security and passengers, and to maintaining business, Juniac said, outlining IATA’s uncertainties, Juniac is cautious about competitiveness within the industry. role in setting and facilitating the 2017. “This year we will see a slight There is still work to be done, as implementation of these standards. softening of profitability with slow trade, Japan will have to meet the needs of a Japan’s domestic network, which higher oil prices compared with 2016, potential 40 million visitors in 2020. includes two of the world’s busiest and weak economic prospects in [some] Juniac concluded by emphasizing that routes—Tokyo–Sapporo and Tokyo– parts of the world.” preparations must be done as part of a Fukuoka—ranks sixth in the world But he is also optimistic, predicting long-term, joint planning process. n and stands to benefit greatly from that the travel experience will continue open borders. “One of the biggest to get better. He noted that online tourism stories in the world is Japan. check-in, e-tickets, Internet shopping, Maxine Cheyney is a staff writer The majority of this country’s 24 million and mobile apps are key innovations at The Journal.

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Japanese Tax Reform An update on ACCJ activities

By Adam Becker and the Taxation Committee

ith the close of another tax bringing talented personnel to their return filing season, the Japanese operations. The committee, nevertheless, W Taxation Committee would Notably, the new legislation adds like to update readers of The Journal on anti-tax avoidance provisions for views the new laws as a its recent activities. Highlights include Japanese nationals and long-term substantial improvement the committee’s work on Japanese foreign residents, subjecting their inheritance tax reform, its US and assets to Japan inheritance and gift Japanese individual tax seminars, and tax for a period after their permanent its continued coordination with local departure from Japan.2 The committee, seminars as a great opportunity to government and industry partners to nevertheless, views the new laws as a bring their efforts directly to ACCJ review Japanese tax matters affecting substantial improvement and hopes constituents, and hopes to continue the constituents of the American Chamber this will ease concern that the old rules seminars next year. of Commerce in Japan (ACCJ). created undue Japanese tax risk for most non-Japanese citizens living in Japan. NEXT FISCAL YEAR'S AGENDA INHERITANCE AND GIFT The reform follows years of the The Taxation Committee has two TAX REFORM committee coordinating with other additional issues that it hopes to The Taxation Committee has been organizations in Japan and advocating review over the next year, in addition working with partners in the Japanese to the Japanese government, and to continuing its efforts on the government to review inheritance the publication of an official ACCJ matters above. and gift tax implications for foreign Viewpoint, which the Japanese Ministry First, to make Japan more attractive nationals in Japan, and the latest of Economy, Trade and Industry as a business hub, the committee Japanese tax reform, effective ultimately quoted in one of its own will review the effect of a Japanese April 1, 2017, reflects a more practical reports. The committee will continue corporate tax rule restricting the ability approach. Specifically, the new to review the inheritance tax rules for of Japanese companies—including legislation amends the old rules to further updates and improvements. subsidiaries of US companies—to exempt foreigners temporarily in Japan deduct non-periodic payments, such as and their transfers of non-Japanese INDIVIDUAL TAX SEMINARS performance bonuses to directors. assets from inheritance and gift tax.1 In advance of tax return filing Second, to help improve corporate The previous inheritance tax rules deadlines, the Taxation Committee, governance and reduce compliance have long caused concern for many along with local tax advisors, risks for companies, the Taxation non-Japanese citizens in Japan because conducted US and Japanese individual Committee will continue its discussions they subject foreign nationals who tax seminars over lunch at Tokyo on the potential for reform of Japanese generally have been resident in Japan American Club. The seminars were corporate tax filing deadlines. In Japan, for at least one year to Japanese taxation aimed at helping foreigners and the tax “busy season” can place great on their worldwide assets in the event ACCJ constituents sort through US pressure on local companies, including of death. This prospect of having their and Japanese tax filing requirements, subsidiaries of US companies, due to entire estate—including assets outside including any new reforms or Japan’s relatively short tax filing period Japan—subject to Japanese inheritance procedural changes. and the harmonized fiscal years of most tax has had a deterrent effect on many Members of the Taxation Committee Japanese entities. foreigners considering whether to were pleased to note from post- The committee welcomes any other move to Japan or extend their residency seminar feedback that the individual suggestions from ACCJ constituents for in Japan, which in turn has created tax seminars were well received by new areas of focus or public outreach difficulties for foreign companies in attendees. The committee sees the during the upcoming year. n

1. NON-JAPANESE ASSETS TRANSFERRED BETWEEN FOREIGNERS LIVING IN JAPAN FOR NOT MORE THAN 10 OF THE PAST 15 YEARS ON A TABLE 1 VISA (SUCH AS A WORK-RELATED VISA) AT THE TIME OF INHERITANCE/GIFT FROM INHERITANCE TAX AND/OR WITH FOREIGNERS RESIDING OUTSIDE OF JAPAN FOR MORE THAN FIVE OF THE PAST 15 YEARS. TRANSFERS WITH FOREIGNERS IN JAPAN FOR MORE THAN 10 OF THE PAST 15 YEARS AND WITH JAPANESE NATIONALS AND TRANSFERS INVOLVING JAPANESE ASSETS WILL NOT QUALIFY FOR THE EXEMPTION. THE NEW RULES CAN BE COMPLICATED. PLEASE CONSULT WITH A JAPAN TAX PROFESSIONAL FOR ADVICE ON YOUR SPECIFIC SITUATION. 2. IN GENERAL, FOR UP TO FIVE YEARS AFTER PERMANENT DEPARTURE FOR FOREIGNERS AND FOR 10 YEARS FOR JAPANESE NATIONALS.

THE JOURNAL n JUNE 2017 45 3F Computec Ichigaya Building E-mail: [email protected] 2-20 Ichigaya-Honmuracho, Tel: +81-(0)3-5225-7017 Shinjuku-ku, Tokyo, Japan 162-0845 Fax: +81-(0)3-5225-7015

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Special Advertising Section COMING NEXT MONTH THE AUTHORITY ON GLOBAL BUSINESS IN JAPAN Education JOURNAL.ACCJ.OR.JP

The July issue ofThe Journal will feature a special advertising section on Education, providing companies in the following sectors an excellent opportunity to showcase their services and solutions:

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As space is limited, reserve your spot by contacting Anthony Head. Tel: 03-4540-7730 or Email: [email protected] KANSAI

How to Attract Talent ACCJ–Kansai and universities build global mindset

By Makoto “Mark” Kawai

inance, soft infrastructure, Japanese and foreign students were a positive reputation among local customers, and talent. These divided into teams and given the task governments. More than 80 students F are the four important things of answering questions regarding the from eight universities attended this needed for doing business, said essential skills, habits, and thinking session, and 92.4 percent of them Michael Alfant, then president of the related to working globally. In the latter commented that it was a great event. American Chamber of Commerce half of the session, teams presented On developing a positive image of in Japan (ACCJ), at an event with the their ideas and were given the chance working for non-Japanese companies, Union of Kansai Governments on to ask questions and learn from experts 59.1 percent said they are strongly October 19, 2012. Finding the right who work in global businesses. interested in doing so, 39.5 percent talent remains a key challenge for Vincent Garcia of Doshisha said they are interested, and 97 percent ACCJ member companies. University, who attended all three said they got a clear idea of the action Under the leadership of the External events, said: “As an American studying to take after the event. Affairs Committee, the ACCJ’s at a Japanese university, I was deeply Companies are globalizing and young Kansai chapter has been organizing impressed by the passion of my Japanese talent must be competitive with events at universities in the region Japanese peers for learning, and their global peers. While English is a to help students understand what’s their open-minded attitudes toward critical skill, mindset is more important. needed to become globally capable. international concepts. This gave The Kansai chapter of the ACCJ is During the past year, we organized me more confidence in the future of trying to help students and universities events at Kwansei Gakuin University, Japan. I believe that, by the end of the realize this by offering programs to Konan University, and Kansai Gaidai event, each of us left with more clarity cultivate the next generation of globally University. More than 50 students regarding how we can act globally in capable talent. attended the session at each location. our everyday lives.” In addition to advocating for changes Separately, by working together needed to make the region a destination PARTICIPANT PERSPECTIVE with the Consortium of Universities in for talent, these examples of student- The effects of globalization have created Hyogo Prefecture, we also organized a targeted events at multiple universities demand for a new generation of young session focusing on first- and second- in the Kansai region are an investment workers with a global mind-set. The year students to help them get ideas the ACCJ–Kansai is making in our local ACCJ–Kansai’s event series What Is on what it’s like and what is needed human talent. This will be of benefit to Truly Necessary to Be Active Globally? to work for non-Japanese companies. our member companies, our community helps students to not only realize the The event was sponsored by the Hyogo and, ultimately, the ACCJ itself. n value of having a global mind set, but Prefectural Government and supported also provides real-life examples of how by the City of Kobe. By applying what to achieve and apply this mind set in we learned from the events organized Makoto “Mark” Kawai is special the workplace—whether working at at universities, we were able to deliver advisor and a member of the ACCJ– home or abroad. a successful event and further build Kansai External Affairs Committee

The ACCJ is . . . offering programs to cultivate the next generation of globally capable talent.

THE JOURNAL n JUNE 2017 47 A world of opportunities

“The Club is like a second home where I can meet or entertain clients, which makes doing business in Tokyo much easier.” Matthew Romaine

Club members Paul Kuo and Matthew Romaine

Start discovering your Club life by arranging a tour. 03-4588-0687 | [email protected] | tokyoamericanclub.org ACCJ LEADER A world of opportunities Open-Source Risk Legal, security, and operational dangers in your software “The Club is like a second home where I can meet or entertain clients, which makes doing business in Tokyo much easier.” Matthew Romaine pen-source software is every- SECURITY where and in everything. Today, Serious security vulnerabilities in open O 90 percent of smartphones source-software appear in the news almost are based on Android, 75 percent every day. According to Matthew Jacobs, of cloud platforms run Linux, and vice president of general counsel at 70 percent of websites are built on security firm Black Duck Software, Inc., WordPress, Joomla, or Drupal. What serious security vulnerabilities in open- By Jonathan Hobbs, founder and has contributed to the extraordinary source components turned up in more director of Hobbs & Associates growth of open-source software? than 65 percent of the code bases that First, in most cases, it’s free (though Black Duck audited last year. Malware licensing obligations do apply). community. This could mean that such as Ghost and vulnerabilities such Open-source software is developed incorporating a piece of open-source as Heartbleed and Shellshock are just and curated by online communities software into your code base would the tip of the iceberg. of professionals, and in most cases the require you to make your entire source Risks related to the unmonitored use code is stable. Communities such as code available for public reuse, making of open-source software to business GitHub have nearly 40 million open- any vulnerabilities in your code open operations are often revealed during source projects available for download. to exploitation by nefarious hackers. a merger and acquisition (M&A). The use of open-source is growing at There are also intellectual property As software has become a larger part a non-linear rate. In 2007, there were issues to consider. Tens of thousands of the valuation during an M&A, 200,000 open-source projects. In 2017, of software-related patents have been the acquirer wants to know exactly that number is expected to exceed granted in the United States dating what operational risks are involved. 2.5 million. back more than 50 years. A patent As a result, audits for open-source Sounds ideal, but there are risks; and guarantees the patentee a monopoly components have become a requirement these fall into three main categories: on, and protection of, their invention during an M&A in the United States. legal, security, and operational. for a limited time. The entire business model of many Legal open-source software is free— Given the long history of software organizations is software-related. in the sense that, in most cases, there patents in the United States, it is Software-as-a-service business models are no licensing fees—but all open- almost certain that many open- rely entirely on software for operations. source software is subject to various source projects are infringing on The risks of unmonitored open-source licensing compliance obligations. some patents. A company’s right to vulnerabilities directly impact the Open-source software is also subject protect software-related innovations bottom line of these businesses, and to infringement of intellectual are blocked by the license obligations could mean the difference between property (IP) rights and, in most in most open-source software success and failure. cases, affords no IP rights. agreements. Many companies There is no doubt that the use of There are many different types of learn that their innovative software open-source software will continue to Club members Paul Kuo and Matthew Romaine open-source software licenses, the product cannot be patented after the rise. This increase requires a vigilant most common of which is the general fact. Having invested hundreds of and proactive approach to code-base public license, version 2 (GPLv2). thousands of dollars in developing management. A clear understanding of Under GPLv2, any modifications unique software, these companies are the legal, security, and organizational to open-source code must be now at risk of competitors copying risks with regard to your business is the made available to the development their products. first step in this process.n

Risks related to the unmonitored use of open-source software . . . are often revealed during a merger and acquisition.

Start discovering your Club life by arranging a tour. 03-4588-0687 | [email protected] | tokyoamericanclub.org

THE JOURNAL n JUNE 2017 49 The ACCJ thanks its PRESIDENT Christopher J. LaFleur Corporate Sustaining McLarty Associates Member companies CHAIRMAN Jay Ponazecki Their extensive participation provides a cornerstone in the chamber’s efforts to promote a better business climate in Japan. TREASURER Nancy Ngou 3M Japan Limited IBM Japan, Ltd. EY Advisory & Consulting Co., Ltd. Abbott Laboratories/ QuintilesIMS Abbott Japan Co., Ltd. VICE PRESIDENTS Intel K.K. Andrew J. Conrad Aflac International, Inc. Adobe Systems Co., Ltd. Johnson & Johnson Amy Jackson Aflac Family of Companies Pharmaceutical Research and Manufacturers of America (PhRMA) AIG Companies in Japan KPMG Peter M. Jennings Dow Chemical Japan Ltd. Marie Kissel Abbott Amazon Japan G.K. Kreab Jonathan Kushner McDonald’s Company (Japan), Ltd. Amway Japan G.K. Lenovo Japan Ray Proper (Chubu) H&R Group K.K. Asia Strategy: Business Intelligence, Lockheed Martin Dr. Stephen A.Zurcher (Kansai) Kansai Gaidai University Public Policy, Advocacy MasterCard Japan K.K. ACCJ GOVERNORS Bayer Yakuhin, Ltd. McDonald's Company (Japan), Ltd. Eriko Asai GE Japan Becton Dickinson Japan McKinsey & Company, Inc. Japan Alison Sayre Birch J.P. Morgan Securities Japan Co., Ltd. Bloomberg L.P. Tim Brett Coca-Cola (Japan) Co., Ltd. Merrill Lynch Japan Securities Co., Ltd. Boeing Japan K.K. Brett C. Gerry Boeing Japan K.K. MetLife Rebecca K. Green ERM Japan Ltd. Broadsoft Japan Microsoft Japan Co., Ltd. A. Barry Hirschfeld, Jr. AIP Healthcare Japan GK Caesars Entertainment Tad Johnson Pratt & Whitney Aftermarket Japan KK Mizuho Financial Group Catalyst Patrik Jonsson (Kansai) Eli Lilly Japan K.K. Mondelez Japan Ltd. Junichi Maruyama Citigroup Global Markets Japan Inc. Caterpillar Monex Group, Inc. Arthur M. Mitchell White & Case LLP CenturyLink Japan Ltd. Sachin N. Shah MetLife Insurance K.K. Morgan Lewis Ryann Thomas PwC Tax Japan Chevron International Gas Inc. Japan Branch Morgan Stanley Japan Megumi Tsukamoto Caterpillar Japan Ltd. Holdings Co., Ltd. Michel Weenick (Chubu) Hilton Worldwide Cisco Systems G.K. Morrison & Foerster, Ito & Mitomi Citigroup PRESIDENTS EMERITI MSD K.K. Coca-Cola (Japan) Co., Ltd. Debbie Howard (2004–2005) Nanzan Gakuen Charles D. Lake II (2006–2007) Colliers International (Nanzan School Corporation) Allan D. Smith (2008) Cummins Japan Ltd. Northrop Grumman Japan Thomas W. Whitson (2009–2010) Daiwa Securities Group Inc. NYU School of Michael J. Alfant (2011–2012) Professional Studies Tokyo Jay Ponazecki (2014–2015) Deloitte Touche Tohmatsu LLC Oak Lawn Marketing, Inc. Delta Air Lines, Inc. CHAIRMAN EMERITUS Procter & Gamble Japan K.K. Designit Tokyo K.K. Kumi Sato Prudential Financial, Inc. Cosmo PR Deutsche Bank Group PwC Japan Dow Chemical Japan Ltd. SPECIAL ADVISOR QUALCOMM JAPAN Inc. Eli Lilly Japan K.K. Eric Sedlak Randstad K.K. K&L Gates LLP en world Japan Robert Walters Japan K.K. EY Japan ACCJ EXECUTIVE STAFF Squire Patton Boggs Federal Express Japan G.K. Laura Younger Executive Director State Street Freshfields Bruckhaus Deringer Tokyo Teijin Limited Information as of May 22, 2017 GE Japan Inc. Teva Pharmaceutical Industries Ltd. Gilead Sciences K.K. Thermo Fisher Scientific Goldman Sachs Japan Co., Ltd. Thomson Reuters The American Chamber of Commerce in Japan Markets K.K. Masonic 39 MT Bldg. 10F, 2-4-5 Azabudai Google G.K. Uber Japan Co., Ltd. Minato-ku, Tokyo, Japan 106-0041 GR Japan K.K. United Airlines, Inc. Tel: 03-3433-5381 n Fax: 03-3433-8454 H&R Consultants K.K. Visa Worldwide (Japan) Co., Ltd. www.accj.or.jp Heidrick & Struggles Japan Godo Kaisha The Walt Disney Company (Japan) Ltd. The ACCJ is an independent membership organization not affiliated with any government Hilton Worldwide White & Case LLP or other chamber of commerce. The ACCJ is a member of the Asia-Pacific Council of American Chambers and values its relationships with Japanese, American and other The Howard Hughes Corporation Zimmer Biomet G.K. nations’ business organizations.

50 THE JOURNAL n JUNE 2017 Step up See ahead Stand out

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JOURNAL.ACCJ.OR.JP ジャーナル二〇一七年六月一日発行定価八〇〇円（本体七四一円） ISSN 0002-7847 THE AMERICAN CHAMBER OF COMMERCE IN JAPAN IN COMMERCE OF CHAMBER AMERICAN THE

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