Joe Massey PhD
- More than 40 years of Asian experience in senior positions advising business and government, leading or advising on government and business negotiations, and in research and graduate business education, all focused on Japan, China and Vietnam.
- Served two Presidents in White House posts at the Office of Policy Development and the Office of the U.S. Trade Representative, 1982 to 1992. Assistant U.S. Trade Representative and chief U.S. trade negotiator with Japan and China from 1985 to 1992 with primary responsibility for the development and implementation of U. S. trade policy and negotiating strategy toward Japan and the People's Republic of China. Led all negotiations with China, securing landmark agreements on intellectual property protection and market access, and led or played a major role in some thirty negotiations with Japan across all major industrial and commercial sectors.
- Professor and Founding Director of the Center for International Business at Dartmouth's Tuck School of Business.
- Led the U.S. team in a joint Vietamese-American initiative that launched Vietnam's first modern business school, the Hanoi School of Business at the Vietnam National University in Hanoi. Supervised the training of 350 senior executives of companies that today account for more than 35 percent of Vietnam's GDP.
- Have advised numerous Fortune Global 500 clients on Asian market entry, business development, government relations and regulatory strategies.
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Doing Business with the Japanese
Key Trends
- Japan's population is aging, the workforce is shrinking and workers retire at an early age – creating increasing opportunities for women.
Japan has a rapidly aging population and shrinking workforce, which is a crucial problem for the country:
- Within 50 years, Japan's population is forecast to drop from 127 million to about 84 million people.
- About a third of the country’s population will be lost and the workforce will drop to 42 million people from about 80 million today.
- What's more, many workers retire at an earlier age, starting at about 55 or 60. The challenge for business will be finding skilled workers to replace them.
There are increasing opportunities for women to enter the workforce. The female participation rate in the workforce is among the lowest in developed countries. To help balance out the workforce for the future and increase the number of women in it, the Japanese government has introduced measures such as increasing the number of daycare spaces in the country to enable mothers to work outside the home. It is also taking measures to increase the number of women in executive roles.- The aging population has resulted in a strong emphasis in government policy and commercial R&D on life sciences.
Japan has long had national laboratories, the so-called Riken labs, doing fundamental and applied research across all of the major areas of science and technology. Those many labs employ thousands of scientists and technicians working in electronics, robotics, clean tech and a whole host of other areas of commercial significance.
One key focus of this R&D is the life sciences. Japan is investing heavily in this area because it has the oldest population of any major country:- The average age is 46, average life span is 84.
- More than a quarter of the population is over 65, and 11 percent is 75 or older.
Japan’s network of national labs has been set up both to do basic research and to aid companies in bringing new technologies to market. One important avenue has been the establishment of life sciences clusters with pharmaceutical and medical device companies located alongside and benefitting from collaboration with state of the art national labs.
Kobe’s Port Island Life Science Cluster is a prime example. It includes the fastest supercomputer in the world devoted exclusively to civilian research; that computer, owned and operated by the government lab, is focused exclusively on developing new drugs. The building next door houses another supercomputer used by the private sector life science companies located in the cluster. This cluster, like others in both life sciences and other technologies around the country, welcome the presence of innovative foreign firms and joint ventures.- Developing safe and efficient energy technologies is an increasingly urgent national priority.
- A key national challenge for Japan is finding ways to meet its energy needs, particularly after the 2011 Fukushima disaster, which resulted in the shutdown of the country’s other nuclear power plants. Japan relies on oil imports to meet more than 40 per cent of its energy needs and coal for nearly a quarter.
With the future of nuclear power in dispute and reliance on hydrocarbons both expensive and unpopular, Japan has also been active in developing and adopting new technologies such as fuel cells and other forms of alternative energy. One of the government's key and urgent priorities is to find and deploy technologies to increase the efficiency and lessen the risk to the environment in the ways Japan uses and generates power. - Regional cities are becoming more competitive in providing incentives for companies to establish operations in locations other than Tokyo.
- When people think about doing business in Japan they automatically think Tokyo. It makes sense given that 37 million out the population of 127 million people live in Tokyo. It's bigger than a lot of countries.
Still, other large cities such as Kōbe, Fukuoka and Sendai with populations in the millions are also significant markets. There are a number of these cities dotted around Japan which have great infrastructure, world-class universities, national labs, and major domestic and foreign company facilities already in place. And costs for labor and facilities are less than in Tokyo.
The national government offers incentives such as tax rebates to companies considering setting up in Japan; the prefectures of these smaller centers add their own incentives for foreign investors to set up a presence in their areas. This makes for competitive packages to induce foreign investment that can be very attractive and can make an important difference in initial costs of setting up in Japan. - It has become increasingly important for Japanese firms to consider Asian manufacturing bases other than China.
China’s remarkable growth has made it the world's second-largest economy and understandably the focus of attention of businesses around the world. That said, not every business is suited to having its Asian or its global hub in China. Japan offers an attractive option as a choice for an Asian base for companies looking for a market with less political risk, fewer risks to intellectual property, a legal system and rule of law rooted in Western norms, and a stable democratic government.
Nevertheless, the huge Chinese market and the low cost of labor there have induced virtually all large Japanese firms, like most of their Western and Korean counterparts, to set up shop and do business there. But China is not the only market and manufacturing base in Asia where Japanese firms have a major presence.
- Japan’s technology companies are looking outward for innovation to meet the challenge of increasingly aggressive competitors in Korea and China.
Whereas Japanese firms used to dominate world markets, especially in electronics and automobiles, today they face increasingly tough competition from other Asian companies. Korean companies such as Hyundai and Samsung, which have already taken away market share in the U.S., China and other overseas markets, have begun to do so in Japan as well. There is widespread recognition that the Chinese will not be far behind.
The Japanese government has put in place both an impressive network of well-funded national labs and multiple programs of financial incentives at both national and prefectural levels to spur the technological innovation needed to meet the challenge. But to date, there has yet to emerge a vigorous, innovative culture of small- and medium-size companies creating and bringing to commercial markets transformative new products that can answer the Asian challenge and sustain Japan’s competitive advantage.
So Japanese businesses, and the Japanese government, are looking outward for innovation, looking especially to the U.S. for the technologies being developed in Silicon Valley, Boston, Seattle and the other centers where small companies are producing big breakthroughs in new goods and services. The company, from the U.S. or elsewhere, that has an innovative new technology that can better meet an existing market demand, create a new market, or provides an advantage to a corporate partner or customer competing against Asian rivals has great potential in a Japan hungry for innovation.