JETRO conducted a survey on foreign-affiliated companies based in Japan and released its report in March.

Key Findings

1. Business expansion in Japan in the future

• About half of respondents report sales increase compared to the previous year, indicating a clear recovery trend.
• 56.1% intend to "strengthen or expand" their business in Japan in the future, up 3.5 points from the previous survey.
• Intentions to establish new bases/strengthen existing bases also increased from the previous survey, indicating an upward drive.

2. Attractiveness and challenges of the business environment in Japan

• The most attractive feature of Japan selected was its “market scale,” while “clustering/presence of customer and related industries” was the highest for the manufacturing industry.
• Companies whose parent companies have only recently been established and companies that have recently entered the Japanese market tend to consider medium-to-long-term growth potential in their own business fields as attractive. 
• Simplification/digitalization of administrative procedures and communication in foreign languages saw improvement in recent years.
• Expectations are particularly high for improvement of environment regarding "securing human resources”.

3. Securing human resources and facilitating the employment and residence of international personnel

• While hiring Japanese mid-career workers is the mainstream, the intention to hire international students is observed especially among Asian companies.
• “IT/technical personnel” and “sales/marketing personnel” were cited difficult to secure. Lack of foreign language skills such as English is a bottleneck.
• Simplification/digitization of administrative procedures and relaxation of status of residence were most cited in order to facilitate smooth employment and residence of excellent foreign human resources.

4. Collaboration/Cooperation and its Enhancement

• 33.0% are implementing or considering collaboration/cooperation with Japanese partners, in which especially pharmaceuticals, cosmetics, and information and communication industries are showing significantly proactive engagement.
• Many companies seek technology and R&D capabilities of collaboration/cooperation partners, and have high expectations for those capacities from Japanese companies and universities.
• Challenges vary depending on the status of collaboration/cooperation, and support is needed according to the stage.

The full report is available online.
Source: Japan External Trade Organization
 

Published: June 2023