Want to Expand in Asia? Talk to JETRO First

The Japan External Trade Organization (JETRO) grabbed attention at the CleanTech Alliance Fourth Annual Meeting, talking about cleantech market opportunities in post-Fukushima Japan. Several months later, companies are still connecting with JETRO for free business services to help them make the most of the Asian market.

In addition to their work at Infra Innovations, Kenji and Marcy Ushimaru serve as JETRO’s primary contacts within Washington State. We asked the team a few questions to better understand why cleantech companies should be looking to Japan, and what JETRO can offer to make Asian expansion a reality. Here’s what they had to say.

What exactly is the Japan External Trade Organization – or JETRO – and what services does it provide?

The Japan External Trade Organization is a nonprofit, government-funded organization that works to promote mutual trade and investment between Japan and the world. Originally established in 1958 to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted to promoting foreign direct investment (FDI) into Japan and helping small to medium sized foreign enterprises gain a foothold in Japan. JETRO currently has a network of 121 offices located in more than 55 countries worldwide.

There are six JETRO offices in the U.S.; each offers complimentary information and support to American businesses seeking to successfully enter and expand into the Japanese market.

JETRO's services include comprehensive business support, timely market intelligence information, regulation and legal policy updates and relevant business events. JETRO can assist with regulatory streamlining, investment support, subsidies, business matching and startup funding for U.S. companies. Each service is designed to encourage and promote thriving relationships between American companies and Japan. JETRO also identifies incentive programs available from regional government agencies to help alleviate the initial cost of setting up business in Japan.

We often hear about market opportunities in China and India. Why is Japan a better option for cleantech companies looking to set up a hub and expand in Asia?

Japan is highly motivated to attract foreign investment. The country has one of the lowest FDI as a percent of GDP in the world. They want to equalize inbound and outbound investment. As a result, the Japanese central government, as well as a number of prefectures, are offering subsidies and financial incentives to foreign companies looking to expand their business into the Japanese market.

Japan has a high standard of living, and since cleantech is generally more expensive, an affluent target market would be essential and attractive. Japan also has a strong consumer economy, and since the country has few natural energy sources, consumers are acutely aware of the need to conserve energy. Because of this, Japanese consumers and businesses readily understand the value of clean and highly efficient energy technology, and they are willing to pay for it. It’s also important to note Japan’s highly developed infrastructure – energy, telecommunications, water and transportation.

Japan also has greater protection of intellectual property. For American cleantech companies who must rely on their innovation, it is less risky to do business in Japan than in other countries.

Japan is known for a very concentrated population and built environment vs. the more spread out population of the U.S. Does that create any unique cleantech market factors or opportunities?

Japan’s population and built environment density creates a distinct advantage for U.S. companies seeking to expand into Japan. In the U.S., energy prices are lower than in Japan. However, since population centers are spread out, there are fewer buildings for each mile of the utility network. Because of this, it takes more money to serve the same number of buildings, requiring more capital for the utilities. Therefore, if a technology can succeed in the U.S., it has an even better chance in Japan.

How are Japan’s shifting energy goals opening immediate opportunities for clean energy companies in Washington State?

Beginning in 2016, Japanese retail electricity will be completely deregulated, so any company can get into the Japanese electrical market. This creates huge opportunities for U.S. companies.

Washington State is the closest of the lower 48 states to Japan, and has historically had strong trade and technology partnerships. Many Japanese investors are looking for tech partners from Washington, and JETRO can facilitate business matching.

Beyond clean energy, what cleantech markets and technologies are getting the most traction in Japan? Do you see a lot happening in sustainable design and construction, waste management and water conservation?

 

Because of high utility rates and lack of natural energy resources, Japan has focused on clean and efficient energy use in their hardware. However, more integrated energy efficiency improvement through sustainable design, construction and energy management has not been well-developed. Therefore, US companies with those strengths will have great opportunities in Japan.

Expanding into Asia can be daunting for cleantech companies going it alone. Are there established Japanese companies looking for strategic partnership opportunities?

 

Yes, there are, and JETRO can help with business matching. In addition, we can help funding sources for U.S. companies at various stages of technology development – from startups to commercialization and sales.

 

Are there any success stories to show Washington State companies what to expect from a JETRO collaboration?

While we can’t divulge specific company names, there are numerous examples. Some benefits arranged in the past include:

  • 30% rent subsidy for a medical device company
  • 30% salary matching from a local government agency for a Washington manufacturing company

We are also currently helping a large, local supermarket chain from Washington State find a new headquarters building and a flagship store location, looking for a building with energy efficiency and sustainable design.

“Talk to JETRO First” is on most of your materials. How can cleantech companies engage JETRO? What’s the first step?

We are the JETRO Correspondence Office in the Pacific Northwest. “Talk to JETRO First” means Talk to Infra Innovations first! The best way to reach us is via email at m.ushimaru@infra-innovations.com.

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