Economic outlook of Japan today – and what are the prospects for the country?

During the past 30 years, Japan has been recovering from the challenges such as burst of bubble economy, deflation, global financial crisis, etc.

• Japanese Nominal GDP has expanded to the highest amount in the past, 550 trillion yen, which is the 3rd highest in the world.

• Employment is recovered. Ratio of job openings to job applicants recorded the highest for the first time in 45 years. (Recorded 1.6 times as the ratio)

The globalization of the Japanese economy has developed fast during the past 30 years.

• the trade amount is 2.5 times bigger than year 1989.

• FDIs is 6 times bigger than year 1989.

• In-bound tourism is 10 times bigger than year 1989.

For the future, it is necessary to respond to the development of globalization and technology reforms.

As the economy grows, life is getting more prosperous and more convenient. The demand for energy and foodstuffs is increasing, the life expectancy is becoming longer, and the aging society is advancing.

In addition, the globalization of the economy is progressing, international competition is becoming increasingly severe, and problems such as the concentration of wealth and regional inequality are growing.

Social problems that must be solved in opposition (as a tradeoff) to such economic development have become increasingly complex. Here, a variety of measures have become necessary such as the reduction of greenhouse gas (GHG) emissions, increased production and reduced loss of foodstuffs, mitigation of costs associated with the aging society, support of sustainable industrialization, redistribution of wealth, and correction of regional inequality, but achieving both economic development and solutions to social problems at the same time has proven to be difficult in the present social system.

Society 5.0 was proposed as a future society that Japan should aspire to. It follows the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0). Society 5.0 is defined as “A human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space.”

IoT, Robott, AI, Big Data, these are the technologies which can influence the society by its development. Japan, as one of the most developed countries of facing challenges, aims to achieve the development of the new society by including the cutting edge of the technologies.

Which kinds of business opportunities are there for Finnish companies in Japan?

Japan’s GDP is the third-largest economy in the world, accounted about 550 trillion yen, and Japan has a large domestic market. The economic situation is stable and its market is sophisticated.

Japan is a country, which has common values with Finland, and can be a hub for the rapidly developing Asian market. Furthermore, the number of foreign tourists has been increasing. It has recorded that over 30 million foreign tourists visited in 2018, and there is a huge potential to do business in Japan by targeting those foreign visitors.

Also, one of the strengths of Japan is its high technology and R&D capability, as in Finland. By cooperating each other, it is possible to create new business opportunities in the future as well as the businesses in the current market.

Some of the main factors to accelerate Finnish companies´ business in Japan are ; entering into force of EU-JAPAN EPA (Economic Partnership Agreement) in February last year, the signing of Social Security Agreement in September last year, and the presence of more than 40 direct flights between Japan and Finland.

Please, also explain us which kinds of investment opportunities there are for Finnish companies in Japan?

The keys to meeting the aim for the “Society 5.0” are Innovation, ICT and AI. We believe that these are the areas of Finnish expertise and can be the triggers for investment.

In addition, cooperation in the Health-Tech field has caught attention in Japan. Especially it is seen as part of the solutions for the aging society that has brought major challenges for both countries recently.

Moreover, there are opportunities in the field of MaaS, smart city , Robotics, block chain, agricultural- IoT solutions, and customer services.

If a Finnish company decides to invest in Japan, what are the most important issues this enterprise must take into its consideration to succeed in the market?

Both Japanese and Finns are known as punctual, patient, and diligent. Only small differences exist in the business scenes. It is unlikely to see any catastrophic problems occurring when a Finnish company invests in Japan.

On the other hand, according to the results of a questionnaire conducted by JETRO targeted to foreign –affiliated companies in Japan, the main obstacles to business development in Japan were “difficulty in securing human resources” and “difficulty in communication in foreign languages”. Regarding the particular difficulty in securing human resources, about 60 % of the companies answered that it derives from “insufficient human resources with foreign language skills”. Doing business in Japan required Japanese language as the essential fact, and how to secure Japanese personnel who are fluent in English or Finnish is an important issue.

Needless to say, it is important to learn about the Japanese business culture in advance, and it will be your advantage of attending some of the events such as business seminars we organize every year in Finland with the initiative of JETRO.

Which kind of assistance and which kinds of benefits there are in Japan for Finnish companies which would like to invest in Japan?

JETRO collectively receives consultations on foreign investment in Japan, and provides various supports such as visa acquisition, licensing, legal and regulatory consultations and provision of office space.

Additionally, the government has supporting measures in the special zones to conduct cutting edge R&D and to mitigate taxation.

As about the local governments, they provide incentives for foreign and foreign-affiliated companies. In some regions, they have introduced start-up visa system and provided support such as rent, establishment costs, and travel costs.

JETRO has a website that centralizes information on investment in Japan. This site contains basic information on Japan, supports information and related news.
More information www.jetro.go.jp/en/invest/ and www.jetro.go.jp/en/invest/setting_up/

We know Japan as a great holiday destination for Finns. Please, tell us more about the tourist attractions and holiday resorts in your country.

Japan has a great number of natural features since its territory is covered widely from north to south and each area belongs to a different climatic zone (subarctic, temperate zone, tropical). 4 seasonal weathers and the sceneries are often affected by the direction of winds. Japan has rich nature and unique features by region to region. It has developed unique varieties of food, history, arts and culture due to the islandic environment. Japan is full of touristic contents to meet each individual´s interests.

From Finland, there are direct flights destined for 5 cities in Japan in the summer, and 4 cities in the winter. This means that it is easy to access various regions in Japan, and not only to Tokyo. We wish for you to find your favorite place in Japan.

My recommendation is to visit Ise area in Mie. This area is located about an hour and a half by train from Nagoya, where you can visit by direct flight from Helsinki. Ise is best known for Ise Jingu, the holiest of all jinja (Shinto shrines) in all of Japan’s thousands of shrines. It has 2,000 years of history, and Imperial Court always visit the Ise Jingu before their visits to abroad since the origin of the Imperial family (one of many Gods in Japan) is among the worship feature. Prime Minister always worships the Ise Jingu in the beginning of the year. Beside the Ise jingu, Kumano-kodo, ancient pilgrimages to the shrines, is one of the unique World Heritages. There are 17 courses existing among the Kumano Kodo such as a course with stone pavement and cypress, a course with scenery of Kumano sea, a course with scenery of Tanada (Japanese terraced rice-field). For the Finns, those who like nature and silence, the Ise area is a terrific choice. Also, please note that this area is famous for the Ise-ebi (lobster), Anori-fugu (blowfish), Matsuzaka-ushi (Beef). These abovementioned Japanese foods in this area must be tasted.

Please visit JNTO-website for more information.

The Olympic Games will take place in Japan next summer – please, tell us something about the Games and places.

The first Tokyo Olympic game held in 1964 showed the Japanese economic recovery from the war and presented to the international community. Now Japan, as the leading member of the international society, the Tokyo 2020 is the time to share important messages from Japan. These are “sustainability”, “inclusive society”, and “reconstruction”.

1. The Tokyo 2020 games prepared medals made from recycled materials , and use already existing stadiums. (Sustainability)

2. Increased number of rooms available for Wheelchairs-users, and Multi-language service is adapted in transportation. (Inclusive Society)

3. Showing the recovery from the Great East Japan Earthquake in 2011, and the appreciation for the received support. (Reconstruction).

We hope that the Tokyo 2020 will be a great opportunity for the people from all over the world including Finnish athletes, visitors and Japanese people to exchange in various aspects.

 Schedule / sports

Olympic games

（１）24th July (Opening Ceremony）～9th August

（２）33 sports

（３）Venue will be in Tokyo mostly, but some of the sports such as Marathon (Sapporo), Wrestling (Chiba) will be held outside of Tokyo.

 Paralympic games

（１）25th August (Opening Ceremony)～6th of September

（２）22 sports

（３）Venue will be in Tokyo mostly, but some of the sports such as Taekwondo (Chiba), Shooting Para sport (Saitama) will be held outside of Tokyo.

Questions were answered by the Ambassador and the Economic section of the Embassy of Japan in Finland

Picture: Unsplash.com