On Thursday, I listened to representatives from the Japan External Trade Organization (JETRO) - more precisely from JETRO Stockholm . It was interesting to hear an insider point of view, as what I had been reading was very pessimistic and harsh on Japan's ability to fully open up the way it should today, in terms of foreign direct investments (FDI), or should I rather say, inward investments, as reaching outward is perhaps what Japan has been most successful with in the past 50 years.
And indeed, present reality can seem quite grim in some aspects: as of 2003, the outward/inward FDI ratio was 3.74:1 in Japan. And most of it comes from larger corporations, like the success story of L'Oréal. The most impressive move still remains Renault's rescue mission to put back Nissan on shape. As noted by BBC News this week, "[as] a result, it is now Japan's most profitable car company, posting a $7.29bn profit in year end of March 2004", in a striking difference to the Mitsubishi - DaimlerChrysler fiasco.
Nevertheless, while heavy industry and manufacturing are still thriving as one of Japan's symbol of technological and industrial prowess, it also stigmatizes the one critical issue that has been preventing the country from a quicker return from the bubble-burst of the 90's: the poorly rewarded and supported smaller businesses and service sectors. Seeing Japan at the bottom of the entrepreneurial ranking in the 2003 study of the Global Entrepreneurship Monitor is not a surprise at all in this context (I could also add that seeing France as the lame duck in the ranking is not surprising either).
However Japan does not remain idle in front of such situation: Prime Minister Koizumi launched the Invest Japan program in 2001, with the ambitious goal of doubling the 2001 figure of inward investment (6,632 billion Yen) by 2006. To accomplish that, a special focus has been put on complementing Japan's natural business assets (technological powerhouse, large consumer base) with new regional cluster policies, for instance in Sendai, Fukuoka and Kobe, following the Triple Helix concept of combining higher education, research-oriented industries and public agencies to reach for a better dynamics.
In parallel, Japan has begun to understand its skills in soft innovations: anime, video games, mobile services and digital culture are very big in Japan, and the country excels at exporting them. It goes far beyond the anecdotic niche, and Japan is setting itself as the "land of the cool". As Joi Ito notes, "the export of trendy culture like anime is strong and that Japanese biggest asset is it's 'cool'".
Another interesting fact mentioned by JETRO is that Japan sees "business" investments closely related with "tourist" ones: in parallel to the Invest Japan program, the government has launched a Visit Japan campaign, with the goal of doubling annual inbound tourists from 5 million in 2003 to 10 million in 2010.
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