Alliance Maker

ACCJ Person of the Year Rahm Emanuel reflects on three years as the US ambassador to Japan

After being tapped by US President Joe Biden to serve as the nation’s ambassador to Japan, Rahm Emanuel arrived in Tokyo in January 2022 at a pivotal moment for the world. The Covid-19 pandemic was raging, Japan’s border closures were wreaking havoc on the business community, and the ripple effects were exposing vulnerabilities across the region.

Strengthening the bilateral relationship was essential. During his time as chief of mission, Emanuel has tirelessly worked to build bonds that foster a prosperous future not only for the United States and Japan, but for the entire Indo–Pacific.

In recognition of his strong support, the American Chamber of Commerce in Japan named Emanuel its 2024 Person of the Year and honored him with a special event on October 23 at Tokyo American Club.

As he prepares to hand over the reins to a new envoy, the 31st US ambassador to Japan talks to The ACCJ Journal about the experience, the importance of the alliance, and the future.

How can the business community strengthen the US–Japan alliance?

The US–Japan alliance is far from limited to our far-reaching security cooperation and the alliance’s place at the heart of a new latticework of security partnerships across the Indo–Pacific. That, of course, is fundamental to our relationship and to our collective deterrence in the region, but the United States and Japan have made strides on every front over the past three years.

As the largest foreign direct investor in each other’s economies, our two nations are persistently pursuing opportunities to forge closer links in business and research. In the fast-evolving environment of emerging technologies, our tech firms and academic institutions have the opportunity to lead the way in the research and development of artificial intelligence (AI), quantum computing, semiconductors, and other cutting-edge scientific fields.

But just as important as technological advances are our measures to protect them. This means tightening our export controls to ensure that technologies such as advanced AI chips don’t end up in the hands of adversaries with malign intentions. Ultimately, this is about securing our intellectual property, our economies, and the jobs of tomorrow.

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“As the largest foreign direct investor in each other’s economies, our two nations are persistently pursuing opportunities to forge closer links in business and research.”

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Of course, we need to ensure we have the relevant education programs in place to train the workers who will be shaping these 21st-century technologies. The United States and Japan have made real progress in this area through partnerships between tech companies and universities. We now need to keep up the momentum by continuing to expand and enhance these talent pipelines.

Investment is the fuel of great business ideas and ambitious thinking. Since the United States has a flourishing venture capital ecosystem, there are boundless opportunities for cooperation in this area between US and Japanese companies. Japan has long been a source of innovation and invention. It’s just a matter of finding the funding to ensure those ideas can take flight.

One area with huge potential is Japan’s biotechnology sector. An increasing number of start-ups are drawing interest from investors here. With greater collaboration and support from US biotech enterprises, and investors with expertise in the sector, Japan can become a leading biotech hub, not just in Asia but globally.

How do talent hurdles and gaps in DEI and marriage equality impact the alliance’s economic strength?

Japan faces the dual challenges of a rapidly aging society and a declining birthrate, which means that the country doesn’t have a person or a talent to lose when it comes to winning the 21st century.

Every country, including the United States and Japan, has a long way to go in fully implementing the principles of diversity, equity, inclusion, and accessibility. But if we are to build well-functioning societies and thriving economies, we need to leverage all our assets. It’s about properly and fairly employing the people we have and embracing an ethos of lifelong learning, upskilling, and retraining.

How can we best collaborate on AI?

Looking at the speed at which AI is being developed and adopted, there is no time to lose in ensuring the United States, Japan, and our allies remain at the forefront of this technology. It is imperative that we set the pace in its continuing evolution and in establishing a fully functioning, well-regulated ecosystem that is aligned with our laws and interests. The sector is already seeing a lot of research and development cooperation and cross-border investment between the United States and Japan. Having talked to many major players in the field, I am confident that this trend will only grow.

During former Prime Minister [Fumio] Kishida’s state visit to Washington in April, we saw the launch of an initiative between US and Japanese universities and private sector partners in both countries to boost AI-focused research and workforce development.

The partnerships between Carnegie Mellon and Keio Universities, and between the Universities of Washington and Tsukuba, are supported by $110 million in investment from Microsoft and other US concerns as well as a consortium of nine Japanese companies.

Similar partnerships between Japanese and US universities and leading tech companies were launched in the fields of semiconductors and quantum computing last year. Both programs are about making groundbreaking advances that will have global benefits while educating the workforce of tomorrow.

Empowering our best and brightest in these critical fields will pay dividends both for our two nations and the world.

How can cooperation on climate change and clean energy be strengthened?

Two of the greatest challenges facing us all are climate change and energy security. Just as in so many other sectors, the United States and Japan are well placed to combine their respective scientific expertise in the development of new and cleaner energy technologies.

Earlier this year, Japan became the first international collaborator in America’s Floating Offshore Wind Shot initiative, which aims to reduce costs associated with the energy source. Having committed ¥120 billion to the development of wind technology and launching the Floating Offshore Wind Technology Research Association (FLOWRA) this year, Japan clearly recognizes the enormous potential of offshore wind.

Our two countries are also partnering on advanced small nuclear reactor technology, for which demand is only set to increase as we build more data centers to power generative AI. Meanwhile, Japan’s largely untapped geothermal energy resources hold tremendous opportunities for further collaboration between Japanese and US energy corporations.

These areas of private sector cooperation and investment not only reinforce our energy security but also offer us opportunities for growth in other markets, as we join forces to help developing countries devise their own clean energy solutions and infrastructures.

How important has the US–Japan Year of Tourism been following the border closures?

While the news in Japan is dominated by the record-breaking numbers of inbound tourists, the number of Japanese tourists visiting the United States continues to rise following the pandemic. Destinations such as Hawaii and New York City remain extremely popular, and, thanks to a certain Japanese baseball player by the name of Shohei Ohtani, Los Angeles—and Dodger Stadium, in particular—welcomed thousands of fans over the course of the MLB season this year. With Shohei recently named the National League’s MVP, we can expect to see even more Japanese travelers heading to California and elsewhere in the States when the 2025 season kicks off.

There are few places in the world with the sheer diversity of natural wonders and cultural and culinary experiences. Next year’s Expo 2025 in Osaka will be a chance to truly showcase all that the United States has to offer. Our interactive pavilion is designed to inspire visitors to learn more about the United States, explore the country in person, and even consider studying there. We expect the expo to help boost visitor numbers to the United States in 2025 and in the years ahead.

The recent agreement to establish Japan as our 18th Global Entry partner country couldn’t come at a better time, and is sure to enhance the travel experience of Japanese visitors to the United States. Since Japan is our largest foreign direct investor, and Japanese companies employ nearly a million Americans, it makes good business sense to make entry as straightforward and as stress-free as possible for pre-approved visitors. This latest agreement is another reflection of the strength of our bilateral ties.

How important was the Biden–Kishida summit?

[Former] Prime Minister Kishida’s state visit in April ushered in a new era for the alliance. It cemented the work we had been doing for the previous two years to deepen our cooperation in a multitude of areas. Security might be a key pillar of our partnership, but we are leveraging our strengths to drive innovation and growth on every front, from energy and education to science and space exploration. The United States and Japan, as President Biden reiterated during the state visit, are global partners whose endeavors and achievements are being felt across the Indo–Pacific and beyond.

The alliance is now at the heart of a new latticework of multilateral partnerships across the Indo–Pacific. By replacing our “hub-and-spoke” architecture of regional bilateral relationships with multilateral cooperation and consensus, we have built an energized environment of trust and dynamism in the region.

The historic trilateral partnerships we forged with Japan and South Korea and with Japan and the Philippines—as well as the work of the Quad strategic grouping of the United States, Japan, India, and Australia—boost our deterrence in the Indo–Pacific while providing renewed momentum for greater cooperation and integration between countries and economies. One thing is for certain: There is much more to come in the years ahead.

“What we do over the next three years will determine our presence and our vision over the next 30 in the region.” That line from my confirmation hearing in 2021 turned out to be my guiding principle during my time here.

How might Japan’s new political landscape impact bilateral cooperation?

Our efforts over the past three years to strengthen the US–Japan alliance, and to reassure allies and partners that the United States is a permanent Pacific power and presence, have received universal support from across the political spectrum on both sides of the Pacific.

There is a clear understanding in Japan and in the United States that the alliance forms the bedrock of our collective deterrence in the region, and that continued cooperation with other regional partners and allies is critical to confronting a China that seems intent on dominating its neighbors and forcing the region to play by its rules.

How has Japan changed your view of America?

Distance has given me perspective on both America’s strengths and challenges. My first few weeks in Tokyo were certainly eye-opening. Seeing people leave valuables on tables or benches while they went to get coffee or jog around the Imperial Palace revealed a level of social trust I had never witnessed before.

Equally bewildering—but beautiful—was the sight of young schoolchildren walking alone to and from school each day, with cars coming to a complete stop when children raised their hands in the air before crossing the road. Those scenes highlight to me how much kids in the United States have been robbed of their innocence. We make so many compromises and concessions for our safety in America. It’s been liberating to be free of that constant and nagging concern.

What I have been repeatedly reminded of while here is the dynamism of America’s entrepreneurial ecosystem. Our unique and unrivaled environment of venture capital firms and angel investors is what drives innovation and invention.

Our university research programs and private-sector tie-ups are unmatched, too. It’s no surprise that so many entrepreneurs, start-ups, and scientists gravitate to the United States—a place that embraces risk, encourages expression, and champions big thinking.

What is your message to the next ambassador?

The past three years have been about shoring up alliances, building multilateral partnerships, and strengthening our security commitments. With a firm framework now in place, the years and decades ahead will be about developing those strategic relationships and initiatives further while ensuring that the stability of the Indo–Pacific is protected and its economic vibrancy preserved.

Your Own Private AI

As artificial intelligence evolves, custom systems unlock business resources

Konosuke Matsushita was one of Japan’s greatest entrepreneurs. As the founder of a light socket company that evolved into Panasonic, he inspired legions of salarymen with his business wisdom. Twenty-five years after his death, the “god of management” was effectively resurrected as an artificial intelligence (AI) model. A chatbot trained on his writings and speeches can produce eerily lifelike Matsushita answers, according to one relative, and will eventually be used to make business decisions. It’s a dramatic example of how businesses are using AI to leverage intellectual property built up over decades.

The past few years have seen an explosion of AI applications based on large language models (LLMs) and tools such as OpenAI’s ChatGPT and Google’s Gemini. They have been used for everyday tasks such as writing text for slide decks, lessons, and articles, as well as synthesizing search results as in Google’s AI Overview that now appears with most searches.

LLMs are based on computational systems using neural network transformers that perform mathematical functions. Measured by the number of parameters they contain, LLMs learn by analyzing vast amounts of text from books, websites, and other sources. During training, the model identifies patterns, relationships among words, and sentence structures. This process involves adjusting millions of parameters—values that help the model predict what comes next in a sequence of words.

A major problem with LLMs and generative AI, however, is that they usually draw entirely from online content and thus are prone to inaccuracies. AI hallucinations, as they are called, occur when LLMs observe patterns in the data that are nonexistent, or at least imperceptible to humans.

One solution is private AI. It brings the power of LLMs inside a company, where queries are secure and limited to the company’s own data, reducing the risk of security leaks and incorrect or misleading responses. Private AI has traditionally been limited to government, defense, finance, and healthcare users, but it’s spreading to a broader spectrum of industries due to fears about intellectual property theft.

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“[Private AI] brings the power of LLMs inside a company, where queries are secure and limited to the company’s own data, reducing the risk of security leaks and incorrect or misleading responses.”

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Kenja KK, a member of the American Chamber of Commerce in Japan (ACCJ), is opening up the market in Japan to private AI. The Tokyo-based company offers AI solutions for enterprises that include purpose-built expert systems, incorporating a relatively new AI technology called retrieval-augmented generation (RAG).

Bearing a name coined as recently as 2020, RAG relies on a predetermined collection of content to improve the accuracy and reliability of generative AI content. Kenja offers a self-service plan for small and medium-sized businesses and a more comprehensive enterprise plan for businesses.

“Private AI is the next frontier,” said Kenja founder and Chief Executive Officer Ted Katagi, who is also chair of the ACCJ’s Marketing and Public Relations Committee. “All companies face the same issues: you have very sensitive data that you don’t want to make accessible to everybody at the same time. Private not just in terms of someone outside the company, but within the company, too. You may not want HR data to be shared with people in finance, for example. That’s an issue you want to solve, and we solve that.”

Kenja users create so-called rooms where they can upload thousands of documents or other content, organizing this into topic-specific folders. The process can be automated, and Kenja can train and fine-tune the system. For instance, it can be taught to forget certain words or trained to understand a balance sheet in order to do financial tasks such as due diligence.

“You are kind of building a wall around a set of information and telling it to only use what’s in this area,” explained Katagi. “Having 85–90 percent accuracy—which is what current generative AI, such as ChatGPT, Gemini, or Claude, will give you—is not good enough. Private AI models that are fine-tuned and query a closed set of materials can close that gap.”

Private AI is being used in surprising applications. Just as Panasonic has cloned its founder in digital form, Dr. Greg Story is using Kenja to share the teachings of another business luminary, Dale Carnegie. The self-improvement guru from Missouri wrote a book in 1936, How to Win Friends and Influence People, that still counts among the world’s all-time bestsellers. As president of Dale Carnegie Tokyo Japan, Story has been teaching Japanese businesspeople about leadership, communications, and other skills in Dale Carnegie seminars for the past 14 years. Dale Carnegie started in Japan in 1963. 

Since learning about the impact of content marketing, he has built up an enormous corpus consisting of white papers, e-books, printed books, course manuals, 270 two-hour teaching modules, as well as video and audio recordings that include hundreds of podcast episodes. He has penned a series of books himself in English and Japanese that includes Japan Sales Mastery, Japan Business Mastery, Japan Presentations Mastery, and Japan Leadership Mastery.

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“If you like the cut of our jib and you want a Dale Carnegie point of view and a curated, trustworthy response, we provide that through this AI.”

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The material was scattered in different places, and when clients began asking for on-demand training, Story decided to get ahead of the curve by including all his company’s content in AI-curated form, something public chatbots cannot do.

“ChatGPT will give you everything it can scrape together, but it’s everything and therefore nothing,” said Story. “You get generic answers, and you don’t know if they’re trustworthy. But if you like the cut of our jib and you want a Dale Carnegie point of view and a curated, trustworthy response, we provide that through this AI.”

Story thinks the technology can benefit businesses that have substantial bodies of work to draw on, but those that don’t will get thin answers. He adds that using tools such as those from Kenja will not only help his company learn about the benefits of AI, but it will also give it an edge over competitors. He plans to roll out his AI offerings in 2025, delivering customized responses to students’ questions in English or Japanese on topics ranging from sales to diversity, equity, and inclusion.

Could there be a Dale Carnegie version of the Matsushita chatbot one day?

Kenja has begun working with Dale Carnegie’s global team to do just that, and has developed a prototype revival of Dale Carnegie’s voice, avatar, and writing style. The writing style and word generation are done with Kenja RAG AI technology.

“Carnegie became a global superstar in a non-digital world,” noted Story. “There’s no question we can get an AI to read a script generated in his style, in his voice. It’s amazing.”

Twenty Years of Links and Leads

The Mercedes-Benz–Francis Ford Coppola Winery Cup strengthens business connections.

It started in 2001, on a sunny day in Honolulu. Robert Grondine and Erik Ullner had just completed a round on the Hawaii Kai Golf Course when Grondine, then president of the American Chamber of Commerce in Japan (ACCJ), had an idea. Could a tournament modeled after the Ryder Cup bring Tokyo’s foreign business community together? Ullner, then vice-chair of the European Business Council (EBC), loved the concept and brought it to EBC Chairman Richard Collasse.

“Our chairman was not a golfer, but he liked the idea because that sort of networking opportunity didn’t exist in those days,” recalled Ullner. “He said, ‘Erik, you’re the golfer, why don’t you arrange it together with the ACCJ?’”

The North America–Europe Golf Challenge was born.

The first outing was on September 26, 2003, at Atsugi Kokusai Country Club. Opened in 1959, the course in Kanagawa Prefecture continues to host the event to this day.

The 20th edition of the international battle will take place in Atsugi on October 4.

Organized by the ACCJ, the EBC, and, since 2013, the Canadian Chamber of Commerce in Japan (CCCJ), the shotgun-style tournament pits Team North America against the European national chambers of commerce and business associations in Japan that make up the EBC. Up to 72 golfers can play for each side. In some years, that has been stretched to 80.

Originally called the DaimlerChrysler Cup, the tournament was renamed the Daimler and Chrysler Cup in 2008, and then the Mercedes-Benz Japan Cup in 2010, as the title sponsor’s corporate structure evolved. In 2015, global lifestyle brand Cole Haan joined as cosponsor and the event became the Mercedes-Benz–Cole Haan Cup. Its sponsorship continued until the pandemic. In 2022, Thomson-Reuters co-sponsored.

This year, a new North American title sponsor comes aboard. California’s Francis Ford Coppola Winery will bring their Alexander Valley varietals to the course and after party.

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“The 20th edition of the international battle will take place in Atsugi on October 4.”

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The event is always competitive, with team scores based on the average of the top 80 percent of players. The winner is rarely ahead by more than 1.5 strokes. The smallest margin has been 0.06 strokes, demonstrating the very even matching of players.

This has led to a back-and-forth affair over the years. The European team won the first cup in 2003 before the North American team pulled off a three-peat in 2004, 2005, and 2006. The Europeans fought back, winning two of the next three (2007 and 2009) before the North Americans went on another roll, prevailing in 2010, 2011, 2012, 2013, and 2015. Not to be outdone, Europe has nabbed five of the past six titles: 2016, 2017, 2018, 2022, and 2023. The tournament was not played in 2020 and 2021 due to the coronavirus pandemic.

While this rivalry is fun, the real value, participants consistently say, is the networking and chance to build new relationships.

“I have played in the tournament 15 or so times over the years, including its first 11 years in a row,” said longtime participant Ryan Dwyer, a partner at the Tokyo office of K&L Gates. “The course is always in top shape, and I always enjoy the round and the networking party afterwards.”

Beyond networking, the tournament also supports the community. A fundraising component was added in 2006, and proceeds helped the YMCA Challenged Children Project—a program assists children with disabilities and special needs, offering them opportunities for inclusion, development, and participation in physical, social, and recreational activities—through 2022. This year, support will go to Unleash Potential, a non-profit organization dedicated to helping children with disabilities and challenges in Japan.

Prizes are also a popular part of the gathering, and the awards and raffle are a centerpiece of the post-competition party at the clubhouse. While top players have a chance to win performance prizes like high-end golf gear, all players have a shot at incredible prizes, such as wine and air tickets for international flights. With millions of yen worth of prizes being provided by this year’s sponsors, it is expected that no player will leave empty-handed.

More than 20 years after the seeds were planted in Hawaii, the North America–Europe Golf Challenge has blossomed into one of the most popular dates on the calendar for golfers of all levels in the business community. And as more Japanese players join, the opportunities for networking continue to grow. Grondine, who passed away in 2011, would no doubt be proud of what the ACCJ, CCCJ, and EBC task forces have nurtured.

If you’re a golfer, join the fun, enjoy the great on-course food and drinks, and find your next business connection. This is one event you shouldn’t miss!

Youthful Energy

The ACCJ Young Professionals Forum opens doors for ages 35 and under.

Fresh ideas and youthful energy are the lifeblood of business and international relations, and the American Chamber of Commerce in Japan (ACCJ) is dedicated to nurturing rising talent through the Young Professionals Forum (YPF). An interactive platform for young, working professionals aged 35 and under, the YPF provides members with opportunities to actively engage in all aspects of the chamber’s activities, including networking, information sharing, and advocacy.

“The YPF is all about creating connections that bridge generations, industries, and more,” explained Melynie Yoneda, a vice-chair of the forum. “Members have the opportunity to interact with high-ranking leaders within the ACCJ, as well as network with peers that they might not necessarily be able to meet in their day-to-day jobs. And ACCJ corporate members are able to get fresh perspectives from YPF members.”

Co-Chair Kelly Langley said that the YPF “has worked closely with the Board of Governors to enhance engagement with young professionals and continue innovating to build the future pipeline of leaders and members.” He added that professional development and human resource challenges continue to be areas where the YPF aims to contribute.

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“The YPF is all about creating connections that bridge generations, industries, and more.”

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Events such as the Learning from Executives series, held in collaboration with the ACCJ CEO Forum, expand mentorship and training, helping members develop both professionally and personally.

Yoneda said she is grateful for the forum and the opportunities it opens up. “As a young professional in Japan, it is easy to get swept away in your day-to-day tasks or fall prey to tunnel vision,” she noted. Her favorite memory so far was a cross-chamber networking event last October that brought together members of eight foreign chambers of commerce. “There was a palpable energy in the room that radiated from the 80 young professionals eager to meet and network with their peers.” A similar event is planned for September 17.

“If anything, the YPF is a chance to interact with peers from all industries and walks of life,” Yoneda concluded. “Today, we may just be networking and eating pizza, but it is exciting to think that the connections we make will become the future leaders shaping the US–Japan relationship.”

Sightseer Surge

Japan has seen a steady rise in visitors. Now set to break a record, can the tourism industry keep pace?

After more than two years of isolation and a slow reopening, Japan has steadily reclaimed its status as a top destination. The impressive bounce back began in 2023, when 25.06 million visitors lifted inbound tourism to 79 percent of the pre-pandemic record. The country is now on course to shatter its record of 31.88 million travelers, set in 2019.

In fact, the rebound has been so great that the pendulum has swung from tourism drought to flood. But with the economic benefits come strains on the hospitality industry. It is no longer a question of if Japan will recover, but rather how it will rise to the challenge of serving up its famous omotenashi to so many visitors.

Moving Past the Pandemic

In 2023, The ACCJ Journal reported on Japan’s reopening. Since the easing of border restrictions, the influx of tourists has had a positive impact on the hospitality industry.

Part of what continues to make Japan an attractive destination is its evergreen allure as a place of rich culture and history. “Japan has significantly boosted global awareness of its many attractions through marketing efforts such as the Cool Japan campaign and the strategic use of social media,” said Karl Hudson, area vice president of Japan and Guam for Marriott International, Inc.

More recently though, one of the most-mentioned drivers has been currency trading. Hudson continued: “The weak yen is having a significant impact on tourism operations in Japan, influencing both inbound and domestic tourism. On the positive side, it has made Japan a more affordable destination for foreign tourists, leading to a surge in inbound tourism.” 

These travelers spent nearly ¥5.3 trillion in 2023. Despite the total number of visitors not reaching 2019 numbers, spending exceeded that year’s ¥4.81 trillion. Midyear projections put the 2024 outlay at ¥8 trillion, and the Japanese government is eying ¥15 trillion by 2030.

According to The Asahi Shimbun, a significant portion of 2023’s ¥5 trillion-plus was spent on accommodations. At ¥1.83 trillion, this category accounted for 34.6 percent of the total spending. Other noteworthy expenditures were ¥1.4 trillion on shopping, ¥1.2 trillion on food and drinks, and ¥602.4 billion on transportation.

The New Challenge: Overtourism

With spending now surpassing pre-pandemic levels, the challenge lies in how to handle the ever-growing number of Japan explorers. In June, the country welcomed the most ever in a single month: 17.8 million.

“The downside [to the tourism influx] includes higher costs for imported goods, which can affect various aspects of tourism operations, from food and beverage supplies to hotel amenities,” explained Hudson. “To navigate these challenges, businesses are adopting dynamic pricing strategies, adjusting rates based on demand, seasonality, and booking trends to optimize revenue and manage costs effectively.”

Not only can these challenges cause issues for operations, but they can also impact the overall travel experience.

“You may often see long lines of foreign travelers waiting in front of train ticket counters and ticket vending machines,” noted Yasuhiro Sudo, senior vice president and Japan country manager at American Express International, Inc. 

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“With spending now surpassing pre-pandemic levels, the challenge lies in how to handle the ever-growing number of Japan explorers.”

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These long lines, he said, are caused by travelers trying to purchase tickets, using unfamiliar machines that lack multilingual support, or interacting with agents. “This causes many foreign travelers to become tired before boarding the train, resulting in a less-than-satisfying travel experience.”

In the most-visited areas, there is a lot of strain on infrastructure, which is felt by residents and visitors alike.

A notable case study is Kyoto, which has received a significant portion of the tourism pie since borders reopened. Residents are growing uncomfortable with the number of daily visitors. As reported by NHK, of about 2,500 Kyoto residents surveyed between October and November 2023, some 86 percent said that they were annoyed by crowding in and around tourist spots. According to the survey, the impact was felt particularly on public transportation, which has become overcrowded. Tourists’ littering and overall behavior are further irritants.

Sudo said the issue is more pronounced along Japan’s Golden Route, which runs from Tokyo to Kyoto and includes stops at popular destinations such as the hot springs of Hakone, in Kanagawa Prefecture.

According to data from the Japan Tourism Agency’s 2023 Accommodation Travel Statistics Survey, Tokyo, Osaka, and Kyoto accounted for about 70 percent of inbound lodging destinations, and there is an increasingly large bias toward staying in these cities.

Digital Transformation

In the face of these challenges, experts in the field are looking to various solutions, including in the area of digital transformation (DX).

American Express, Sudo said, is promoting the adoption of contactless payments with credit cards on public transportation so that foreign travelers can use their usual credit cards.

“This is not only for transportation,” he added, “As contactless credit card payment progresses at sightseeing spots, stores in town, shrines, temples, and other places, it can contribute to reducing congestion. Cashless, contactless payment is one of the first issues to be addressed in the tourism DX space.” 

Marriott’s Hudson agrees, and shared some of their own efforts. “Our app and web merchandising have become key localization channels, enabling us to deliver targeted and relevant offers, destination content, and dining recommendations tailored to the location, tier level, and digital behaviors of each of the 210 million Marriott Bonvoy members. By adopting a federated regional approach to managing merchandising content, we achieved faster market responsiveness amid the shifting conditions following the Covid-19 pandemic.”

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“In the face of these challenges, experts in the field are looking to various solutions, including in the area of digital transformation.”

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Hudson also noted the efficacy of Marriott’s other DX efforts, such as their Destination Storefronts,
Dining Portal, and multilingual websites.

The digital space has been a key element in improving visitor experience, with other major players also bringing in new services, such as Universal Studios Japan’s smartphone app.

With the upcoming Expo 2025 Osaka, Kansai expected to attract 28.2 million visitors—3.5 million from overseas—an important consideration is how to ensure smooth travel and minimize disruptions. “We remain hopeful that tools like the Travel Contents App, among others, will facilitate seamless access for visitors from across the globe to enjoy Osaka,” a Universal Studios Japan representative told The ACCJ Journal.

Fees and Education

Another option industry experts are eying is the introduction of taxes and other visitor fees. One such proposal was discussed at the Osaka Prefectural Assembly in March, with Governor Hirofumi Yoshimura emphasizing “the need to secure financial resources for landscape beautification and other things,” as reported by The Mainichi Shimbun.  

Similar taxes and fees already have been introduced, such as July’s introduction of a ¥2,000 fee to climb Mount Fuji and the International Tourist Tax, which came into effect in 2019 and requires residents and visitors alike to pay ¥1,000 when leaving the country. ACCJ Tourism and Hospitality Committee Chair Stephen Zurcher said he is unsure of the efficacy of these measures. “When our committee members met with various Diet members last year, we found that the tourist tax usage was opaque,” he explained. “Even the Diet members did not know how the tax was being spent.”

A shortage of personnel is also making it difficult to serve visitors. “With the rapid return of strong inbound tourism, the industry is seeing higher demand for rooms, but staff levels are lower than before the pandemic,” noted Zurcher, who is also a management professor and dean of the Asian Studies program at Kansai Gaidai University. The sentiment was echoed by Hudson, who said that Marriott is also facing “staffing challenges.”

This is not a small issue. According to business research provider Teikoku Databank Ltd., more than 80 percent of inns and hotels are facing a labor shortage. And with rising visitor numbers, the discrepancy between supply and demand will only grow more prominent.

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“Both imported and local talent need to be developed to support the projected growth of tourism in Japan over the next five to 10 years.”

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Both Marriott and Universal Studios Japan mentioned overseas recruitment and bilingual staff as being a part of the solution, but this comes alongside a push for more domestic workers and a need to educate both.

“Bringing in foreign workers to assist the labor shortage in the hospitality industry is currently being supported to some extent,” said Zurcher. “But, beyond these workers in operational roles, the industry needs management talent, and that takes a longer-term investment in talent development on the part of the government and the industry itself. Both imported and local talent need to be developed to support the projected growth of tourism in Japan over the next five to 10 years.”

The ACCJ published a viewpoint last October entitled “Preparing Japan for the Post-Pandemic Tourism Industry,” in which it recommends that the Japanese government make education in hospitality a priority. The viewpoint notes that, while a lot has gone into the building of accommodations to match tourism growth, not enough has been done to expand training at educational institutions to keep pace.

There is a call for Japan to step up its game to be on par with other international players. “Hospitality education in Japan has historically fallen to junior colleges,” noted Zurcher. “This contrasts sharply with the rest of the world, where hospitality education is conducted primarily at four-year [colleges] and at the graduate level, often at highly regarded schools such as Hong Kong Polytechnic University, the University of Nevada, Las Vegas, and Cornell University, as well as many excellent schools in Europe. Japan currently has no equivalent.” Education and encouraging young talent could be a much-needed part of the solution to both staffing shortages and visitor satisfaction.

Looking Forward

While the tourism surge has brought challenges, it presents an opportunity to improve services and create a better experience for tourists and residents alike. Whether through DX, education, or other approaches, finding solutions is paramount as Japan’s visitor numbers soar.

“Tourism is one of the fastest growing industry segments in Japan,” Zurcher said in closing. “Over time, tourism could become the most important industry for the country as a whole. It is in Japan’s best interest to be able to support this anticipated growth by investing in the labor supply.”

A Night of Stars and Stripes

ACCJ members and partners celebrate Independence Day and 75 years as the voice of global business in Japan.

Photos by Miki Kawaguchi/LIFE.14

Tokyo American Club’s New York Ballroom pulsed with energy—and music—on July 2 as the American Chamber of Commerce in Japan (ACCJ) marked the 248th birthday of the United States and its own 75th.

Dubbed “A Night of Stars and Stripes,” the evening was an expansive celebration of American heritage and the enduring bilateral relations that connect the United States and Japan.

More than a Fourth of July bash, the event marked the diamond anniversary for the ACCJ. Organized by the Board of Governors, the party was the chamber’s largest gathering since the onset of the Covid-19 pandemic and highlighted the vibrant reengagement that has been underway throughout the year.

As more than 400 members, guests, and VIPs made their way into the ballroom, emcee Emily noted that, since its founding in 1948 with the support of General Douglas MacArthur, the ACCJ has been the most active and influential foreign business organization in Japan, fervently pursuing its mission to: 

• further develop commerce between the United States of America and Japan,
• promote the interests of US companies and members,
• and improve the international business environment in Japan.

ACCJ President Victor Osumi surprised the crowd by singing the national anthems of Japan and the United States before delivering opening remarks. “There’s no budget problem,” he jokingly noted, explaining that he chose to perform these important songs himself because of his heritage, which fuels his passion for US–Japan relations.

“Having grown up in the US and Japan, both countries have greatly shaped my identity and values, and have given me a bicultural perspective that made me who I am today. I’m honored to serve as a bridge connecting our two great nations,” Osumi said.

“To our members and our incredible committee leaders, thank you for your involvement with the chamber, which drives everything we’ve accomplished over the past 75 years,” he continued. “And to our valued partners, thank you for working with us to strengthen the US–Japan economic partnership, which is one of the most important alliances in the world.”

Japanese Vice-Minister for International Affairs Takehiko Matsuo spoke next on behalf of the Ministry of Economy, Trade and Industry.

“The Japanese government continuously provides its strong support to all of you,” he said. “I believe, and I do hope, that the ACCJ could play a very important, very key role to further strengthen our two countries’ economic ties.”

US Ambassador to Japan Rahm Emanuel then shared congratulations via video, as he was traveling in the United States at the time and unable to attend.

“Since the birth of the chamber, Japan has emerged as a respected global leader in a multitude of areas—in business, technology, manufacturing, and most importantly, research and development,” he said. “Through the dedicated efforts of the chamber, and all the companies that make up the chamber, our two nations have worked side by side to make groundbreaking strides across the spectrum, from next-generation technologies to clean energy.

What we accomplish together in the years ahead will set a benchmark and will shape the lives of millions for decades to come. I wish all of you a very happy Independence Day and another 75 years of success as we build a future for the United States and Japan.”

Newly arrived Deputy Chief of Mission Katherine E. Monahan followed up these remarks with her own reminiscence of coming to Japan in 1987 on the Japan Exchange and Teaching (JET) Programme, as well as her past work with the ACCJ Financial Services Forum. “It was a really interesting and fun time,” she said. “I have a deep love of Japan, and a part of me has always been here. Japan is a really special place, and the things we do together are amazing.”

Monahan raised a glass to toast the birthdays of both the United States and the ACCJ, and the evening gave way to a rousing performance by legendary American guitarist Marty Friedman. Well known as the lead guitarist of American thrash metal band Megadeth, Friedman moved to Japan in 2004 to pursue his love of the country, language, and a desire to perform with Japanese musicians. He was named an ambassador of Japanese heritage by the Agency for Cultural Affairs in 2016.

“It takes a lot of motivation and kind of an insane story to want to come here to Japan and make a life here,” he said. “But I know all of you will agree with me that it’s probably the most cool thing that we’ve all done in our lives. Japan is like a country of dreams … and my dream came true in so many different ways because of Japan.”

Friedman performed as part of the generous support of iconic guitar maker Fender, which presented two Stratocasters—one manufactured in the United States and one in Japan—to the chamber. ACCJ President Victor Osumi joined Fender Senior Vice President APAC Giorgio Guerrini and Product Management Director APAC Masato Fujikawa onstage to receive the gifts.

Following another spectacular performance by Friedman, members and guests began networking as they were treated to a flavorful Fourth of July-inspired spread curated by Michael Anthony, executive chef of New York’s Gramercy Tavern. Anthony, who was brought to the event by Delta Air Lines in collaboration with Tokyo American Club and the ACCJ, got his start in Tokyo in the early 1990s. Anthony’s goal in crafting the Independence Day menu, he told The ACCJ Journal, was to “serve foods that connect with childhood memories of the holiday.”

To go along with the bites, Brown-Forman bartenders served up more-adult libations made with the company’s Jack Daniel’s Tennessee whiskey and Woodford Reserve bourbon, including the signature Woodford 75 cocktail, named in honor of the ACCJ’s diamond milestone.

The night’s theme of music continued across the way in the Brooklyn Suite, where ELAC, innovators of speakers and audio equipment for 98 years, presented an immersive sound experience featuring more than seven decades of classic American and Japanese vinyl.

The evening was made possible thanks to the generous support of Aflac, Boeing Japan, Delta Air Lines Japan, Google Japan, and GR Japan, who contributed at the highest level as Stars and Stripes sponsors, as well as Red, White, and Blue sponsors FedEx Japan, RGA Reinsurance Company, and Toyota.

Along with ACCJ President’s Circle member companies Cisco Systems, connectFree, and Eli Lilly Japan, and other partners, the community came together to deliver a night to remember as the ACCJ continues the mission it set out on in 1948: to be the voice of global business in Japan.

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Partnership and Progress

ACCJ President Victor Osumi shares thoughts on the chamber’s active year of reengagement and 75th anniversary.

Photos by Shelley Mae Photography

Growing up in a diverse, dual-culture environment, Victor Osumi spent most of his early years in Los Angeles. He would also regularly visit Japan. When he moved to Florida for high school, he set out on a path that would lead him to the US Air Force and, ultimately, to his current role as managing director and president of Japan operations for Delta Air Lines, Inc., as well as president of the American Chamber of Commerce in Japan (ACCJ).

At the start of 2024, The ACCJ Journal sat down with Osumi to learn more about his very active role with the chamber and the path he saw ahead as he took the helm. As the heat of summer set in, we again joined him at Delta’s office near Shiba Park to gauge how the year he has dubbed one of reengagement is evolving, and where he sees the chamber amid its 75th anniversary.

You set out to focus on fostering partnership, embracing progress, and bridging to the future with excellence when you began your presidency. How are those goals progressing?

It has been going very well. For three years, Covid-19 put limitations on in-person interactions, but this year we are fully open and the ACCJ is taking advantage. The changes resulting from the pandemic bring opportunities not only for business but for us to refine ourselves as a chamber to best meet the needs of today.

We’ve had tremendous success in reaching these goals and reinforcing why the ACCJ is known as the voice of global business in Japan. I have to thank everyone on the Board of Governors for their hard work. In our meetings, I have asked each leader how they feel we could improve the chamber.

We identified three areas:

• Quality over quantity
• Committee focus
• Strengthening relationships

We promote 500–600 events each year organized by 60-plus committees. That is a lot. We have working groups assessing how best to leverage and focus the expertise of our membership to benefit the global business community.

Relationships are the lifeblood of the chamber, and an important task coming out of the pandemic has been to reengage in person with our member companies. In the first half of 2024, we visited many leaders—including the CEOs of more than 30 of our Corporate Sustaining Members—to discuss the state of business and the market, and to be sure that we are delivering what they need. I have enjoyed doing this together with many fellow board members and Executive Director Laura Younger.

When it comes to advocacy, we want to be sure that we are approaching the right people and are enhancing those relationships. There was a bit of a disconnect during the Covid-19 pandemic, so we have prioritized reengaging those efforts where needed, such as with the Keizai Doyukai [the Japan Association of Corporate Executives] and embassies.

We are making great progress, and our goal is to ensure quality, strengthen advocacy, and boost the voice of the ACCJ and the benefits of being a member.

How was this year’s visit to Washington?

The DC Doorknock—along with the Diet Doorknock—is one of the most important events each year for our advocacy, and those meetings were curtailed by the pandemic. The full resumption this year has reinvigorated the communication and bonds that are critical to strengthening bilateral relations and business.

In June, I joined fellow ACCJ leaders for this year’s visit to Washington. Everyone we met was more engaged with Japan. They wanted to know what the Japanese government and US businesspeople in Japan are thinking as they consider how the United States should approach the region. I feel we are reengaging in a constructive way and advancing important dialogues on a range of critical issues, including artificial intelligence (AI), quantum computing, semiconductors, cybersecurity, and space.

Digital initiatives are of particular urgency, and expanding cooperation with like-minded partners to align on the application and governance of AI, strengthen cybersecurity, and promote free and fair digital trade agreements is essential to the peace and stability required for ensuring a prosperous future for our nations.

One path to that is the Indo-Pacific Economic Framework for Prosperity (IPEF). How has that initiative progressed this year?

Yes, IPEF is one way in which Japan, together with the United States, can play a leading role in the region and build stable and resilient relationships with its neighbors. It has been good to see the progress made thus far—a very steady approach that isn’t rushed.

There is huge opportunity in the Indo–Pacific region—it’s one of the fastest-growing markets—and I believe that IPEF offers many areas for the ACCJ to explore. The bilateral trade relationship between the United States and Japan has improved, and Prime Minister Fumio Kishida’s visit to Washington in April highlighted this.

Infrastructure, technology, cybersecurity, and supply chains are all areas with great potential for development as a result of IPEF. There is room to improve, and there are challenges in the regulatory environment given each country’s own regulations and policies, but I see great potential. As the countries involved work on the next steps to realize the promise of IPEF, the ACCJ must continue to be part of the discussions.

Tourism is another area hit hard by the pandemic. How has the ACCJ been able to support its recovery?

Inbound tourism is vital to the economy and has seen an incredible resurgence this year. Japan is on track to break the record of 31.88 million visitors, set in 2019. When Ambassador Rahm Emanuel arrived in January 2022, the number of foreign nationals entering the country that month was 17,800. There was pressure from many areas and organizations to get the borders reopened. Ambassador Emanuel and his staff were key to making that happen, and the ACCJ was able to serve as a conduit between our members and the Japanese and US governments. Japan is thriving again, and with events such as next year’s Expo 2025 Osaka, Kansai on the horizon, this economically important trend looks certain to continue.

Also important to our member companies is diversity, equity, and inclusion. Has there been progress on Japan’s support for DEI?

DEI is so very important to attracting and retaining top talent for our members. I feel everyone is conscious these days about social responsibility, and DEI helps each company bring its core values to the forefront.

Japan remains an outlier among G7 countries in recognizing same-sex marriages. While not all the court rulings have been resoundingly positive, I do feel we have made some progress in the Diet, and we renewed our viewpoint in support of marriage equality. Ambassador Emanuel has been extremely supportive of diversity and has helped a great deal. I think that we are doing the right thing socially by supporting marriage equality and DEI initiatives, of course, but the issue is also of great importance to business. We must continue to aggressively support this movement.

From left: ACCJ Executive Director Laura Younger, President Victor Osumi, US Deputy Chief of Mission Katherine E. Monahan, and Japanese Vice-Minister for International Affairs Takehiko Matsuo at A Night of Stars and Stripes on July 2. (Photo: Miki Kawaguchi/LIFE.14)

Where do you see the ACCJ as we mark our 75th anniversary?

The ACCJ has adapted to many challenges and changing environments over the past 75 years, and the Covid-19 pandemic was a real test of our resilience as an organization. Our strength showed, and we learned a lot that is helping us rethink how we work, how we communicate, and how we support each other.

The vibrancy of the ACCJ was on full display on July 2, when we gathered at Tokyo American Club for A Night of Stars and Stripes, our big bash to celebrate the Fourth of July as well as our own 75th birthday. The event was organized by the Board of Governors and we had more than 400 attendees. It was a pleasure for me to sing the US and Japanese national anthems. I’m honored to serve as a bridge connecting our two great nations. My background, having grown up in
both countries, is what drives my passion for US–Japan relations and my current role as ACCJ president.

It was also an honor to welcome representatives of the US and Japanese governments to speak. Their close collaboration at our many engagements and briefings throughout the year are vital to the success of our mission. Vice-Minister for International Affairs Takehiko Matsuo joined us from the Ministry of Economy, Trade and Industry, and Deputy Chief of Mission Katherine E. Monahan attended from the US Embassy. Ambassador Emanuel shared remarks in a video, as he was traveling in the United States at the time. It was an incredible evening.

I would also like to say thank you to all our members, and especially to the founding companies that are still with us today—Bank of America, J.P. Morgan, Citi, United Airlines, and AIG, along with Coca-Cola and GE, both of which joined a few months after the founding. Since 1948, the continuity that these members represent is a testament to the staying power of our collective voice.

I’m very proud of what we’ve accomplished. As a member-led organization, the power of the ACCJ comes from our 3,000-plus members. My mission as president, and the mission of the Board of Governors, is to ensure that we are bridging to the future with excellence. Our incredible members and committee leaders—as well as the dedicated office team that works so hard behind the scenes—come together to drive everything we’ve accomplished over the past 75 years, and there are many more years of partnership and progress to come.

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A Bishop Scholar’s Journey

As his internship ends, Matthew Trani shares impressions of the ACCJ and a message for future recipients.

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Following the tragic deaths of Bill Bishop, his wife Izumi, and their daughter Sophianna on Christmas morning 2022, the American Chamber of Commerce in Japan (ACCJ) and the United States–Japan Bridging Foundation came together to honor their legacy. Launched in July 2023, the Bishop Family Memorial Scholarship Fund brings US students to Temple University, Japan Campus, where Bishop was a lecturer and board member. It also provides an internship at the chamber.

The ACCJ Journal interviewed the first recipient, Matthew Trani, last December, two months into his internship. As his time as a Bishop Memorial Scholar draws to a close, we again sat down with Trani to learn about the experience and how he hopes to maintain his ACCJ connections.

How do you feel about your internship ending?

Odd, because it almost feels like I’m leaving the community that I’ve been attached to—almost to a point of dependency—for the past eight months. There aren’t many places where you can have a working relationship and be able to just casually talk to people in Japan as a foreigner. That feeling hasn’t changed since our first interview.

How will you maintain your ACCJ relationships after you leave?

A lot depends on if I can convince my new company to become a member. If that were to happen, then I would potentially be back within a relatively short time.

But I think I can still connect regardless, as I’ve met as many members outside the chamber as I have through the chamber; they’re all in the same circles. When I get invited to somebody’s house, there will be a professor from Temple there, or someone from Tokyo American Club or the embassy. The network is so tight that they’re never more than one connection away.

Did making connections remain your number one goal?

A little bit. The priority did change from the beginning of the year. Making connections was great, but I needed a job to continue living here. A lot of the companies to which I was thinking of applying are ACCJ members, but I needed to figure things out on my own, which I did. The biggest difficulty is switching from a student visa to a work visa. I was very lucky to find a company that had the patience to do that.

Now, it should be a lot easier to use those connections in the future. So, I would say my goal didn’t change, but now that I’ve achieved my secondary goal, I can go back to my primary goal, which is to continue making and maintaining connections.

Beyond connections, what did you gain most from this experience?

I probably wouldn’t have had the chance to work in a corporate environment where I interacted with so many executives all at once. It’s kind of [remarkable] seeing somebody where it’s like, “Oh, you’re the CEO of Bloomberg Japan, which is the same company my dad works for in New York.” But this is someone that my dad would not usually be able to talk to. And it’s very different having Victor Osumi, as the president of Delta in Japan, saying hi to you and being on a first name basis.

Matthew Trani with ACCJ Executive Director Laura Younger

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Where were you most involved at the ACCJ?

That changed over the course of the year. When I started, I was going to a lot of events and getting most of my networking connections early on. Then it shifted to more back-office work, and I worked a lot in Membership and we did some assignments on the competitive advantage of the ACCJ. That project took time to flesh out and get it to how we wanted it for the board.

On the whole, I definitely preferred the administrative work, with the exception of spreadsheets. I think with networking and helping at events it becomes much of the same routine, but when you deal with administrative materials, you can think a lot more critically. I really like jobs in which you can think deeply and try to solve problems.

What was your favorite event?

I learned so much from attending committee meetings. Often, I would think, “I didn’t know that, but that’s very interesting.” Or they would discuss things I’ve noticed in Japan but didn’t have the opportunity to say out loud.

We were at a meeting of the Tourism and Hospitality Committee and they were talking about how Japanese people aren’t going abroad, so domestic airlines are empty. Typically, it’s Japanese people who take those airlines, while foreigners take airlines from their home country.

It’s really crazy that a lot of the time you don’t have the opportunity to voice things like that, but the committees do so and work toward resolving those issues through advocacy papers and other things.

What would you tell future Bishop Scholars?

This is the best opportunity in Japan for a college student, one you never imagined you’d get. That’s what it was for me; I never expected that I would have the opportunity to do this during my time in Japan, and I never planned around it when I originally booked my study abroad. You can’t plan on where you’re going. I would say to all the Bishop Scholars who come after me, I’m sure you probably feel the same, so just roll with it and see where this opportunity takes you.

Trani completed his internship with the ACCJ in late April and is expected to begin working in Japan in mid-June, after having graduated from Hofstra University in late May.

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Assisting Business

The Sales Support Alliance supercharges ACCJ members’ networking opportunities with monthly meetings and unselfish teamwork.

In many sports, one player basks in all the glory of a score while another enjoys lesser accolades for their assist. Ice hockey spreads the wealth a bit more with a secondary assist—the pass before the pass that leads to the goal—and all three players earn a point in their stats.

This emphasis on teamwork is the same idea that forms the foundation of the American Chamber of Commerce in Japan (ACCJ) Sales Support Alliance (SSA). Founded in 2019 by Sales Development Committee Co-Chairs Eric Wedemeyer and Kjell Yadon, the SSA is designed to add value for committee members and guests by setting up the assists that lead to a business win.

Wedemeyer and Yadon describe their committee as horizontal rather than vertical as it serves ACCJ members across industries and company types. This broad reach amplifies the network effects and helps the SSA “supercharge everybody’s ACCJ experience.”

As an organization built on community and networking, the lifeblood of the ACCJ is serving up opportunities to its members. The SSA infuses this with the unselfish teamwork that leads to long-term success. Members introduce each other to new contacts in the hope that those fellow members will find business, even if there is no direct benefit to themselves—the pass before the pass that leads to the goal.

“In a networking situation, when you meet a new person at an ACCJ event, someone you know could very well be of use to the person you’re talking to, it becomes a richer experience if seen as an opportunity to introduce not just yourself, but also your contacts,” explained Wedemeyer. “If that results in a valuable business connection between two other people, that’s great. It’s a nice thing to do, it feels good, and the introduction will get paid back over time.”

J.R. Best, an SSA regular, found himself on the receiving end of an assist a couple of years ago. “David Clement connected me with the athletic director at [the American School in Japan],” said the co-founder of Hawaii-based Sports Camp of America (SCOA). “His daughter ended up being a junior counselor at SCOA’s summer camp, and she was fantastic.”

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“In a networking situation, when you meet a new person at an ACCJ event, someone you know could very well be of use to the person you’re talking to, it becomes a richer experience if seen as an opportunity to introduce not just yourself, but also your contacts.”

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SSA meetings regularly feature alternating small-group sessions and large-group discussions where attendees refine their self-introductions, sharpen their listening skills, and practice introducing other members to the group. This creates a feedback loop that allows attendees to reflect on their message and understand if their main point is coming across. For Japanese salespeople, it’s a chance to build confidence presenting in English in a comfortable, supportive, informal setting.

“By explaining my business to the people around me, I am able to look at myself objectively—what I am doing now, what I want to do, whether I am overreaching,” said Naoki Hioka, president of translation and localization company MedicaLingual, Inc. Hioka feels he has been able to identify issues and find the best path forward for his business thanks to SSA meetings.

Another feature of SSA meetings is the “Expert Corner,” where participants share knowledge and tips on a sales topic of interest. Recent topics have included using generative AI as a sales tool and post-Covid changes in lead generation strategies. Because SSA members represent so many different industries and job descriptions, these discussions generate an illuminating range of perspectives.

The name Sales Support Alliance might lead some to assume that only salespeople stand to benefit from the meetings, but Wedemeyer and Yadon stress that this is far from the truth. More than half of attendees are not in formal sales roles.

“Everyone is selling something,” said Yadon. “Many of our attendees are running their own companies or are responsible for promoting a company function internally. Sales skills always come in handy.”

Kreston ProWorks Business Development Manager Luc Swamika shared how he has benefitted from an introduction made at an SSA meeting. “Through the program, we forged a strong, lasting partnership and developed a mutually beneficial referral system that’s driving value for both our companies. Most importantly, we’ve built a relationship of trust and deep understanding with a valued partner.”

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“SSA meetings regularly feature alternating small-group sessions and large-group discussions where attendees refine their self-introductions, sharpen their listening skills, and practice introducing other members to the group. ”

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SSA meetings are open to non-committee-members, and usually half of attendees are first-timers. But once in the door, many get hooked and thrive on repeat attendance, building relationships over time.

Wedemeyer and Yadon describe the SSA as a momentum machine. Month to month, the results may look piecemeal, with people coming in with different sales targets and networking expectations. But over time, the SSA’s connections multiply as members get to know one another and build the trust necessary to make new introductions with confidence.

That momentum changed a bit during the coronavirus pandemic. Like most groups, productivity waned as meetings were forced to go virtual. Now, the Sales Development Committee is rebuilding the SSA as the in-person gathering it was before Covid-19. With more and more members joining, setting up the assist and scoring the winning goal is within everyone’s reach.

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The next SSA meeting will take place on May 22 in the American Room at Cambridge Innovation Center. If you enjoy the personal relationship building of business, or just want to get together to chat, the SSA is waiting for you.

Losing the Lag

Rob Claar’s quest to bring lifesaving innovations to Japan

Rob Claar became interested in healthcare at an early age. Watching his father work on the government-program side of insurance and talking to him about the industry, Claar came to understand some of the issues surrounding public and private systems. But as he entered Yale University to study art history, he did not envision a career helping healthcare innovators from the United States and elsewhere bring their lifesaving drugs and devices to Japan. A twist of fate, however, led Claar to become a champion of Japanese doctors, working to connect them with international peers and innovation.

Ahead of his presentation at a March 13 luncheon hosted by the American Chamber of Commerce in Japan Independent Business and Healthcare Committees, the HekaBio K.K. founder shares his journey from childhood in Detroit to Tokyo, where he helps companies gain regulatory approval for healthcare innovations.

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An extended version of this interview is available on The ACCJ Journal Podcast or by streaming from the audio player above.

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How did you get involved in healthcare innovation in Japan?

Claar: I came to Japan basically out of cultural interest. This was in 1987. I was 23, had just graduated from college, and decided that I wanted to see Asia. I was interested in the culture, art, and language, particularly of Japan.

I forced myself not to come to Tokyo to begin with. I thought Tokyo would be an easier place to survive with English, and I wanted to push myself to learn Japanese as quickly as possible. So, I landed in Nagoya and immersed myself in studying the language. I thought I was going to be good enough at Japanese after one year to move on to my next destination and call my Japan experience a success. That didn’t happen.

I was studying Japanese at the YWCA in Nagoya, and it was going very well. But, as you know, it takes a lot of time. After one year, I was still not where I wanted to be. I gave myself another half a year, and I started really enjoying being in Japan and speaking Japanese.

Then I got a job as a Japanese-to-English translator for Brother Industries and moved into their dormitory in Nagoya. They were setting up manufacturing operations in Malaysia and elsewhere, and I was translating manufacturing and line instructions. That was interesting and a good experience but, once I got good enough at Japanese, I decided it was time to either go home to America and start the rest of my academic career or go up to Tokyo and see what I could do. I decided to move to Tokyo and was lucky enough to get hired by a think tank called Sanwa Soken.

They were essentially a research arm for the government. The day after I joined, a huge project came in from the Ministry of Health. I was put on that project and got to learn all about the healthcare system. I traveled around Japan, met doctors, and began to understand how serious they are about patient care. I really started to fall in love with the idea of the Japanese healthcare system [and] how a national single-payer system can work wonderfully.

What did you discover that led you to want to help innovators?

Claar: As I met doctors, I began to understand their struggles. They wanted to be considered among their international peers as studying, researching, and being able to speak in an international forum on the greatest innovations worldwide. But their frustration was that their research was one generation too late in many areas. I became aware of the innovation lag and wanted to see what I could do to make an impact.

I realized that Japanese doctors struggle to get their hands on up-to-date innovations from around the world. There’s a lot of talk about drug lag and loss, and the same thing is happening on the device side, where innovations that are getting approved in the United States and Europe are not making it to Japan.

There are a few reasons for this, but I thought that if I could focus on how to help these very sincere, wonderful doctors in Japan, then that was going to be a way for me to potentially make a career here and have an impact on society.

So, I left Sanwa Soken to start my own company, Junicon. We would go around and interview doctors, and we found a way to sell those results to large pharmaceutical and medical device companies in Japan, Europe, and the United States.

I also started spending my spare time helping doctors translate their papers from Japanese into English so that they were better able to speak at international conferences. It was a minor thing, but being helpful to Japanese doctors is a way that I got into things and maintained those relationships.

What’s stopping overseas companies from entering the Japanese market?

Claar: Small companies are doing more and more of the true innovation around the world, and they have no bandwidth to start thinking about Japan. So, how do we get more innovative companies to think about Japan? That’s what we’re really focused on at HekaBio, and that’s my personal interest.

Japan is far away, and these companies don’t really know what goes on here. They have this outdated image that Japan is very hard to get into and the regulatory process is super opaque. They’re never going to get regulatory approval on their own, or they’re never going to form the right commercial relationship. I think this is a really outdated image of Japan that many companies have. We’re trying to help solve that. Our doctors and their patients are waiting for these innovations. We want to see if we can bring them in and arrange the capital.

The Japanese government is doing a great job right now with new programs that they’re introducing. They’re making clinical trials easier to get started and operate in Japan, both on the drug and the device sides. They’re welcoming first-in-human studies to be done in Japan, which has not been the case until recently. They’ve eliminated the requirement to have a Japanese principal investigator on international studies. And they’re also offering pricing incentives for programs that get submitted in Japan within a certain number of days or months of the submission in the United States. In some cases, we’ve had an approval in Japan before the United States, even though we started at the same time.

How many companies have you helped get regulatory approvals in Japan?

Claar: More than 50, including at our former subsidiary unit, which was a clinical research organization called Vorpal Technologies. We’re very proud to have been involved in getting those launched and into the market.

What is that process like?

Claar: At the beginning, we do market research. We want to confirm that the doctors who we want to be behind the program are really behind it. We’ll find out who has done the presentations and who has published how many papers in that area. Who’s in the medical society? Who’s on the board? All these different things. The worst thing we could do is partner with an overseas company that doesn’t have the health economics and an appreciation for the Japan system in mind.

Once we do that, and we understand the strength of the clinical data that the company has produced overseas—and whether the Pharmaceuticals and Medical Devices Agency (PMDA) will accept it as valid in Japan—then we start talking with the PMDA to understand the regulatory process [for the specific innovation]. Once we get buy-in from the regulators, then we go forward with the clinical trial. If no in-Japan clinical trial is required, which is often the case for devices, then we can just go forward to the submission and review period, which typically takes 12 months.

Sounds straightforward. Is there something else holding back innovation from overseas?

Claar: What remains is the question of reimbursement price. If companies have no idea until the very end what the reimbursement price is going to be, then it becomes difficult for them to want to invest the time and money. So, that’s part of the upfront market research that we do. What does a comparative product look like in terms of reimbursement? What can you expect, based on your experience in overseas markets, in terms of the ability for the Japanese health insurance system to pay?

If there’s no comparative product, if it’s a new category, then you submit your cost accounting information. The PMDA really wants to see everything in a very transparent way.

What we would like to see in Japan is more clarity. New categories, where nobody knows what the pricing is going to be, is a situation in the market that most people have to deal with. I think that if the government were able to give better guidelines up front, in a consultative process, and you could go to the Ministry of Health, Labour and Welfare and tell them what you are thinking about, more of the issues around the drug and device lag and loss could be solved. But they won’t give you anything in terms of a response with any responsibility associated with it. They’ll listen and tell you yes or no, but their answer is not a promise.

Japan’s healthcare system is the best in the world. I fully believe that. And we all have the responsibility to make sure that Japan’s great healthcare system can survive. We know that the government is fearful of healthcare costs growing. They’re looking for ways to cut the costs of [things such as] long-selling drugs, devices, and in vitro diagnostic tests. But we would like to encourage them to think more long term about some of the things that can be done in terms of digital health solutions for early diagnosis of particular conditions.

What opportunities do you see for ACCJ member companies? Can they replicate the success you’ve had?

Claar: Absolutely. And I hope so. I think we’ve come up with a great business model, and we’re happy for anyone to copy it, because we think it really works for bringing innovations into Japan.

HekaBio is focused, for the most part, on pharmaceutical and device interventions for acute illnesses, hospital treatments, and serious diseases. What we’re not working on are things such as chronic diseases, which are a huge burden on the healthcare system. [Monitoring] chronic diseases with at-home digital health [tech] would also work in our business model.

If somebody wanted to exactly copy our model and go right into exactly what HekaBio is doing in serious acute disease identification and treatment drugs and devices, then be my guest. We’ll be happy to have them [replicate] our business model with no worry.

But there are so many opportunities. For example, if they want to do something different, there are many new molecular entities, particularly for rare diseases. The PMDA has a list showing the status of those that are [only] available elsewhere. So, there’s no development risk, really, because you know that it works. It’s been approved in either the European Union or the United States, but it’s not available in Japan yet. Take one of those for a rare disease, buy the rights for Japan, and get it developed. You wouldn’t even have to build a big organization with your own infrastructure here. You could be a one-person company, get the rights, and then have a contract research organization do the clinical trial and be the in-country clinical caretaker on your behalf. Get it all through and then sell it to a pharmaceutical company once it’s done. That’s another business that could be not only very lucrative, but interesting and of societal benefit for Japan.

Charting the Course

ACCJ President Victor Osumi shares his thoughts on 2024 and the chamber.

Photos by Shelley Mae Photography

January 1 marked a change in leadership for the American Chamber of Commerce in Japan (ACCJ) as Victor Osumi, managing director and president of Japan operations for Delta Air Lines, Inc., was elected to guide the chamber in 2024.

Having served as a vice president last year, Osumi joined the board as a governor in January 2021 and has played an active role in chamber advocacy through the DC Doorknock visits to Washington and Diet Doorknock meetings with Japanese lawmakers.

The ACCJ Journal sat down with the former pilot at Delta’s office near Shiba Park to learn more about how his career took flight, how he became involved with the chamber, and the path he sees ahead as he takes the helm as president.

Tell me a bit about your background.

Growing up in a diverse, dual-culture environment, I spent most of my early years in Los Angeles, but I went to high school in Florida. My father was a Japanese expat. That’s what brought me to the United States. I also spent some time in school in Japan. I had dual citizenship, but Japan requires you to choose one by age 22. So, when I was 21 and joined the US Air Force, I chose to keep my US citizenship.

What led you to become a pilot?

I always had a passion for flying. After high school, I went to the Florida Institute of Technology and majored in aviation management, with a focus on flight technology and aeronautics. That led me to get my private pilot license, commercial pilot license, and flight instructor license.

I joined the Air Force because of this passion. I also thought that I could get a lot of flight hours, and that could create a path to joining a US airline as a pilot. But when my physical condition made it more difficult for me to fly, I got into management. Since I couldn’t fly, I decide to leave the Air Force.

Where did that course change take you?

When I shifted away from aviation, I joined a hotel company. That gave me experience in hospitality and an understanding of tourism, what it takes to be the best of the best when it comes to customer experience and service. I thought it would be for just a couple of years, but I ended up spending 27 years in the hotel industry.

That really gave me the backbone of where I am today. I gained knowledge through the financial side, customer service, and food and beverage. I also sat on the owner’s side of the property, which gave me additional insight into what a private equity company does, how they operate, and how they make decisions on investment in different countries.

Now, here I am back where my original passion lies: aviation and airlines. It took me a long time—almost three decades—but it came full circle.

How did you become involved with the ACCJ?

When I was assigned to Japan in 1998, I thought I would be here for five years and then I would go back to the United States. But I found that this country is where I belonged. At that time, most of the management at global hotel companies were American expats. They needed someone who could understand, speak, read, and write Japanese. And I thought that working in Japan for a global company gave me more opportunities for career advancement.

Ever since, either directly or indirectly, I have always been involved in chambers. I worked at Hyatt, then briefly with the IHG Group, and then twice at Marriott, which is a global, US-based company.

Being part of the ACCJ has given me a great opportunity to network and expand people-to-people relationships in the community.

Are there other career benefits you’ve felt from ACCJ involvement?

In the airline industry, we really value our relationship with the government, anywhere we go. I think it is the same for a lot of chamber members. They expect to have some type of advocacy dialogue, whether it’s with the US Embassy, the US government in Washington, or the Japanese government. We had a great opportunity in December during our Diet Doorknock to meet with lawmakers and officials to voice our mission and what we’re trying to accomplish.

And, of course, there is the education aspect. There are so many committees and forums at the ACCJ, and these offer great opportunities to learn more about a wide range of areas, from investment and finances to healthcare and pharmaceuticals—almost any area of business you can imagine. This has been a great experience for me.

Why did you decide to run for president?

It’s obviously a big commitment and will take a lot of my time. It’s a team effort. It’s not just me. At Delta, we value the presence of chambers commerce of commerce in each country. Particularly for Japan, the Atlanta headquarters recognized the importance of being part of the ACCJ and the value in me serving as president.

Of course, I have big shoes to fill following Om [Prakash]. But again, he and I are both ex-military, so he always said that I was second in command. Last year, when there were some times when he was not able to be present, I took the controls in a way. And having had that opportunity really helps smooth this transition for me, I feel.

Why is 2024 a special year?

It is the year of the dragon, but not just any dragon. Each of the 12 animals in the Chinese Zodiac has five types associated with the elements. This year’s dragon is the wood dragon, called kinoetatsu in Japanese. It only comes around every 60 years. The last time was 1964, when the Olympics were held in Tokyo, the shinkansen began operations, and I was born.

Kinoetatsu means this is a year when the energies of growth and adaptability associated with the element of wood in Chinese Wu Xing philosophy combine with the dragon’s qualities of power, prosperity, and transformation.

What do you see as the key initiatives and advocacy points for 2024?

My vision for the ACCJ this year centers on three main areas:

• Fostering partnership
• Embracing progress
• Bridging the future with excellence

The Indo-Pacific Economic Framework for Prosperity (IPEF) is an area I feel is especially important. It is key not only for Japan but the Asia–Pacific region, and the ACCJ must continue to be part of the discussions around IPEF.

Of course, diversity, equity, and inclusion will remain important, as will sustainability and cross-border investment.

One I see as especially big, as it impacts all the others, is digital transformation. Not just “going digital” as some people might see it, but the many aspects that can impact industries. In transportation, for example, one of the biggest issues is the free flow of data across borders. This would allow us create things such as paperless passports, with face-recognition technology used to ensure security. But there are still issues to resolve so that the US side has full confidence in Japan’s data security.

And as we talk about economic security, I think that data is going to be one of the biggest parts to bringing about economic security. It has tremendous value. But we need an agreement between the Ministry of Economy, Trade and Industry and the US Department of Commerce to make sure that we have cleared out the trust issues that impact digital transformation.

How important has US Ambassador Rahm Emanuel been to ACCJ advocacy?

We were missing an ambassador for almost three years. We always have great representatives and support from the US Embassy, but when Ambassador Emanuel arrived, he hit the ground running. He has been a tremendous help to the ACCJ and Japan. We really needed somebody like him to represent the United States in the Japanese community. I have very high respect for Ambassador Emanuel.

When he arrived, two years into the Covid-19 pandemic, there was pressure from many areas and organizations to get the borders reopened. The ACCJ played a part in making this finally happen, and Ambassador Emanuel and his staff were key. The chamber was able to speak up and serve as a conduit between our members and the Japanese government, and also the US government to get their help as they pushed from their end.

Ambassador Emanuel also visited Chubu last July in support of efforts to resume flights from the region to the United States. He met with ACCJ members from our Chubu Chapter and area leaders that included Aichi Governor Hideaki Ohmura, Nagoya Mayor Takashi Kawamura, and Riki Ishizuka, president and chief executive officer of the Chubu Centrair International Airport.

These are not only examples of his effectiveness, but how both the US and Japanese governments value the ACCJ’s voice.

What else would you like to say to members?

As we continue our celebrations to mark the ACCJ’s 75th anniversary, one thing I would like to ask is for everyone to help grow our membership. Word of mouth is very important. So, if there is someone you feel is a potential candidate for membership, please let me know.

Related to this is finding ways to make the chamber even more appealing. Advocacy, education, networking, and dialogue with the US and Japanese governments are important. If you have ideas for making these more effective, I would love to hear them.

Let’s work together to make 2024 a great year and the ACCJ’s presence bigger than ever before.

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Synthetic Savants

As generative AI sweeps the world, how will it transform the way we work and innovate?

We live in an age of intelligent machines. Since the introduction of consumer-facing artificial intelligence (AI) applications such as OpenAI’s ChatGPT and Google’s Bard over the past year, generative AI has transformed how people work around the world.

From $40 billion in 2022, the market size for generative AI will balloon to $1.3 trillion over the next 10 years, according to Bloomberg Intelligence. First popularized through image generators, the technology has been applied in fields ranging from neuroscience to advertising, sometimes in surprising ways.

Generative AI programs like the large language models powering ChatGPT are trained on enormous volumes of data to sense patterns and predict how they will play out in a piece of content. These models can be trained on linguistic, financial, scientific, sensor, or other data—especially data that is uniform and structured—and can then create new content in response to user input. They have had remarkable success, particularly in image and text generation, and have seen rapid uptake in sectors ranging from education to computer programming. “This technology is set to fundamentally transform everything from science, to business, to healthcare … to society itself,” Accenture analysts enthused in a report. “The positive impact on human creativity and productivity will be massive.”

Powerful New Assistants

Generative AI first gained public attention thanks to its ability to change how we communicate through words, images, and video. It’s no wonder, then, that the world’s largest public relations company has embraced it. Edelman worked with OpenAI to launch the original ChatGPT-2 and delivered the first application in an ad campaign. In the spots for Hellmann’s Mayonnaise, the tool is tasked with finding new ways to use leftovers.

Edelman believes the technology will reconfigure the communications industry, but it won’t replace human ingenuity, strategic advice, and ethical decision-making that builds trust, said Meghan Barstow, president and representative director of Edelman Japan.

“We predict that AI will become an essential assistant in our work, helping to brainstorm, research, summarize, trend spot, monitor media, and generate content, among other tasks,” explained the ACCJ governor and chair of the chamber’s Communications Advisory Council. “The emphasis here is on ‘assistant,’ as we believe there will always be a human in the loop, that AI and people working together will provide the most effective and valuable work output.

“As with any technology, there are risks that require appropriate caution, education, processes, and policies to ensure the safe and trustworthy use of generative AI to protect our work, our clients, and end users from issues related to disinformation, bias, copyright infringement, and privacy.”

Similarly, lawyers such as Catherine O’Connell are also using generative AI as smart assistants. O’Connell is principal and founder of Catherine O’Connell Law and co-chair of the American Chamber of Commerce in Japan (ACCJ) Legal Services and IP Committee.

After taking a course on how to get the most out of ChatGPT, she has been using it for writing keynote speeches, article outlines, posts on social media, and skeletons of presentations. She compares the tool to a human intern, and praises its time-saving efficiencies, but warns that it should not be used for legal work, such as contracts or legal advice. Attorneys in the United States, she noted, have found themselves in trouble after producing legal filings referencing non-existent cases that generative AI simply made up.

“Generative AI is like a teenager that has a lot of promise but has not learned how to be a whole professional yet; it needs guidance,” said O’Connell. “However, in terms of an idea generator or idea expander, a time-saving device, and an assistive tool, generative AI is an asset. The rest falls to me to add my human touch to check and verify, to add my own personality and insights only I have, and to make the output my very own. I think generative AI is so good that its cousin, Google search, may be out of a job sometime soon.”

Smart Tools for Talent

Recruiting is another industry in which workers deal with mountains of structured data, in the form of resumes and online posts, that can be utilized by AI. Robert Half Japan, an ACCJ Corporate Sustaining Member company, uses a system called AI Recommended Talent (ART) to match resumes to client needs. The system speeds up matching for job hunters and employers, allowing staff to spend more time with clients.

“The real power of generative AI is how much it can integrate with our existing systems,” explained Steven Li, senior division director for cybersecurity. “We are piloting ChatGPT-4 integration in our Salesforce CRM. Studies have shown benefits from integrating generative AI into workflows. Other industry examples that highlight the benefit of integration include the GitHub CoPilot generative AI feature.”

The effectiveness of AI in recruiting has led some people to speculate that it could render many human recruiters obsolete. Deep learning algorithms are figuring out what a good resume looks like, and generative AI can craft approach messages and InMails, a form of direct message on the popular LinkedIn platform, noted Daniel Bamford, Robert Half’s associate director for technology.

“However, the real value of agency recruitment is not, and never was, a simple job-description-to-resume matching service,” added Bamford. “Agency recruitment done well is a wonderful journey of problem-solving, involving the goals of organizations and teams and the values and desires of individuals. Excellent recruiters will thrive. They will use AI’s capacity to handle simple tasks like scheduling and shortlisting. This will free up time for high-value interactions, delivering even greater value for their partners and industries through the human touch. The future of excellent recruiters will be brighter with AI’s support.”

Tracking Ships and Patients

Even a traditionally hardware-oriented industry like logistics is being transformed by generative AI. Shipping giant Maersk is using a predictive cargo arrival model to help customers reduce costs with more reliable supply chains. It also wants to harness the power of AI to recommend solutions when shipping routes are congested, advising on whether goods should be flown or stored, and better understand the sales process, Navneet Kapoor, Maersk’s chief technology and information officer, told CNBC.

Maurice Lyn, head of Managed by Maersk for Northeast Asia, also sees great potential in the technology. “The biggest changes that I foresee will be related to the enhanced visibility into, and agility of the management of, the global supply chains of our clients on an execution level,” he told The ACCJ Journal. “The data aggregated will allow logistics service providers [LSPs] to deliver predictive and proactive solutions to our clients. If clearly interpreted by the LSPs, stability and uniformity of costs and deliverables will be provided globally and locally to our clients.”

Generative AI may even help us live longer, healthier lives via long-term patient monitoring. Sydney-based medical AI startup Prospection recently launched its first generative-AI model in Japan to analyze anonymized patient data for pharmaceutical companies so they can better understand patient needs. A Japanese drug company, for instance, could look at cancer patient outcomes across the country and find that they are slightly worse in a particular region, possibly because less-effective drugs are prescribed there.

Founded in 2012 and operating in Australia, Japan, and the United States, Prospection now has data on half a billion patients. For the first 10 years, it was using traditional AI methods, but generative AI has opened new services for the company. Users can query Prospection’s AI services about typical pathways for patients who took a certain drug, or what therapy they underwent after quitting the medication. A Prospection model can predict whether a patient will experience a certain event, such as needing to be hospitalized, over the next year.

“The ChatGPT transformer model is trained on billions of sentences consisting of words. We see each patient’s journey as the sentence and events in the journey as the words. That’s the vocabulary,” said Eric Chung, co-founder and co-CEO of Prospection. “The data is very powerful. There are lots of insights to be gained from data on 500 million patients. It’s beyond the power of humans to analyze, but AI can do it.”

Renewable Ambitions

Japan aims to mix up power, but are the targets achievable?

Japan has detailed ambitious plans for the wider deployment of renewable energy sources throughout the economy, with the government in October 2021 announcing the Sixth Strategic Energy Plan and setting a target of between 36 and 38 percent of the nation’s power coming from renewables in 2030.

That would be about double the 2019 level and significantly above the previous 2030 goal of up to 24 percent.

Japan’s target renewables mix would include up to:

• 16 percent from solar
• 11 percent from hydropower
• 5 percent from wind
• 5 percent from biomass
• 1 percent from geothermal

The contribution from nuclear energy was left unchanged, at between 20 and 22 percent. This will require a minimum of 30 reactors to be operational.

The targets tie in with the Clean Energy Strategy, unveiled by the government in May 2022, announcing an ambitious 46-percent reduction in greenhouse gas emissions in fiscal 2030 and carbon neutrality by 2050.

And, given the impact of instability involving Russia and in the Middle East, the two traditional primary sources of energy for Japan, combined with the yen at 10-year lows against other leading currencies, it would be in Japan’s best interest to dramatically reduce its reliance on imported energy.

Yet energy experts caution that Tokyo is unlikely to reach those targets as progress in the development of renewables has slowed, with fewer large-scale solar projects, delays in offshore wind generation, and local resistance hampering the acceleration of other technologies, such as onshore wind and geothermal power.

“Private capital markets are ready to invest in Japan, and both multinational and Japanese firms have developed technology and human resource pools to hit targets,” points out Andrew Statter, a partner at the Titan Consulting Group and head of its GreenTech division.

“However, policies and subsidies are unclear, and there are conflicts between ministries that are causing questions for investors while potentially profitable asset types, such as large-scale agrisolar, are not yet eligible for project financing,” he told The ACCJ Journal. “All of which puts a huge pause on the potential accelerated development that industry is ready to deliver.”

Japan needs to go beyond the “what” in its policies and clarify the “when,” “where,” and “how” to encourage investment, Statter said.

Favorable Winds

Turning to specific energy resources, Statter said offshore wind is critical as Japan has geographical and physical limitations on the volume of onshore renewables that can be developed. “With vast ocean resources, offshore wind is the ideal renewable technology which is proven and scalable to give Japan a shot at hitting renewable energy targets,” he said. “Key here is the need to accelerate floating offshore wind, as Japan’s waters become very deep quite close to shore.”

Statter also sees a secondary benefit to Japan’s expansion of floating technology. The country could become a technology exporter on a regional scale as Asia–Pacific markets embrace the technology.

Akira Amano, country manager of Invenergy Wind Development Japan GK, agrees on the importance of offshore wind to the nation’s overall energy goals, pointing out that “Japan has the right resources to become a global leader in renewable energy, especially offshore wind.”

He also concurs that significant challenges need to be navigated for the renewables sector to thrive.

“In order to accelerate progress and meet our nation’s goals, there will need to be long-term regulatory certainty, increased transmission capacity to deliver energy to customers, and long-term planning to address challenges like cost uncertainty.

Amano also noted that, with strong leadership, Japan can accelerate the build-out of clean energy and meet its energy goals in a timely manner.

Rocky Foundation

If the authorities are serious about making the most of offshore wind, Amano said, a number of regulations need to be revised, not least the unbundling of generation, transmission, and distribution at existing electricity utility companies to get rid of unfair competition. The sector also needs the authorities to increase the price for renewable energy certificates, he added.

Hideyuki Ohnishi, regional general manager for GE Renewable Energy in North Asia, agrees that Japan needs to make the most of its exclusive economic zone—one of the world’s largest—for offshore wind.

“The wind conditions, the speed and quality of the wind, is much better when you go to the seaside,” said Ohnishi. “In the mountains, there is turbulence and such, and average wind [speed] is not as strong. So, it is important for us to go to the places where we have better wind.”

Yet there are challenges, particularly in laying the foundations for turbines.

“We have to install big wind turbines in the sea, where the depth differs,” he explained. “Wave and seabed conditions have an impact. The geosurface is very important. Rocks and related conditions impact our design, and it’s not easy in terms of technology.”

Equally, the investment required to get the blades turning is significant, and projects must be considered in the long term.

The Japanese government is also pushing for 60 percent of the components in offshore wind farms to be manufactured locally.

General Electric started working with Toshiba in 2021, initially focusing on the nacelle at the top of the tower that houses all the critical components of the turbine. Construction of the nacelle is now largely done by local labor and with components utilizing the local supply chain, all of which will have a long-term benefit for the community, Ohnishi added.

Lofty Aims

While the government’s 2030 targets can be achieved as battery storage and grid technology improve, in tandem with innovations in the use of the grid, the 2050 targets are “a real moonshot,” Ohnishi admitted. “The 2050 goal is very, very challenging, but a majority of us have agreed to aim for it,” he said.

The Japanese government has also been a vocal advocate of hydrogen as an effectively limitless source of energy in the future, although questions are being asked as to whether this is the most appropriate path.

“Generally speaking, I think the industry and international impression is that Japan’s hyper focus on hydrogen to solve all problems has been outsized and unrealistic,” said Ken Haig, vice-chair of the ACCJ Energy Committee. “It is also too future-focused, relying on technologies that will not become commercially viable or scalable until well after 2030.”

Haig noted a comment made by former ACCJ President Glen Fukushima in a recent Kyodo News opinion piece: “Japan’s support for innovation in green hydrogen, perovskite technology, and offshore wind is the right move,” said Fukushima, “But METI should take a ‘yes, and’ approach by also immediately boosting funds to deploy existing clean energy technologies like solar and wind power—technologies that have already proven successful for Japan.”

Whatever the source, the renewables sector agrees that Japan’s need for home-grown energy is only going to intensify. The Sixth Strategic Energy Plan is billed as a rethink of regulations that have thus far inhibited development; for developers, the elimination of red tape cannot come soon enough.

2022 Person of the Year: Akio Mimura

The ACCJ honors the Japan Chamber of Commerce and Industry honorary chairman for his enduring support of international businesses in Japan.

Photos by Miki Kawaguchi/LIFE.14

From left: ACCJ Executive Director Laura Younger, Akio Mimura, and ACCJ President Om Prakash

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On November 9, 2023, the American Chamber of Commerce in Japan (ACCJ) recognized Akio Mimura as the 2022 ACCJ Person of the Year. He was chosen for his efforts to bring the Japanese and international business communities closer together during his nine years as chairman of the Japan Chamber of Commerce and Industry (JCCI).

The person of the year is normally honored in spring, but this year’s event was delayed due to the coronavirus pandemic.

During a special luncheon at The Place of Tokyo, the former chairman and president of Nippon Steel Corporation spoke about his long career.

The event began with a VIP session where ACCJ leaders greeted Mimura, after which ACCJ Executive Director Laura Younger welcomed guests and provided background about the award. ACCJ President Om Prakash delivered remarks and invited Mimura to the podium.

“I am truly honored to be nominated as the 2022 ACCJ Person of the Year, because 2022 was the year I concluded my 60-year business career, 51 years in the Nippon Steel Corporation and nine years as the chairman of the JCCI,” Mimura began.

“The last nine years have been especially worthwhile periods in my life,” he continued, noting that the coronavirus pandemic, during which he closed out his time as JCCI chairman, required action and guidance to protect the most vulnerable people and businesses, especially small and medium-sized enterprises (SMEs).

“I devoted my energy to three initiatives,” explained Mimura, who requested:

• Balanced measures to contain Covid-19 that allow free economic activity
• All possible measures from government to ensure that businesses survive
• SMEs use the pandemic as a wake-up call and promote self-reformation

“Luckily, Covid-19 is finally coming to an end, and most SMEs were able to preserve their business continuation,” he said. “Overall unemployment in Japan was kept very low, at 2–3 percent. Our real challenge is to position this pandemic and the worldwide inflation as a turning point, and to rejuvenate the Japanese economy, which has been stagnant for the past quarter century.”

Mimura shared that another great memory is encountering the philosophy of Eiichi Shibusawa. Born in 1840, Shibusawa played a key part in business development during the Meiji Period (1868–1912) and is often referred to as the father of Japanese capitalism.

“He was involved in the founding of 481 companies and played an active role in the launch of 600 social contribution institutes. Can you believe it?”

The latter especially resonates with Mimura.

“In recent years, I have been very heartened to see the increasing global interest in [strategic development goals] and stakeholder capitalism,” he said. “However, I have personally felt dissatisfied with the fact that this interest often remains only on the surface, limited to general overviews or investor-related presentations without translating into concrete actions.”

Shibusawa, he notes, insisted earnestly that business leaders should pursue profit but also contribute to the public interest, namely by enriching society and making people happier.

“He was not only a person of action but also a visionary leader,” Mimura said. “We business leaders must somehow achieve the harmony of private and public interests in our own way.”

Equal Partners

Five years in, the ACCJ’s campaign for marriage equality gains speed.

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In September 2018, the American Chamber of Commerce in Japan (ACCJ) released a viewpoint entitled Support the Recruitment and Retention of Talent by Instituting Marriage Equality in Japan in collaboration with the Lawyers for LGBT & Allies Network (LLAN) and five other chambers of commerce. Five years later, the viewpoint has been endorsed by 139 domestic and international entities.

Across Japan, support for marriage equality is gaining momentum among the population, with 278 municipalities and prefectures now offering same-sex partnership registration. This includes the Tokyo Metropolis as well as major cities such as Sapporo, Osaka, Kyoto, and Fukuoka.

Traction can also be seen in the general population, with surveys indicating support for marriage equality of 44 to 82 percent, with stronger support among younger people and women.

Yet calls for marriage equality continue to fall on deaf ears in the Diet.

“This year, we did have the very first LGBT legislation, the ‘awareness bill,’ so that domino has fallen,” said LLAN co-founder and co-chair Alexander Dmitrenko. He noted that the watered-down language does little more than say, “Please be aware there are gay people out there.”

But there are ways to influence the national government, he said.

“One way is to really work with local governments to ensure that, to the extent they can support recognizing equality, they do it.”

Some prefectural governments, he said, have made strong efforts to afford greater rights to same-sex partners.

Dmitrenko said the LGBT community is very grateful for this, but warned that, when talking about this progress, “we need to be very careful not to dilute focus on the actual goal, which is equality. These move us a small step closer, but they’re not equality.”

A second way, he explained, is through the courts.

The impact of the ACCJ viewpoint can be seen in litigation efforts. In 2021, Sapporo District Court Judge Tomoko Takebe referenced the ACCJ position in a case brought against the government by three same-sex couples. Takebe ruled that prohibition of same-sex marriage is unconstitutional, but denied demands for compensation.

There have also been favorable outcomes in Tokyo, Nagoya, and Fukuoka. The message from the first-level courts was that there’s definitely discrimination. And, like Sapporo, these cases also referenced the ACCJ viewpoint.

“But ultimately, court cases, unlike in the US, can’t change the law. Only the Diet can,” Dmitrenko explained. “Yet, those cases create important pressure points.”

Growing support from Japanese corporations is also helping move the needle. The Business for Marriage Equality campaign had the support of 458 companies and organizations as of December 8.

The ACCJ issued an open letter to the government on April 21 stating the business case for marriage equality and protection of LGBTQ+ rights, and will soon release an updated viewpoint. Both can be viewed on the ACCJ website. Any company can endorse the viewpoint by contacting info@llanjapan.org.

Dmitrenko is confident that Japan will eventually join its G7 partners in recognizing same-sex marriages.

“It’s a very slow, local train to equality, making all the stops, getting everyone on,” he said. “Which is fine. Just a little faster, please.”

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Innovation Engine

CIC co-founder Tim Rowe shares his entrepreneurial journey and vision for collaboration in Japan.

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Like so many new graduates, Tim Rowe and his friends from the Massachusetts Institute of Technology (MIT) left their Cambridge campus with diploma in hand and took “ordinary” jobs. A few years later, in 1999, they quit those jobs to build
start-ups.

But they needed offices—not the easiest thing for young entrepreneurs to pay for in a town that’s home to two of the world’s most prestigious universities. So they decided to share a space near MIT and Harvard to lighten the financial load. At least one of their companies would make it, they thought.

The shared space led them down an unexpected path, however, as more companies moved in and they went from five to 10 to 50 to 100. The Cambridge Innovation Center (CIC) was born.

Fast forward two decades and CIC opened its first Asia facility in Tokyo, in the Toranomon Hills Business Tower. The ACCJ Journal sat down with Rowe in the bustling networking hub to learn more about how he went from sharing a space with friends to leading a community for entrepreneurs that includes more than 1,000 companies at centers in eight cities around the world.

How did CIC expand?

For the first 13 years or so, we just grew right there in Cambridge. I had little kids at the time and didn’t really want to travel as much. And Cambridge is an amazing place for start-ups. So, we just kept taking more space and filling it. It was really kind of a surprise to us. We didn’t set out to build a shared space for start-ups as a business. We were actually just
using it for ourselves.

My mother had been the ombudsman at MIT, and one of her friends who had been the provost of MIT, Mark Wrighton, had become the chancellor of Washington University in St. Louis, one of the top medical schools in the United States. She said, “Mark called and wants you to come to St. Louis.” I was about to give all the reasons why I didn’t know if I could do that, but then she was like, you gotta go. Okay, Mom. So, I flew to St. Louis and met with Mark Wrighton. He said, “Look, we want you here, and we’re going to help you figure it out.”

One thing led to another and we opened in St. Louis. A few years later, the federal government was looking for a home for the National Geospatial-Intelligence Agency, and they toured St. Louis. They came to our center and said this is the kind of vibe they were looking for. They actually testified before Congress that they selected St. Louis because of their experience at our center. It was a $2 billion investment, a big deal for the local economy. After that, as other people came and knocked on the door, we said, “Sure, let’s look into it.”

How has the view of start-ups changed?

If you survey new college graduates, they often say the number one thing they want to do is go create a start-up. I think it’s good for the world, because what we’ve learned is that innovation has the power to make the world better in so many ways. But what we’re finding is that innovation gets into the world, is adopted and spreads much more quickly, through new enterprises rather than existing ones.

When we’re part of a larger organization, we want to respect all the rules that exist in that organization. Doing new things becomes rather hard. We hear things such as, “We tried that once and it didn’t work,” or “That sounds interesting, but that’s 1/1,000 of the revenue of this company, so we can’t prioritize it.” That’s normal, and it’s been well studied. But the bottom line is that existing enterprises find it very difficult to introduce true innovation.

“They understand that it’s not about them so, when there’s something really new and interesting that they have in their company, they push it out. It’s like asking your teenager to move out of your house. It’s time now, it’s time to go off.”

I think the smarter of the big organizations understand this. They understand that it’s not about them, so, when there’s something really new and interesting that they have in their company, they push it out. It’s like asking your teenager to move out of your house. It’s time now, it’s time to go off. They do the same thing and take those teams and move them out of headquarters.

Why did CIC choose Japan?

There’s a personal reason and there are professional reasons. The personal reason is that, in my youth, my dad said that if I studied Japanese for a while he would help me get an internship here. And my grandmother spent about 10 years in Asia in her youth, in the 1920s—mostly in China but some in Japan—and she taught me kanji when I was a kid. That all got me interested in Japan, and I was fortunate to do an internship here during high school.

Professionally, if you look at the most successful companies in the world—and you can use any measure, but one would be the Russell 2000 Index—all those companies were at one point start-ups. So, another way to look at that list is that it is a list of the 2,000 most successful start-ups ever. When you break them down by country, you find that the United States and Japan tie for the number of companies on the list adjusted by population. So, historically, Japan ties for number one as a place to build start-ups. That’s a reason to be here.

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Photos: ©CIC Tokyo

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Is the Japanese government doing enough to support start-ups?

Building a start-up ecosystem is a decade-long process. A piece can come from a supportive government, and it’s really terrific that the Japanese government is leaning in. Other governments that have leaned in, such as Israel, have done really well. It’s clear that a national policy that pushes in this direction can pay big dividends.

But it’s not the only thing that needs to happen. You also need the entrepreneurs themselves. And I think the Japanese innovation ecosystem is responding. These days, if you talk to young Japanese people—and this is a change, perhaps just like what started to happen a decade ago in the United States—you see many more who say they want to build a start-up.

I see Japanese universities leaning into this, which is important. They’re doing entrepreneur programs like those US universities started a decade or more ago. I see a growing awareness of, and interest in, what we call innovation infrastructure. This is things such as shared wet laboratories, the physical infra-structure that allows for new start-ups in, let’s say, the biotech field.

We’ve built shared workspaces focused on a number of industries. The largest so far is the wet lab for life sciences. We collaborated with others to found a nonprofit doing that in Cambridge. It’s called LabCentral and is, as far as we are aware, the largest shared wet lab on the planet. It’s over 20,000 square meters and has every possible piece of equipment you would need in life sciences. Then we figured out how to make that commercially viable and built a similar facility, a commercial one, called CIC Labs in Philadelphia. It’s the largest commercial shared wetland facility in the world, to our knowledge.

How can Japan and the United States work together?

The good news is that the interests are very aligned for Japan, for the United States, for Japanese companies, and for US companies in Japan. Everyone in this circle benefits when they figure out how to get these collaborations to work well, and set a different way.

If you aren’t out there working with new technologies, which are often coming from start-ups, then you’re at risk that you’ll be Airbnb’d or Uber’d. You’re in the hotel business and someone figures out another way to have lodging. You’re in the taxi business and someone figures out another way to get people around the city.

“If you aren’t out there working with new technologies, which are often coming from start-ups, then you’re at risk that you’ll be Airbnb’d or Uber’d.”

This is core to the ACCJ itself. Really, what you’re talking about is brokering conversations. You’re getting people to know each other and to talk about what they’re doing, and how they might help each other.

When I was a young person at the Mitsubishi Research Institute in the early 1990s, I was a member of the ACCJ, because I saw—and I convinced my bosses—that the connections that could be made were meaningful and important. I think it’s no less relevant today. And I think that, as many of these companies have evolved, one of the things they’ve come to realize is that, while the connections between larger organizations are important, the connections between larger organizations and smaller fledgling ones are also important. The challenge is figuring out how to find those little companies and how to know which ones to work with.

What’s next for CIC in Japan?

We were approached by Nishitetsu, the major private railway company in Kyushu. They said, we like what we see at CIC Tokyo and we’d like to work with you to build another one in Fukuoka. We have announced that we’re in a formal collaboration and will soon finish all the due diligence to make sure this will really work. Then we can announce if, in fact, we’re moving ahead with construction, but it’s looking very good and we’re excited to be headed to the second site.

We’re also in several conversations about building some of those shared wet laboratories, robotics laboratories, and other kinds of deep tech shared spaces here in Japan.

We’d love to hear from Journal readers on this; if they have ideas, they should let us know. We think there’s a lot of demand for this kind of innovation infrastructure. Not only does it propel start-ups, but it also creates an environment much like CIC Tokyo does, where larger companies can interact with, and find interesting, smaller companies. Those are our two main areas in the future: more in deep tech and more locations around Japan.

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Healthy Makeover

How are digital transformation tools changing healthcare in Japan?

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ChatGPT, that large language model that is stealing the headlines these days, may be all the buzz, but it’s just one example of how technology is rapidly changing the way we work and do business. And while the artificial intelligence (AI) bot may represent a leap forward, the deployment of digital technology across an organization’s operations has been on the rise in all industries since the advent of the World Wide Web in 1989.

Today, we call it digital transformation (DX), and it is bringing computation, Big Data, AI, other digital applications, as well as connected devices, to bear on how products and services are made and/or delivered, in industries as diverse as education, finance, and logistics.

Healthcare could also greatly benefit from these incredible advances, and the industry is undergoing its own DX revolution—including in Japan. Here, healthcare DX is gaining traction in part due to the advocacy efforts of the American Chamber of Commerce in Japan (ACCJ).

However, speaking to The ACCJ Journal, industry insiders—including members of the chamber’s Healthcare Committee—note that adoption of healthcare DX in Japan lags that of other countries, especially those in North America and Europe.

“I think the current situation is that [Japan is far behind] compared with countries such as Denmark or the United States,” said Makoto Kawai, director of government affairs at Zimmer Biomet G.K., a global medical technology company. Kawai is also co-chair of the ACCJ Healthcare Committee.

Maya Mamiya and Diogo Rau share similar sentiments. Mamiya is an associate director of global public policy for Asia at Eli Lilly Japan K.K. and a Healthcare Committee vice-chair, while Rau serves as Eli Lilly’s chief information and digital officer.

Also sympathetic to Kawai’s view are healthcare industry expert and committee Vice-Chair Eiji Sasahara, and Go Ikeda, a senior manager in the Healthcare Economics and Government Affairs Division of medical devices maker Medtronic Japan Co., Ltd.

Data Utilization

Dr. Sasahara noted that healthcare DX in Japan—especially optimal utilization of Big Data—is still low. Why? It is in large part because “operations heavily depend on manual and paper-based processes,” he explained. “It’s not easy to utilize [the] merits of digital technologies, such as accessibility, scaling, and automation.”

However, optimizing Big Data use in healthcare is important for a variety of reasons. One area where its effective deployment is critical is in determining the health outcomes of patients, the experts pointed out.

Rau identified even more areas where optimal use of DX tools can make a difference. In the case of Eli Lilly, Big Data, AI, and machine learning can be used to:

• Develop digital connectivity for clinical trials and therapeutics
• Deploy solutions to manage patient-specific digital information
• Speed up the discovery of new life-changing medicines
• Design and implement clinical trials
• Increase accessibility to and diversity of medicines
• Obtain more accurate efficacy/safety data
• Improve patient experience
• Improve the safety and effectiveness of medicines
• Manage and interpret patient data from connected therapeutic devices

Medtronic’s Ikeda agrees. “In order to link personal health records [(PHRs)] and medical information, it is necessary to build a platform and take measures to shift data ownership and management to individuals,” he explained.

“By connecting and sharing data such as PHRs and medical information, the value of medical care will be improved, allowing for early diagnosis and prevention of disease progression.”

“By connecting and sharing data such as PHRs and medical information, the value of medical care will be improved, allowing for early diagnosis and prevention of disease progression.”

To provide better healthcare while maintaining universal access, the current fee-for-service health insurance system should be shifted to value-based healthcare (VBHC), Ikeda suggested. “DX of healthcare is an important precondition for VBHC.”

Sasahara refers to this new paradigm as “citizen-centered care”—a form of healthcare that not only makes use of digital tools such as Big Data, but also puts patient outcomes at the core of the industry.

Healthy Prices

The upside of deploying healthcare DX can be enjoyed not only by patients and the private sector, but the public sector, too, the experts noted.

Government ministries and agencies—as well as the hospitals and other healthcare institutions and research and development (R&D) centers they fund—will be able to reduce costs through the effective deployment of DX strategies.

Ikeda noted: “DX will promote R&D and enable outcome-based reimbursement evaluation, supporting a reduction of medical and nursing care costs. It can also support the healthcare workforce shortage [to] benefit patients overall.”

Data Security

Improving data security is another benefit the DX revolution will confer on the healthcare industry, according to the experts. This is especially the case when securing the privacy of patient records, an area of concern many of them highlighted.

Healthcare DX, they said, should adhere to international standards of security. These standards are based on interoperability of systems and use of platforms such as cloud computing. In Japan, however, patient data is usually stored on premises and in stand-alone systems, which are not necessarily secure.

“With regard to data storage, the current mainstream on-premises, stand-alone system has increased security risks, and it should be considered that an open mechanism using the public cloud paradoxically improves security,” explained Ikeda.

Lilly’s Rau added: “Some of the key concerns include ensuring the confidentiality of this data when tied to a patient and the integrity of the data when billing and making care decisions.”

Sasahara agrees. He also noted that, in Japan, there is a lack of in-house security expertise. “It is usual that there is no [chief information security officer] at Japanese hospitals.” Kawai held a similar view.

However, this opens up an opportunity not only to acquire the necessary human resources but also to “develop and utilize emerging privacy-enhancing technologies,” Sasahara and Kawai agreed.

Securely digitizing patient records will be key to realizing the potential of healthcare DX.

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Prevent and Cure

The reach of healthcare is broad. It includes the prevention, diagnosis, and treatment of diseases, injuries, and ailments, and encompasses a wide area of professions and fields—from doctors to nurses to medical researchers—as well as facilities such as hospitals, clinics, and research institutions.

In the healthcare technology space, a few themes are emerging at the forefront. For Ikeda, three areas of particular note are:

• Grand design
• Value assessment
• Private–public partnership (PPP)

Regarding the path to implementation, Ikeda shared: “We believe that it is necessary to first illustrate a grand design for the overall picture of what the platform should be in order to realize medical DX, and then the process for building that overall picture should be presented.” It is the remit of the government, working with stakeholders across society, to provide that grand design or vision, he added.

“DX will promote R&D and enable outcome-based reimbursement evaluation, supporting a reduction of medical and nursing care costs. It can also support the healthcare workforce shortage [to] benefit patients overall.”

As for value assessment of digital health technology, Ikeda noted that this is difficult to properly assess under existing medical service reimbursement systems.

“To reduce the burden on medical professionals, as a new evaluation perspective unique to digital health technology [emerges], to equalize and improve the efficiency of technology, and to evaluate products that match the speed of product development and improvement, it is necessary to build a new evaluation system by referring to overseas cases and the utilization of non-insurance combined medical care systems,” he explained. Here, stakeholders in Japan and abroad can learn from each other.

And what of private–public partnerships? To enhance PPP, Ikeda added, it is also necessary to set up new forums for information sharing and discussion among the public and cross-cutting private sectors. “I am expecting that the ACCJ could be the hub of PPP.”

Sasahara mentioned three more trends to keep an eye on as paradigms change in the healthcare industry:

• Citizen engagement
• A shift from reactive treatment to data-driven prevention
• Utilization of gamification tech for patient care

The ACCJ Healthcare x Digital program focused on empowering elderly patients through digital health in 2022.

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Advocating for Change

To keep abreast of fast-changing developments in the industry, the ACCJ Healthcare Committee was invited in March to an event hosted by the American Medical Devices and Diagnostics Manufacturers’ Association (AMDD).

Led by Ikeda, who is chair of the AMDD’s Digital Health Committee, the event featured Dr. Kengo Miyo of the National Center for Global Health and Medicine, a hospital and international medical research and healthcare training facility located across Tokyo. Miyo is the director of the institute’s Department of Planning Information and Management.

Ikeda explained that the event was organized to realize medical DX in a situation where the environment is changing, and technology is progressing rapidly. “Cooperation among stakeholders toward a shared goal, and understanding of medical DX as a whole, are indispensable,” he stated.

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Future Ready

What must Japan do to ensure that its workforce can compete in a digital world?

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We’ve been living in a digital world for quite some time. More than three decades have passed since the World Wide Web began connecting us through zeros and ones. For most of that time, it’s been possible to straddle the line between digital and analog. But if the first quarter of 2023 has made anything clear, it’s that we’re at an inflection point when it comes to technology.

If Japan is to remain globally competitive and secure its future economy, it must embrace digital transformation (DX).

Despite increased efforts to push DX, Japan dropped to 29th place in the 2022 IMD World Digital Competitiveness Ranking, an annual report published by the Switzerland-based International Institute for Management Development that assesses and compares the digital competitiveness of countries based on their ability to adopt and explore digital technologies.

More concerning is that Japan ranked 41st in the talent subcategory and 54th in future readiness.

Overcoming this digital talent gap is a must. For companies, the required skill sets are shifting, impacting not only talent acquisition and retention, but also the country’s education system and overall workplace culture.

To find out where Japan is on the road to readiness, The ACCJ Journal spoke with corporate leaders making DX possible, as well as those helping companies and talent come together for success in today’s digital-driven world.

Widening Gap

Talent acquisition has become a pressing issue for companies across Japan. In a 2022 survey conducted by the Ministry of Internal Affairs and Communications (MIC), 67 percent of Japanese respondents cited a shortage of information and communications technology (ICT) personnel as a roadblock to their DX efforts.

Surveys conducted by recruitment site Doda show a sharp rise in the monthly number of job openings per candidate for engineers and other tech professionals—from 3.44 in March 2019 to 9.54 in March 2022. The Ministry of Economy, Trade and Industry (METI) projects a shortage of 450,000 ICT workers by 2030.

“We have a big problem. It’s a serious talent crisis that is going to get much worse,” said Daniel Bamford, associate director of technology for Asia–Pacific at specialized recruitment agency Robert Half Japan.

Changing Workplace

Faced with a dwindling talent pool and fierce competition, the Japanese labor system must change within a few years if Japanese companies are to acquire good talent, Megumi Tsukamoto, senior adviser at global consultancy J.S. Held Japan LLC, told The ACCJ Journal. The country’s traditional human resources model, according to which compensation is based on age and seniority, has exacerbated the digital talent shortage.

A 2016 comparative survey by METI found that the average annual salary of ICT personnel in Japan was roughly half that of their US counterparts. Workers in their twenties in the United States earned an average of $77,990 per year, while their Japanese counterparts took home just $31,300.

“Workers in their twenties in the United States earned an average of $77,990 per year, while their Japanese counterparts took home just $31,300.”

Tsukamoto noted that, in a bid to obtain and retain talent, some Japanese companies are beginning to offer salaries two to three times higher than previous packages. Some are offering much more than that. This is the result of ICT professionals either moving abroad, or choosing to work for such foreign companies in Japan as Google.

However, higher salaries are just one piece of the puzzle, said Victoria Ryo, associate director at Robert Half. In-demand ICT tech workers expect more.

“A company that provides workplace flexibility, along with benefits, interesting projects, and an international environment, is going to be more attractive,” she explained.

Ryo pointed to innovative initiatives that catch the attention of potential ICT workers. As an example, she mentioned the financial services organization Money Forward’s Culture Hero campaign, which awards employees who epitomize the company’s inclusive culture. But Bamford warns that a good diversity, equity, and inclusion (DEI) policy is not enough to attract these in-demand talents.

“For them, it’s a base expectation, not something that will win them over,” he said. “But if you’re not providing a diverse and inclusive environment, you will lose people.”

Looking Abroad

To address the domestic talent shortage, companies such as Fujitsu Japan Limited have accelerated plans to hire non-Japanese engineering researchers in the wake of recent mass layoffs in the US tech sector.

While skepticism remains that ICT workers from abroad can thrive in Japanese workplaces, where language—and sometimes insufficient DEI culture—remains a barrier, Tsukamoto cites Mercari, Inc. as a domestic player that has found success hiring international talent.

The thriving e-commerce company began its full-scale efforts to recruit overseas talent in 2018. Today, more than 50 foreign nationals are working at Mercari’s Tokyo office, according to their FY2022 sustainability report.

Last year, the company opened a subsidiary in Bengaluru, a hub for IT companies in southern India, with the goal of recruiting IT workers. As of last July, it had attracted 45 new graduates from the Indian Institute of Technology.

The school has been a popular source of tech talent for Japanese companies such as Rakuten Group, Inc., whose Bengaluru base grew from six engineers in 2014 to more than 1,000 in 2020.

The Japanese government has responded to this trend by launching two new visa schemes in April that target highly skilled foreign workers, such as researchers and engineers, as well as graduates of highly ranked universities.

The Japan System for Special Highly Skilled Professionals, or J-Skip, visa allows researchers, engineers, and business managers to bypass the points-based system used to award visas to skilled professionals.

Meanwhile, the Japan System for Future Creation Individual, or J-Find, visa allows graduates from highly ranked universities to live in the country for up to two years while they find employment.

Evolving Workforce

The Japanese government also pledged last October to spend ¥1 trillion over the next five years on reskilling workers to address the shrinking pool of tech talent.

In January, Japanese Prime Minister Fumio Kishida said that guidelines will be drawn up in June to increase labor market flexibility to encourage workers to move to high-growth sectors.

Major companies are also contributing. Amazon Web Services Japan G.K. (AWS) has invested more than ¥1.3 trillion to help its Japanese customers modernize their IT systems and to overcome their digital skills gap through education programs, training, and certification.

“Cloud and cybersecurity skills will be the two most sought-after digital skills by Japanese employers by 2025,” said James Miller, the company’s head of public policy. “AWS has trained over 400,000 individuals in Japan with cloud skills since 2017, providing them with in-demand skills and best practices to help learners and organizations innovate in the cloud.”

Miller—an American Chamber of Commerce in Japan (ACCJ) governor who also serves as co-chair of the chamber’s Digital Transformation Committee and vice-chair of the Secure Digital Infrastructure Committee—shared an example of how AWS extended a 21st-century hand to a 19th-century company.

In 2021, the company helped Toppan Printing Co., Ltd., the 122-year-old Japanese global juggernaut, embark on a full-scale digital transformation. More than 1,600 of its employees received AWS training over three months and 1,050 pursued AWS certifications in a single year.

Room for Movement

As businesses make DX a point of emphasis, having a range of skill sets has become more important. In terms of hard skills, such as cloud and DevOps, Bamford noted that recruitment has gone from a T-shaped model, where someone has broad awareness and one deep specialization, to a V-shaped one, where the candidate’s deep specialization is complemented by medium-depth knowledge in other areas.

“The other side is that the soft skills aspect is really focused on being able to bridge global and local, while also bringing technical and people skills,” he added.

While senior managers who can lead a company’s DX efforts are in demand, companies should look inward for potential employees who they can elevate, according to Bamford. He pointed to a client that was looking for a certified ScrumMaster and, rather than hiring someone already at that level, found success in ambitious young candidates who the company could train to be certified.

“Since there will be that much more demand, and that much more shortage, the secret is to unlock the skill sets of the people you currently have. Experience is nice, but learning mindsets are even better.”

“Since there will be that much more demand, and that much more shortage, the secret is to unlock the skill sets of the people you currently have. Experience is nice, but learning mindsets are even better,” he added.

Ryo noted that this can help companies retain their technical talent. “I think the number one reason people leave an organization is because they don’t feel they have the opportunity to grow.”

Preparing Future Generations

While reskilling offers companies a path to overcoming current DX issues, Japan’s new ¥10 trillion national endowment fund to boost research at universities in strategic priorities such as artificial intelligence (AI), biotech, and quantum technology is expected to help train the next generation.

However, Matthew Wilson, dean and president of Temple University, Japan Campus, believes that changing student mindsets is arguably more important to reversing the tech talent drain.

He contrasted students in the United States, who define their future goals by jobs they want to pursue, with Japanese students, who aspire to work for specific companies.

“If your goal is to work at a company, your pathway is going to be a lot different,” he said, noting that the practice of job rotations at Japanese companies, in which employees are transferred from department to department every few years, provides fewer incentives to focus on specific fields.

Wilson also noted that Japan’s public education system is “very conservative, which is difficult to change,” but is optimistic that the government’s push for DX and the advent of new AI technologies, such as ChatGPT, the conversational large language model developed by OpenAI, will accelerate change.

“It’s going to force people to educate differently and to assess differently,” Wilson said. “The point isn’t catching somebody who just did their essay with ChatGPT. Rather, it’s how to educate somebody so they have the skills and the knowledge they’re going to need for a job five years down the road.”

Unified Response

Steps have been taken to reshape the country’s education system with last year’s release of the Roadmap on the Utilization of Data in Education. A joint statement issued by the Digital Agency, MIC, METI, and the Ministry of Education, Culture, Sports, Science and Technology states that, by 2030, the government aims to create “a society where anyone can learn in their own way, anytime, anywhere, with anyone.”

While Wilson recalls similar government ambitions, such as former Japanese Prime Minister Yoshiro Mori’s “one student, one computer” initiative more than two decades ago, which had little success, he is optimistic about the Digital Agency and Minister Taro Kono, whom he praises for being “energetic and constantly finding ways to challenge processes and procedures.”

But he also noted that, while things are starting to move, “it’s going to take a while to get Japan to the digital utopia that they’ve been talking about for 25 years.”

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Surf the DX Wave

Five big lessons for Japan from Hawaii

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As Japan’s fledgling Digital Agency finds its way through its second year of existence, and the Tokyo Metropolitan Government’s new start-up strategy takes hold, a digital transformation (DX) wave is sweeping across the country. Learning to surf that wave takes experience, however, and another group of islands that know a bit about surfing, and have ridden DX to their advantage, could be a guide for Japan.

How the Hawaiian tourism industry found renewed life through digital transformation was the subject of a February 28 event held at Tokyo American Club and online, and entitled How to Surf the DX Wave: Five Big Lessons for Japan from Hawaii. The American Chamber of Commerce in Japan Tourism and Hospitality Committee luncheon—co-hosted by the Digital Transformation and the Information, Communications, and Technology Committees—welcomed Mayumi Nakamura and Mike Birt of Ascent Partners, LLC to discuss the restructuring of Hawaii’s tourism management system.

When the Covid-19 pandemic forced a total shutdown of travel, tourism hot spots such as Honolulu, which had welcomed a record 10.4 million visitors in 2019, went from overtourism to dead empty in just a few days. The islands fell quiet. And when tourism returned in 2021, it was not the same.

Recovering from Wipeout

“As people started coming back, the domestic travel industry was just a madhouse,” Birt explained. It was clear that the pandemic had left Hawaii’s tourism industry scarred and unprepared for the influx. Change was needed.

The seeds for change were planted even earlier. When heavy storms hit Haena State Park, on the island of Kauai, in April 2018, major access roads were shut down and neither tourists nor locals could enter.

It was a needed pause, however. Before the disaster, some 3,000 tourists had visited daily, leaving little room for Hawaiians. “There was some conflict there, and many people couldn’t enjoy their own homeland,” Nakamura explained.

While the storm was a multi-million-dollar disaster for many, others saw it as divine intervention, an opportunity to reappraise the management of state parks and give greater consideration to the balance of tourists and locals.

When the decision was made to transform the system, the Hawaiian government approached Ascent Partners for help. Nakamura led a team that designed a timed-entry reservation system. Entry was restricted to those with reservations, and daily tourist admission was capped. This allowed locals more opportunities to enjoy their own land. Greater emphasis was also placed on hiking the trails and evoking the experience of the natural land as the Native Hawaiians saw it.

Due to the pandemic, all the work had to be done remotely. The Hawaii project was run from Seattle, while the software development team was in India and various support staff were scattered across the US mainland.

The project was a great success. Not only were there societal benefits, but economic ones as well. The state brought in 250 percent of its projected tourism revenue in the first year.

The island of Kauai, home to Haena State Park

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Model for DX

Birt believes the fact that this project could be carried out remotely with such great success shows the potential for adapting the approach to other countries, with each following their own philosophy of reimagining post-pandemic tourism.

“It became a model for how to scale and develop very effective software digital transformation projects that can literally span the world,” he explained. “Destination management is a key element—and this isn’t just Hawaii. Venice, Iceland, Amsterdam … there are a number of [places] that have really had to work on how to manage their destination so that it doesn’t become overrun, and the community can still enjoy where they live.”

“It became a model for how to scale and develop very effective software digital transformation projects that can literally span the world.”

Birt and Nakamura said they learned a lot during their three years working with the Hawaiian state government. They shared five lessons which they believe Japan could put into action to transform its own post-pandemic tourism.

Lesson 1: DX requires leadership and vision
“Without a vision, none of the people around [you] can support the project. In the case of Hawaii, it was a return of aloha spirit,” Nakamura said. What made the project possible, she added, was that both the state government and private individuals were on board and committed to using the pandemic to take a bold step.

Lesson 2: DX has customers—and adversaries
“The state parks are literally part of [Hawaii’s] soul; Hawaiians think of their parks as almost a living thing,” Birt explained. Undertaking such a large-scale project, therefore, brought together many parties with a vested interest, whether emotional or financial.

Naturally, with this came those who strongly opposed the transformation. But nobody, Birt and Nakamura acknowledged, knowingly played the role of adversary; they resisted change simply for self-preservation. What saved the project from failure was that powerful friends in the Hawaiian state government shared the vision and supported it from the start.

Lesson 3: Technology is powerful
DX is not a simple one-and-done operation. It is an everyday effort that must be constantly analyzed and adjusted to fit the needs of the project. The DX wave does not stop or slow down. Everyone must be skilled and educated to properly participate in the journey. Questions must be constantly asked. In the case of the Hawaii project: Where are the tourists going? How are they going? How could communication be improved? What could smooth entrance into the parks?

Lesson 4: Expectations change
While the aloha spirit is the genuine treasure of Hawaii, it must always be met in balance with malama, the respect for the state and environment, as well as the customs and culture that come with it. You receive the generosity of Hawaii, but you are obliged to pay it back in appreciation. The same balance is sought in DX, where it has the potential to bring revenue and benefits, but we must be careful to not kill the goose that lays the golden eggs.

Lesson 5: DX waves won’t stop, learn to surf them
Lastly, there must be an emphasis on change, and an understanding that there is no final resting point in DX. Nakamura referred to the decline of Facebook and the rise of the artificial intelligence tool ChatGPT as examples of the unpredictable nature of technology. “You have to be ready to ride the waves as they comes,” she said. “Be adaptable, be adjustable. Don’t think of it as a destination, but as a journey.”

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Big Moves Moving

Two years into the JDA 2030, ACCJ leaders take stock of progress.

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Transformations take time. Reaping rewards can take longer. For Japan, shedding analog processes is critical for future prosperity, and the American Chamber of Commerce in Japan (ACCJ) is bringing together the broad expertise and experience of its membership to assist with the push for digital transformation (DX).

In early 2021, the ACCJ unveiled a comprehensive white paper entitled Japan Digital Agenda 2030 (JDA 2030) that outlined 11 big moves which could position the country as a global leader as we dive deeper into the 21st century. Produced together with McKinsey & Company, the JDA 2030 presents technology use cases and describes how Japan could realize a transformation that would put the world’s third-largest economy on equal footing with leading digital nations.

These measures to bolster DX in Japan call for concerted steps by major industries and stakeholders in areas such as digital talent, industry transformation, digital government, and economic renewal. And in the two years since the paper was published, the need for cross-industry collaboration to make many of the JDA 2030’s big moves a reality has become increasingly clear.

An Evolving Proposition

What has also become clear is that the pace at which digital everything is infiltrating all aspects of business and society calls for a reassessment of the JDA 2030. The ACCJ’s new Digital Forum, confirmed by the Board of Governors in April and led by Chair Mitsuhiko Ida, along with Vice-Chairs Kristopher Tate and Scott Warren, will be leading this task, working with the various digital-related committees to coordinate the chamber’s voice and position on DX.

And with DX impacting all organizations, not just those in technology fields, everyone has a role to play.

“The question is swiftly becoming, Is there such a thing as a non-tech field?” Warren told The ACCJ Journal. “We are seeing technology being applied in almost every business. I think the application of technology is almost too alluring—and necessary to keeping a competitive edge—to be ignored.”

ACCJ Digital Transformation Committee Co-Chair Jim Weisser agrees. “All businesses are digital or have a DX component. Trying to figure out which piece to transform—and how to do it—is a problem for all companies.”

“All businesses are digital or have a DX component. Trying to figure out which piece to transform—and how to do it—is a problem for all companies.”

Fellow co-chair and ACCJ Governor James Miller added: “The most important thing for members to keep in mind is the cross-sectional view versus the deep dives. There are sets of concerns that are technology specific, but we are continuing to focus on sharing what sets of issues business leaders should prioritize that are cross-sectional.”

Already, the chamber is looking at a variety of mechanisms to bring together the insights from the JDA 2030—and those continually being developed by the ACCJ’s committees—to refine its position and recommendations to provide the best guidance in a rapidly changing environment. This effort, supported by the work of the digital committees on technology-specific issues, is focused on teasing out the common positions across the broad range of committees to bring the whole chamber to bear on DX.

A question about the big moves outlined in the JDA 2030 is whether they might require a longer timeline to be realized than the seven years that remain until the original target date. This has spurred an effort to learn from the chamber’s landmark 2009 white paper Achieving the Full Potential of the Internet Economy in Japan, how progress was achieved, or efforts stalled, and how the digital agenda itself can evolve.

While a lack of dialogue or substantive business input may have slowed progress, the Great East Japan Earthquake and Tsunami of March 11, 2011, reignited interest in resilience. Similarly, former Japanese Prime Minister Shinzo Abe’s focus on the role of data at the 2019 World Economic Forum Annual Meeting in Davos has since proved to be a major lift for the JDA 2030.

Data, Trust, and Talent

At the center of Abe’s Davos proposal was Data-Free Flow with Trust (DFFT), something which Japan and its allies have struggled to define in the years since, said Warren, who is also co-chair of the ACCJ Legal Services and IP Committee as well as vice-chair of the Information, Communications, and Technology Committee.

“How we achieve [DFFT] will be one of the main topics discussed during the G7 conference. The real challenge, I think, is that the definition cannot be static, as it is very dependent on the type of data—critical infrastructure data versus other data—and the question of how much you trust the receiving entity and country. I think the true answer has to take those factors into account.”

Ida, an ACCJ governor, noted that the establishment of a new organization to promote DFFT was agreed at the G7 Digital Ministerial Meeting held in Gunma Prefecture in April. “For this, governments want private sectors to share our experiences, needs, and suggestions for policymaking. This is just one case in which the ACCJ can contribute,” he said.

Another area of great importance to successful DX is the acquisition and training of digital talent. But for a company to build a deep bench of world-class talent, with the digital know-how that is increasingly critical to success, takes time, Weisser said.

Megumi Tsukamoto, a vice-chair of the ACCJ Task Force on Economic Security, said that it is likely to take five years or so for Japanese companies to establish their digital bench once they recognize the need and begin fostering this talent. First, they must overcome major challenges in their operating cultures to provide levels of compensation expected by these professionals.

She also notes that opportunities are emerging that might enable Japanese companies and IT vendors to build their digital talent sooner. One is the sudden availability of personnel following the recent restructuring in the IT sector, both in Japan and in key markets overseas. “They’ll do it because, without IT talent, it is very difficult to compete with other global companies. It is an urgent issue,” Tsukamoto emphasized.

Companies are also increasingly aware of the business opportunities digital can drive, and are developing their people to realize them. Tsukamoto points to one Japanese service provider that is working to create tools, some powered by artificial intelligence, to help staff who lack digital skills. By pooling specialists in planning, user interface design, and the core product—and combining these with dedicated IT support—they are able to develop in-house software that can enable service staff to focus on the highest value tasks while leaving the software to automate others. She also mentioned a Japanese manufacturer that is already pairing robots with its production line workers to realize mutual benefits.

Now Is the Time

New tools such as these show that technology concerns are not the biggest obstacle. “Oftentimes, it is the business thinking that we should be focused on,” said Miller. “A lot of tools can be used to reduce risk and mitigate concerns in a way that was not conceivable a decade ago.”

Japan also brings to the table a high level of competency in science, technology, engineering, and mathematics, or STEM disciplines, that enables it to leverage a strong legacy of engineering capabilities. “Combined with being the world’s third-largest economy, the level of scale and scope of opportunities seen in Japan are really unrivaled,” added Miller.

“Combined with being the world’s third-largest economy, the level of scale and scope of opportunities seen in Japan are really unrivaled.”

These insights are the basis for plans to coordinate DX leaders across the ACCJ’s various digital committees. The goal is to
understand the high-level points and the depth of topics, ranging from talent acquisition to cybersecurity.

“Now is the time to work together,” Miller concluded. “We’re seeing dramatic changes in Japanese policy and company environment that we haven’t seen for 30 years. We are seeing a lot more combined interest in [the US–Japan] partnership.”

The ACCJ, with its diverse and multinational membership, is one of the few organizations that can pull such voices together and bring industry views to both the US and Japanese governments, noted Ida. “We can partner with both governments to support their policymaking by providing our experiences, needs, and technical assistance.”

Warren invites all ACCJ members to get involved in shaping the chamber’s digital advocacy.

“The ACCJ has consistently espoused, for years, that whatever new policies are created in Japan must be fairly implemented across both domestic and international companies,” he said. “As for specific policies to implement related to digital transformation, the ACCJ is in the process of gathering those. If you have ones you think important, please submit them to one of the many digital policy committees or to your committee leadership.”

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Have an idea? Get involved!

The ACCJ has a range of committees working on leadership and advocacy for Japan’s DX journey:

Digital Transformation • Digital Economy Task Force on Economic Security • Secure Digital Infrastructure • Information, Communications, and Technology • Healthcare • and many more

Visit accj.or.jp/committees to learn more.

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