The Journal The Authority on Global Business in Japan

Stronger partnerships between the United States and Japan are key to the prosperity of both nations as we chart a path into an uncertain future. The business community has an important leadership role to play in the formation of closer, mutually beneficial ties, and the American Chamber of Commerce in Japan (ACCJ) and the Japan External Trade Organization (JETRO) jointly explored this topic on April 24 at an invitation-only C-suite event hosted at The Peninsula Tokyo.

The gathering, entitled “Forum on US–Japan Collaboration on Investing in the Future,” took place just one week before the dawn of a new era in Japan, as the abdication of Emperor Akihito brought the Heisei Period to an end and the coronation of Crown Prince Naruhito marked the beginning of Reiwa.

This new era presents an oppor­tunity to make an assessment as to where things stand, where Japan will go in the future, and how both Japan and the United States will further promote mutual bonds.

A group of high-level discussion leaders and panelists were assembled for this forum, and they analyzed the obstacles and opportunities in five sectors (see sidebar). From this emerged three key themes:

  • Connectivity
  • Mobility
  • Community of interests

One consistent message was that technology—artificial intelligence (AI), autonomous systems, ubiquitous sensors, and advanced manufacturing—will drive the future. Digitalization, the internet, broadband, mobile devices, and 5G cellular networks will be the delivery vehicles.

CONNECTIVITY
As these technologies indicate, the key to harnessing flows of knowledge and investment is connectivity, and cooperation between the United States and Japan in Asia in rule-making for the digital economy is of key importance for our future prosperity. JETRO Chairman and CEO Nobuhiko Sasaki highlighted this fact in his dialogue with ACCJ President Peter M. Jennings during the luncheon session, which I moderated.

Tokyo Governor Yuriko Koike also spoke at the forum and explained how the city has already bloomed as the smartest in Asia. This was achieved, she said, by fostering:

  • Environmentally friendly construction policies
  • New ways of transforming public transportation
  • Data links between government, Big Data, and the Internet of Things (IoT)

Governor Koike also said that she aims to showcase the Japanese capital as the best city in the world by the time of the Tokyo 2020 Olympic and Paralympic Games.

Fifty years ago, the United States accomplished another technological feat by landing a man on the moon. Since the time that the crew of Apollo 11 set foot on the lunar surface, ushering in a bold new age of exploration, our relationship with space has expanded by leaps and bounds. We are now at a point where a frontier once dominated by government is accessible by, and presents opportunities to, the private sector.

While Jeff Bezos’s Blue Origin LLC, Richard Branson’s Virgin Galactic, and Elon Musk’s Space Exploration Technologies Corp.—better known as SpaceX—get most of the headlines, Japan is home to some serious space innovation as well. The founders and chief executive officers of two such companies—iSpace Inc.’s Takeshi Hakamada and Astroscale’s Nobu Okada—took part in a session entitled “New Frontiers in Outer Space.”

In the discussion moderated by Garvey McIntosh, NASA attaché to the Embassy of the United States, Tokyo, Okada and Hakamada looked at ways in which private companies are getting involved, such as making plans to conduct mining operations on the moon and clearing Earth’s orbit of dangerous amounts of manmade debris—a task in which Astroscale specializes.

MOBILITY
Down here on Earth, mobility is not just a key feature of data, it is also a characteristic of people and money—both of which move in and out of Japan in exceptional ways.

This was addressed in a panel entitled “The Future of Sports and Tourism.” The administration of Japanese Prime Minister Shinzo Abe has set a target of 40 million inbound tourists each year by 2020 and 60 million by 2030. The country is well on course to meet these goals. And while some logistical barriers still exist, the Olympics and Paralympics—as well as the Rugby World Cup this year—are expected to provide both tangible and intangible legacies, including opportunities to further develop sports as business. If we can rise to the challenge, Japan can become a role model for the world.

Foreign direct investment (FDI) is important if Japan is to take full advantage of these opportunities and sustain the benefits long term. Although FDI levels are still low com­pared with countries such as the United States, China, the Netherlands, Ireland, and Australia, it is steadily increa­sing as investors become more aware of comprehensive policies designed to promote FDI. These policies and incentives include tax reductions, corporate governance reform, deregulation, and the streamlining of administrative processes. The United States is the largest source of FDI in Japan, and will likely continue to be as new ideas and business models migrate here.

COMMUNITY OF INTERESTS
Both Japan and the United States have long been major sources of innovation. Government support for research and development of technology has played a key role in both countries. It is now widely understood that government cannot pick winners and losers, but it can foster an envi­ronment for innovation by setting appropriate rules. While the United States and, importantly, China may have taken the lead in AI and Big Data, our panel concluded that it is likely that Japan will provide leadership in certain areas such as robotics, healthcare, and the extension of IoT to the manufacturing process.

The panel on Tokyo as a financial center highlighted the importance of developing new ways to think about how to provide financing for investments in new business models and technologies, as well as how to provide for post-retirement income in an aging society.

Upon reflection, we can see that all the issues discussed during the forum are related. And as the speakers made clear, unlocking the creativity and innovation of the Japanese people requires that:

  • Communication and transportation links be strengthened
  • Technology and business models be exchanged more quickly
  • Strategic cooperation on global policy issues be enhanced

Only in this way can the benefits of connectivity and mobility be achieved within the context of the beautiful harmony promised by the new era.

 


 

SESSIONS AND SPEAKERS 

Session 1: The Future of Sports and Tourism

Cynthia Usui, chair, ACCJ Tourism Committee

Jonathan Kushner, chief communications officer, McDonald’s Holdings Company (Japan) Ltd.

Sonja Vodusek, general manager,
The Peninsula Tokyo

Masato Mizuno, chairman, Mizuno Corporation (moderator)

Session 2: Foreign Direct Investment in Japan:
Accelerating in New Directions

Shigeki Maeda, executive vice president, JETRO

Mario Stein, president and representative director, Johnson & Johnson Consumer Company

Yoshiyuki Tanaka, president, DuPont K.K.

David Milstein, head of Japan, Eight Roads Ventures

Ken Lebrun, chair, ACCJ FDI Committee (moderator)

Session 3: Japan as an Innovation Center

Taro Shimada, corporate vice president, general manager of the Cyber-Physical System Promotion Division, and chief strategy officer, Toshiba Corporation

Michael Alfant, group CEO, Fusion Systems

Heizo Takenaka, professor emeritus at Keio University and professor at Toyo University (moderator)

Session 4: New Frontiers in Outer Space

Nobu Okada, founder and CEO, Astroscale

Takeshi Hakamada, founder and CEO, iSpace

Garvey McIntosh, NASA Asia Representative,
the Embassy of the United States, Tokyo (moderator)

Session 5: Tokyo as a Financial Center

Keiko Tashiro, deputy president, Daiwa Securities

Yoshiki Minowa, vice president of Service Strategy,
IBM Global Business Services

Oki Matsumoto, chairman and CEO, Monex Group, Inc.

Jesper Koll, CEO, WisdomTree Japan (moderator)

SPECIAL THANKS TO . . .

Peter M. Jennings, president, ACCJ

Ken Lebrun, chair, ACCJ FDI Committee

Nobuhiko Sasaki, chairman and CEO, JETRO

Shigeki Maeda, executive vice president, JETRO

Sonja Vodusek, general manager, The Peninsula Tokyo

Junjiro Yamashita, director, The Peninsula Tokyo

Arthur M. Mitchell is ACCJ governor and senior counselor at White & Case LLP.