JETRO Global Connection -Accelerate Innovation with Japan-

Report
Innovation by foreign companies spreading across Japan

(Japan)
Invest Japan Promotion Division

On November 27, JETRO announced the "JETRO Invest Japan Report 2019" (Note 1). This fifth report, with the subtitle "Innovation by foreign companies spreading across Japan", presents case studies of innovation by foreign companies that are attracting attention, and the results of a survey on foreign companies in Japan (Note 2).

Inward FDI balance reached 30-trillion-yen on mark

Inward foreign direct investment flow in Japan (Balance of payments, net) was 2.9 trillion yen, the second-largest since 1996 when comparable records started, following 2016. Inward FDI stock at the end of 2018 was 30.7 trillion yen, marking a record high for five consecutive years. By region, Europe accounted for 49.5%, North America 21.8%, Asia 19.2% and the rest of the world 9.5%. The stock continued to grow steadily in 2019, with the stock at the end of Q2 2019 (April-June) at 33 trillion yen (initial estimate).

Focusing on regional and Advantages of Japan
Introduce examples of business development

The report focuses on the advantages and social issues of regions and Japan itself, and introduces examples of business development through innovation. Aizuwakamatsu City in Fukushima Prefecture has been working on developing a "Smart City" along with Accenture, the general consulting company. As the population declines, the city has a mix of urban and depopulated areas, making it a region that is suitable for conducting social demonstration experiments. To date, more than 30 demonstration experiments have been conducted, and about 20 projects have been put into practical use, such as notification of vaccination appointments by digitizing mother and child health notebooks.

70% of foreign companies are positive about open innovation in Japan

According to a survey conducted by JETRO for foreign companies in Japan, regarding the status of open innovation with Japanese companies and universities, 20.6% of companies "have already implemented open innovation and will continue and expand it in the future", and 52.0% "have no experience but are interested", indicating that more than 70% of companies are positive about open innovation. According to the survey, more than 40% of respondents said that "the attitude of Japanese companies and society to foreign investment" has improved in the past one or two years. As Japanese companies and society change, it is expected that cases of open innovation between foreign companies and Japanese companies and universities will further increase in the future.

For the text and summary of the JETRO Invest Japan Report 2019 and past reports, see the JETRO Invest Japan Report page.

(Note 1) JETRO Invest Japan Report: A report summarizing trends in Japan's inward FDI and the efforts of the government and JETRO to promote investment in Japan. Published every year since FY2015.

(Note 2) Survey of foreign companies in Japan: A survey conducted by JETRO on foreign companies in Japan regarding the investment environment in Japan. The analysis was conducted from June to July based on responses from 213 foreign companies.

(NAGASAKI Yuta)

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