News & Updates

“JETRO Invest Japan Report 2018” published - Foreign Investment Contributing to Emergence of Innovation -

Nov 29, 2018

JETRO has published the "Invest Japan Report 2018," a comprehensive report covering recent trends in inward FDI to Japan. A summary of the report and JETRO's follow-up efforts follows.

Three Main Points

1. Stable increase in Japan's inward FDI – Asia continues to increase its share

  • Japan's inward FDI stock at the end of 2017 was 28.6 trillion yen, renewing a record high for four consecutive years.
  • By country/region, only FDI stock from North America has decreased from the previous year (down 444.2 billion yen). Meanwhile, FDI stock from Asia has risen by a factor of 10.3 compared to 2000 levels, making it the fastest growing player and third largest investor in Japan following Europe and North America.
  • Investment from Asia expanded in business related to inbound tourism (new airline services to regional cities in Japan by low-cost carriers [LCCs] and cashless payment services), establishment of procurement bases by cross-border EC site companies, and the sharing economy, which is a new form of service.
  • The number of JETRO-attracted investments in 2017 reached a record high of 193. More than 50% came from Asia, representing an increase in the region's share.

2. New Trend of Investment in Japan – Full-scale foreign investment in ecosystem to create innovation

  • Foreign companies are successively participating in the Japanese ecosystem for startups which has led to innovation.
  • Foreign-affiliated players such as coworking spaces, accelerators, and venture capital firms are contributing to the forming of an environment for startups in Japan, leveraging their abundant experience and successes achieved abroad. They provide various opportunities for creating business innovation and acquiring knowhow needed for a startup to grow. Use of coworking spaces by large enterprises aiming at planning new business is also expanding.

3. Active attitude of foreign-affiliated companies in the Japanese market – eager to create innovation

  • In a survey of foreign-affiliated companies conducted by JETRO [Note], over 70% of the companies perceived Japan as a highly profitable market. (New question.)
  • About 70% of foreign-affiliated companies plan to expand their investment and employment. Fifty percent of them expressed an interest in M&A deals with Japanese companies. (New question.)
  • Around 70% of the foreign-affiliated companies showed interest in open innovation with Japanese companies and universities. They are interested the most in Japan's SMEs as partners. (New question.)
  • Over 60% of companies expressed an interest in using the "Regulatory Sandbox" system (established in June 2018). This indicates high motivation for innovation creation in Japan. (New question.)
"Survey on Japan's Investment Climate 2018" :
A survey conducted by JETRO from May to June 2018, which collected and analyzed data on the perception of the business environment in Japan among 266 foreign-affiliated companies

JETRO's efforts going forward

1. JETRO will make earnest efforts to attract startups from overseas from the next fiscal year.

  • JETRO will attract innovative technology and business models to Japan by expanding a range of support services while identifying future prospects of each company.
  • JETRO will work to find promising local startups, utilizing the "JETRO Global Acceleration Hub" set up worldwide, aiming for two-way (not only outbound but also inbound) support.
  • Toward the creation of innovation and economic vitalization at the local level, JETRO will work to invite startups to various regions in cooperation with local governments that conduct activities to cultivate startups and draw investment from overseas.

2. JETRO will hold a new series of lectures at Japanese universities/graduate schools

  • The most common problem among foreign-affiliated companies when doing business in Japan is difficulty in finding and hiring human resources. JETRO has been promoting the invitation of highly-skilled foreign professionals to Japan, such as holding IT career fairs in India. In addition, to support foreign-affiliated companies in securing human resources, JETRO has held networking events between foreign-affiliated companies and international students in Japan in collaboration with the University of Tokyo and Tohoku University.
  • While continuing these efforts, JETRO will organize omnibus lectures inviting foreign-affiliated companies at Japanese universities/graduate schools, and is now in preparation with candidate universities to begin in April 2019. These are aimed to help make foreign-affiliated companies a promising career choice for university/graduate school students (including international students).

3. JETRO will contribute to further improvement of the business environment

  • Acknowledging requests JETRO has received from foreign and foreign-affiliated companies regarding the "Business Manager" status of residence, the outcome of discussions between the Ministry of Economy, Trade and Industry and the Ministry of Justice is that approval has been given for a preferential measure for issuing the status of residence under certain preconditions even when using shared offices such as coworking spaces.
  • JETRO will contribute to further improvement of the business environment in Japan by continuously listening to the opinions of companies and conveying these requests and ideas to the national government.

Mr. Tsuboi or Ms. Yamada
Invest Japan Coordination Division, Invest Japan Department, JETRO