"Survey on Business Operations of Foreign-affiliated Companies in Japan" Summary of Survey Results －New surveys about geopolitical risks and new business trends in the post Covid-19 era－

Mar 21, 2024

JETRO conducted a survey of 7,427 foreign-affiliated companies based in Japan from October to November 2023 and received valid responses from 1,537 companies (valid response rate: 20.7%).
The purpose of this survey is to grasp the current status and trends of foreign-affiliated companies* based in Japan, the attractiveness and challenges of the business environment in Japan, and the support needed, as well as to prepare data used for effective FDI promotion projects and for reference to improve business environment and for related measures. Based on this objective, the survey scope was expanded to all foreign-affiliated companies in Japan from JETRO-supported companies only; this is the third such survey.
The key findings of the survey will be presented as follows: 1) Impact of geopolitical risks and other uncertainties, 2) Collaboration and cooperation for business expansion, 3) Securing Human Resources.

* “Foreign-affiliated companies” in this survey refer to companies in which foreign investors have a stake, regardless of the percentage of foreign capital.

1. Finding business opportunities in Japan and expanding business amid geopolitical risks and other uncertainties

• Performance of foreign-affiliated companies in Japan was strong for the second consecutive year. Their intention to "strengthen or expand" operations in Japan in the future also showed further increase. The percentage of companies that intend to establish new sites or strengthen existing sites both increased approximately 1.6 times from two years ago.
• Given the geopolitical risks, social and economic stability has become a prominent attractiveness of Japan's business environment. With business opportunities expanding in Japan due to changes in the supply chain and others, some have pointed out the growing importance of the Japanese market, business, and Japanese subsidiaries.
• 8.0% of the respondent companies have implemented to transfer, or are planning to transfer or considering transferring the functions of their overseas bases to Japan. While "sales and marketing" is leading this trend, it tends to be in the consideration stage for "manufacturing and processing" and "R&D."

2. Collaboration and cooperation as a key step for business expansion, as well as for building new business trends in the post Covid-19 era

• Companies that are considering collaboration/cooperation with Japanese companies and institutions have a particularly high interest in business expansion in the future, positively considering collaboration/cooperation as a means of business expansion. In addition, there is growing interest in collaboration/cooperation with startups in the manufacturing industry.
• More than one third of the respondent companies are either conducting or considering collaboration/cooperation with Japanese companies and institutions. The percentage is particularly high in the fields of pharmaceuticals and professional services. The ratio exceeds 50% in the IT sector. The most significant theme for future business development after Covid-19 selected by the respondents is Digital Transformation, collaboration/cooperation in the IT field can be an effective means for promoting this.

3. Securing human resources continues to be an important issue, needing to improve the environment to accept international talents

• Securing human resources is the most significant challenge that foreign-affiliated companies in Japan wish to see improve. As a countermeasure, some companies are taking steps to improve payrolls, work-life balance, and other aspects of their compensation packages.
• In terms of efforts to ensure the smooth employment and residence of international talents, there is a tendency to place further emphasis on the working environment, personnel system reforms are also becoming increasingly important. On the other hand, there is still a high need for digitization of administrative procedures, more rapid acquisition of status of residence, as well as multilingual support.

"Survey on Business Operations of Foreign-affiliated Companies in Japan" Summary of Survey Results(2.8KB)