Survey Report on Japan-based Companies Operating in the San Francisco Bay Area

Aug 13, 2020

JETRO San Francisco has released a report summarizing the results for the 15th edition of a biennial survey conducted since 1992 of Japan-based companies operating in the San Francisco Bay Area. The survey was jointly conducted by the Japanese Chamber of Commerce of Northern California (JCCNC) and JETRO San Francisco between February and March 2020. The survey’s objective is to gather information on the business conditions of Japanese companies in the Bay Area. These results will help inform Japanese companies interested in doing business in the area and help the JCCNC and JETRO San Francisco determine business initiatives to better support those companies and the wider community. A report will also be sent to the California state government and other local authorities to inform them of the economic contributions and business challenges of Japan-based companies in the area. It is important to note, however, that this survey was conducted prior to the spread of COVID-19 in the San Francisco Bay Area, which began around mid-March.

The San Francisco Bay Area is a global financial, technological, and cultural hub. As of March 2020, a total of 1,035 Japan-based companies have been confirmed to be operating in the Bay Area. Of those 1,035 companies, this survey was sent to 738 companies, and we received 237 responses. According to the responses, the three most commonly represented industries in the Bay Area are the manufacturing (33%), service (24%), and tech (19%) industries. Within the manufacturing industry, over 40% of respondents identified themselves as manufacturers of electronics (including semiconductors). In Santa Clara County, which is home to 45% of Japan-based companies in the Bay, manufacturing is the leading industry; whereas in San Francisco and San Mateo counties, service industry – including specialized business and restaurants – was the dominant industries represented. Despite the heavy representation of manufacturing industry companies in the Bay Area, a further look into these companies illustrates that most are not conducting manufacturing and production operations in the Bay Area, but rather are using their offices in the area to conduct sales and marketing operations instead.

As of December 2019, nearly five times as many companies reported making a profit as those making a loss. This trend was reflected in all industries. It should be noted though that several companies, particularly in the technology sector, do not sell products or services in the Bay Area, so a N/A option was added in this edition of the survey to reflect this.

Regarding employment, approximately 50% of respondents saw no change between 2018 and 2019, which underscores relatively stable employment. As mentioned before, however, this survey was conducted prior to the onset of the COVID-19 pandemic in the Bay Area and the United States as a whole, and thus does not reflect changes in employment that may have occurred as a result of it. The survey goes into further detail on the salaries of employees at Japan-based companies in the Bay Area. It also discusses benefits offered to local employees. One major point of interest is the increase in work-from-home policies from 24 to 43% between 2018 to 2019. This is before the shelter-in-place ordinance went into effect.

The survey also identified major business concerns of Japan-based companies in the Bay Area, the biggest of which is economic trends (74%), but also rising housing and employment costs (>50%). Also, although the survey was conducted from February 21 to March 13, before the Bay Area began to see the negative impact of the COVID-19 pandemic, roughly 50% of respondents cited epidemics as a major business concern. At the time of the survey, nearly half of respondents intended to either expand operations in the Bay Area or maintain the status quo. Very few intended to build new facilities or downscale operations. Many businesses seemed eager to work with U.S. startups as well as other Japanese corporations.

While much has changed in the economic landscape of the Bay Area, the U.S., and the world since this survey was put out, it is still a useful resource for Japan-based businesses, as well as adjacent organizations such as JETRO and the JCCNC. Thank you to all the respondents of our survey, and thank you to the JCCNC for helping to conduct the survey alongside us.

Please read the full report HERE.