accj journal december 2009

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December 2009 | The Journal | 1

CONTENTS Volume 46 | Issue 12 | December 2009

FEATURESCOVER STORY

12 Repricing Innovation An April Viewpoint addresses the impediments, and solutions, Japan’s pharmaceutical pricing practices raise in regard to bringing the best care available to the populace. By Julian Ryall

価格改定によるイノベーション4月号のビューポイントでは、国民への最適な医療を妨げる日本の薬価慣行と解決策を紹介ジュリアン・ライアル

20 Competition or CooperationJapan, China and India are coming to recognize economic solutions that lay beyond their respective borders. By William J. Swinton and Dr. James Portwood

競争か協力か日本と中国とインドが国境を越えて横たわる経済問題の解決に目覚めるウィリアム・J・スウィントン、ジェームズ・ポート博士

24 Magic Wows the CrowdsThere’s a lot to look at when it comes to tomorrow’s technology on display. By John Boyd

観衆を魅了する魔術将来の技術が満載の展覧会。ジョン・ボイド

12

ACCJ MissionFurther the development of commerce between the United States of America and Japan, promote the interests of U.S. companies and members, and improve the international business environment in Japan.

2 | The Journal | December 2009

DEPARTMENTS9 From the Publisher

11 President’s Message

17 Media Watch Edible Economics. Jeans Blues. Blog Botches. Where’s the Beef? Age Gauge.

30 Jesper Koll Writes 10 Japan Surprises for 2010

32 Events Line-up Business and leisure-related happenings in December. By David Umeda

34 FDI Portfolio Retail Tally. Smoothie Operator. Virtual Cloud. Browne Black. By Nicole Fall

42 Making It in Management Whether English is a second language to the speaker or audience, the key

to a successful presentation rests on the person standing in front. By Dr. Robert Tobin

45 Behind the Book Japanese Workplaces in Transition: Employee Perceptions by Hendrik Meyer-Ohle, is

reviewed by Tom Baker.

46 Advocacy Update ACCJ Viewpoints

48 In the Final Analysis By Samuel H. Kidder, ACCJ Executive Director

CONTENTS Volume 46 | Issue 12 | December 2009

32

17

42

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Presidents EmeritiThomas F. Jordan (1994-1995)Robert F. Grondine (2000-2001)

Debbie Howard (2004-2005)Charles D. Lake II (2006-2007)

Allan D. Smith (2008)

ACCJ LeadersPresident

Thomas W. Whitson KPMG FAS Co., Ltd.

ChairmanAllan D. Smith AIG Companies, Japan and Korea

Vice PresidentsMichael J. Alfant Fusion Systems Japan Co., Ltd.

Laurence W. Bates GE Japan CorporationWilliam R. Bishop, Jr. Nippon Becton Dickinson Co., Ltd.

Michael D. Bobrove (Kansai) Nihon Medrad K.K.Kumi Sato Cosmo Public Relations Corporation

Mark F. Schwab United Airlines, Inc.Chris Zarodkiewicz (Chubu) Cezars International K.K.

TreasurerNasir Majid PricewaterhouseCoopersBrett Jensen (Kansai) Colliers Hallifax

Steve Burson (Chubu) H&R Consultants

ACCJ GovernorsAndrew Conrad Aflac International, Inc.

Bruce J. Ellsworth Johnson & Johnson Family of CompaniesJames Foster Microsoft Co., Ltd.

Harry Hill (Chubu) Oak Lawn Marketing, Inc.Tad Johnson Pratt & Whitney Aftermarket Japan KK

John Kakinuki AXA Life Insurance Co., Ltd. Jiri Mestecky Kitahama Partners Legal Professional Corporation

Kinji Yasu Stone Container Japan Co., Ltd.Douglas L. Peterson Citi Group Japan Holdings

Nicole W. Piasecki Boeing JapanJay Ponazecki Morrison & Foerster, Ito & MitomiMitsuyo Teramura Federal Express Corporation

Jim Weisser PBXL

ACCJ Executive StaffSamuel H. Kidder Executive Director

Aron Kremer Deputy Executive Director

ACCJ CommitteesAerospace & Defense Committee Jean Pierre Bolat/Terry Nakatsuka

American Auto Industries Rick BrownArchitecture, Construction & Real Estate Kevyn Johnson/Michael P. King

Asia Business Philip C. JonesB2B Sales Karl Hahne/Craig Saphin

Banking and Finance Thomas Clark/Ernfred OlsenCharity Ball Barbara Hancock, Jeffrey Shimamoto

Corporate Social Responsibility Patricia Bader-JohnstonDirect Marketing Joseph Peters

Environmental Rebecca K. GreenFinancial Services Forum Chris LaFleur

Food and Agriculture Collin BensonForeign Direct Investment Nicholas Benes

Government Relations Ira WolfHealthcare Steve Plunkett

Human Resource Management Chris Lamatsch, Adam KassabIndependent Business Doug Jackson

Information, Communications & Technology Darren McKellin, Ann RollinsInsurance Nathaniel Graddy/Jonathan Malamud

Intellectual Property David CaseInternational Education Patrick Newell

Investment Management David MonroeLeadership Forum Michael J. Alfant/Kumi Sato

Legal Services Bonnie Dixon, Haig OghigianMarketing Programs Koichi Hama

Membership Relations Andrew SilbermanRetail Ed Kolodzieski

Special Events Barry BergmannYoung Professionals Group John Ghanotakis

Taxation Jack Bird/Michael ShikumaToiletries, Cosmetics & Fragrances Yukiko Tsujimoto

Transportation and Logistics Jeff Bernier/Jeremy GoldstrichTravel Industry Kayoko Inoue

University Briefing Program Richard May/David Satterwhite

Kansai ChapterBusiness Programs Pabel Delgado

Community Service Kojiro DanExternal Affairs Kiran SethiLiving in Kansai Barry Louie

Membership Paul DupuisWomen in Business Mari Nogami

Chubu ChapterCommunity Service Steve Burson

Independent Business Chris Oostyen/Jason MorganLiving in Chubu Lowell Sheppard

Membership Relations Chris ZarodkiewiczPrograms Steve Brown

American Chamber of Commerce in JapanMasonic 39 MT Bldg. 10F, 2-4-5 Azabudai

Minato-ku, Tokyo, Japan 106-0041Tel: 03-3433-5381 Fax: 03-3433-8454

www.accj.or.jp / www.ecentral.jp

The ACCJ is an independent membership organization with no affiliation with any government or other chamber of commerce. The ACCJ is a member of the

Asia Pacific Council of American Chambers and values its relationships with Japanese, American and other nations’ business organizations.

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Publisher Vickie Paradise [email protected]

Senior Editor David Umeda

Art Director Paddy O’ConnorGraphic Designer Akiko Mineshima

COLUMNISTSTom Baker, Nicole Fall, Jesper Koll

CONTRIBUTORSAlana Bonzi, Geoff Botting, Martin Foster, Justin McCurry, Tony McNicol,

Anthony H. Rowley, Julian Ryall, Catherine Shaw

PHOTOGRAPHERS / ILLUSTRATORS Tony McNicol, Jeremy Sutton-Hibbert, Darren Thompson, Mattias Westfalk

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Journal

FROM THE PUBLISHER

Some jobs are inherently rewarding for their singularity, and publishing the ACCJ Journal has been just such an experience for me.

This issue concludes a nearly eighteen-year stint as publisher of this magazine, and a deeply fascinating

period it has been. I recall the early 1980s, when no shadow of doubt existed among Japanese leaders that the rewards of a uniquely harmonious state-industry relationship and a peculiarly stable business model would continue its spectacular and exponential growth. So much has changed since then, not least regarding the position, role and priorities of the foreign business community. This fl agship publication of the ACCJ has both recorded that change and evolved with it.

There was a time, for instance, when the magazine strongly refl ected the business community’s preoccupation with trade barriers and “iron triangle” connivance. Those days are long gone. We have witnessed a new generation of Japanese leaders push ambitious agendas of change. Meanwhile, new ACCJ leaders, fl uent in the local language and with a sophisticated understanding of the dynamics of this nation’s power structure, have made profound contributions to ongoing economic reform.

It has been a privilege to work with the chamber members most deeply involved in the ACCJ’s evolution.

Recognition must also go to the hard working and dedicated Paradigm staff who, over the years, lived and breathed the Journal. There were smiles on our faces when this issue was ready for print, but the farewell was bittersweet.

I will miss this job. As publisher of the Journal, I have been the bridge between the advertising and editorial sides and the last person to read and approve the magazine’s content and design before going to print. It has been a challenge and at times an ordeal; it has also been a privilege and a pleasure.

“To everything there is a season and a time to every purpose under the heaven.” It is the season and the time for all of us at Paradigm to say farewell to you, the readers of the ACCJ Journal. We also thank our many advertisers who placed their confi dence with Paradigm in supporting the Journal.

We wish everyone a joyous holiday season, with the spirit of Christmas where it belongs: in the heart—and among family and friends. ■

Changing of the Guard

Vickie Paradise Green


PRESIDENT’S MESSAGE

WOW!!! What a year!

The Chamber closes the year with its annual elections, a Diet Doorknock, and the Charity Ball on December 4. On December 9, the Joint Chamber Bonenkai kicks off our descent into Japanese tradition that reaches its climax with the Kohaku Utagassen (Red-White Song

Contest) that NHK airs on New Year’s Eve. This is a chance to see and hear singers from years past that you thought had died a long time ago. And it is a good warmup before you venture out into the cold to perform Hatsumode at your local shrine. Or, if you are really keen to see nearly all of your Japanese neighbors at the same time, you can join the crowds at Meiji Jingu.

I am embarrassed to report that ACCJ membership has declined every month this year. However, we responded by controlling expenses, reallocating Chamber offi ce responsibili-ties, decreasing headcount, and negotiating successfully on a new offi ce lease. As a result, the ACCJ will end 2009 in the black and we will enter 2010 with signifi cant reserves.

The ACCJ was very active in 2009 and member participa-tion in our events and activities was very high. This tells me that members believe ACCJ networking, information sharing, advocacy and other activities have value for them in the current economic environment.

The Fall 2009 FCIJ Business Confi dence Survey has just been released and foreign businessmen are upbeat about their business prospects and the Japanese economy. 74% think that the Japanese economy will show improvement in the next 12 months. 34% had improved sales performance in the last 6 months and 62% expect improved sales in the next 6 months. 66% are working on growth strategies in Japan. Less than 1% of respondents are considering withdrawal from the market.

Even with the optimism of our members, 2010 looks to be very challenging, but we have some exciting programs to pursue. In 2010, I would like the ACCJ to:

• Get our member issues on the table at the 2010 APEC working group meetings that Japan will host;

• Improve our understanding of evolving Japanese government policies and adapt our advocacy messages and approaches so that they resonate with the government offi cials we talk to;

• Roll out specifi c Internet Economy White Paper issues to the Japanese government in concert with Japanese business organizations;

• Advance our concept for a US-Japan Dialogue on Economic Competitiveness;

• Manage within our fi nancial means;

• Find new ways to engage and retain our current membership; and

• Attract new members.

I think that we can accomplish all of these things and react quickly to situations that will arise that we cannot even imagine today.

In closing, I would like to thank the Chamber offi ce staff for all of their support and all the ACCJ members who have contributed their time and efforts to making 2009 a successful year for the Chamber. And I wish you and your families a healthy happy Christmas and a bright New Year in 2010. Thank you. ■

Thomas Whitson is ACCJ [email protected]


Millions of patients in Japanese hospitals are not receiving the optimum medical care because the particular pricing system applied to medicines distributed in Japan makes introducing the newest and most

effective drugs economically unviable. The Ministry of Health, Labour and Welfare under the previous Liberal Democratic Party government had expressed its willingness to carry out revisions, and there is hope that the new administration of The Democratic Party of Japan, installed after the August 30 general election, will pursue the same path. There are concerns, however, about just how soon progress might be realized.

The Pharmaceuticals Subcommittee of the Chamber is actively encouraging Japan’s healthcare authorities to re-examine a system that, in effect, discourages innovation and research into new medicines. This appeal has the full support of virtually all foreign drug fi rms operating in this market, as well as most of the large Japanese companies in the sector.

Yet, there is a feeling that the new government of the DPJ has other priorities in regards to health and welfare issues—including revamping the nation’s pension system and providing additional resources for the most elderly in society.

As a result, there is a sense of urgency among those wanting reform. Unless progress is made on drug pricing in the near future, any opportunity to do so may be lost.

“There are two major issues that we see as an industry regarding the current pricing system,” says Ko Sekiguchi, execu-tive advisor to Janssen Pharmaceutical K.K., a subsidiary of healthcare giant Johnson & Johnson, and chair of the Japan-based Executive Committee of the Pharmaceutical Research and Manufac-turers of America (PhRMA).

“The fi rst is the drug lag for the most innovative medicines that patients here need; the second problem is that this country is losing its attractiveness as a market and, consequently, Japa-nese companies are investing less in technology and becoming less competitive,” he says.

A recent study of 12 pharmaceutical companies refl ects the consequences. It has revealed that research and development on 23 drugs had been halted simply because there was no possibility of the companies involved being able to earn a profi t in the Japanese market.

Repricing InnovationACCJ VIEWPOINT RAISES CONCERNS AND OFFERS SOLUTIONS.By Julian Ryall

Ko Sekiguchi



According to Ira Wolf, Japan represen-tative for PhRMA, the delay in approving a new medicine for the market here is between three and fi ve years past the date that it has been available in the U.S. or Europe. Equally alarming is that around one quarter of the top 100 best-selling drugs are not available to Japanese patients.

“The Japanese system used to work because the country used to have a young and relatively healthy workforce whose main healthcare issues were infectious and acute diseases that needed immediate treatment,” says Wolf. “But in the last 10 years, Japan has seen major lifestyle changes and a rapid increase in the number of older people, so there has been a shift from acute diseases to chronic illnesses—such as diabetes, heart disease and cancer.

“People’s bodies are changing faster than government policy is changing,” he adds.

At present, when a new drug is released in Japan, its price is set in relation to similar medicines that are already available here. There is no factoring in the amount of time or money that has been invested in developing the latest weapon against the disease. This price rule has the immediate effect of discour-aging companies from investing in research and development of new treatments. The turn-off is worsened by a rule that requires that the price be automatically reduced every two years—even when a drug is protected by a patent.

Japanese companies have come to recognize the inherent drawbacks to the pricing system. As a consequence, they either scaled back research, or are carrying out their studies overseas, primarily in the U.S. and Europe, and completing clinical trials and launching new products abroad—not here. Among the last to benefi t, unfortunately, are patients in Japan. The domestic industry is suffering as well because Japanese companies are losing their competitiveness and the know-how required to carry out the needed research and clinical tests.

Wolf describes the process as a “hollowing out of the Japa-nese pharmaceutical industry.” He says that, while it is impera-tive for all drug companies to do clinical trials, the environment in Japan has fallen behind that in South Korea. All this means that the infrastructure in Japan is much less conducive to the critical aspect of research and development activities.

The Pharmaceuticals Subcommittee is also opposed to the repricing mechanism imposed on popular medicines. Drugs that exceed their sales forecasts by more than 100% and whose total sales volume exceeds ¥15 billion have their prices subject to a downward revision of as much as 25%.

Wolf describes this repricing regulation as “perhaps the single most anti-innovation policy” in the pharmaceutical sector.

“This says to companies that their drug was more successful than they expected—not because of advertising, as you are

not permitted to advertise drugs in Japan, but because doctors recognized it as being valuable—then they are expected to accept a price cut,” he says.

An automatic drop in price due to successful marketing even applies when a new drug developed to combat, for example, ovarian cancer is subsequently found to be helpful in the treat-ment of colon cancer, thereby increasing sales. Even though its product cost tens of millions of dollars to develop—and is helping countless people—the fi rm earns substantially less from its success.

The subcommittee stated in a recent Chamber Viewpoint on revising the pricing system, released in April 2008, that this

“Arbitrary system further discourages future investment and innovation in the pharmaceutical industry by increasing the uncertainty about whether companies will be able to recoup their research and development costs.”

Despite the industry—domestic and international fi rms alike—being in complete agreement on the need for improve-ments here, there remain vested interest groups in Japan that oppose change. Chief amongst them are the members of the Japan Medical Association—the single most powerful non-political organization in Japan over the last 40 years. Japanese doctors care deeply about the well-being of their patients, but they are not paid particularly well by, say, U.S. standards. They dispense fully 40% of all medicines in this country, and fear that revising the pricing structure would adversely affect their earn-ings. The problem, say critics, is a system laden with perverse incentives.

The subcommittee has made a series of recommendations that it hopes the government will act upon.

First of these proposals is a fundamental reform of the pharmaceutical pricing system in Japan in a way that promotes long-term investment in the health of the Japanese people and innovation in the pharmaceutical industry. Secondly, the View-point is calling for the abolition of certain regulatory disincen-tives, such as special repricing and the biennial price revisions. The subcommittee is also opposed to the proposed introduction of price revisions on an annual basis.

More specifi cally, according to Sekiguchi, prices should be maintained during the exclusivity period after a new product is launched—either the patent life or eight years from introduc-tion, whichever is longer—until the arrival of generic versions of the drug.

“People’s bodies are changing faster than government

policy is changing.”Ira WolfIra Wolf


Sekiguchi admits that adopting such changes increases the necessary amount of money spent on innovative new medicines every year, although the industry is proposing a way to keep down total spending on medicines.

“If the government can agree to these proposals, it will mean that spending on innovative new medicines will rise,” says

Sekiguchi, “but we are willing to have our products replaced by generic versions—which are 30% cheaper—after the exclusivity period has expired.

“We believe this will help achieve the overall balance that is required,” he adds.

In addition, the industry will undertake developing drugs that have yet to be approved for the Japanese market, but have already been granted licenses in the U.S. and Europe.

Companies have balked at going through the long, compli-cated and costly approval process for many of the drugs that target a relatively small number of patients here. Such limited use in specifi c treatments would mean fi nancial losses for the drug company. Failing to have the medication available here, however, means those patients would suffer unnecessarily.

“This pricing system is unique to Japan and clearly it was conceived as a way to cut spending on healthcare,” says Wolf of PhRMA. “And if all you care about is cutting spending, then the system works. But if you care about ensuring that the world’s most innovative drugs are delivered promptly to Japanese patients, then this system is clearly not working.

“There are too many people here—in particular the Finance Ministry—who consider healthcare to be purely a cost,” he adds. “We say that it’s an investment that helps people, enables them to live longer and happier lives, creates a healthier work-force and invests in jobs and the economy.”

So where is the downside in that? ■


Julian Ryall is The Daily Telegraph’s Tokyo correspondent.

SNAPSHOTDevise Better Device PipelineMany medical advances that have been saving lives in other countries are not available in Japanese hospitals because of a “device lag” in the testing and approval of the technology here.

The Medical Devices and Diagnostics Subcommittee of the Chamber has been making efforts to rectify this problem, reduce the time it takes for devices to earn approval, and make sure that patients have access to the best medical technology available, carrying out a study into the reasons for the delay and working with the Japanese authorities.

According to Steve Plunkett, general manager of the Government Market Development division at GE Healthcare and chair of the Chamber’s Healthcare Committee, there are a number of reasons for the delay in

Japan, all of which can be reversed.“There are not enough device reviewers in Japan, the time for devices

to reach the market is slow and the rules regarding the approval of devices are often unclear and the submission process can be painstakingly slow,” he says.

In a study by the ministries, companies and industry groups released in 2008, it was pointed out that the average time taken to approve a device in the U.S. is 10.1 months, but the same product took 21.1 months to win approval in Japan. For a 501(k) equivalent product, it was 2.2 months in the U.S. but 14.3 months in Japan. For this reason, as well as the high costs involved, only about half of the medical devices available in the U.S. and Europe are presently in use here.

To underline the scale of the problem, the United States Food and Drug Administration (FDA) has nearly 10 times the number of device reviewers as Japan with only three times the population.

To address the problem, the Ministry of Health, Labour and Welfare has taken steps by instituting a new system from April 1 this year that will triple the number of device reviewers over the next fi ve years, allowing more equipment to be certifi ed by a third party and instituting a “three-track” system, similar to the U.S. It has pointed out, however, that merely reducing the time it takes to review a new product will not eliminate the device lag and that there must also be a reduction in the lag in time it takes to submit devices here for testing and certifi cation.

Among other things, the Chamber’s task force still wants the authorities here to simplify few material information requirements, accept more broadly accelerated stability tests, harmonize test conditions for biological safety tests with international practices, reduce the scope of partial change approval applications—known as “ichihen”—and waive such requirements that do not affect product safety or effi ciency.

“There have been gradual and positive improvements in the product review and approval system in Japan,” says William Bishop of Nippon Becton Dickinson and ACCJ vice president and Health Care Committee Board Liaison. “Monitoring the ministry’s pledge to make further changes through agreed metrics will be essential in ensuring continued progress.

“For patients and physicians, the sooner the device lag can be eliminated, the sooner they will have full access to leading-edge medical technologies that all too often lag in their availability in Japan with the rest of the world,” he says. JR

Steve Plunkett

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MEDIA WATCH

Economy Over Safety

The recession and decline in discretionary income are clearly impacting Japanese consumer attitudes toward food safety, which, in turn, affect consumer preferences for both domestic agricultural products and prepared foodstuffs.

An article in the Nikkei Marketing Journal (Sep. 30) cited a nationwide food trends survey of 2,000 adults, conducted in July by the quasi-governmental Japan Finance Corporation. Compared with

41.3% of respondents who had given food safety as a prime concern in May 2008—shortly after pesticide-laced dumplings imported from China sickened several people—the fi gure had declined to 31.7% at the end of 2008. By July 2009, the response plunged to 19.8%.

On the other hand, the food survey shows that consumers have attached increased priority to affordability, which received a 35.1% response in the recent July survey, compared to 27.2% and 34.6% in May and December 2008, respectively.

Changes were also noted in the concerns between domestic food products vis-à-vis imports. In the survey taken in May 2008, 84.4% of respondents had said they put priority on items made in Japan. In the latest survey, the number declined to 79.4%. Likewise, the surveyed preference for domestic ingredients in foods served at restaurants fell from 44.1% in the 2008 survey to 36.7%.

Meanwhile, the online newspaper J-CAST reported on October 18 that frozen foods have made a considerable shift into the dietary mainstream. (The Circle K/Sunkus convenience store chain has begun offering a line of 12 frozen food items uniformly priced at ¥105.)

In Japan, frozen foods had long been associated with the ingredients of home-produced obento box lunches. But the Japan Frozen Food Association, based in Tokyo’s Chuo Ward, surveyed 500 married women in August and found that 52.6% now often include frozen food items with regular meals.

To promote its members’ products and observe the 40th anniversary of its founding, the association proclaimed October 18 to be “Reito no Hi,” the day for eating frozen foods. The name is also a useful mnemonic, since the 10th month would be pronounced “to” and “-18” is the association’s recommended temperature (in centigrade) for preserving frozen foods.


On October 5 the U.S. Federal Trade Commission issued new guidelines warning bloggers that they could incur an $11,000 fi ne if they receive free goods, free services, or other types of compensation, and write about goods or services without making clear their “material connection” to the provider.

This is, indeed, a major concern; the Los Angeles Times cited the Word of Mouth Marketing Association as estimating the blog-for-money business was valued at $1.35 billion in 2007.

When the “Be between” column in the Asahi Shimbun (Oct. 3) asked 6,732 online members if they pursued so-called “Kuchikomi sites” (word-of-mouth blogs) that make recommendations for products and services, 65% replied that they did. Out of these, 65% acknowledged that some of what was recommended probably is yarase (put on or staged).

The most popular businesses mentioned in the Kuchikomi sites

by 2,050 respondents were hotels and Japanese inns. These were followed by restaurants (1,851) and household appliances (1,397). The top 10 (multiple responses given) was rounded off by sightseeing destinations, books, hot springs, cosmetics, hospitals, personal computers and movies.

Some 35% of respondents who said they do not peruse such blogs gave as their main reasons: not interested (1,031); fi nd the contents suspect (962); don’t want to be infl uenced by others’ opinions (461); didn’t know such blogs even existed (426); and “it’s harder to decide if you have too much information” (387).

Itsuro Hamada, a professor of media communications at Edogawa University, advises Asahi readers: “Kuchikomi sites are growing, but their data are a hopeless jumble of wheat and chaff ... If you take the trouble to view several sites, you’ll almost certainly spot something fi shy.”

Three-digit Economics

Be-log It or Not

Blue jeans for ¥690; down jackets for ¥2,800; and men’s business suits for ¥5,000. “Nightmarish” is how Nikkan Gendai (Oct. 17) highlights the defl ationary spiral, characterized by plummeting prices for apparel. The consumer price index in August had plunged 2.4% over the same month in 2008, its sharpest recorded drop.

“From the economic data, it appears the defl ation will be long term,” points out Yoshikiyo Shimamine of Dai-Ichi Life Research Institute. “The supply-demand gap in the GDP during the April-through-June quarter stood at 7.8%. The demand shortfall comes to about ¥40 trillion. Since Japan’s latent growth rate is around 1%, reversing this toward price infl ation will be an extremely diffi cult task. We’re looking at defl ation continuing for the next 10 years.”

Takakazu Nakamori of Teikoku Databank delivers a gloomy prediction that corporate cost cuts are likely to fall on personnel. “Manufacturers are likely to accelerate overseas production, with

the domestic industry hollowing out and the unemployment environment wors-ening,” he says. “We’re likely to see more bankruptcies caused by defl ation.”

Perhaps there is no better example of price defl ation than the phenomenon of “three-digit” blue jeans. Domestically

produced denim trousers have long sold for well over ¥2,000, with deluxe designer brands going for ¥15,000 or more. But in March 2009, Fast Retailing launched sales of jeans for ¥990 a pair under its low-priced g.u. brand. This was undercut by ¥10 two months later by Seven & I Holdings’ trou-sers sold at its The Price discount outlets.

By August and September, the Aeon and Daiei supermarket chains had undercut these prices, with jeans selling for ¥880 a pair. As of this writing, the Don Quijote discount store chain was offering jeans for just ¥690.

Weekly Playboy (Oct. 19) reports that the domestic jeans industry has been reeling. In September, Okayama City-based Bobson (founded in 1950) was acquired by a Tokyo-based investment company, Milestone Turnaround Management Co., Ltd., for undisclosed terms. Also hard hit was Levi Strauss Japan, reporting a 79% year-on-year decline in after-tax earnings in its December 2008 to May 2009 fi scal period.


MEDIA WATCH

Environment WatchingThe September issue of Gekkan Shohisha (Monthly Consumer) conducted a survey of 377 adults to examine perceptions regarding the environment. On average, over 90% said they were able to perceive the deterioration of the environment in the course of their daily lives, with the lowest age segment, people in their thirties, giving a 37.7% response. The most frequently cited examples of environmental problems were climate change (34.7%), air pollution (26.9%), river contamination (19.1%) and noise (8.6%). The factors most responsible for environmental problems, in the respondents’ views, were industrialization (29.2%), deforestation (28.6%), motor vehicles (25.4%) and population increase (8.1%).

When asked what they were doing to improve the situation, the most common

response was reducing the volume of rubbish (21.8%). Other replies included turning off lights and appliances (18%), adjusting air-conditioning settings (14.9%), conserving water (14.5%), planting greenery (7.9%), utilizing recycled products (7.8%), and traveling on public transportation (7.7%).

When asked, “Are you willing to tolerate a certain amount of inconvenience or reduction in your living standard for the sake of the environment,” 62.2% of those in their twenties gave a positive response, as a opposed to 29.7% who said they were not. The youngest segment’s positive response was signifi cantly lower than the over 80% given by other age segments. Those respondents over age 70 scored a perfect 100%.

Where’s the Beef?Japanese fast food continues to make successful inroads into the world’s largest consumer market: China. The Sankei Shimbun (Oct. 25) reports that Yoshinoya, famed for its affordable gyudon—or nyurou-fan (bowl of stewed beef over rice) as it’s called in Mandarin—is on a roll in the People’s Republic.

Currently, KFC and McDonald’s are said to have over 2,500 and 1,000 outlets respectively in China, where the fast-food market in 2008 was estimated at ¥6.2 trillion, up about 60% over 2005. This puts China “around the stage Japan was in the early 1970s,” says Shuji Abe, president of Yoshinoya Holdings, whose outlets in China passed the 200 mark in September.

The shops of Abe’s company in China serve 1.6-1.7 times more customers per store than the average in Japan, with some even serving threefold. This is despite the price of 13 to 15 yuan (equivalent to ¥173-199)—which is considerably higher than a simple meal in local-style restaurants.

“With the economy and incomes growing, Chinese people are less deterred from spending more, which is helping to bring us more customers,” says Abe.

Yoshigyu launched its fi rst branch in Hong Kong in 1991, and currently operates 218 shops in China, mostly in coastal cities. The company aims to have 1,000 outlets operating by the middle of the next decade. But competition is also coming: domestic rival chain Matsuya just opened its fi rst outlet, in Shanghai, in late September.


The 21st century belongs to Asia, or so they say. But what part? And who will lead and what will the future look like? Recently, the Chamber’s Asia

Business Committee convened a panel questioning whether Japan was destined to relinquish its place as the leading Asian economic power. Will China, instead, take on regional leadership?

A distinguished panel of business leaders and experts from GE, J. Walter Thompson Advertising, and the Fujitsu Research Institute offered considerable insight into current trends and future possibilities. Randy Krieger, president of Ford Japan Ltd., who moderated the

panel, deftly navigated a wide-ranging discussion of the potentials and pitfalls, similarities and discontinuities that defi ne the rivalry between China and Japan for ascendancy in the coming decades.

As to the question of who would emerge as the leader of Asia going forward, no clear answer emerged. More recently, Japan’s new prime minister, Yukio Hatoyama, made it clear that he wants to promote greater cooperation with neighbors in the region, substanti-ating an “East Asian Community.”

The success of such a strategy is far from assured, however. Bill Emmott, former editor of The Economist, describes

an Asian tomorrow as characterized by nationalism, historic recriminations, and escalating economic tensions among an economically mature Japan and the rising stars in the region, China and India. This scenario would become much more likely should the current global economic crisis lead to protectionist policies and even to civil unrest in China and/or India, where the gap between haves and have nots has been widening.

Cultural differences, simmering border disputes and historic rivalries notwithstanding, Japan, China and India have a signifi cant amount to gain from multilateral economic integration and commercial cooperation.

Competition or CooperationASSESSING THE ECONOMIC FUTURE OF ASIABy William J. Swinton and Dr. James Portwood


Harvard University’s Michael Porter, author of the Global Competitiveness Report, states that the relative competi-tiveness of nations is a measure of “their ability to sustain signifi cant productivity growth and economic expansion.” This, in turn, is based on the availability and effi cient use of natural resources, the general education level in the population, as well as management sophistication, infrastructure development and environ-mental conditions.

The following review of the profi les in competitiveness for the three major Asian economic powers reveals an interesting quality of mirrored images. Japan, China and India individually have recognized strengths and challenges in meeting the competitiveness require-ments laid out by Porter, yet each also

demonstrates strengths and challenges different from—yet complementary to—their neighbors.

Japan: Effi cient production systems undermined by an ageing population and lack of entrepreneurshipJapan’s global competitiveness is built on sophisticated enterprise management systems that have allowed Japanese industry to blend a well-trained workforce with state-of-the-art technology to produce high-quality goods. This has been accomplished while achieving the lowest energy use per unit of GDP in the world. Japan also has been accomplished in its rising awareness of, and investment in, environmentally friendly products and production practices in recent years.

An important consideration is how the nation’s population and industrial base are ageing. Low birth rates are already leading to a shrinking labor pool. Compounding the situation is Japan’s economy suffering from a decided lack of both successful entrepreneurism and creative vitality. Recent statistics compiled by the Venture Enterprise Center (VEC), a state-funded research fi rm, indicate that new IPOs for Japanese startups have “dwindled signifi cantly over the last seven years, hitting a low of 42 in all of 2008.”

A report from the Stanford Program on Regions of Innovation and Japanese Entrepreneurship (SPRIE), at Stanford University, fi nds that total venture capital investment in Japan over the last several years has averaged less than 10% of that in the U.S. All of this—coupled with increasing competitive pressures on existing Japanese industries due to the appreciating yen and maturing markets—will likely lead to persistent economic contraction unless these trends are reversed. It is also clear that such a reversal is unlikely to occur if one looks for solutions strictly within Japan.

China: Growth will require access to increasingly scarce natural resources China’s economic ascendance has been crowned with the recent announcement that the country has passed Japan as the world’s largest holder of foreign reserves (more than $1.4 trillion and growing). China’s growth has been fueled by its enormous (albeit ageing) labor force and the massive foreign investments that such an available labor pool attracts. A growing middle class with improved buying power has made China an increasingly attractive market for imports. All this economic momentum makes China an attractive trading partner and powerful global player—well into the future.

Yet, China now is facing a number of impediments to growth. Sheer popu-lation size and low wages had given Chinese industry a decided advantage over its competitors during the last decade. The same forces at work in Japan—low birth rates and higher life expectancy—will soon saddle China with an ageing workforce and a substantial senior population. Such trends are likely to drive up costs, especially if the yuan is revalued upward in the face of pressure from China’s trading partners. Chinese fi rms will be forced to seek greater effi -ciencies in all aspects of their businesses.

Another related set of concerns for China must be its rapidly expanding reliance on scarce resources, including energy, water and land. Contrary to Japan, China’s energy use per unit of GDP has actually been going up, not down, as the economic race to grow faster has led to systemic strains—such as increased congestion and greater population mobility. Similarly, water resources are under pressure as the demands of industry, agricul-ture and personal use compete for shrinking supplies. Left unchecked, these concerns will impact negatively on China’s economic expansion.

COMPETITION OR COOPERATION


Dr. James Portwood, a tenured professor at the Fox School of Business and Management, Temple University, teaches executives and MBA students in the U.S., Europe and Japan.

William J. Swinton is director of International Business Studies at Temple University, Japan Campus and Vice Chair of the ACCJ Human Resource Management Committee.

India: Can infrastructure improvements keep pace with growing demand?India has come late to the table as far as economic development goes, but the country is making up ground by leapfrogging some of the earlier stages that often characterize economic development in emerging economies. A combination of savvy entrepreneurs, highly educated professionals (India now has more Ph.D.s than any other country in the world), global alliance experience, and repatriating nationals (with signifi cant technical expertise) has allowed India to enter and compete successfully in a range of high-leverage fi elds, including IT outsourcing, basic and application software development, and information-based business services.

As India embarks on a rapid indus-trialization of its own, however, strains are beginning to become apparent everywhere in its underdeveloped infrastructure—from roads and rails, to energy-generation and educational systems. What will be needed is an infu-sion of massive investment and expertise in these areas in order to design and manage all efforts effectively.

A Century of CooperationAs the three Asian giants come to recog-nize that the solutions to their problems require input and involvement beyond their respective borders, they will seek partners to support the effort.

Business and economic integration in Asia already is underway in several areas. Japan recently signed a multibillion-dollar agreement to build the infrastructure for a high-tech corridor in India. China has surpassed the U.S. as Japan’s largest trading partner, and has completed an agreement to build electric plants in India. Indeed, future connections among these neighbors are likely to accelerate beyond simple trade in products and services.

Cross-border investments are expanding rapidly and exchanges of people are likely to increase as well. Japanese managers are being sent to India to help native management teams develop the sophisticated enterprise management systems so responsible for Japan’s economic prowess. Japanese companies, in turn, have begun to hire Indian-based fi rms for offshore software development. Each of the two countries, but especially Japan, can benefi t from an infl ux of foreign entrepreneurs with new eyes and ideas.

Furthermore, as these three Asian economies return to growth (China is looking at an 8% growth rate this year), each country will be looking to build on its strengths to add value across the region. The outcome should be a stronger, more politically and economically robust neighborhood.

On a political plane, there are important reasons why each of these three major players in Asia will want to

maintain U.S. involvement in the region. Prime Minister Hatoyama has made it clear that he still sees the U.S. as a key strategic and economic partner. India certainly will want to keep the U.S. close as a counterbalance to any Chinese pressure. The large Indian population in the U.S. will continue to create business links. China may seem the least likely partner, but it, too, has a huge stake in the U.S. economy and the dollar through its large holdings of U.S. Treasury securities.

American business inter-ests will need to focus on their ingenuity, entrepreneurship when seeking further global opportunities in the region. The products and services that will be most attractive to consumers in either mature or emerging economies in Asia are likely still on the drawing boards of U.S. companies and universities.

Industries ranging from green energy and biotechnology, from information management to higher education, stand to be major global growth sectors over the next decade. American businesses would do well to anticipate such opportunities in this region. ■

COMPETITION OR COOPERATION

India now has more Ph.D.s than any other country in the world.


The 600 or so exhibitors at CEATEC Japan put on a grand show to celebrate the 10th anniversary of this October love fest for all things digital.

Among the standout technologies on display for the 150,000 attendees, who came despite the global economic slump and a transport-disrupting typhoon, were a singing robot, 3D TVs and far-out phones for the future.

Readers fi nally ready to splurge on a large fl at-screen TV or upgrade an ageing home theater unit might want to hold off until next year, though, when Sony Corp. and Panasonic Corp. say they will be introducing 3D-enabled televisions for residences. Both global manufacturers, along with Sharp Corp. and Hitachi Ltd., demonstrated their technologies using 3D movie and video clips before steady streams of CEATEC visitors.

Related to this progress, Howard

Stringer, Sony’s CEO, emphasized earlier this year the importance his company is placing on the technology to enhance home entertainment. Stringer added, “3D is clearly on its way to the mass market.” Besides 3D-enabled standard TVs, Sony also demonstrated 3D video game tech-nology and recorded 3D sports scenes that had been shot live.

To enjoy the new TVs requires that you wear shutter glasses employing electronic blinds that alternatively open and block each lens rapidly in time with the refresh rate of the screen’s image. This creates two slightly different images, which the brain combines to produce the 3D effect. Therein, however, lies the challenge for the technology. Will consumers be disposed to wear the glasses and shell out a premium for the sensation? Much will depend on not just how good the 3D media is, but also how comfortable the viewing experience

turns out to be. Judging from the CEATEC demonstrations, while the quality of the 3D images are excellent, the comfort side of the experience still needs tweaking if consumers are going to delight in 3D for long periods of viewing time.

In May, as a way to help it come up with innovative designs for future mobile phones, Fujitsu ran a design contest open to the public. The nine winning designs from 2,000 entries were chosen and put on display at CEATEC, including the overall winner from Jin-gwon Go, a student at Keimyung Univer-sity in Daegu, South Korea, who picked up ¥2 million for his efforts. Go’s gesture phone uses a graphical user interface that interprets hand gestures and the way the phone is handled to change its functions—for instance, from a phone to a camera. Among the other winning concept models to receive an award was the curiosity-grabbing circle phone, a

Magic Wows the CrowdsTOMORROW’S PRODUCTS ON SHOW IN TOKYOBy John Boyd


design employing a round 3-in (7.62cm), icon-laden, touch-screen LCD and retract-able phone unit.

Still on the same topic of concept phones, NTT DoCoMo Corp., Sharp and Olympus Corp. generated much interest with their less-than-high-tech, but, never-theless, appealingly designed Touch Wood phone. The prototype handset’s casing is produced from compressed and toughened cypress wood to form an eye-catching design—each phone possessing its own individual natural-wood pattern—that is water-, mildew- and insect-resistant. And it even smells nice! The wood is supplied from culled trees taken during forest thin-ning for a reforestation project called More Trees. No word yet when DoCoMo might put the phone on the market.

To show off its vocal synthesis soft-ware to great effect, Yamaha Corp. used an HRP-4C humanoid robot created by the National Institute of Advanced

Industrial Science and Technology (AIST) in Tsukuba and dressed it up to look like a well-known Japanese female singer. An attendee among the throngs of gaping visitors was asked to use Apple Inc.’s iPod touch to send the robot a request from six listed songs. The robot acknowledged the sender and request, then proceeded to lip-sync the song, as well as move its head and blink its eyes quite realisti-cally as it sang. In the opinion of one attendee: “Creepy!” (See a video clip of the robot singing at www.youtube.com/watch?v=LorTKDFIsxc)

And staying with the robot theme, Nissan Motor Co. Ltd. at last year’s CEATEC had demonstrated small robot vehicles that avoided colliding with obstacles when moving by using a laser range-fi nder and sensor technologies. The concept was inspired by studies on the composition of a bee’s eyes to determine what enables the insect to avoid colliding

with obstacles across a radius of 300° during fl ight.

At CEATEC 2009, Nissan showed how far its biomimetic research has progressed. In a demonstration, six EPORO robot vehicles—which are designed to travel in a group “mimicking the behavioral patterns of a school of fi sh in avoiding obstacles and without colliding into each other”—traveled one behind the other around an enclosed circuit. By communi-cating with each other, they were able to change patterns of movement to avoid a collision. The robots use laser range-fi nders and short-distance radio communications, while employing a swarming algorithm.

The target of the research is to create a safety shield that in the future could conceivably protect drivers—in normal and unfavor-able driving conditions. ■

MAGIC WOWS THE CROWDS

John Boyd is a freelance technology writer based in Kawasaki.

(clockwise, from left) Nissan’s EPORO robots communicate to avoid collisions; Yamaha’s HRP-4C created by AIST is cued to sing by Apple iPod touch; 10th CEATEC drew 150,000; special eyewear delivered amazing clarity to 3D TVs; and eco-driving habits onboard Nissans in Yokohama can be evaluated by a Softbank Apple iPhone.

In a time when Architecture, Real Estate and Construction is intertwined

and the market calls for a necessity to change the way we value our property,

we at SIA change by believinggood design = good valueRichard Bliah

President

design your life.

design + construction - project management - real estate

nagoya daitec sakae

yayoi-cho

roppongi flux studio mauboussin ginza


Whether you’re growing the business or downsizing

it, the business support and outsourcing profes-

sionals available in Japan speak your language.

They provide what you need (and dream of) in

terms of systems and services, offi ce design and appointments,

regulation and motivation, installation and maintenance—and so

much more.

Civic centers and outlying industrial parks in Japan require state-

of-the-art infrastructures, and exterior and interior designs that

are both functional and inspirational. The expectations are espe-

cially high when considering how Japan’s deep aesthetic traditions

are coupled with phenomenal advances in technology respected

the world over.

The ACCJ ACRE Committee “provides an interactive forum for

U.S. and Japanese businesses and organizations that are involved

in architecture, construction, engineering and real estate-related

industries, as well as for individuals who have an interest in these

businesses and activities. ACRE functions as a proactive point of

contact among member companies, U.S. and Japanese govern-

ment agencies, and the Japanese business community.”

Within member companies, there is a strong focus on human

resource needs. Yet, outsourcing can provide needed cost-effective

measures that enable companies to concentrate on their core

functions. The ACCJ Human Resource Management Committee

“aims to provide a dynamic forum in which members can explore,

learn and develop skills and understanding in human resource

management.” More precisely, the committee offers “proactive

solutions for diffi cult times; resources on HR Best Practices and

leading-edge research and practice; information and advocacy

relating to the Japanese legal framework; networking and other

events; and support for the human element of HR, focusing on

stress management and mental wellness.”

Inside Japan, between partners/subsidiaries and headquarters,

and across borders, a company’s telecommunications system

holds the key to timely coordination and response. Business

support and outsourcing not only ensure optimum business

performance, but also provide performance incentives for staff

as they embrace the latest technology. The ACCJ Information,

Communications and Technology Committee includes the

Telecommunications and E-business subcommittees. They

support and promote “the expansion and diversifi cation of sales

of high-tech goods and services by American companies in Japan.

Programs include guest speakers from government, leading

technology companies and service providers. In addition, there is

an active advocacy component addressing issues such as privacy,

telecommunications tariffs, and international standards.”

In a global dynamic economy, business support and outsourcing

play a vital role. The ACCJ Transportation and Logistics Committee

works toward the “effi cient use of air, sea and land transportation

in Japan. The Committee monitors legislation and regulations that

affect equal access and free competition in the logistics service

industry.”

The value placed on mobile communications is especially

pronounced in Japan’s high-density urban areas. To market goods

and services requires tapping not only the Internet, but also the

small screen of keitai viewed on long commutes or while waiting

for a friend. The experts in the fi eld that offer business support

and outsourcing can keep you in touch with today’s tech-savvy

consumer. The ACCJ Internet Economy Task Force has identifi ed

“key regulatory, business and economic challenges related to

the Internet Economy in Japan, and is working with the U.S. and

Japanese governments to offer a corresponding set of recommen-

dations drawn from international experience and best practices.”

In many cases, it’s not that you can’t handle key aspects of the

operation. Rather, business support and outsourcing professionals

allow you to focus on your core functions. And that’s good for the

bottom line.

David Umeda

Senior Editor

Paradigm

BUSINESS SUPPORT & OUTSOURCINGSpecial Advertising Section

Business Cents


AP OutsourcingTel: 03-5228-1820Fax: 03-5228-1830Web: www.APOutsourcing.jp

AP Outsourcing (APO) is an independent outsourcing provider of Accounting and Payroll with Big Four experience (Arthur Andersen and KPMG). It was separated from Azsa Audit Corporation (the audit group of KPMG Japan) in April 2004. AP Outsourcing provides bilingual staff with extensive experience and knowledge of fi nancial operations, payroll and tax, helping you compete better and accomplish your goals.

Start-up Support: APO provides business start-up support for new foreign corporations and venture companies, including legal registration, tax and social insurance applications.

Project Management: Effective and effi cient project management support for outsourcing migration.

Outsourcing Operations: Well-qualifi ed bilingual accountants, tax/social insurance specialists and system experts accurately and promptly provide outsourcing operations, focusing on the confi dentiality of accounting payroll/information.

Loan Staff: Accounting/payroll processes are facilitated by the placement of our own specialist staff in the clients’ offi ces for specifi c periods.

APO also offers other specifi c services and support on request. For more information on how we can help you to simplify your business processes, call AP Outsourcing at 03-5228-1820.

Business Associates K.K.Tel: 03-5715-3315 Fax: 03-5715-3318Web: www.ba-net.co.jp Web: www.ba-net.co.jp/english/plaza-i/foreign.html

Business Associates, founded by Japanese certifi ed public accountants with expertise in IT, accounting and taxation, designs systems that help business grow and empower clientele to achieve their business objectives through proprietary software solutions.

Plaza-i is the only ERP package developed by a Japanese company geared for foreign corporations operating in Japan. Unlike imported software with limited application to Japanese business parameters or domestic programs that cannot completely support international operational procedures, Plaza-i remains the only bilingual, multi-currency ERP package—developed for over 20 years—that fully supports foreign corporations here.

Plaza-i’s built-in bilingual capability is 100% compliant. Japanese users’ screens operate in the vernacular yet produce reports in English, while foreign staff can work using English commands and menus.

Plaza-i comes at a price not infl ated by typical fees for imported ERP packages. We provide genuine value for your software investment.

Plaza-i’s multi-currency capability—not typical in Japanese ERP packages—supports foreign companies who typically import products from their parent companies. Plaza-i’s aging schedule function and other software features defi ne your ideal single ERP package.

Whether entering the Japanese market for the fi rst time or looking for a better and more reasonable ERP system in Japan, you owe it to your staff—and your bottom line—to contact us today.

Crown Worldwide K.K. TokyoTel: 03-5447-2301Fax: 03-5447-2309E-mail: [email protected]: www.crownrms.com/japan

Crown Records Management, a division of Crown Worldwide Group, specializes in the management and storage of business information—including cartons, fi les, documents, magnetic and digital media. Records management is more than storing records. It’s about reducing the risk of misplacing critical information—and about giving clients prompt access and control. All documentation and business information has a lifecycle. Crown Records Management offers assistance and provides a range of services to assist at any point of this lifecycle.

Crown Worldwide Group operates from over 250 locations in 52 countries, providing governments, corporations, diplomats and private customers with global mobility, transportation of household goods and fi ne arts, departure and destination services, business information storage, high-value warehousing, freight forwarding and third-party logistics. Established in 1965, in Yokohama, the Crown Worldwide Group is a privately held company with global headquarters in Hong Kong.

Daifuku Company, Ltd. Tel: 03-3456-2395E-mail: [email protected]: www.daifuku.com

Since 1937, Daifuku has become a global leader in the development of automated material-handling solutions for manufacturing, warehousing and distribution, operating in more than 16 countries.

Our products range from simple utility carts and storage rack, to complete, fully automated warehouses, DCs, factories and cleanrooms.

We provide a Total Solution, not just automated equipment.Total Design - We start by analyzing your total process. We have

become a global leader not only by our experience, but also by dedicating ourselves to achieving a complete understanding of manufacturing and distribution logistics.

Forming a partnership with our customers through each phase—interviews, analysis, concept, design, installation and operation—a Total Solution is realized.

Total Production - Under strict quality-control guidelines, we produce our products incorporating the latest technologies. Faster operation, higher density, improved working environments and greater productivity are your benefi ts to our commitment to constant improvement.

Daifuku’s major production facilities are certifi ed under ISO9001 and ISO14001.

Total Support - Our customer commitment continues beyond installation and implementation. Global support and service are essential to delivering a Total Solution.

As your needs change, our partnership makes it possible to help you more quickly achieve the results you need for success.

BUSINESS SUPPORT & OUTSOURCINGSpecial Advertising Section


BU

SINESS SU

PPORT &

OU

TSOU

RCIN

G | Sp

ecial Ad

vertising Section

ElanexTel: 03-4530-3883Fax: 03-4496-4309E-mail: [email protected]: www.elanex.com

Elanex is a leading global translation company headquartered in the U.S. Elanex develops and deploys leading-edge technology designed to increase the effi ciency and reduce the cost of high-quality translations by the best translators in the world. These savings are passed on to the client. With over 20,000 translators and covering more than 104 language pairings, Elanex is introducing a revolution in the way the translation process is managed. Legal translations are a speciality and Elanex has handled many very large projects such as the recent translation of over 20,000,000 words in 6 weeks as part of an M&A. Elanex was also responsible for translation of major documents, both fi nancial and legal, in one of the largest corporate takeovers conducted in Japan. For single page translations to multi-million-word texts, Elanex will provide the total translation solution.

KVH Co., Ltd.Tel: 03-5772-5818Fax: 03-5772-5685E-mail: [email protected]

KVH Co., Ltd. is a leading integrated communications and IT management service provider established in Tokyo in 1999. Through our facility-based optical-fi ber networks and data centers, KVH provides comprehensive IT management solutions—developing and managing network and IT infrastructure through the entire planning, consulting, design, implementation and operations processes. KVH serves as a single point of contact and ownership for fully managed regional network operations throughout the Asia-Pacifi c region, including a local presence through affi liates in China and India. In alliance with our global partners, KVH provides a value-added, strategic alternative for both Japanese and multinational companies, by offering seamless and fl exible solutions tailored to their important and specifi c IT needs. KVH solutions are implemented in an effi cient operational structure using the latest technology incorporating global best practices, and are monitored on a 24/7 basis. In addition, KVH’s bilingual Service Desk associates respond to customer needs and inquiries on a 24/7 basis. KVH serves over 1,700 corporate customers in a variety of industry segments, including fi nancial services, manufacturing, pharmaceuticals, media and e-commerce, meeting the operational needs of local and multinational customers in the region.

Larkin & Associates Inc.Tel: 03-3551-4390Fax: 03-3551-4395E-mail: [email protected]: www.jcompliance.com

Larkin & Associates provides a variety of Auditing and Compliance services for foreign companies operating in Japan, from Outsourcing of internal audit through to IPO listing support, M&A Due Diligence services, Fraud and forensic services and customized project assistance for US-SOX and J-SOX compliance documentation, testing and remediation.

When it comes to outsourcing, our most popular services are provided by our Internal Audit Division.

• Outsourcing – In this arrangement we assume responsibility for the internal audit function, providing end-to-end services. For certain clients, we work closely with, and report to, the Director of Internal Audit in the client’s Head Offi ce.

• Co-source – We serve as an extension of your internal audit department, working collaboratively with team members of your

in-house internal audit function. We can support your internal resources in various roles, including project management, planning, controls identifi cation, documentation, testing, remediation and results analysis.

• Special projects – For certain clients, we provide additional resources, supporting the in-house internal audit function on a project-by-project basis in Japan and/or in other Asia-Pacifi c countries.

We also accept projects for outsourcing Documentation & Effectiveness testing for US-SOX & J-SOX projects, working in close liaison with our clients to produce a customized solution that is the correct one for them.

Nagamine Accounting Offi ceTel: 03-3581-1975Web: www.nagamine-mri.com

Since 1989, Nagamine Accounting Offi ce has been assisting foreign-affi liated fi rms (nearly 80% of our clients are foreign-affi liated) expand their business operations into Japan by providing expertise in the areas of tax and accounting. NAO supports the business start-up process in Japan, thus offering payroll and cash management services. Our main areas of service are as follows:

Transfer Pricing Consulting: Evaluating taxation risk based on client interviews and the analysis of internal information regarding related-party transactions. We offer the appropriate solutions on transfer pricing risk management.

Audit: When foreign-affi liated companies implement voluntary audits in Japan for the purpose of M&As or per request of the parent company, NAO can support with the proper handling of audits and due diligence.

Tax & Accounting: NAO tailors all of services to the needs of our clients, from routine bookkeeping to the preparation and review of fi nancial statements in accordance with the IFRS or US GAAP.

Payroll: NAO can provide payroll accounting and social insurance services for our client.

Cash Management: NAO can also act as an expense clerk service; by giving authorization to wire vendors, we can perform the majority of back-offi ce fi nancial functions.

For more information, please contact Shinya Nishi at [email protected]

S’International ArchitectsTel: 03-3239-1333 Fax: 03-3221-6510E-mail: [email protected]: www.s-i-a.co.jp/

Is building and maintaining morale a challenge for your company? You are not alone. Firms throughout Japan—as around the world—are struggling to increase revenue and reach a profi table bottom line. In the process, they have been forced to cut costs, lose talented staff and, in so many cases, move into smaller, lower-cost offi ce space. That’s where S’International Architects steps in.

A notable—and least-discussed—consequence of downsizing is lower employee morale. However, we fi nd that staff are very responsive to environmental changes providing comfort and effective design that inspire them to become more productive. Our know-how spurs on a level of productivity vital to companies with fewer personnel facing increases in workload.

S’International Architects can help your company maximize morale by creating an environment that inspires your teams to achieve their potential—whether as individuals or as members.

Our multi-cultural, full-service design capabilities provide innovation that is intrinsically tied to maximizing achievement. We deliver vibrant surroundings that fulfi ll function as well as respect humanity.

If your company needs a change, let S’International Architects lead you through every stage of the project. Our aim remains to add value—fi nancial, technical and aesthetic—at each link in your corporate chain.


Surprise #1Strong growthNobody expects strong growth from Japan’s economy. For 2010,

the consensus of forecasts calls for 1-1.5% improvement in GDP,

and almost all of that growth expected to come from exports.

Sustained growth of 3-3.5% would be a real surprise, particularly

if led by strong domestic demand. Possible? I think Japanese

business could well surprise by actually raising investment

spending. The need to improve productivity is overwhelming,

so more spending on IT and robots, and upgrading to more

productive machinery could well drive a stronger-than-expected

2010 corporate demand cycle. And consumer spending? What a

surprise that would be if the new government’s consumer-focus

policies actually feed a consumer boom.

Surprise #2The yen goes to ¥120/$Everybody is calling for a weaker dollar and, therefore, a

stronger yen—with some pundits arguing we may get to ¥50/$

soon. A real surprise would be if—counter to the trend of the

past years—we actually get a weaker yen and stronger dollar.

Possible? Personally, I am bearish on the yen. The combination

of an enormous fi scal defi cit, a dwindling surplus in private

savings, and loss of the relative competitive position suggests the

yen should be weak, not strong. Once America comes out of its

economic woes and Fed Chief Bernanke starts raising rates, the

dollar should begin to rise, especially against the yen.

Surprise #3China buys a major Japanese companyCould China succeed where everybody else failed? I mean, with

very few exceptions, no foreigner has ever been able to buy

a major Japanese company. So a successful bid from China to

buy into Japan Inc. would be a huge surprise, particularly if the

takeover is in the car or electronics industry. Possible? From an

economic perspective, a major merger between Japan and China

makes all the sense in the world: Japan offers technology and

brand, China the market and high growth—a match made in

heaven. Of course, in the real world …

2010A

s 2009 comes to a close, forecasts and predictions for what might happen in the New Year are

in high demand. Will the economy grow? What is the outlook for the stock market? Where will

the yen go? Of course, all forecasts must always be taken with a grain of salt. Even the most

serious statistical and econometric analysis can never do more than attach a probability to what

may happen. Unfortunately, the real world is never probabilistic. A prediction either happens,

or it doesn’t. Never forget that any forecast worth its money is still nothing more than the best statistical

estimation on the probability of an event occurring. This adds up to mean forecasts are very predictable most

of the time—and, well, boring. So rather than offering what my econometric models hold forth, I want to tell

you about some possible surprises Japan may bring in 2010. Statistically speaking, these are low-probability

forecasts. Deliberately contrarian, this is the stuff that just may happen. At the very least, “thinking the

unthinkable” should help uncover some of the risks and opportunities the country may offer in the coming year.

So here we go—10 Japan surprises for 2010:

10 Japan

Surprises for

Surprise #4Japanese companies start relocating headquarters out

of JapanThe home bias and natural place for Japan Inc. is to be head-

quartered in Japan. However, as more and more companies rely

on global markets for growth and profi tability, relocating out of

Japan may start to make increasing economic sense. Possible?

Well, if government policies do start to tighten rules and increase

taxes, a true hollowing out may start to happen. That would be a

shock, though, not just a surprise.

Surprise #5South Korean consumer electronics fi rms enter Japanese marketIn all global markets, South Korean consumer electronics

fi rms have become major market leaders. Yet, none of them

has focused on Japan. Try buying a Samsung TV in Tokyo. A

big surprise would be if they now start attacking Japanese

consumer electronics giants on their home turf. Possible? South

Korean corporate leaders are very focused on both growth and

profi tability, so they have been razor-focused on emerging

markets—from India to China to Latin America. So a move on

Japan would be a huge surprise. It also would be a strong indica-

tion that an all-out attack on Japanese technology and brand

dominance is underway.

Surprise #6FSA and MoF merge into one super ministryWhile Prime Minister Hatoyama and the ruling Democratic

Party of Japan (DPJ) are keen to be seen as bureaucracy

fi ghters, a merger of the Financial Services Agency (FSA) and

the Ministry of Finance (MoF) may be in the making. To some

it may actually make sense, given the global need for better

and more coordinated supervision and control of fi nancial

systems. However, the resurrection of a super fi nance ministry

would be a surprise, nonetheless—and send a clear signal that

the bureaucrats’ rule is getting stronger, not weaker.

Surprise #7Retail investors forced to buy perpetual government bondsJapan’s fi scal position is dire, with debt-to-income levels now

at about 200%. The worry about funding the defi cit is real, and

sooner or later the government may have to resort to, well,

unorthodox measures. One idea would be to issue perpetual

bonds to retail investors – bonds that, when they mature, do not

get you your money back, but simply allow you to buy some new

bonds. Unfortunately, this—or some other way to, de facto, force

private savings to buy government debt—has become a real

possibility. Hopefully not in 2010, though.

Surprise #8LDP landslide in the 2010 upper house electionsExpectations run high for the DPJ to win big in the 2010 upper

house elections. Indeed, many predict the possible demise of

the Liberal Democratic Party (LDP). A comeback at the polls by

the old-fashioned erstwhile LDP rulers would be a real surprise.

Possible? As they say in Japanese politics, three inches ahead

there is darkness.

Surprise #9Japan starts building aircraft carriersJapan is eager to redefi ne its defense and security policy. While

this is a highly complex—and, at times, emotional—issue, there

is no doubt that de facto rearmament would come as a real

shock. A naval buildup, including the development of aircraft

carriers, would be a very strong indicator that Japan is ready to

take defense matters into her own hands. Very low probability, I

hope. But clearly some form of greater self-reliance in matters of

defense is in the making.

Surprise #10Japan wins the World Cup

2010 is the year of the World

Cup. And, as we all know,

32 teams compete and

the Germans win—clar-

ifi cation: I am German

and every four years I tend

to show a very clear national

bias. Japan’s national team is a

serious underdog, barely rated by most who

claim to know the sport. The coach is aiming

to have the national team advance all the

way to the fi nal four. That would be a

real surprise. And Japan winning—well,

that’s out of the question, really. Germany

winning, now that’s a forecast, not a

surprise. ■

JESPER KOLL WRITES

Jesper Kollis President and CEO of Tantallon Research Japan.

0


21st Festive Tree CampaignDecember 1-6Free concerts, live shows, and bazaar of arts and handicrafts to raise funds for Refugees International Japan, and centered around a traditionally decorated, towering Seattle Douglas fi r tree in the Marunouchi OAZO Bldg.

IFFT.interiorlifestyle living 2009December 2-410:00-18:00 (last day: -16:30)www.ifft-interiorlifestyleliving.com/en/ The international furniture and design-oriented interior trade fair—concentrating on the affl uent and comfortable living environment that displays a chic approach to home life. Tokyo Big Sight, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome Line

SEMICON Japan 2009December 2-4www.semiconjapan.org/sj-en/index.htmThe world’s largest exposition of semiconductor manufacturing equipment, materials and components brings together cutting-edge technologies and the key industry players who guide the semiconductor business into the future.

Makuhari Messe, Chiba, Kaihin-Makuhari Station, JR Keiyo Line

4th ICITS 2009December 3-6www.rcis.aist.go.jp/ICITS2009/A related event to Asiacrypt 2009, the

International Conference on Information Theoretic Security brings together leading researchers in this area. Granship (12-fl oor plus B1-2), Shizuoka City, JR Higashi-Shizuoka Station

2009 Grand Prix FinalDecember 3-6Last international fi gure skating championship for senior and junior divisions before the 2010 Winter Olympic Games in Vancouver (Feb 12-28). Yoyogi Arena, Yoyogi Koen, Shibuya Station

15th Asiacrypt 2009December 6-10http://asiacrypt2009.cipher.risk.tsukuba.ac.jp/At the International Conference on the Theory and Application of Cryptology and Information Security, technical sessions from Monday to Thursday, with non-technical activities on Tuesday afternoon and rump session on Monday evening.

National Center of Sciences Bldg., Hitotsubashi Memorial Hall, near Imperial Palace (Togu-gyoen and Kitanomaru Parks), Takebashi Station, Tozai Line

6th EcoDesign 2009December 7-9www.mstc.or.jp/imf/ed/ The International Symposium on Environmentally Conscious Design and Inverse Manufacturing (recycling chain) involves the integration of social system design, business strategies

and technologies by the EcoDesign approach. A session examines the special themes of “Green ICT” and “Sustainable Manufacturing.”Royton Sapporo Hotel, Hokkaido, Nishi 11-Chome Station, Tozai Line

ICOM – ASPAC 2009December 7-9www.kahaku.go.jp/english/icomaspac2009/index.html Museums in the Asia-Pacifi c region now are facing various problems regarding management and operations, and want to consider their defi nition, roles and future.National Museum of Nature and Science, JR Ueno Station, Park Exit

FR9December 7-11www.fr09.org/The theme at the International Conference on Fast Reactors & Related Fuel Cycles is “Challenges and Opportunities,” organized by the International Atomic Energy Agency and hosted by the Japan AEA.Kyoto International Conference Center, north side of Kyoto City

26th TRONSHOW 2010December 9-1110:00-17:00www.tronshow.org/index-e.htmlSince the start of the TRON project in 1984, the organizers have been making efforts toward the realization of “Computers Everywhere”—ubiquitous computing environments. The TEPS2010


EVENTS LINE-UP

symposium is a day later on the 12th.Tokyo Midtown, Hall & Conference (9th-11th), Midtown Tower 4F (12th), Roppongi Station, Hibiya or Toei Oedo Lines

The StylisticsExclusive ACCJ Christmas LiveDecember 12, Fri16:30-19:50 (doors: 16:15)www.billboard-live.com/access/o_index.htmlHosted by the ACCJ Living in Kansai Committee, up to 30 ACCJ members and their guests are invited to a special meet & greet session before doors open. Music fee, course dinner, all you can drink open bar included: ¥18,000, members & spouses; ¥23,000 guests. By Dec 4 (incl. cancellations): ACCJ online registration (http://member.accj.or.jp) or ACCJ Offi ce Fax (06-6345-9890). Billboard Live Osaka, Tel. 06-6342-7722, Herbis Plaza Ent, B2.

Tokyo Opera City Christmas TreeDecember 15, 11:30-23:30A 14m-high tree on B1, in Nishi-Shinjuku

Hagoita-IchiDecember 17-19www.jnto.go.jp/eng/ The lively Battledore Fair is full of Edo sentiments, brightly coloring downtown Tokyo near Senso-ji Temple, Asakusa.

Koto Tokyo LightopiaDecember 18-24, 17:00-22:00Near the Imperial Palace and Marunouchi district, including Wadakura Bridge

International Print Competition & ExhibitionDecember 22www.yamasa.com/musee/ Yozo Hamaguchi 100th Anniversary. Original works of intaglio prints and print-based works by grand prizewinner and two second prizewinners, and 15 honorable mentions. Musée Hamaguchi Yozo, Nihonbashi, Chuo-ku; Suitengumae Station, Exit 3, Hanzomon Line; 11:00-18:00 (Sat, Sun, National holidays: 10:00-; Closed: Mon)

Emperor’s BirthdayDecember 23This National holiday affords an oppor-tunity to hear an offi cial greeting from Emperor Akihito, who will be turning 76.

Baccarat Eternal LightsDecember 25, 16:00-23:00Includes huge crystal chandelier and decorated trees at Yebisu Garden Place, Ebisu Station, Tokyo Metro Hibiya or JR Yamanote Lines

Caretta Ocean ChristmasDecember 25, 17:30-23:00Illumination show designed by master Hideki Togi: Emerald Ocean, Blue Ocean and Sunset Ocean trees at the Shiodome City Center, near Shimbashi Station

Christmas FantasyHarborside Christmas – December 25www.tokyodisneyresort.co.jp/tdr/english/calendar/index.html Tokyo Disneyland and DisneySea; Chiba, Urayasu Station, Tozai Line

Christmas MarketDecember 25, 11:00-21:00Authentic German (Stuttgart) Christmas Market in O-YANE Plaza and West Walk (2F) at Roppongi Hills, Roppongi Station

Ginza Mikimoto Christmas TreeDecember 25, 10:00-22:00A 10m-high tree in front of Mikimoto Pearls, near Wako

Landmark PlazaDecember 25, 7:00-23:30A 10m-tall tree with 10,000 lights and 69F Sky Garden observatory’s four romantic window displays (10:00-21:00 Sun-F, -22:00 Sat, -24:00 23rd & 24th), Minato Mirai 21 Yokohama Waterfront

Marunouchi Bldg. Christmas TreeDecember 25, 6:00-24:30An 8m-high tree in 1F lobby, near South Exit of Tokyo Station, and 850,000 champagne-gold LED lights on trees along Nakadori Street

Mitsukoshi Solar-Powered Christmas TreeDecember 25A 15m-high tree with 20,000 LED lights all powered by solar energy, Nihonbashi

Omotesando Hills ChristmasDecember 25, 11:00-23:00Beautiful 11.5m-high crystal tree and other decorative Christmas lighting, Jingu-mae

Starlight GardenDecember 25, 16:00-23:00Blue-lit (125,000 LED lights) garden behind Tokyo Midtown, Roppongi Station, Hibiya or Toei Oedo Lines

Tokyo Tower Christmas TreeDecember 25, 9:00-24:00A 12m-high tree with 30,000 lights (100,000 total for tower) and 15-min light show every hour (16:00-23:00), Akabanebashi Station, Oedo Line

Haneda 3rd Terminal CompletedDecemberwww.tokyo-airport-bldg.co.jp/en/Haneda Airport, now with three runways, is scheduled this month to complete the international terminal, which was partially operational, to complement the two domestic terminals.

David Umeda is Senior Editor at Paradigm


Apparently it’s only temporary. Gianni Versace S.p.A has exitied the Japanese market in October as it restructures under new CEO Gian Giacomo Ferraris. The company is dissatisfi ed with its store locations across Japan, and has decided its current strategy is detrimental to the brand. A return date has yet to be determined.

In a statement from the unit, quoted in the Nikkei: “Japan is an important market, so we hope to supply products again by opening stores or through wholesale as early as next year.”

Gianni Versace Japan Co., Ltd. ended its wholesale operations a few years ago, and closed its last three directly run boutiques at the end of July.

It’s not just high-end brands affected by the economic slowdown. The UK fashion chain French Connection Group plc revealed plans the same week to close its 21 stores in Japan, and Japanese designer Yohji Yamamoto announced it was bankrupt—only to be reprieved by an investment group.

Meanwhile, competitively priced retailers Uniqlo (Fast Retailing Co., Ltd.), H&M Hennes & Mauritz AB, and Forever 21, Inc. are notable exceptions thriving in these tough market conditions.

Japan’s market for imported luxury clothes, bags and other goods fell 10% from 2007, to ¥1.06 trillion last year, according to a June report by Yano Research Institute Ltd. The Tokyo-based researcher forecasts the market will shrink to ¥992.7 billion this year, in stark contrast to its peak of ¥1.9 trillion in 1996.

Smoothie King, which claims to be the 1973 originator of the nutritional fruit drink, is making its meal substitutes available to consumers in Japan. Tokyoites will be the fi rst to try Smoothie King’s products, with the planned opening of the inaugural store in 2010. “Japan has historically been on a par with the West for being a nation of early adopters of new products and cultural trends, and Japan already has a strong trend toward healthy diet and fi tness,” said Steve Kuhnau, Smoothie King’s co-founder and CEO.

For its expansion into Japan, Smoothie King has partnered with Smoothies Asia

Co. Ltd., headed by its brand operator in South Korea, Sung Wan Kim. Kim has been successful in developing 57 stores there, operating through his joint venture with Pacifi c Smoothies and Smoothies Korea.

“Smoothie King combines a cutting-edge concept with an extensive product offering that we believe will tap into the trend toward healthy living in Japan,” said Kim. Smoothie King opened 103 new stores in 2008, and continues to expand with 34 more outlets since January 2009. Serving up a variety of nutritional products and snacks, Smoothie King has more than 600 locations worldwide.

Keeping It Smooth

Import Exit


The fi rst overseas offi ce of Blade Network Technologies, Inc., a next-generation Ethernet solution fi rm, has been established in Tokyo. Blade was spun off from Nortel Networks Corporation, a major Canadian communications equipment manufacturer, and commands about a 40% share of the global market for blade server switches. Thin platforms called blades contain the server’s CPUs, memory and hard drives. Blades are able to populate a server freely, and decrease the physical space needed by sharing power supply, cooling fan and exhaust.

Blade fi rst opened a Japan offi ce in 2008, but later decided to upgrade it to a wholly owned subsidiary. This was in response to a desire to better serve its clients here and facilitate handling increasing demand for network

virtualization (a single physical resource—such as a server, an operating system, an application, or storage device—that

appears to function as multiple resources).Blade servers have become an

indispensable part of cloud computing (users access services/resources via the Internet without being limited by particular software or specifi c servers). The virtual nature of cloud computing defi nes a growing trend in the IT industry.

One of the fi rm’s core products is RackSwitch, the industry’s fi rst converged networking switch for rack-level server virtualization. It allows for effi cient switching between physical and virtual servers in a single rack and external networks, and saves energy through rack-friendly cooling.

The market for 10G Ethernet is predicted to increase 10-fold over the next fi ve years. Blade Network K.K. aims to cater to this growing demand in Japan and boost its business performance and product line-up.

FDI PORTFOLIO

Nicole Fall is a freelance writer based in Tokyo.

Blade Networking

Brooks Brothers is the oldest surviving men’s clothier in the U.S. Though some other brands are failing, its premium line Black Fleece was launched in the fall at luxury mall Omotesando Hills.

Founded in 1818, Brooks Brothers is privately owned by Retail Brand Alliance, Inc., a spinoff of the Luxottica Group, and is headquartered on Madison Avenue in New York City. Black Fleece is its most expensive range, and features bespoke suits and pieces currently designed by Thom Browne, who was invited by Brooks Brothers in 2007 to add a touch of pizzazz to the company’s classic product line-up.

The recipient of the 2006 Council of Fashion Designers of America Award for menswear, Browne is known for reviving the gentleman’s suit for the younger generation and updating it with eccentric prints and quirky silhouettes.

Black Fleece can be found in approximately 25 Brooks Brothers stores globally, but the outlet at Omotesando Hills is only the second freestanding Black Fleece location in the world, following New York’s downtown appointment-only store in the Meatpacking District.

Black Sheep

Rejection – it can happen to eventhe nicest opinion leader.

It’s an embarrassing problem. An important paper written by a respected collaborating researcher is rejected. What’s a nice pharma company to do?

What you need is DMC’s Paper Rescue service. Drawing on our 15 years’ expert experience with thousands of papers from Japanese authors, we’ll work with you and your researchers to revamp and restyle the paper into a masterpiece of clarity and logic, ready for submission to another journal. You’ll be amazed and delighted at just how much improvement we can bring to a rejected manuscript.

Read the case studies on our website (in Japanese or English). With a success rate of 100%, Paper Rescue is just what it says - rescue for rejected papers.

Digital Medical Communications Corp., [email protected], Tel: 03.6459-1545, www.dmed.co.jp

Atlantic Building 9F, Azabudai 2-3-3, Minato-ku, Tokyo 106-0041


The foreign community and Japanese society want the very best in healthcare. Such pragmatic expectations require localized

execution of globalized solutions. Shortening the pipeline so that the latest drugs and devices are made available is an ongoing endeavor on both sides of the Pacifi c. Keeping R&D costs down—not to mention covering them—is another challenge. That’s why companies in the pharmaceutical sector in Japan play a pivotal role in trying to bring the best care to market.

The Healthcare Committee of the American Chamber of Commerce in Japan refl ects the diver-sity of the industry operating here. The Committee “focuses on overarching healthcare reforms through the exchange of opinions among its subcom-mittees [Healthcare IT, Dietary Supplements, Biosciences, Healthcare Services, Medical Devices and Diagnostics, and Pharmaceuticals] and the development of policy recommendations that best serve the interests of the Japanese patients.”

The Healthcare IT subcommittee provides “a forum to exchange information on government initiatives and industry developments, interact with key policy makers and industry leaders, and advocate for regulatory improvements that promote competition, transparency and market-based solutions to Japan’s healthcare IT challenges.”

The Dietary Supplements subcommittee “serves on behalf of ACCJ member companies active in the nutritional supplements industry. Meetings are once a month, and activities focus on regulatory impediments regarding labeling, testing, licensing, and other issues.”

The Biosciences subcommittee “provides up-to-date information about academic research, government funding and strategy, novel tools and techniques, as well as investment opportunities in the life sciences. It brings together individuals with common interest such as researchers and business people who may not otherwise have a convenient common venue, and seeks to offer input into the government decision-making process on academic and industry funding.”

The Healthcare Services subcommittee “acts as a forum for companies interested in participating in the sector. Given that current Japanese regulatory practice means that many potential service markets are closed, much of the subcommittees work focuses on infl uencing the policy environment.”

The Medical Devices and Diagnostics subcom-mittee aims “to improve the welfare of Japanese patients through the adoption of advanced medical technologies and to work closely with the Ministry of Health, Labour and Welfare to encourage further deregulation and promote adequate reimburse-ment, cooperating with domestic industrial associations and other healthcare bodies. It also works to regularly inform member companies on Pharmaceuticals Affairs Law and other regulations, and to convey the value of medical technologies to the public via Public Awareness Campaigns, patients advocacy programs, the Diet, and policy makers.”

The Pharmaceuticals subcommittee “hosts lunch and breakfast programs that feature prominent speakers addressing a variety of pharmaceu-tical and healthcare issues, including current and future patient needs, prescription and OTC

drugs, nutraceuticals, research and develop-ment, and marketing and communications.”

Innovation remains critical and requires tapping advances in R&D technique and technology. On November 27, the Healthcare IT subcommittee hosted a lecture on “Healthy Innovation in Medical Technology? Healthy Healthcare.” To cope with growing healthcare challenges, innovation has been supported by the emergence of new diag-nostic tools and treatment procedures. Jerome Galbrun of Tokyo Institute of Technology discussed how physicians contribute to emerging innova-tion solutions in medical technology, as well as potential insights for management and research

Emerging markets are as much a part of the landscape in Japan as innovation. On October 27, the Biosciences subcommittee invited Professor Yoshiaki Tsukamoto. Prof Tsukamoto has a back-ground in chemical engineering and a long career at METI in the areas of cluster development and bio-industry development; and, more recently, as the Executive Director of the Japan Bioindustry Association. He talked about “Bioindustry in Japan - Current Status and Challenges,” literally covering the entire biotechnology landscape. There was also a presentation by the Japan Bioindustry Association outlining its role as a funding agency for commer-cial entities, a non-profi t think-tank, and a platform for communication among scientists, technolo-gists, businessmen, policymakers and managers.

David UmedaSenior EditorParadigm

Keeping Up with Healthcare

HEALTHCARE & PHARMACEUTICALSSpecial Section


Company Activities / HistoryCovidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in three segments: Medical Devices, Pharmaceuticals, and Medical Supplies. With 2009 revenue in excess of $10 billion, Covidien has 42,000 employees worldwide in more than 60 countries, and its products are sold in over 140 countries.

The Covidien Group Japan (President and Representative Director, Ryo Noda) consists of two companies, Covidien Japan Inc. (legal entity name to be changed from “”Tyco Healthcare Japan”” on January 1, 2010) and Nippon Sherwood Medical Industries Ltd., with local manufacture and product development, as well as the import of advanced healthcare products.

Covidien Group Japan (Covidien Japan Inc./Nippon Sherwood Medical Industries Ltd.)

Address 4-10-2 Yoga, Setagaya-ku, Tokyo 158-8615

Tel 03-5717-1700

Fax 03-5717-1317

E-mail [email protected]

Web site http://covidien.co.jp (to Dec 2009: www.sherwood.co.jp/; http://tycohealthcare.co.jp)

Year established Feb 1973 (Nippon Sherwood), Oct 1991 (Covidien Japan, formerly Tyco Healthcare Japan)

Staff Size: 1,400 in Japan

Contact: Tomomi Inoda, PR

Company Activities / HistoryBD is a leading global medical technology company that develops, manufactures and sells medical devices, instrument systems and reagents. The Company is dedi-cated to improving people’s health throughout the world. BD is focused on improving drug delivery, enhancing the quality and speed of diagnosing infectious diseases and cancers, and advancing research, discovery and production of new drugs and vaccines. BD’s capabilities are instrumental in combating many of the world’s most pressing diseases. Founded in 1897 and headquartered in Franklin Lakes, New Jersey, BD employs approximately 28,000 people in approximately 50 countries through-out the world. The Company serves healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public.

BD has four strategic focus areas: (1) “Reducing the spread of infection” associated with HAIs (Healthcare Associated Infections) and needle stick injury for Healthcare workers and patients. BD solu-

tions here include MRSA screening systems, closed IV systems and safety engineered medical devices. (2) “Advancing global health” includes diagnostics for HIV/AIDS and TB. (3) “Enhancing therapy” by working with pharma partners in research, production of their drugs and drug delivery, including prefi llable syringes, BD FACS cell sorters

and analyzers and AF media. (4) “Improving disease management,” which includes cancer such as cervical cancer detection, infectious diseases and diabetes. BD-Japan was founded in 1971 and headquartered in Akasaka, Tokyo. In 1986, BD-Japan established a production, warehousing and distribution center in Fukushima

prefecture. Prepared plated media and Glass syringes for the prefi llable market are manufactured at the Fukushima facility for customers in Japan.

Nippon Becton Dickinson Company, Inc.Address Akasaka Garden City, 4-15-1 Akasaka, Minato-ku, Tokyo 107-0052

Tel 03-6234-5550

Fax 03-6234-5415


Web site www.bd.com/jp/

Year established 1971

Staff Size: 540

Contact: Yoko Mukai, Senior Manager, Communications


Company Activities / HistoryJanssen Pharmaceutical K.K.—part of the world’s largest total healthcare company, Johnson & Johnson—always puts the patient fi rst by offering cutting-edge pharmaceuticals delivered through the most effi cient pipeline possible. Our core capabilities address four key areas of treatment: for the central nervous system, fungal infections, narcotic analgesics, and cancer. We recognize the vital role that our products play in contributing to the patients’ quality of life. We recognize how our globalized network enables the delivery of quality drugs that meet the clinical testing standards of each country we serve. In providing exceptional care into the future, our R&D efforts cover genomic and antibody drugs, drug delivery systems and technology, as well as other innovative drugs to be applied in a diverse range of medically underserved disease treatments.

Company Activities / HistoryDMC is an established provider of writing, editing and communications services to the Japanese pharma, medical and life sciences fi elds. We work with a number of major Japanese and foreign pharmaceutical companies, as well as universities, hospitals and research institutes. Since our founding, we have been sole editing provider to a Top-3 Japanese pharma company.

Our paper editing service provides papers of the highest quality through two processes: by multiple rounds of versions between researcher and editor; and through deep editing that reviews not only the language, but also the structure, fl ow and logic of a paper. With our science backgrounds and experience with thousands of papers, we often improve not only the expression, but also the content of a paper.

Our advanced services include Paper Rescue, which is intensive restructuring and rewriting of rejected papers. This may involve face-to-face meetings with authors to discuss their research. Paper Rescue clients include authors themselves and their pharmaceutical sponsors. Our success rate in getting previously rejected papers acepted is 100%. Clients include Top-5 foreign Pharma companies.

We also provide lectures in medical writing and communications to postgraduate students at Kyoto University, and undergraduates at Tokyo Metropolitan University, among others; as well as on the job training in medical writing for Japanese pharma researchers.

Our editing staff are native English experts, most with Masters degrees or higher in life sciences or medicine from institutions such as McGill, Texas A&M, and NSW. Most work is performed securely in our Tokyo offi ce, or onsite at client offi ces.

Janssen Pharmaceutical K.K.Address 3-5-2 Nishi Kanda, Chiyoda-ku, Tokyo 101-0065

Tel 03-4411-5046

Fax 03-4411-5050


Web site www.janssen.co.jp/


Staff Size: About 1,700

Contact: Corporate Communication Dept.: Tel. 03-4411-5046

DMC Corp.Address Atlantic Bldg. 9F, 2-3-3 Azabudai, Minato-ku, Tokyo 106-0041

Tel 03-6459-1545

Fax 03-3588-0745


Web site www.dmed.co.jp


Staff Size: 7

Contact: Guy Harris

HEA

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HEA

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Company Activities / HistoryQuintiles is the only fully integrated biopharmaceutical services company offering clinical, commercial, consulting and capital solutions worldwide. The Quintiles network of 23,000 engaged professionals in more than 50 countries around the globe works with an unwavering commitment to patients, safety and ethics. Quintiles helps biopharmaceutical companies navigate risk and seize opportunities in an environment where change is constant.

Quintiles Japan has been in business since 1993. Today, Quintiles Japan is perceived as one of the most experienced and trusted strategic partners among Contract Pharmaceutical Organizations (CPO).

Increasingly, Japanese pharmaceutical companies are expanding their activities into the U.S., Europe and other markets. At the same time, more and more multinationals are discovering the potential of the Japanese market. With nine facilities in Japan, Quintiles Japan has developed a special expertise as an integrated service provider of both CRO and CSO to help you achieve your goals: In-country drug development; Accelerated Japanese approvals through offshore trials; Services for Japanese companies selling into Europe, the U.S. and other markets; Flexible, high-quality, cost-effective capabilities; and Effective pharmaceutical sales and marketing plans.

Quintiles Japan covers the following key services: Biostatistics; Central laboratory services; Clinical monitoring and site management; Data management; Drug safety and pharmacovigilance; Project management; Regulatory services; Commercialization, such as Innovative sales solutions and Medical communications (MSL); and Partnering.

Quintiles Transnational Japan K.K.Address 3-12-1 Kachidoki, Chuo-ku, Tokyo

Tel 03-3531-9628

Fax 03-3531-9151


Web site Japanese: www.quintiles.co.jp English: www.quintiles.com


Staff Size: 2,300

Contact: Corporate Communication

Company Activities / HistoryThermo Fisher Scientifi c (NYSE: TMO) is the world leader in serving science. The company enables its customers to make the world healthier, cleaner and safer by providing analytical instruments, equipment, reagents and consumables, software and services for research, analysis, discovery and diagnostics.

With annual sales of more than $10 billion, Thermo Fisher Scientifi c has more than 30,000 employees and serves more than 350,000 customers in pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies.

The company delivers the industry’s broadest selection of analytical instruments, equipment, consumables and laboratory supplies. Its growing portfolio of products includes innovative technologies for mass spectrometry, elemental analysis, molecular spectroscopy, sample preparation, informatics, fi ne and high-purity chemistry production, cell culture, RNA interference analysis and immunodiagnostic testing.

Thermo Fisher Scientifi c K.K.Address 3-9, C-2F Moriya-cho, Kanagawa-ku, Yokohama 221-0022

Tel 045-453-9100

Fax 045-453-9110

E-mail info-jp@thermofi sher.com

Web site www.thermoscientifi c.com


Staff Size: 34,000 worldwide, 300 in Japan

Contact: Murray Wigmore

Spread the Word

Advocacy Networking

InformationIf anyone in your valued network is not an ACCJ member yet, help sign them up. Recommend a new member to connect the best in business.

Call us at 03-3433-7304 for more information.

American Chamber of Commerce in Japan

Bringing Businesses Together for 61 Years


I didn’t exactly impress the fi rst time I gave a presentation in English to a Japanese audience. The comments gave me clear signals that my message didn’t quite connect. The

audience comprised English speakers, but I heard remarks like “you’re so tall” and “I liked your slides.” This wasn’t what I had hoped for. I’d have to change my style, content and delivery to have the impact I wanted should the audience have a different level of English fl uency. I’ve since learned several more effective approaches that I hope will lead to hearing bravos, not seeing blank stares.

Be understoodIn the same way that Starbucks anticipates customer demand, think carefully about what the listener wants and make it easy for them to understand. While you are understandably concerned about deliv-ering a good talk without mistakes, the audience’s key concern may be under-standing you. They’re unsure about their listening skills, your pronunciation and volume, interruptions, etc.

So let them know where you are going with your talk. Give them an outline—a roadmap—so they know the topics and can anticipate your speech.

Highlight names and diffi cult words, and write them in the native language of the audience. When I give a talk to my university colleagues, many don’t understand my Japanese or my English pronunciation. I give them an outline of my talk in advance, so they can follow in English or Japanese, or both, depending on the situation.

When Takao Fujii (who asked that his real name not be used) had to go overseas to make a presentation to his new executive board, he panicked. It was already a huge adjustment for him when a U.S. company bought his fi rm. Now he had to go to Silicon Valley and explain his business strategy to people from many countries. He wrote an outline of his presentation, numbered the major points and connected them to his PowerPoint slides, and used verbal markers, such as “half way down the page” and “now number four.” This helped the audience

keep up with him. His easy-to-follow handout made it easier for the listeners, too. And he spoke slowly and clearly.

Fujii didn’t hand out copies of the slides. Why? He wanted to keep eye contact to see if the audience could understand him speaking. He wanted them looking at him and the screen—not down at distracting papers. When Fujii fi nished his presentation, he provided another handout—one they could refer to later. The data in the supplementary handout could be discussed with others later.

Graham Harris, president of The Harris Consultancy in Tokyo, is a leading Toastmaster. He suggests that you “cut out the idioms—e.g., ‘let’s ensure we are all on the same page.’ [If not,] this will likely have the audience looking through their notes to fi nd a certain page.”

Harris suggests not starting with an apology—e.g., “You probably know as much about this as I do.” This is not the time for self-effacing behavior, which may be misconstrued by an audience unfamiliar with Japan.

HELP FOR NON-NATIVE SPEAKERS DURING PRESENTATIONS. By Dr. Robert Tobin

Making It in Management


MAKING IT IN MANAGEMENT

Be early, don’t rush, stay lateToo often, speakers hurry. They arrive just before their talk is scheduled, speak too fast, and then leave immediately after—like a trip to the dentist. Arrive early and stay late. Think of it as a visit to a favorite relative. Talk with members of the audience fi rst so they can warm up to you and become accustomed to your way of speaking, and you can assess their language skill.

Practice diffi cult words and names, but don’t ask the audience for help. Ask native speakers well before your speech how to say words or pronounce the name of that small town in Hokkaido.

Avoid struggling with numbers in public. If you can’t remember how to say $5, 893, 412 in English, just say, “almost 6 million dollars.” If you don’t know how to say, 781,583,000 units in Japanese, just fl ash the fi gure big on the screen—Steve Jobs style—and say, “This is the number we want to achieve.”

Takao Fujii worried about the Q&As. The audience in Silicon Valley would talk quickly and ask tough questions. He knew he would be judged by his answers.

I recommended more time for this. It’s almost always more interesting with interaction. Andrew Silberman, presi-dent and chief enthusiast of Advanced Management Training Group, said in an issue of Andrew’s Axe, his e-mail news-letter: “Whenever you have a choice, lengthen the time you allocate to ques-tions.” The audience is more involved when there is less formal presentation and more questions.”

After your presentation, people will come up to you and ask questions that they did not want to ask, or could not ask, in front of the larger group.

Refl ect and connectBefore your talk, worry less about the language issues, and think harder about what you want to say and how you want to say it. Consider how your speech can have the greatest impact, given the existing language limitations.

Years ago, when working in Thailand, I met up with a friend who was studying Thai and was anxious to try out his skills on the taxi driver who was taking us to a

well-known seafood restaurant. My friend gave long and exacting directions in Thai—and, in the end, we got lost. Finally, I just said, “Somboon, Silom”; and we got there.

What keywords or expressions can be used that will connect you to the audi-ence? John F. Kennedy knew exactly what would work in West Germany in 1963, when he said, “Ich bin ein Berliner.” Much more recently, Lorin Maazel, the musical director of the touring New York Philhar-monic, introduced An American in Paris by George Gershwin to a North Korean audi-ence, by saying that, “maybe someday, someone will write a work entitled, Americans in Pyongyang.” It was a risk, but the audience smiled and clapped enthu-siastically, further advancing the effort of greater cultural diplomacy.

If you’ve been fortunate enough to hear Ricco de Blank, the former general manager of The Ritz-Carlton, Tokyo, speak, you will know what I mean. De Blank touches people’s hearts when he talks. In the speech I heard him give for the ACCJ, the audience was transfi xed as he talked about the Ritz-Carlton’s approach to service; but he did much more than talk about the hotel. He helped everyone in the audience aspire to a higher level of achievement and living for themselves.

Picture thisIan Fenwick, who is a professor of marketing at Sasin Graduate Institute of Business Administration of Chula-longkorn University (Bangkok), lectures throughout Asia. He advises making your

presentations as pictorial as possible and simplifying the vocabulary on the slides. He also suggests going for the fewest number of words, with very little punctuation.

There is no need to integrate those elaborate matrixed organizational charts with dotted and non-dotted reporting functions on your slides. Rather, put them in a separate handout.

It is hard enough for people to focus on a presentation and listen to your words, without hearing the sounds, bells and whistles that are part of the PowerPoint programs. Rather, use pictures, beautiful ones—ones that fi t the message.

I was impressed by a talk given by Daniel Amos, chairman and CEO of Afl ac Incorporated, to the ACCJ membership a few years back. His talk was interesting and easy to follow, and on his slides—not a single word—only pictures. The visuals—and he—got the message across and told the story.

Focus on youHarris suggests that you emphasize your facial expressions when the audience and the speaker have different levels of fl uency. That and your body language can signal any move, from serious to humor, or from humor back to serious. De Blank of the Ritz-Carlton recommends pressing the “B” key on your keyboard, which blacks out the screen so all the focus is on the presenter. “How you look matters as well; dress as your audience and use examples that the audience is familiar with. Look at the audience, look at individuals ... 1-2 seconds ok, and move around the room.”

Harris agrees. “The focus should be on you—not the slides. Remember the message comes from the spoken word, not the slides,” he says. “The slides are there to reinforce the spoken word, so face the audience, not the screen, and do not read the slides.”

Ricco’s advice rings true for these kinds of talks, as well as whatever you do: “Most of all, have fun doing the presentation. Enjoy what you do.” ■

Dr. Robert Tobin is an executive coach, Keio University professor and co-founder of the Asian Collection Art Gallery.

SNAPSHOTNeed an interpreter?

Use a specialist — Employ someone who ■

knows your industry or profession and its special languageAllow time — When preparing, reduce ■

your speech by 30-50%. Share it with the interpreter well in advanceMeet and brief — Discuss your text, ■

highlight special vocabulary, acronyms, etc., and describe the feeling you wish to convey Keep it short — Speak two sentences, ■

pause, let the interpreter talkWatch the stars — To see experts in action, ■

study press conferences of foreign actors here; spot what glitches occur even with top interpreters Praise — Thank the interpreter even if you ■

disagree with something and never criticize in front of the audience

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We are giving away 3 copies of Japanese Workplaces in Transition. Simply e-mail [email protected] by December 18. The winners will be picked at random. Winners of Japan’s Open Future: Timothy Connor, Newport Co., Ltd.; Mark Detrick, Asatsu-DK; and Michael A. Takeuchi, Bloomberg L.P.

By Hendrik Meyer-OhlePalgrave Macmillan, 214 pp, £60Reviewed by Tom Baker

Lifetime employment and seniority-based advancement have

long been seen as essential elements of Japanese-style human

resources management. While there always were companies

and workers not affected by such conditions, the principles were

exercised widely enough to set the tone of the labor market and

shape people’s career expectations.

In recent years, of course, many companies have been thin-

ning the ranks of regular employees, increasingly relying on

non-regular workers such as temps and part-timers. There is now

enough momentum to throw serious doubt on the survival of

any older Japanese employment practice.

Hendrik Meyer-Ohle, a professor special-

izing in Japanese business practices at the

National University of Singapore, gives a

detailed overview of the current scene in

Japanese Workplaces in Transition: Employee

Perceptions. He draws on survey results,

government statistics and previously

published studies; yet his book is more

vivid and down-to-earth than many

academic tomes—thanks to its generous

excerpts from dozens of fi rsthand

accounts at Japanese workplaces.

These examples are gleaned from

blogs in which dozens of workers

from varied backgrounds discuss

their hopes, ambitions, anxieties and

disappointments. Some of them, in

actuality, eagerly welcome a shift from

seniority to performance as factors

affecting personnel decisions, while

others understandably feel threatened by

it. “Foreign-owned companies are often

seen as front-runners in the introduc-

tion of performance-based principles in

Japan,” the author notes.

Because the older workers are

more expensive under a seniority

system, some companies are trying to ease the fi nancial burden

through early retirement schemes. Meyer-Ohle writes that,

while in the United States such offers are seen as “a benevolent

measure compared to layoffs, [they] were considered a harsh

measure in Japan, and surveys as well as diary accounts do show

an impact on organizational culture and climate.”

Meanwhile, companies that have started to rely on temps

or part-timers to save on payroll expenses can face problems

maintaining skill levels, leading to worries about deterioration

in customer service, product quality, production speed and even

safety.

One of Meyer-Ohle’s observations with policy implications

for the future is that, previously, part-timers usually had other

sources of income—wives had working husbands, students had

supportive parents, and retirees had pensions. But, nowadays,

a growing number of individuals and couples are surviving

entirely on part-time income.

Yet, according to Japanese Workplaces in Transition, the future

could also be more competitive in ways that are positive for

some workers. When staff ranks are reduced in restructuring,

say, employee loyalty is shaken, leading the author to speculate

that many will be more likely to look for work elsewhere once

the economy improves. Although Meyer-Ohle observes that

underdeveloped labor markets in Japan keep people

from leaving their companies, he also notes the rise

in the number of headhunters to help discontented

staff navigate the transition. He points out that

employees who are newly subjected to personnel

evaluations may begin to have a clearer idea of their

market value in terms of skills than the old-style

generalist would have had.

How Japanese society will adapt to this mix

of greater fl exibility and heightened uncertainty

remains to be seen. ■

Tom Baker is a staff writer at The Daily Yomiuri.

BEHIND THE BOOK

Japanese Workplaces in Transition:Employee Perceptions


Advocacy Update

ACCJ Viewpoints are the core products of ACCJ Advocacy. An ACCJ Viewpoint is a brief paper, generated by a committee, that expresses the Chamber’s offi cial position on a specifi c issue. Viewpoints are primarily used to express opinions on current policies, policies under consideration by the Japanese and/or U.S. governments, and policies under discussion in bilateral or multilateral forums. They are also used to raise new concerns about issues not currently on the Japanese government agenda.

Revise Portfolio and Business Transfer Provisions Under Japan’s Insurance Business LawInsurance Committee

RecommendationThe American Chamber of Commerce in Japan (ACCJ) calls on the Government of Japan (GOJ) to revise the Insurance Business Law (IBL) in order to facilitate the effi cient domestication of a branch in Japan of a foreign-incorporated insurance company (such a branch is defi ned in the IBL as a “foreign insurance company”).

Under the IBL, corporate transactions by domestic insurance companies are treated differently from those by foreign insurance companies. Japan-incorporated insurance companies have procedures such as mergers (shinsetsu gappei), spin-offs (kaisha bunkatsu), policy portfolio transfers (houkatsu iten), and non-portfolio transfers of the company’s business (jigyou no jouto) available to them. However, the procedures available to foreign insurance companies are limited to only policy portfolio transfers and non-portfolio transfers of the company’s business. These procedures are also more complicated and costly compared to procedures available to Japan-incorporated insurance companies.

Having a more comprehensive menu of options for corporate reorganization procedures for foreign insurance companies would increase management options and could result in greater corporate transactions and increased investment in Japan. This is consistent with the Financial Services Agency (FSA)’s commitment to “Better Regulation” and overall GOJ efforts to increase foreign direct investment (FDI).

The ACCJ urges the GOJ to establish new measures to allow for the transfer and domestication of a foreign insurance company’s business on more reasonable terms. As part of the new branch domestication measures, the FSA should establish an “overnight” reorganization procedure that does not require a sales blackout or individual notice to creditors, and that assumes the license of the branch to the local transferee entity.

Take Measures to Facilitate Domestication of Foreign Company Japan BranchesACCJ Financial Services Forum

RecommendationThe American Chamber of Commerce in Japan (ACCJ) recommends that the Government of Japan, through the Ministry of Justice, the Ministry of Finance and other Ministries concerned, revise the Corporation Law, the Corporation Tax Act and other relevant laws and regulations to establish a new simplifi ed procedure to convert the branch offi ce of a foreign-incorporated company registered in Japan (Japanese branch) into a Japan-incorporated stock company (stock company) (kabushiki-kaisha under the laws of Japan). The present situation greatly disadvantages Japanese branches in terms of legal and taxation procedures when they are incorporated as kabushiki-kaisha, compared with domestic companies doing the same. While foreign-incorporated companies recognize their ability to continue to operate as a Japanese branch, the option to convert the Japanese branch to a stock company on terms equivalent to those accorded to domestic companies will greatly improve the fl exibility of their corporate organization. To remedy the current situation, the ACCJ recommends the following:

(1) Establish a new “quasi company split” procedure to allow a Japanese branch to be converted to a stock company. The new procedure should allow a foreign-incorporated entity to either incorporate the Japanese branch into a stock company or issue new shares by transferring the business of the Japanese branch to such stock company without having to obtain consent of the creditors of the transferred business by implementing procedures comparable to the creditor protection procedures and other procedures for a company split;

(2) Not require inspection by a court-appointed inspector for a quasi company split, similar to the procedures for a company split; and

(3) Allow the quasi company split to be tax deferred as a tax-qualifi ed reorganization and establish measures to exempt consumption tax and reduce real estate acquisition, registration and license taxes.

Ensure that the Scheduled Review of the Money Lending Business Law is Conducted by a Qualifi ed Independent Policy Research OrganizationBanking and Finance Committee

RecommendationThe revised Money Lending Business Law (MLBL) should be reviewed in accordance with Article 67 of the Supplemental Provisions of the Law prior to June 2010, and in any event prior to full implementation of such revisions. In order to ensure an objective and unbiased review is performed, the American Chamber of Commerce in Japan (ACCJ) recommends that a qualifi ed independent policy research organization conduct the review and report the results to the Diet and appropriate regulators, including the Financial Services Agency (FSA), Consumer Affairs Agency (CAA) and Ministry of Justice (MOJ). To give full effect to the purpose of Article 67, the review should be carefully considered by the Diet and appropriate regulators and its fi ndings considered in fi nalizing implementation of the revised MLBL.

Released ACCJ Viewpoints can be read in full in the Advocacy section of www.accj.or.jp


ACCJの「意見書」は、特定の問題に対してのACCJの公式見解を表明する委員会が作成した簡潔な提言書であり、提言活動の中核を成しています。現行の政策や、日本又は米国政府で検討中の政策、二国間もしくは多国間で協議中の政策についてだけでなく、新たな関心を高めるために現在日本政府の課題となっていない問題についても意見を述べています。

日本の保険業法に基づく包括移転および事業譲渡の規定の改定を保険委員会

英語正文

提言在日米国商工会議所（ACCJ）は日本政府に対し、効率的な外国保険会社の日本法人化を促進するための保険業法の改定を求める。　保険業法の下では、日本の保険会社による組織再編と外国保険会社による同様の再編の取扱いは異なり、日本で設立された保険会社は、新設合併、会社分割、包括移転、事業の譲渡等の手続きを行うことができる。しかし、外国保険会社が行うことのできる手続きは、包括移転と事業の譲渡に限定されており、これらの手続きは日本の保険会社が行うことのできる手続きに比べて複雑かつ費用負担が大きい。　外国保険会社の利用できる組織再編の選択肢が充実すれば、経営の選択肢が広がり、M&A取引の増加、ひいては対日投資の増加につながる。これは、金融庁のコミットメントであるベター・レギュレーションおよび対日海外直接投資を増進するという日本政府の試みと合致するものである。　ACCJは、日本政府に対し、外国保険会社のビジネスをより合理的な条件で譲渡および日本法人化することができるよう手続きを整備することを提言する。金融庁は、日本法人化の新しい手続きの一環として、保険契約の販売停止期間や債権者への個別通知を必要とせずに、支店の保険業法免許を譲受人である日本法人に承継させる「即日」組織再編手続きを整備すべきである。

外国会社の日本支店の株式会社化を容易にACCJ金融サービスフォーラム

英語正文

提言在日米国商工会議所(ACCJ)は、外国会社の日本支店の株式会社化を容易にするべく、法務省、財務省および関係省庁に対して、会社法、会社税法その他関連法の簡易手続きの新設制定を要望する。現在、外国会社の日本支店は日本の会社と比べ、法律上および税務上、不利な扱いを受けている。外国会社の日本支店が支店形態で引続きビジネスを行うことができることを認識する一方で、日本の会社が支店を株式会社化する際と同様の条件で外国会社が日本支社を株式会社化する選択肢を持つことは外国会社組織の柔軟性を大きく向上させることになるであろう。現状を改善するため、ACCJは以下の提言を行う。

(1) 外国会社の日本における事業所として登記される支店（以下「日本支店」）を株式会社にするための手続きとして「準会社分割」を新設し、外国法人企業の日本支店が債権者保護手続、その他会社分割と同等の手続きを実施することにより、承継事業に係る会社債権者の同意を要することなく、当該日本支店の株式会社に事業を承継させ、当該日本支店の株式会社の設立または新株の発行を行うことができるものとすべきである。

(2) 準会社分割については、会社分割と同様、裁判所の選任する検査役の検査を要しないものとすべきである。

(3) 準会社分割については、会社分割と同様、税制適格組織再編による課税繰延を認め、また、消費税の非課税、不動産取得税・登録免許税の軽減措置を設けるべきである。

貸金業法の見直しにあたり適切な独立政策研究機関の起用を提言銀行・金融委員会

英語正文

提言改正貸金業法は、附則第67条の見直し規定により、2010年6月までに行われる完全施行より前に見直しの検討が行われることになっている。在日米国商工会議所（ACCJ）は、客観的かつ公平な見直しの検討が行われるようにするため、適切な独立政策研究機関が調査を実施し、国会および関係省庁（金融庁、消費者庁、法務省など）に結果報告を行なうことを推奨する。国会および関係省庁は、第67条の趣旨に沿うべく調査結果を十分に検討し、それを改正貸金業法の最終的な施行において考慮すべきである。

ACCJが公表した意見書の全文は、 www.accj.or.jp の政策提言活動のページでご覧頂けます。

Last year we celebrated ACCJ’s 60 years of “Bringing businesses together.” This year has been less a celebration. But when we look back I am certain we will recognize 2009 as a watershed year in the Chamber’s history. Back in March I wrote that we were in a tunnel

and that we could expect the landscape to be quite different when we emerged. Though I can’t say we are completely out of the tunnel, there is enough light ahead to make some predictions on what the new environment will be like.

For our advocacy efforts we will continue to become more fl exible and nuanced. We will not change our tune so much as we will change our tone. This year we have made major cooperative efforts with Keidanren and the European Business Council. Also we have laid the groundwork for a stronger ACCJ policy participation in the Asia Pacifi c Council of American Chambers of Commerce (APCAC). Our work with APCAC will be more important as Japan hosts next year’s APEC meeting and the U.S. hosts in 2011. So one characteristic of the new environment will be the need to build cooperative advocacy relationships with like-minded organizations. Our bilateral advocacy with the Japanese government remained strong this year with as many published viewpoints as ever and with a signifi cant increase in the number of public comments. With all the new developments as the DPJ takes over policy formation we can expect that demand for our advocacy input will continue to increase.

It is more diffi cult to predict what the membership environment will look like. Certainly this year we had no slowdown in activity and member involvement. I would argue that this year our committee leaders were the best performers in their class at least since I have joined the Chamber. And the slate of candidates that the Nomination Committee presented at the November General Meeting showed what an outstanding group of leaders we have. Unfortunately, post-Lehman we did lose members. Some were sent back to the States as their companies left the market or downsized severely. Some have reappeared with a new company affi liation. Among those who left were many whose contributions will be missed. Still others have passed away and our roster will seem emptier without such familiar names as past presidents James Adachi and Robert Sharpe. The more recent loss of Mike Makino is still painful and we thank him for all he did for the Chamber for so many years up to and including 2009. We are fond of mentioning that networking is one of the three key pillars of Chamber activity. When we think of these people we are reminded that networking is not just for building business contacts but also for nurturing friendship. And despite the downturn, we continue to attract well over 500 new members with 6 weeks left in the year. From this group will come the leaders for the next generation of the ACCJ. I’m confi dent that under the leadership of the Board, these new members will help the Chamber to adapt to whatever changes 2010 brings. And that there will be many new friends. ■

Friendships

IN THE FINAL ANALYSIS

Samuel H. Kidder is ACCJ Executive Director.

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