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WHY JAPAN?

Opportunities for EU companies in Japan

September - 2013

Rob Van Nylen

mailto:[email protected]


http://www.eu-japan.eu/

http://www.eubusinessinjapan.eu/

http://www.een-japan.eu/


EU-Japan Centre for Industrial Cooperation 2



TABLE OF CONTENT

1 Executive Summary ...................................................................................................................................... 5

2 Japan: Facts and Figures ............................................................................................................................... 9

2.1 Japan’s Domestic Economy in Figures .................................................................................................. 9

2.1.1 Background .................................................................................................................................... 9

2.1.2 Cabinet of Prime Minister Shinzo Abe ......................................................................................... 10

2.1.3 Economic Outlook FY2013 ........................................................................................................... 12

2.2 Japan’s Political System ....................................................................................................................... 13

2.2.1 Background .................................................................................................................................. 13

2.2.2 The Lower House ......................................................................................................................... 13

2.2.3 The Upper House ......................................................................................................................... 14

2.2.4 The Supreme Court ...................................................................................................................... 14

2.3 Japan’s Legal System ........................................................................................................................... 14

3 Why Japan .................................................................................................................................................. 16

3.1 Japan and EU business in Figures ........................................................................................................ 16

3.2 Japan and EU FTA negotiations ........................................................................................................... 17

3.3 Trans-Pacific Partnership negotiations ............................................................................................... 18

3.4 The Japanese “Prosumer” and Disposable Income............................................................................. 18

3.6 Governmental and Public Procurement ............................................................................................. 21

4 Examples of Business Potential in Specific Market Segments ................................................................... 24

4.1 Elderly Care Market ............................................................................................................................. 24

4.2 Healthcare ........................................................................................................................................... 25

4.3 Renewable Energy ............................................................................................................................... 27

4.4 Bio and Nanotechnology ..................................................................................................................... 29

4.5 Information and Communication Technology .................................................................................... 30

4.6 Luxury Products ................................................................................................................................... 31



5 Challenges and Tips .................................................................................................................................... 33

6 Bibliography ................................................................................................................................................ 35

Figure 1: Nikkei 225 Evolution 2011-2013 ...................................................................................................................................... 10

Figure 2: Yen-Euro Exchange Rate 2008-2013 ................................................................................................................................ 11

Figure 3 Japan: From Creditor to Debtor ........................................................................................................................................ 11

Figure 4: Japan’s Regional GDP ....................................................................................................................................................... 12

Figure 5: Trade in Goods and Services between EU and Japan ...................................................................................................... 16

Figure 6: EU Trade with Main Partners ........................................................................................................................................... 17

Figure 7: Comparison of US and EU Export Competitiveness in Japan ........................................................................................... 18

Figure 8: Comparison between Japan, China and US as European Target Markets ....................................................................... 19

Figure 9: Direct Investment Income in Japan ................................................................................................................................. 20

Figure 10: Public Tender Flow ......................................................................................................................................................... 22

Figure 11: Percentage of Population Aged 65 or Older per Country .............................................................................................. 24

Figure 12: Number of Recipients Long-Term Care Insurance ......................................................................................................... 25

Figure 13: Japan’s Pharmaceutical Import Surplus ......................................................................................................................... 26

Figure 14: Market Size Environment Business in Japan .................................................................................................................. 27

Figure 15: Market Growth Potential Renewable Energy ................................................................................................................ 28

Figure 16: Cumulative Number of Bioventures in Japan ................................................................................................................ 29

Figure 17: Sales Volume of EU Car Brands in Japan ........................................................................................................................ 31



1 Executive Summary

Although Western business eyes have been focusing on Asia, mainly China for manufacturing reasons,

for the last decade, Japan remains an extremely important economic player in the region, with a

Gross Domestic Product (GDP) valued at 500 trillion yen. For reasons of perspective, Japan has 47

prefectures with many of each of them producing a regional GDP comparable to the GDP of many

European countries. On top of that, opposite to popular belief in Europe, Japan has a rather non-

protective trading policy, always bearing in mind that some sectors, for example agriculture, are the

exception that makes the rule.

Japan and the EU have been historically strong business allies, given the 55.5 billion euros export of

goods in 2012, while the imports from Japan stood at 63.8 billion euros in the same year. When

taking into the account the trade balance of services, the situation is reverse but the absolute

amount is a mere 35% compared to the aforesaid trade volume of goods.

At the beginning of 2013, Japan and the EU officially commenced their Free Trade Agreement (FTA)

negotiations, to be concluded not earlier than 2018. Once concluded, experts estimate that Europe’s

economy as a whole will grow with 0.6 to 0.8% and might create 420.000 new jobs. European exports

to Japan should receive a growth boost of +30% once the agreement is rolled out.

For bigger European companies, looking into the English public tenders of the central and the local

governmental institutions, could create interesting business opportunities but before jumping the

gun, this is also one of the most challenging business segments for foreign companies entering the

Japanese market. The disaster hit Tohoku region has been pro-actively reaching out to overseas

players but in the end, in most cases, Japanese based companies have been awarded these tenders.

With a well-educated and long-living population of 127 Japanese million ‘prosumers’ (professional

consumers) this gigantic consumption market remains very often an underexplored market for

exporting European companies for various reasons. Especially, authentic and innovative European

products and services are highly appreciated by Japanese consumers (who spend 80% of their

disposable income domestically) and many EU companies that entered this market in the past, are

reaping the fruits of their efforts. It makes no sense though for European enterprises to start

competing with cheaply Asian manufactured products, underlining once more the importance of the

Unique Selling Proposition (USP’s) of your company’s products. E-commerce is surely the way ahead

in Japan, with the 2 main players being Rakuten and Amazon Japan, thriving thanks to the rigorous

system of home parcel deliveries.

The Japanese language barrier, the native style of doing business and quality-service savvy end-users

are surely some of the main factors that will impede your market entrance but these hurdles can be

won over by a long-term commitment to adapt to this demanding market, resulting in unlocking the

real business potential of Japan. Trade sections of EU embassies in Japan, your country’s Chamber of

Commerce in Japan, the European Union, the EU Japan Centre for Industrial Cooperation, the



European Business Council (EBC) and Japan External Trade Organization (JETRO) offer

support in various ways like logistical, consulting and even business matching services for companies

trying to enter the challenging Japanese market.

Intellectual Property laws are very similar to Western standards and during the last decades,

infringements in Japan have been extremely limited but one important note here is that Japan uses

‘the first to file’ system for trademarks and this has caused quite some foreign, both small and big,

companies headaches in the past.

As for specific market segments with lucrative business potential for European companies, we would

like to focus on the following sectors, without being exhaustive, namely the Elderly Care Market,

Healthcare Market, Renewable Energy Sector, Bio and Nanotechnology Sector, Information

Technology Sector and Luxury Products market segment.

In regard to the Elderly Care Market, no other Western country is ageing at a pace comparable to

Japan, creating many challenges for the government but also a wide range of business opportunities

for keen entrepreneurs. In 2010, over 30 million inhabitants were aged over 65 years (23% of the

population) but studies estimate this to be 45% of the total population in 2050. This increase will

hugely spur demand for both domestic and overseas manufacturers of hardware and elderly care

related goods.

The healthcare market, closely interlinked with the aforesaid Elderly Care segment, is another

promising business segment in Japan for European companies active in the pharmaceutical and

equipment manufacturing field. The ageing market described above has made Japan’s national

medical expenditure go skyrocketing in the last 2 decades, taking up almost 11% of national income

in 2009, valued at 7.4 trillion yen, according to the Ministry of Health, Labour and Welfare.

Over the past couple of years, Japan has been running a pharmaceutical trade deficit of 2.5 trillion

yen with annually growing imports but flat export figures. Recent major market liberalization

measures by the Japanese government included faster drug approval, the set-up of the central

Institutional Review Board and specific Innovative Technology Zones for pharmaceutical companies

too name only a few.

Ever since the Tepco Daiichi Fukushima Nuclear Plant accident on 11 March 2011, in the aftermath of

the disastrous Tohoku Earthquake and Tsunami, renewable and clean energy business has been the

talk of the town. The Ministry of Economy, Trade and Industry expects an increase in market value

from 59 trillion yen in 2005 to a whopping 83 trillion yen by 2015.

Recently the Japanese government also announced the Green Innovation Incentive plan, targeting 50

trillion yen in sales and estimated to create 1.4 million new jobs in order to firmly establish a Green

Japan, profoundly reducing the future dependence on traditional energy like electricity produced at

nuclear plants nationwide.

Germany, The Netherlands and the Nordic countries are highly regarded in Japan for their clean

energy realizations and efforts in the last decades and businesses specialized in this field, should be

able to surf this wave of unlimited business opportunities arising in Japan at present.



When talking about growth segments, one cannot overlook the business potential of bio and

nano technology for Japan. The total market value of biotechnology marked 25 trillion yen in 2010,

while the nanotechnology market is estimated to be worth 13.4 trillion yen in 2020 to grow further

to 26 trillion yen by 2030.

Annually in January, the Nano Tech Executive Committee organizes the Nanotech Trade Fair in Tokyo,

attracting almost 50,000 visitors, making it one of the biggest global trade fairs in Nanotechnology.

Also many European countries and companies exhibit their latest technology here. This exhibition is

traditionally supported by the commercial trade offices of the embassies of most major European in

Japan.

The information and communication technology market, a combination of hardware, software and

others, value is almost 96.5 trillion yen and employs more than 4 million people. The hardware

market accounts for almost 28 trillion yen while software and services represent approximately 20

trillion yen.

Very often, software delivered to Japanese companies requires a large amount of customization,

taking up over 50% of the total software and services market value of 20 trillion yen.

The enormous 3.11 Tohoku Earthquake profoundly disrupted various important ICT infrastructure

backbones and nowadays, loads of efforts go into avoiding a similar situation in the future, resulting

in business potential for companies specializing in risk management in regards to failure, downtime

and back-up scenarios.

The major challenges for overseas ICT related companies remains in the areas of Japanese language

support, after-service models and maintenance support post-installation but once overcome,

rewarding business potential is yours.

Lastly but traditionally a business segment where many European companies are enjoying brisk sales

in the Japanese market, is the luxury high-end market, valued at approximately 2.6 trillion yen in

2012. The market breakdown goes from high-end accessories like jewellery over fashion, in the broad

sense of the word, till luxury European cars.

40% of all globally produced luxury products are purchased by savvy Japanese customers and it is

also said that 90% of all Japanese women own at least 1 or more luxury handbags, very often from

European origin. Most major European fashion brands have already a strong foothold in Japan, either

directly or via their domestic business partner but this specific market segment still has room for new

coming, innovative brands, especially now that the Japanese economy is enjoying some momentum

with the recent announcement of Tokyo being the host city for the summer Olympics and

Paralympics in 2020.

The market segment of luxury import cars, including almost all European top manufacturers, also has

been thriving the last 10 years with double digit annual growth figures. Given the recently initiated

mutual Free Trade Agreement negotiations between Japan and the EU, predictions are that this will

continue for the next couple of years at least.

Hence that this survey tries to explain why Japan is worthwhile your business and management time,

without falling into the typical pitfalls of long and theoretical explanations. Wherever possible,



updated, practical and useful information combined with real life and field sales tips are

offered. Good luck with your (new) business venture with Japan!



2 Japan: Facts and Figures

2.1 Japan’s Domestic Economy in Figures 2.1.1 Background

Japan increased rapidly its prominence in the global economy during the post-war period. Historically, the primary drivers of Japan’s strong economic growth have been high rates of investment in production plants and equipment, the application of efficient industrial techniques, a high standard of education, good relations between labour and management, ready access to leading technologies with significant investment in research and development, an increasingly open world trade framework and a large domestic market of discerning consumers – all of which have given Japanese businesses an advantage in scale of operations. Many of these attributes remain relevant to Japan’s economic growth. Another important major factor behind the enigma of the Japanese economic revival and success after World War II, has been the active role that highly educated bureaucrats played in the central government during the 50-70’s, widely known as the Japan Inc. phenomena. During this period, staggering annual economic growth rates close to double digit per annum were recorded. Japan's industrial facilities were largely destroyed in the Second World War. Thereafter, a high ratio of investment to GDP and efficient industrial techniques resulted in strong real growth rates, particularly in the 1960s. These were boosted by a high standard of education, good relations between labour and management and government guidance for selected industries. The late 1980s saw a rapid increase in real estate prices following a sustained loosening of monetary policy from the middle of the decade. Asset prices started falling in the early 1990s, however, as the Bank of Japan (the Central Bank) raised interest rates, the government introduced measures to limit speculation in real estate. This era is globally known as Japan’s bubble economy. Till date, deregulation and liberalization remain important policy issues, but the pace of change has been slow. The rapid aging of the population has tremendous implications for the structure of the future labour force, the savings rate of the whole population and hence also for the government's budget. Faster economic growth in the last decade has helped to save the largest banks, but concerns remain about the health of the smaller, regional banks. The government's fiscal position is also in poor standing, owing to sluggish tax revenue growth and the implementation during the 1990s of successive fiscal-stimulus packages with a combined headline value of more than 100 trillion yen.



2.1.2 Cabinet of Prime Minister Shinzo Abe After a very long sluggish economic situation of Japan after the bubble burst in the early 90’s, the so-called 2 lost decades, Japan’s economic and financial situation has been changing rapidly and profoundly since Shinzo Abe took office in December 2012 as Japan’s 96th Prime Minister, after a landslide election victory for the Liberal Democratic Party (LDP). During the elections of 21 June 2013, the LDP’s coalition also secured a majority in Japan’s Upper House, dissolving the Divided Diet (Nejire Kokkai) phenomena, allowing Abe to implement very promptly approved guidelines, many of them including more global and liberal economy but also a more pro-active engagement of Japan in the global political scene in general. His revival plan for Japan is based upon a 3 arrows strategy and is often being referred to as “Abenomics”. Arrow 1: Aggressive Monetary Policy Arrow 2: Flexible Stimulant Fiscal Policy Arrow 3: Sustainable Long-term Growth Strategy by Sparking Private Investments Since then, both the average Nikkei Index and the exchange rate of the Japanese Yen have been very volatile but on average, the Nikkei Index1 increased with 30% while the Yen devaluated with 30% compared to other major global currencies. In July 2013, the exchange rate of 1 Euro to the Japanese Yen stood around 130 JPY2, a similar level to the initial price fork of 133 JPY, when the Euro was introduced to the global financial markets in 2002.

1 http://www.tradingeconomics.com/japan/stock-market

2 http://www.xe.com/currencycharts

Figure 1: Nikkei 225 Evolution 2011-2013

http://www.tradingeconomics.com/japan/stock-market

http://www.xe.com/currencycharts



However, the outlook is not only rosy as Japan is facing major challenges shouldering an immense public debt of over 1,000 trillion yen since August 2013, being approximately 230% (luckily, the majority amount of these sovereign bonds are owned by Japanese citizens, not by foreign institutional investors) of the present GDP, it’s continuous deflation domestically, while a major consumption paradigm is and will take place given a quickly ageing in combination with a shrinking population. On a more micro-economic level, this huge debt figure translates in a debt of almost 9 million yen per capita. In order to reduce this public debt, the LDP has announced to start gradually raising the present consumption tax of 5% via 8% to 10% by October 2015 but this remains under discussion given the continued weak state of domestic spendings. The awarding by the International Olympic Committee (IOC) on 7 September 2013 to Tokyo to host the Summer Olympics and Paralympics in 2020, is surely extra wind in the sails of Abe and his team. The economic effects of this organization decision, following Tokyo’s last hosting in 1964, is estimated at 3 trillion yen by 2020, creating over 150,000 new jobs. At the same time, adding another expense bill of 400 billion yen over the next 7 years, also gives mixed feelings to many Japanese. It will surely put pressure on Tepco and the Japanese government to profoundly solve the nuclear leakage issues at Fukushima Daiichi Plant. An important side remark, worthwhile bearing in mind, is about the influence of bureaucrats on government policy, being enhanced by close relations between civil servants and the long-time dominant LDP. This tie is reinforced by the considerable number of civil servants that enter politics after retirement, and by the practice of “amakudari” (literally: descent from heaven), where retired bureaucrats sit on the boards of private companies or semi-

Figure 2: Yen-Euro Exchange Rate 2008-2013

Figure 3 Japan: From Creditor to Debtor



governmental companies. According to recent data released by the World Bank in July 2013, Japan remains the number 3 global economy with a GDP of almost 5 trillion USD, after the United States and China. Germany is the first European country, claiming the number 4 global country GDP spot. Several regions in Japan boast a GDP3 level similar to other countries, as can be easily understood from the visual below.

Figure 4: Japan’s Regional GDP

The unemployment rate for 2012 hovered around 4.4% compared to 4.6% in 2011 of the working population. From a business potential perspective, the most important takeaway is that almost all of 127.61 million Japanese inhabitants have a strong average purchasing power parity combined with high domestic spending, compared to many other developed countries, hence creating interesting business opportunities for exporting European enterprises in general but especially in specific niche market segments.

2.1.3 Economic Outlook FY2013 On 28 February 2013, the Cabinet of Abe announced the following statement in regard to the economic outlook for fiscal year 20134 for Japan. “In FY2013, with the modest recovery of the world economy expected, the Japanese economy will recover, driven by domestic demand as implementation of the measures shown in “Basic Stance for

3 Three Windows on Japan, JETRO

4 Fiscal 2013 Economic Outlook and Basic Stance for Economic and Fiscal Management, Council on Economic and Fiscal

Policy (CEFP) from the Cabinet Office, 28 February 2013



FY2013 Economic and Fiscal Management” is expected to create steady demand and employment. With regard to prices, the rate of increase in consumer prices is forecasted to be approximately 0.5%, while the GDP deflator will turn to positive. Owing to an increase in the number of employees, the unemployment rate is set to decrease. In consequence, the real GDP growth rate in FY2013 is expected to be around 2.5% (the nominal growth rate is around 2.7%). Downside risks include the following: uncertainty in overseas economy such as the European sovereign debt crisis, developments in foreign exchange markets, and constraints on the electric supply.”

2.2 Japan’s Political System

2.2.1 Background

Japan is a constitutional monarchy, with the Emperor as the head of state. The system is a

parliamentary democracy with the Diet being the sole legislative organ. The Diet consists of

the House of Councillors (the Upper House) and the House of Representatives (the Lower

House).

The Japanese constitution, de facto a peace constitution, became effective from May 1947

during the US occupation. Its main features are that it renounces war and arms in Article 9,

asserts fundamental human rights and equality of the sexes and declares that sovereignty

resides with the people (rather than with the Emperor). Article 9 has been particularly

controversial, as it raises questions over the constitutionality of Japan’s de facto military, the

Self-Defence Forces.

The executive, the Prime Minister, is chosen by a ballot of the Diet and appoints a cabinet, a

majority of whose members must also be members of the Diet. The national legislature is the

bicameral Diet, comprising the 480-member Lower House and the 242-member Upper House.

The Liberal Democratic Party (LDP) governed Japan for most of the last 70 years, being briefly

out of power in 1993-1994. It has since been the leading party in a series of coalition

governments, but another major blow hit the LDP power house on August 30, 2009 when the

Democratic Party of Japan (DPJ), led by Yukio Hatoyama, secured a historical landslide victory

putting back the DPJ into governing powers, albeit for a short stint.

2.2.2 The Lower House

The Lower House (House of Representatives) election in October 1996 was the first held under

a new voting system introduced in 1994 by the non-LDP administration of then Prime Minister

Morihiro Hosokawa. The new arrangement of a combination of 300 first-past-the-post seats

and 200 proportional-representation constituencies replaced the 511 multi-seat constituencies

introduced in 1925, which were criticized for encouraging “money politics” (kinken seiji).

Following changes in 2000 to electoral legislation governing the Lower House, starting with the



election held in June of that year, the number of seats selected by proportional

representation was reduced by 20 to 480. The Lower House is elected every four years, but

polls are often held before a term is completed.

As of 16 December 2012, the coalition of the ruling party holds 325 seats, while the opposition

all together has a mere 150 seats, with the remaining 5 seats belonging to independent

representatives.

2.2.3 The Upper House

One-half of the seats in the Upper House (House of Councillors) are contested every three

years. Voters have two ballots, one for the proportional-representation constituency and one

for their prefectural electoral district. The Upper House currently has 242 seats. Of this total,

121 seats are contested at each election for the chamber, 48 by proportional representation

and 73 through prefectural electoral districts. The minimum age for Upper House candidates is

30, five years older than that for candidates standing for the Lower House.

Following the election results of 21 June 2013, the LDP coalition with the New Komeito Party

won 76 of the contested seats, resulting in a comfortable majority of 125 seats out of the 242

seats in total. Japan’s voting system is non-obligatory.

2.2.4 The Supreme Court

The Supreme Court is a US-style court, appointed by the cabinet, and presides over a legal

system of lesser courts divided into four arms: the high court, district courts, family courts and

summary courts.

Under Article 76 of the constitution, all judicial power is vested in a Supreme Court, which

administers eight high courts, below of which are 452 summary courts, 50 district courts and

50 family courts. In weighing constitutional issues, the Supreme Court has been criticized for

granting public welfare too much importance in relation to the rights of the individual. This

criticism resulted in the start of a jury system on May 21, 2009. In general, judicial precedent is

considered to be binding.

2.3 Japan’s Legal System

Prior to World War II, the basis of the Japanese legal system was mainly German (civil and commercial code) with some French influence but afterwards, Japan mainly adapted a USA based legal system (constitution), following the occupation by the American troops. Since 1996, a wave of various law changes have been taken place, which catapulted also Japan into the countries with a modern and globally accepted legal system, some minor exceptions set aside. Also in the legal system, similar to the economic and political system, clever bureaucrats played an active role in advising non-binding administrative guidance to companies.



The Cabinet of Prime Minister Abe has also actively been pursuing bilateral economic talks with various partners (FTA’s, TPP) but has also expressed to, finally, join the Hague Convention as one of the last modern countries. Legally speaking, incorporating your business in Japan is a pretty fast and straightforward process with the major impediments being that documents are often available in Japanese only and that at least 1 Japanese or foreign registered resident is necessary for a legally correct incorporation. Most foreign companies rely on specialized Japanese legal companies for this process, very often using signed proxies. Once established, the normal set of legal regulations apply like the commercial code, tax regulations, visa regulations for the overseas employees and national social and pension security obligations for all employees.

As for tax regulations, Japan has 3 main pillars being Corporate Tax, Consumption Tax (5% at present) and Individual Income Tax. Contrary to popular belief, Japan offers very good Intellectual Property Protection, many of them harmonized with prior and global protection applications done in Europe and the USA. The same goes for trademark protection, bearing in mind though that Japan still uses the ‘first-to-file’ principle so best to take care of this part as well, simultaneously with the incorporation process. Japan is also one of the participating countries, together with the EU, Anti-Counterfeiting Trade Agreement (ACTA) aiming to enhance international cooperation, enforcing the applicable laws and developing an appropriate legal framework. In case of importing physical products for distribution, wholesale or retail sales, goods will need to be cleared by the Customs, requiring detailed documents like pro forma invoices, certificate of origin and detailed packing lists, especially when imported for the first time ever, even when declared as samples. Once customs are cleared, the necessary Labelling requirements and other market specific guidelines and regulations will need to be respected. In order to revive the dullish domestic situation and increase foreign direct investments, the central government launched several incentives and subsidies for new overseas market entrants. The incentives can be split up in the areas of making the Japanese entity also acting hub office for Asia, special exemptions when located in 7 specific economic zones and eased immigration procedures for highly skilled staff. The incentives focus more on financial cash support towards energy bills and hedging against fluctuating exchange rates. Besides the aforesaid central incentives, many prefectural and municipalities of the actual business location also offer special support and incentives.



3 Why Japan

3.1 Japan and EU business in Figures

Important to bear in mind is the constant import volume by Japan from Europe, quite independent from exchange rate fluctuations and the global crisis, stressing the importance of Japan as a global, mature and loyal business partner for the EU.

In 2012, EU companies exported a total value of 55.5 billion5 Euros to Japan, covering business segments like machinery and transport equipment, chemical products and agricultural products. In the same year, EU imports from Japan accounted for 63.8 billion Euros in total, showing a continuous strong balance deficit in favour of Japan. However, taking a more detailed look at the trade balance of services between the 2 nations, it shows a balance strongly in favour of Europe but the absolute volume is merely 1/3 compared to actual products. Japan is and remains a major direct foreign investment player in Europe with 3,750 local branches and employing an equivalent of 470,0006 people, being 0.2% of the total work force.

5 European Commission-Trade, http://ec.europa.eu/trade/policy/countries-and-regions/countries/japan/

6 JETRO, Japan’s Market is Open to the World

Figure 5: Trade in Goods and Services between EU and Japan

http://ec.europa.eu/trade/policy/countries-and-regions/countries/japan/



3.2 Japan and EU FTA negotiations

Japan has been conducting a large number of free trade agreements (FTA’s) and economic partnership agreements (EPA’s) since 2001, having 13 agreements in force at present. During fiscal year 2012, the EU was Japan’s 3rd largest trading partner while Japan is the EU’s 7th largest trading partner, clearly showing the importance of both countries as international trade partners.

The ongoing Free Trade Agreement negotiations, led by Commissioner Karel De Gucht, between the EU and Japan, were officially initiated on 25 March 2013. When concluded, the FTA is estimated to boost Europe’s economy by 0.6 to 0.8% of its GDP, resulting in 420.000 new jobs7. The same research report also predicts that the EU exports to Japan could increase by 32.7%. Japan’s exports to the EU are expected to grow with 23.5% in the same period. Japan is aiming at eased market entrance in the EU for automotive and home electronics companies while the EU is pushing hard to break through Japan’s nontrade barriers, also hoping that European enterprises could gain easier access to Japan’s public tenders and works. The EU and Japan together account for 33% of world GDP and have a combined population of 632 million people. In 2011, the EU was Japan’s largest foreign direct investor with approximately 7 trillion Yen. The earliest date set forward for the FTA to go into force is set for 2018.

7 European Commission, Impact Assessment Report on EU-Japan Trade Relations

Figure 6: EU Trade with Main Partners



3.3 Trans-Pacific Partnership negotiations

Trans-Pacific Partnerships (TPP) are mainly to accelerate further trade liberalisation between the negotiating partners, and to enhance inward and outward foreign direct investment to mutual benefits, while taking advantage of the existing production network. Eliminating Japan’s historically well-known agricultural nontariff trade barriers will be one’s of Japan main challenges at the negotiation table.

Japan recently joined the Trans-Pacific Partnership negotiations, spanning a total of 21 market segments, together with 11 other nations, including the USA, under the strong impulse of present Prime Minister Shinzo Abe, in his attempts to liberalize Japan’s economy.

The table above clearly shows the export advantage of the USA to Japan in comparison with the EU, again proving the necessity for the ongoing FTA negotiations between the EU and Japan8.

3.4 The Japanese “Prosumer” and Disposable Income

While weak macro-economic factors, enhanced by the aftermath of the triple 11 March 2011 earthquake/tsunami/nuclear disaster, pose great challenges upon Japan, the present liberal and global economy views of the Abe’s cabinet will also create mutually beneficial long-term business opportunities for European companies in Japan with the right business partners.

8 European Centre for International Political Economy, Upholding Europe’s mandate on trade

Figure 7: Comparison of US and EU Export Competitiveness in Japan



Hence it is clear that only European companies offering products and services with very distinct Unique Selling Propositions (USPs) will be able to conquer a substantial market share in the highly competitive Japanese market, where 79% of all disposable income9 is spent domestically.

USPs very much liked by savvy Japanese “prosumers” (“professional” consumers) of European products include features like high quality, traditional, hand-crafted, eco-friendly, durability, recyclable, universal design, health-oriented, no-additives, no artificial colourings, no preservatives, organic materials, natural ingredients, and products created by companies that value Fair-Trade, Corporate Social Responsibility (CSR), impeccable service and after-service. Separately, potential Japanese customers will also evaluate more “abstract” characteristics of your company like how many years from establishment to date, its management members, export experience, your company policy, your global clients, sufficient production capacity, quality assurance systems, universal certifications, sound financial situation, production flexibility, international logistics experience, minimum order quantities and last but not least, price. As for business sectors with a bright future in the Japanese market, various market research companies have come up with the following segments, bearing in mind this list is not exhaustive. Traditionally speaking, Japan has a strong Automotive Industry, a huge Retail Business but no easy entrance for newcomers (eg. Carrefour shops were taken over by Aeon group), Bio/Nano Technology and Medical/Health Care-related businesses are surely set for a bright future. Anything related to Environmental/Green Technologies is growing steadily, and last but not least, also ICT has huge growth potential. However, services offered really need to be cutting-edge in order to be successful. All ad-hoc rebuilding efforts needed for the disaster-hit Tohoku-area and soil cleaning public works will also create new but very specific market entrance opportunities for keen and alert European companies.

Judging from the recently released Bank of Japan’s data in regard to corporate income figures10 of European companies operating in Japan, it is crystal clear that investing and doing business in Japan can be a very profitable venture in the long-term.

9 European Centre for International Political Economy, Upholding Europe’s mandate on trade


Figure 8: Comparison between Japan, China and US as European Target Markets



3.5 Internet Shopping Business

The Japanese Direct Market size is approximately 4.67 trillion yen, of which 55% (and growing) is internet based nowadays. Given the high internet flat-fee and high speed access penetration ratio to nationwide households, combined with year-around real bargains for computers and tablets, Japanese “prosumers” are even increasingly becoming more product and service savvy given price comparison websites like www.kakaku.com but they are also extensively reading the review/comment pages by past consumers, on both e-commerce and m-(obile) commerce platforms like www.rakuten.co.jp (Japan’s biggest online shopping mall) and www.amazon.co.jp. When searching for product information, research reveals that Japanese consumers will rely for 53% on the internet sources, for 34% via hardcopy catalogues and another 16% via mobile phone internet. A June 2011 market survey by the Ministry of Economy, Trade and Industry (METI), splits the e-commerce market up into Business-to-Business (B2B) with a value estimated at 169 trillion yen and the Business-to-Consumer (B2C) market valued at 7.8 trillion yen. Japan’s online business is thriving due to a historically strong mail order catalogues business practice in the land of the rising sun. However, the main driver is undoubtable the impeccable, just-in-time, high-quality house parcel delivery service of companies like Kuroneko Yamato and Sagawa Kyubin. They offer value added services like Cash on Delivery (COD) or Credit Card Payment at the door but also frozen and chilled deliveries within designated delivery time slots, defined by the client at time of his online purchase. More and more often, once the purchase value exceeds a threshold (differs from shop to shop), delivery fees are waived.

Figure 9: Direct Investment Income in Japan

http://www.kakaku.com/

http://www.rakuten.co.jp/

http://www.amazon.co.jp/



Fast deliveries, after online purchase and credit card payment, are key for a successful online business model. Amazon Japan has been offering an inventory fulfilment service in Japan since 2008 directly from its warehouses in Japan. This service takes the hustle of logistical operations completely out of the hands of the shop owner, who can now fully concentrate on increasing sales turnover by running sale campaigns and one-to-one Customer Relations Management (CRM) service. Amazon Japan’s “Prime” delivery service allows easy 365/24/7 shipments, guaranteeing next day delivery at your doorstep. This marketing model even creates lucrative business opportunities for new European companies once they have a registered company in Japan with 1 person taking care of the daily shop operations in the Japanese language and client support via email or telephone. Hence that a smart online sales strategy for Japan should surely be an important part of any new market entrance strategy plan of any European company.

3.6 Governmental and Public Procurement

Ever since the 3.11 disaster, Japan has been working hard to open up their public tenders and procurements, not only limited to the disaster stricken areas, to overseas companies but there is still a long way ahead before we can actually say that new foreign entrants are actually winning the projects. Public tenders are published in the Japanese Official Gazette called ‘Kanpo’. The latest international procurement agreement signed in March 2013 opened up the market for 42 World Trade Organization (WTO) countries, being Armenia, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech, Republic, Denmark, Estonia, European Union (EU), Finland, France, Germany, Greece, Hungary, Hong Kong China, Iceland, Ireland, Israel, Italy, Japan, Korea, Liechtenstein, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Netherlands with respect to Aruba, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan, United Kingdom and United States. Generally, Japan applies the following 3 procurement methods namely Open Tendering, Selective Tendering and Limited Tendering. The Open Tendering Procedure is the commonly accepted public bidding style while the Selective Tendering is only used for specific projects (mainly for technical and quality reasons). The Limited Tendering procedure is very exceptional and only used in cases the government did not receive a competitive bid via the Open and Selective bidding procedure. Valid applications will need to include a complete set of all the required documents, the company should meet all the necessary qualification criteria and be able to commit to both the scope and the duration of the assignment, in order to be a valid application. Japan’s 47 local prefectures publish their procurement intentions in the ‘Kenpo’ Gazette. A typical public procurement application process11 in Japan is shown in the visual below:

11 Government Procurement Information, http://information1.gov-procurement.go.jp

http://information1.gov-procurement.go.jp/



Figure 10: Public Tender Flow



You can visit the new Government Procurement Information Portal Website in English via the following link: http://information1.gov-procurement.go.jp Other updated and useful information in English about public procurement in Japan can be found at the following website links: JETRO (updated every weekday): http://www.jetro.go.jp/en/database/procurement/local Ministry of Foreign Affairs Government Procurement Information: http://www.mofa.go.jp/policy/economy/procurement Recently, some European companies with Japanese subsidiaries like Veolia Water Japan, GlaxoSmith Kline and Siemens Japan won public procurement projects, respectively valued between 4 to 19 billion yen.

http://information1.gov-procurement.go.jp/

http://www.jetro.go.jp/en/database/procurement/local

http://www.mofa.go.jp/policy/economy/procurement



4 Examples of Business Potential in Specific Market

Segments 4.1 Elderly Care Market

With a life expectancy of an average of 83 years at birth, Japan is a top runner amongst the longevity countries in the world, creating both major challenges but also substantial business opportunities as elderly care till recently was still very often done in reality by the oldest son. Often referred to as the “Silver Market” as +23% of the total Japanese population was over 65 years old in 2010 being almost 30 million people in absolute figures. Several market studies reveal that people aged over 65 years might make up 45% of the total Japanese population by 205012, which will profoundly shake the essential fundamentals of the complete Japanese demographics and family life. No other developed Western nation is experiencing the ageing of its population so drastic and fast as Japan.

Many of the ageing Japanese citizens are luckily still in very good shape and healthy, and in combination with their financial savings, they form an exciting market segment for products and services catering their specific needs and requirements.

12 JETRO, Attractive Sectors-Healthcare

Figure 11: Percentage of Population Aged 65 or Older per Country



Therefore, newly built public facilities and private care homes have been increasing since the last decade on a per annum basis. Major market players in elderly care home business are Benesse Style Care, Watami Care and Nichii Home.

Given the continuously growing demand for elderly care workers, Japan recently also decided to allow Asian workers to take the nationwide Japanese care exam to assure sufficient influx of competitive workers. The ageing market has almost no geographic boundaries, allowing new market entrants to tap into the complete Japanese market from Hokkaido till Okinawa, including other major regions around Osaka and Nagoya, besides Tokyo, hence optimizing the initial market entrance investment resources.

4.2 Healthcare

The ageing market described above has made Japan’s national medical expenditure go skyrocketing in the last 2 decades, taking up almost 11% of national income in 2009. Around 4 million patients received nursing care in 2009, based upon the Long-Term Care Insurance program of the government. In real figures, this means that patients have doubled in less than 1 decade. The total expense bill stood at the whopping figure of 7.4 trillion JPY in fiscal year 2009, according to figures released by the Ministry of Health, Labour and Welfare.

Figure 12: Number of Recipients Long-Term Care Insurance



In order to assure eased market entrance and participation by overseas pharmaceutical players, Japan has been gradually liberalizing the market with various incentive policies like faster new drug approval (aiming for 19 months, down from the earlier 30 months), and the establishment of a central Institutional Review Board (IRB) to speed up multinational clinical trials. Lastly, Japan also assigned certain areas for specific themed Innovative Technology Zones, for the pharmaceutical business. In 2011, there was a pharmaceutical trade deficit of 2.5 trillion yen while imports grew with 730 billion yen over the past 5 years. During the same period, Japan’s exports remained flat at around 370 billion yen. In 2012, the export surplus of EU countries like France and Germany was actually exceeding the US but also Italy, the UK and Belgium run a pharmaceutical trade surplus with Japan.

Japan’s regenerative medicine market will probably increase by 62 times to 1.6 trillion yen by 2030 from 26 billion yen in 2012, the METI estimates. Research done by Fuji-Keizai Group says it is likely that the regenerative medicine market tops the 100 billion yen mark already in 2020 if more products are put on the market and their clinical applications are promoted13. Studies estimate that the market size of medical devices will reach a value of 3 trillion JPY by FY 2015, with about 50% depending on imports. Add to this a market value of +1 trillion JPY for welfare equipment, the present and future market potential speaks for itself. Over 176,000 medical facilities nationwide, expanding steadily till date, should guarantee sufficient care capacity for the challenges the domestic healthcare market is facing the next couple of decades.

13 The Japan Times, Nobel for stem cell work boon for biotech industry

Figure 13: Japan’s Pharmaceutical Import Surplus



The Japanese subsidiary Sanofi KK, of the France headquartered Sanofi, was incorporated in 2006. By focusing its services and products, adapted to the local Japanese market, their business has been growing steadily. This patient-centric business model has been paying off and Sanofi is now offering diabetes, oncology, cardiovascular & thrombosis, internal medicine but also vaccines business through Sanofi Pasteur KK. Through the acquisition of Genzyme, Sanofi KK is also able to provide a wide portfolio of rare disease medicines locally in Japan.

4.3 Renewable Energy

Another promising business segment is every product and service related to clean, renewable and future energy, especially since the nuclear accident aftermath at Fukushima Daiichi Plant. A recent survey done by the METI estimates the market to grow from 59 trillion yen in 2005 to 83 trillion yen by 201514.

The definition of renewable energy can be taken in the broad sense of the word including also water and wind power, geo-thermal and solar energy but also encompasses bio-mass development and marine power renewable resources15.

14 Ministry of Economy, Trade and Industry, Survey on Environment Management and Environment Business Promotion

15 JETRO, Future Energy Systems

Figure 14: Market Size Environment Business in Japan



A very ambitious clean energy growth incentive plan by the Japanese government, called Green Innovation, has targeted 50 trillion JPY sales in the environmental business. Once realized, hopes are that a total of 1.4 million new jobs would be created. In the meanwhile, pilot projects with smart energy communities are popping up on a nationwide scale to make optimal usage of both the new technologies and available financial stimulus packages. On a more micro-economic level, in order to reduce CO2 emissions to curb global warming, the Japanese government has launched several incentive policies for hybrid or electric vehicles and sustainable eco-friendly houses. Given the continuous thin line of power shortage, following the defunct of the Fukushima nuclear plant, most of the large manufacturing plants and big office buildings have changed their traditional light bulbs for LED lightings, creating a complete new market segment in a couple of years. Umicore Japan KK, the Japanese arm of Umicore (HQ: Belgium) decided to make use of these government incentives in this promising Japanese market segment and set up a brand new R&D facility and manufacturing plant for positive electrode material for lithium-ion batteries in Kobe in 2011. The total investment value was 4 billion JPY.

Figure 15: Market Growth Potential Renewable Energy



4.4 Bio and Nanotechnology

The Japanese biotechnology market size in 2010 stood at 25 trillion yen16 (divided over 8.5 trillion in medical, 6.3 trillion in foods, 4.2 trillion in environment and 5.3 trillion in informatics). The number of new bioventures17 peaked at 587 in 2006 and has been in decline ever since, according to figures released by the Japan BioIndustry Association (JBA). The Japanese biotech industry has been dullish for the last couple of years due to many reasons but the recent extra liberalization measures and financial incentives implemented by Abe’s Cabinet are having a very positive impact on the market capitalization of publicly traded bioventures.

The Japanese nanotechnology market is estimated to be worth 13.4 trillion yen in 2020 to grow further to 26 trillion yen by 2030. Japan has always been, combined with the fact that the Japanese Government has been top-funding the nanotechnology market profoundly, on the forefront in bio and nanotechnology business thanks to pioneers like Leo Esaki of IBM, a former Nobel laureate, and Sumio Iijima of NEC who discovered carbon nanotubes. Every year in January, the Nano Tech Executive Committee organizes the Nanotech Trade Fair in Tokyo, attracting almost 50,000 visitors, making it one of the biggest global trade fairs in Nanotechnology. Also many European countries and companies exhibit their latest technology here. Major players in the nanotech market are the typical big Japanese business conglomerates like Fujifilm Corporation, Toshiba Corporation, Bayer Material Science, Toray Industries, Mochida Pharmaceutical, Gunze Limited, Bruker AXS K.K. and Hitachi to name only a few.

16 Mitsuru Miyata, The Next Challenges in Biotechnology of Japan

17 Shiaw Jia Eyo, Vicious Cycle in the Japanese Biotechnology Industry

Figure 16: Cumulative Number of Bioventures in Japan



The following organizations and universities try to shape the Japanese nanotech research landscape namely RIKEN Advanced Science Institute, National Institute of Advanced Industrial Science & Technology, National Institute for Materials Science, New Energy and Industrial Technology Development Organization, Society of Nano Science and Technology, Mitsubishi Research Institute, Tokyo University, Osaka University and Nagoya University, without this list being far from exhaustive.

4.5 Information and Communication Technology

The Information and Communication Technology (ICT) market18 in Japan, is huge in many aspects for European standards. It is very large in annual volume, advanced in state-of-the-art and up-to-date technical applications, excited due to great realizations of what is still wishful thinking in other countries, and yet full of opportunities, especially for European enterprises with cutting-edge technology. The nominal domestic output of the ICT industry is almost 96.5 trillion yen, employing over 4 million people. Mainly comprising of 2 key segments, hardware, and software with services. The Lehman Shock in September 2008 and the 11 March Great East Japan Earthquake respectively rocked the ICT market with the latter leading to a major disruption in telecommunication services, manufacturing facilities and supply chains. With a market value of more than 20 trillion yen in the segment of software and services, the market poses challenges and opportunities both for domestic and overseas vendors. However, regretfully, the lion market share of almost 50% goes to customized software, which is very difficult to enter for new market entrants due to the Japanese language barrier, after-service and maintenance support needed. The hardware market size is slightly bigger at 27.5 trillion yen, comprising of consumer and industrial electronic equipment, components and devices but growth perspectives are limited due to increased off-shore South-East Asian cheap labour countries. Business tie-ups, alliances for joint-purchasing with scaled production and capital tie-ups are worthwhile to pursue. The globalization of the market is forcing domestic players to adopt international standards of business administration more and more. The Japanese believe they cannot survive without such skills, which they are willing to obtain from competitive foreign companies. Metris NV (http://www.metris.com), established in 1995, is a spin-off of the Catholic University of Leuven’s Production Engineering Department has sophisticated Research and Development (R&D) as its core business. Metris managed during its early years to learn to understand customer needs by delivering services and to apply its core technology and knowhow to develop a software package for quality control and reverse engineering.

Initially, Metris entered the Japanese market through local distributors and agents. After seeing its customer base in the Japanese automotive, aerospace and other advanced manufacturing industries grow substantially, Metris opened its Japan office in August 2006.

18 European Commission External Relations: EU Gateway Program - Market Study on Information and Communication

Technology in Japan

http://www.metris.com/



Today Metris designs, develops and markets a unique range of 3D hardware and software inspection systems, including Coordinate Measuring Machines (CMMs), Optical CMMs, 3D laser scanners, X-ray and Computed Tomography (CT), Laser Radar, iGPS / iSpace systems, and metrology software for 3D scanning, 3D inspection and reverse engineering. The company’s reliable and innovative metrology solutions cover the full range of measurement volumes required by automotive and aerospace customers, like e.g. Nissan and Toyota. In 2009 Nikon Corporation, the Japanese maker of cameras and lenses, acquired Metris in order to add non-contact, three-dimensional measurement systems to its test equipment product line-up.

4.6 Luxury Products Japan is and remains a major retail market in general, as 55% of the whole Asia retail value is consumed domestically in Japan. Japanese consumers are said to purchase 40% of all luxury goods produced globally and 90% of all Japanese women own 1 or more luxury handbags. Hence, it is not surprising that the market segment of Luxury Products in Japan, always has been very rewarding for European companies, going from luxury cars over fashion to jewellery. All major department stores and own boutiques in top-tier shopping arcades and on the major avenues in all big Japanese cities, the landscape is decked with European brands like Louis Vitton (69 stores), Hermes (53 stores), Gucci Group (83 stores), Salvatore Ferragamo (80 stores), Cartier and Franck Muller and Dior to name only a few. For cars, brands like VW, Mercedes-Benz and BMW have a strong foothold but also top-notch brands like Aston Martin and Ferrari are appealing to many Japanese car owners19.

The total market size of luxury brands in Japan is estimated to be worth a whopping 2.6 trillion yen in 2012, according to a survey released by Bain & Company in October of the same year.


Figure 17: Sales Volume of EU Car Brands in Japan



Yano Research Institute reported that the total import value of luxury accessories (watches and jewellery) stood at 703 billion yen in 2012 but is estimated to increase to 754 billion yen in 2013 due to increased consumer confidence amongst affluent consumers. Double digit market size growth in the luxury market segment was last realized in 2006 so the right tone for a future bright import business is surely set.



5 Challenges and Tips

Successful business schemes in overseas markets are no exact science but in the case of Japan, certain basic business and sales rules are key, regardless of industry or product/service category. The first is securing distribution, given the multi-tier business levels on a nationwide scale. No matter how good or advanced a company's product or service is, if appropriate distribution channels cannot be secured, the road to success will be tough and long. The second key is finding a niche market segment as Japan is a sophisticated market that gives its consumers access to whatever they might desire. Differentiating a company's product or service so that it can rise above the crowd is no small challenge; nor is it inexpensive. Mistakes are extremely costly and can mean the difference between success and failure. The third key is making a commitment by the Board of Directors or Management Team of your firm. Considering the importance of corporate credibility among Japanese consumers, and the inherent change-adverse nature of Japan, making a long-term commitment is part of being successful. The list of companies that have been successful includes many who have been active here for well over 30 years. As Japan is quite homogeneous, mutual trust are key for business success. In the past, agreements didn't need to be written because counterparties knew and trusted one another. Intimate and long-term relationships allowed the parties to be flexible and mutually supportive, especially when they encountered unexpected market turmoil. Negotiating contracts with Japanese companies is quite similar to other international business negotiations. However, there are some unique problems and characteristics that are particular to the Japanese business culture. Japanese start negotiations in order to result in the establishment of not only long-term cooperation based on legal considerations, but also mutual trust. Building mutual trust is time-consuming, and therefore negotiations with Japanese may often be prolonged and postponed. Since decisions in Japanese companies are often a result of extensive consultations with people and departments in entire organizations (bottom-up style), negotiations may require several meetings over a long period of time. Sometimes even issues that may seem already settled need to be discussed again. However, once the contract is finally fixed the implementation will proceed relatively smoothly because the entire organization has obtained understanding and support. Often, agreed contracts remain open to discussion in mutual understanding and approval, even after signature.



To bear in mind when talking to Japanese business men: Japanese people are non-confrontational Group decision-making and consensus are important given the bottom-up decision process Written contracts are recommended as good rules make good friends, also in business The Japanese often remain silent for long periods of time. Be patient and try to work out if your Japanese colleagues have understood what was said Japanese prefer broad agreements and mutual understanding so that when problems arise they can be handled flexibly Never lose your temper or raise your voice during negotiations Some Japanese, especially older executives, close their eyes when they want to listen intently The Japanese seldom grant concessions. They expect both parties to come to the table with their best offer The Japanese do not see contracts as final agreements, leaving room for renegotiation and changes, even post-signature

Japanese tend to be more visually oriented than Europeans, one of the reasons why they love taking pictures. Therefore, it is helpful if your presentation included more graphics and charts than long sentences. Hand-outs should also be distributed before the meeting. Powerpoint and alike presentation slides took a long time to catch on in Japanese corporations. However, there is still a fundamental cultural difference between Japan and Europe in how a presentation is supposed to appear. For Westerners, presentations are all about style; whereas for Japanese, it is about showing effort. In the West, the emphasis is on clearing the way for going straight to the conclusion, while in Japan the emphasis is on giving context and often leaving the audience to figure out the conclusion. So when presenting to Japanese customers, you might need to give more detail about context and history before reaching your conclusion. As every company, product and service but also each customer differs, we would like to advise European companies to approach the Japanese market with an open mind to find the best suitable business model for themselves. Global business alliances, Merger and Acquisition (M&A) and selling off non-core business strategies surely also apply to Japan. A recent survey conducted by JETRO in 2013, covering 555 company respondents, reveals the following major business challenges for new overseas market entrants, being high running business costs, business particularities, strong unilingual Japanese environment, rigid administrative procedures and finding suitable bilingual human resources. Key Sectors with substantial business turnover opportunities are Aerospace (Market Size: 1.3 trillion yen), Agricultural, Biotechnology, Computer Software, Cosmetics and Toiletries, Education and Corporate Training, Electronic Components, Healthcare IT, Medical Equipment, Nanotechnology, Pharmaceuticals, Renewable Energy, Safety and Security, Soil Remediation and Engineering Services, Telecommunications Equipment and Travel & Tourism too name the biggest ones.



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