http://www.nytimes.com/2012/03/09/business/global/japan-looks-beyond-its-borders-for-investors.html?ref=business
A very interesting article on how Japan is trying to open up its economy to foreign investor.
Once an industry powerhouse, Japan is famous for establishing businesses outside its border while maintaining a strict wall of regulation against foreign companies. It has one of the lowest levels of foreign investment relative to its overall economy.
However, after decades of economic recession and a year of natural disasters, businesses are weakened and even Japanese entrepreneurs do not prefer to open new businesses domestically.Likewise, current Japanese companies would rather invest in opportunities abroad than reinvest in the home country, according to data by the Japanese Finance Ministry.
Thus, Japan is welcoming companies from abroad, especially China, to invest in it. For Chinese company, learning to satisfy the high demand of Japanese customers would provide invaluable lesson to dominate global markets. In turn, these new ventures will provide more jobs in Japan.
My only concern would be, due to the high cost of living in Japan, such investment will need to yield very high return in order to offset the high labor cost. That being said, other than a skilled and disciplined work force, I can hardly find any other reasons to offshore businesses Japan when other third world countries are catching up really fast in term of labor improvement.
A very interesting article on how Japan is trying to open up its economy to foreign investor.
Once an industry powerhouse, Japan is famous for establishing businesses outside its border while maintaining a strict wall of regulation against foreign companies. It has one of the lowest levels of foreign investment relative to its overall economy.
However, after decades of economic recession and a year of natural disasters, businesses are weakened and even Japanese entrepreneurs do not prefer to open new businesses domestically.Likewise, current Japanese companies would rather invest in opportunities abroad than reinvest in the home country, according to data by the Japanese Finance Ministry.
Thus, Japan is welcoming companies from abroad, especially China, to invest in it. For Chinese company, learning to satisfy the high demand of Japanese customers would provide invaluable lesson to dominate global markets. In turn, these new ventures will provide more jobs in Japan.
My only concern would be, due to the high cost of living in Japan, such investment will need to yield very high return in order to offset the high labor cost. That being said, other than a skilled and disciplined work force, I can hardly find any other reasons to offshore businesses Japan when other third world countries are catching up really fast in term of labor improvement.
2 comments:
From the Economist article we were assigned about the Japanese structure, it seemed as though many of the strict principles of the Japanese business environment had been broken down since the bank crisis during the 1990s. Much of this manifested itself in the 'lost generation', who grew up without the job security and seniority structure of their parents. While this was negative for those individuals, the slow destruction of those seniority and security norms should make it easier for foreign investors to operate with more available labor and labor flexibility, which would allow Japan to attract a greater amount of foreign investment.
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