Japan Business

Looking towards a productive economic future with mutual benefits

We could witness lately a great excitement among the Israeli companies who have an interest in the Japanese market, following the fact that Israel and Japan are experiencing record-breaking trade and economic ties and are willing to take this lucrative relationship to the next level.

There are a few companies whose expertise is to assist bridging between Israeli companies and Japanese companies. Those companies have been established by either academic scholars or economist that studied in Japanese Universities, lived in Japan for a few years, speak and write Japanese and proficient in its business manners.

Also in our company, I.J. Business Do Ltd., we have witnessed lately an increasing interest of Israeli companies, following the new business atmosphere between the two countries.

More than that, we have received lately many requests from Japanese companies, with some of them we are working for a while, and some are new companies that came to Israel with the economic delegations, and have a great interest either to invest here in new technologies, or to develop commercial relationship.

Following the mutual visits of the prime ministers of Israel and Japan (Mr. Netanyahu and Mr. Abe) in May 2014 ; and January 2015, accordingly, together with high-ranking business delegations, the business dialogue jump to a new stage and the expected results will strengthen economic cooperation between Israel and Japan in the future.

Following the above visits, several bilateral agreements were signed, covering high-level visits, security and defense cooperation, as well as economics, agriculture, space, tourism and culture. In addition to these bilateral issues, both countries have agreed to cooperate in promoting peace and stability in the Asia-Pacific and Middle East.

We could feel on a daily basis the significant change and the new level of cooperation between the two countries towards promoting exports and foreign investments.

Not only the Israeli companies are doing more efforts in order to penetrate the Japanese market, but we can feel a blessed change by the Japanese ecosystem, and witness it by the fact there are many delegations from leading and prominent Japanese companies coming to visit Israel in the last year.

The more positive sentiment towards Israel in East Asia has meanwhile encouraged Jerusalem to give more attention to this part of the world, and particularly to the world’s third largest economy.

More than that, also the governmental offices, as the ministry of Economic here, the export Institute, as well as the Israeli Embassy in Tokyo are doing their best efforts to support the warming business relationships.

The Ministry of Economy is working toward strengthening cooperation with Japan and increasing our exports to the country, and accordingly has added Japan to their India- China fund, assisting Israeli companies to open a local presence in those countries and subsidizing its activities in those 3 countries.

Director of the Foreign Trade Administration at the Israel Ministry of Economy, Ohad Cohen, mentioned:

"The Japanese economy and society have been undergoing a unique process of change and openness, which presents a golden opportunity for Israel – as a source of knowledge and global exporter of advanced technology – to increase cooperation and tighten economic relations with this country,” Cohen stated.

Israel’s decision in early January 2015 to open a trade office in Osaka and to increase the number of commercial officers in Tokyo is a good and important step in Israel Japan business relations.

Cooperation in civilian areas such as tourism and cultural exchange will be boosted. Israel has planned to increase the number of Japanese tourists by 45 percent in 2017.

Also, there have been some declarations about opening 14 weekly direct flights to Tokyo, however we believe it will take some time until there will be accompanied government decision to subsidize this route, and without such a subsidiary, we are afraid that no obligations would be taken from any airline companies. According to the Foreign Trade Administration in the Israeli Ministry of Economy, total trade between Israel and Japan stood at $2.3 billion in 2014, with export to Japan reaching $800 million and import total $1.5 billion.

In practical terms, efforts to improve bilateral relations have involved reciprocal visits and discussions to bolster cooperation in defense, cyber security, trade, tourism, science and technology, and so on. As yet, these overtures have had only a modest impact on overall economic ties. In 2014, bilateral trade had an increase of 9.3 percent. These figures suggest scope for expanding the economic aspect of the relationship, and we expect that this coming year, the increase would be more significant, and the gap between import to export will be shrinking.

Israel’s rapidly rising importance to Japan has come at an opportune time for Jerusalem, with an evident decline in the strength of its ties with the European Union and its major partner, the United States.

How to explain the warming of relations between Israel and Japan? There are several factors. From Japan’s perspective, stepping up cooperation with Israel has been a priority for Prime Minister Shinzo Abe. Tokyo wants to benefit from Israel’s military industries in enhancing its defense capabilities, particularly against an increasingly defiant North Korea. Another enticing factor is Israel’s continuing stability at a time of turbulence in the Arab world that began with the uprisings in late 2010. For Japan, Israel appears an attractive partner. Japan’s view of the region in Israel’s favor, is a new approach, according to Naoki Maruyama, a professor of history at Japan’s Meiji Gakuin.

Another significant factor that changed the Japanese government's approach toward Israeli companies, is the awareness to the internal macro problems as:

-The economic recession Japan is struggling at for many years,

-The decrease in the Japanese population and the aging population,

-The fact Japan remain a close isolated country that leaned on the local consumers and did not invest in becoming a global significant player, as its neighboring countries Korea and China did so well. (Or as she did so well in the car industry, see the Toyota super case study).

The above made the Japanese government to be aware to the need to make more efforts to import attractive technologies from advanced and innovative country, as Israel, or to invest in such new technologies.

Especially toward the 2020 Olympic Games in Tokyo, the interest in the area of cooperation between Israel and Japan that will definitely be strengthened is cyber security. The Israeli government has approved an investment plan to speed up cooperation in space and cyber-related R&D. Also there is a great interest from the Japanese companies to learn more about the Start Up nation success, the incubators and accelerators systems and stimulations etc.

At a time when giants like Apple, Samsung, Intel and Google are operating research centers in Israel, Japan may consider it as well.

Let us help you to materialize those endless opportunities to collaborate with the giant companies in the rising sun country, as well as to represent the Japanese companies wish to materialize the local opportunities in the innovative Start Up Nation.

Please feel free to contact us either for a good Cappuccino in Herzliya Pituach Sea View Tower, or-Just to ask a Question: [email protected].