Business for business' sake in the Kansai - Japan

Business America, April 5, 1993 by Ira Kasoff

A region whose GRP (gross regional product) is larger than Korea, Taiwan, Hong Kong, and Thailand, combined; a region whose economy, if it were an independent country, would be the world's seventh largest; a region whose central city, Osaka, boasts a population of 2.6 million in the city proper, and 8.5 million including the suburbs; a region with one of the most internationalized port cities in the world, Kobe, one of the world's richest cultural centers, Kyoto, and a city with one of the longest historical traditions, Nara; and a region with a no-nonsense business approach, where people traditionally greet each other by asking, "have you made money yet today?": this is the Kansai.

Japan's Kansai region is the area of west central Japan usually defined as Shiga, Kyoto, Osaka, Nara, Wakayama, and Hyogo prefectures. The combined population of these six prefectures totals some 22 million people. This area, the traditional merchant center of Japan, is an economic giant, accounting for over 3 percent of the entire world's gross national product.

The Kansai has development plans that would make even the most aggressive planners gasp: as of last year, there were 920 major projects (defined as projects in excess of one billion yen, or $8.7 million at current exchange rates) in planning or in progress, totaling some 39.7 trillion yen ($345 billion). The centerpiece is the Kansai International Airport, an engineering wonder now being built on a man-made island in Osaka Bay.

Other massive projects include the Kansai Science City, a research/industrial park being constructed on a large piece of land between Kyoto, Osaka, and Nara; Technoport Osaka, a city to be built on three manmade islands south of Osaka, and including the Asia and Pacific Trade Center and the World Trade Center; and "Rinku Town," the link town to be built on the shore facing the new airport to provide support services, hotels, and office space.

Despite Kansai's size and clout, most Americans think only of Tokyo when they think of Japan. In fact, the Kansai offers many advantages to American companies looking to enter the Japanese market: labor and housing costs much lower than Tokyo; superb transportation, communication, and other infrastructural support, including the new airport, due to begin operations next summer as Japan's first 24-hour airport; and office rental prices approximately 50 percent of Tokyo's on the average.

The Kansai, as the traditional merchant center of Japan, has a strong business orientation. It is the home of tens of thousands of companies, and the center of Japan's textiles and apparel, chemicals, pharmaceuticals, machinery, metals, sporting goods, and processed foods industries. Other factors, intangible but important, include a willingness to innovate, sustained by a long history of doing things first; and heightened access to government, business organizations, and the press in the Kansai. Success in Japan is often related to access to key decision-makers, and it is easier to get the attention of influential people in Kansai than in Kanto.

FCS/Osaka, commended by the Department of Commerce as an outstanding US&FCS unit for 1992, stands ready to assist U.S. firms willing to make the commitment to succeed in the Japanese market. Our staff of seven has national responsibility for the sporting goods, jewelry, apparel, and building materials industries, as well as regional responsibility for major projects. Last year we organized or supported eight trade promotion events, leading to a projected $185 million in near-term sales for U.S. exporters, and assisted U.S. companies in winning over $100 million in contracts for major projects in the Kansai in 1992.

For many U.S. companies, from small ones like bicycle manufacturer Trek Japan to large firms like Square D to giants like Proctor & Gamble, Kansai has proven to be a good route into the difficult Japanese market. Perhaps your company should consider joining them.

For further information on the Kansai market, contact the Foreign Commercial Service, U.S. Consulate General, Osaka-Kobe, Unit 45004, Box 239, APO AP 96337-0002; fax 011-816-361-5978.