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Stimulating investment in Japan’s industrial heartland

Fumio Kawaguchi, Chairman, Greater Nagoya Initiative Center

The Greater Nagoya Initiative Center (GNIC) was established in February 2006 in order to promote foreign investment. The GNIC acts as a support center for companies in Greater Nagoya, a manufacturing heartland that is known for the growth of numerous sectors: automotive, aerospace industry, IT, biotechnology and more. The GNIC aims to be a one-stop shop not only for foreign companies wanting to enter the Greater Nagoya region but also for Japanese SMEs wanting to expand globally.


What were the driving factors behind the creation of the Greater Nagoya Initiative (GNI)?

The Greater Nagoya Initiative includes the prefectures of Aichi, Gifu and Mie, but we also have a larger area called Chubu. By comparison, Tokyo is the center of Japan’s economy and diplomacy – and in Japan power is very centralized, so all that power is concentrated in Tokyo – while Osaka and Kyoto have traditionally been commercial areas. Meanwhile, Nagoya and Greater Nagoya, which comprises the area within a 100km radius of the Nagoya Central Business District, have been very strong in manufacturing, but this reality has not been widely recognized by the rest of the world. Nagoya does not enjoy the fame that other Japanese cities have, so this initiative is a great opportunity for greater Nagoya to promote itself abroad.

“We are in an aging society, in Japan and the rest of the world, and this means that medical equipment, robotics and caregiving will become very important industries”

How has the project evolved over the years?

Expo 2005 was held in Aichi prefecture and that boosted the economy. We wanted to sustain that upward trend, so in 2006 we established the GNI, where I serve as its second chairperson. The initial target was to raise the name value of Nagoya, to attract foreign investment and to raise the power of Nagoya. We can probably say that we have already achieved those early goals, and created a strong foundation for the initiative to grow further. The governors of the three prefectures are cooperating and serving as consultants for the GNI, and the mayor of Nagoya has also joined as a consultant. It is is a combined effort by business circles and local governments. We have now reached a second stage, and it is time to set some new goals. The GNI is a support organization for municipal governments and economic circles, so we shouldn’t be very conspicuous while still providing the necessary backing to these local leaders.

What services does the GNI offer member companies?

In this region, we have many industrial clusters such as automobile, aerospace and machine tools. The larger companies can conduct their own sales and marketing activities for their products. However, SMEs working as suppliers have a very hard time marketing their own products, and that is where we come in with support for our members. Back when I worked for the procurement department of Chubu Electric Power Company, at a time when the Japanese economy was suffering, my job was to go to Europe and the U.S. to purchase electrical equipment. We already had vendors in this area with good products, but because they were small and medium companies, there was a need for someone to support them and advertise their products and technology. A public initiative was required to help them expand their business chances.

“Historically, we have adapted our industries to make anything required by society”

What makes the Greater Nagoya region the ideal home base for international businesses?

In manufacturing, you need a good labor force, and we are blessed with just that. Any industry needs water, and we happen to have three rivers in the area, so we are blessed with abundant resources. We also have a great port, and having worked at port facilities myself, I know how vital they are for distribution. All these elements are necessary conditions to establish any industrial site. And there is one more thing to consider: the region should have good schools and universities because that is a good incentive to set up a business. There should be partnerships between business and academia, and we can do that because we have a very good higher education center, Nagoya University, with excellent science and engineering departments. 

 Greater Nagoya is known as the monozukuri center in Asia and the world. Could you tell us more about that concept and why that spirit of perfection in manufacturing has flourished in Nagoya? 

It is related to the structure of the city and of the region. The Meiji government was established in 1868 and the capital was moved from Kyoto to Tokyo. While Osaka served as the commercial center, this area was sandwiched between both, and that is why we started focusing on manufacturing. At first, there were breweries for sake, vinegar, miso and soy sauce, and after that, the region made textiles and related machinery like spinning machines. Then, industrialization started and the auto industry developed led by companies like Toyota. And then came heavy industry with giants like Mitsubishi. Historically, we have adapted our industries to make anything required by society.

“For medium and small planes, there are Bombardier and Embraer, but now Mitsubishi wants to become the third player in that field”

 Which sectors need to attract the most foreign expertise and why?

The airplane industry has two main manufacturers, Airbus and Boeing. For medium and small planes, there are Bombardier and Embraer, but now Mitsubishi wants to become the third player in that field. There is also an ancillary industry for related products like cockpits, airplane floors, toilet facilities and so on, and Japan can become a prominent player in this field.

 How is GNIC dealing with the challenges and opportunities of Japan’s ongoing demographic changes and aging society?

Many companies in this region make very specialized products. As for medical devices, many companies can make catheters, micro-cameras and other special products that can also be combined to make a medical device. We want to promote this kind of technology with a view to improving the lives of citizens in an increasingly aged population.

Aichi will host the G20 Foreign Ministers’ Meeting. The prefecture is one of the world’s leading industrial regions. How will this meeting help promote the region’s innovative characteristics to the international community?

There are no borders in the world in terms of commercial activities, so we should not become a closed society. If there is good technology in one country, it should be available for use in any other place in the world, so we can all contribute to the international community, and that is the concept that we have to advance. We are in an aging society, in Japan but also in China and the rest of the world, and this means that medical equipment, robotics and caregiving will become very important industries from now on.

How do you see Japan’s role in leading this effort, and what about other members of the international community? 

I expect the U.S. to act as the world leader. There are many small developing countries in Africa and Asia and I hope the U.S. will have the generosity to nurture and help them, not shut them out. And I would like Prime Minister Abe in Japan to hold the same views. I hope the U.S. will act in a collaborative way with the rest of the world. Europe is not acting as a solid power, as witnessed by Brexit. From the viewpoint of medicine and transportation in an aging society, I would like the U.S. to lead in these fields.

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