ACCJ Journal August 2009 by Paradigm

¥800 | August 2009

Journal

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GOVERNMENT RELATIONS ROUNDTABLE

How the ACCJ takes advocacy to the table.

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ACCJ Mission Further the development of commerce between the United States of America and Japan, promote the interests of U.S. companies and members, and improve the international business environment in Japan.

CONTENTS

Volume 46 | Issue 8 | August 2009

12 FEATURES COVER STORY 12

ACCJ Government Relations Roundtable GR heavyweights Ira Wolf, William Bishop, Keith Henry and Vivian Tokai debate the art of successful advocacy. Moderated by Geoff Botting ACCJ政府関係会議アイラ・ウルフ、ウィリアム・ビショップ、キース・ヘンリー、ヴィヴィアン・トーカイ ̶ 政府関係各重鎮が政策提言術をディベート。司会ジョフ・ボッティング

ACCJ Event Luncheon with Jeffrey Immelt, Chief Executive Ofﬁcer, General Electric Company. By Julian Ryall ACCJイベントゼネラル・エレクトリック、ジェフリー・イメルトCEOとの昼食会。ジュリアン・ライアル

Sustainability in the Hospitality Industry The Challenges of Green Hotels and Serviced Apartments. By Catherine Shaw ホスピタリティ産業における持続可能性グリーンホテルとサービス付きアパートメントの課題。キャサリン・ショー

August 2009 | The Journal | 1

Volume 46 | Issue 8 | August 2009

ILLUSTRATION FOR THE ACCJ JOURNAL BY DARREN THOMPSON

CONTENTS

TONY MCNICOL

DEPARTMENTS 9

Note from the Editor

President’s Message

Media Watch Hit products. Fleeing debts. Office glut. Ad ethics. Cheap health checks. Drinking habits. Eco no.

On the Spot Financial Services Commissioner Dr. Takafumi Sato is interviewed by Julian Ryall.

Opinion Leader Toshimitsu Motegi is State Minister in Charge of Financial Services, Administrative Reform and Public Servant System. オピニオンリーダー衆議院議員茂木敏充は、国務大臣として金融、行政改革、公務員制度改革を担当する。

Jesper Koll Writes Conﬁdence Tricks

Events Line-up Business and leisure-related happenings in August. By David Umeda

ACCJ Tokyo Walkathon By Barry Bergmann

Out and About ACCJ Washington, D.C. Doorknock

FDI Portfolio TUJ tie-up. Taiwan conbini. Barney’s Fukuoka. Emerging U.S. designers. By Nicole Fall

Behind the Book Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition by Guy Kawasaki, is reviewed by Tom Baker.

Business Profile Homare Takenaka is Chairman and CEO, LBS Co., Ltd. By Tony McNicol

Advocacy Update ACCJ Viewpoints

In the Final Analysis By Samuel H. Kidder, ACCJ Executive Director

2 | The Journal | August 2009

Presidents Emeriti Thomas F. Jordan (1994-1995) Robert F. Grondine (2000-2001) Debbie Howard (2004-2005) Charles D. Lake II (2006-2007) Allan D. Smith (2008) ACCJ Leaders President Thomas W. Whitson KPMG FAS Co., Ltd. Chairman Allan D. Smith AIG Companies, Japan and Korea Vice Presidents Michael J. Alfant Fusion Systems Japan Co., Ltd. Laurence W. Bates General Electric Japan, Ltd. William R. Bishop, Jr. Nippon Becton Dickinson Co., Ltd. Michael D. Bobrove (Kansai) Nihon Medrad K.K. Kumi Sato Cosmo Public Relations Corporation Mark F. Schwab United Airlines, Inc. Chris Zarodkiewicz (Chubu) Cezars International K.K. Treasurer Nasir Majid PricewaterhouseCoopers Brett Jensen (Kansai) Colliers Hallifax Steve Burson (Chubu) H&R Consultants ACCJ Governors Andrew Conrad Aflac International, Inc. Christopher K. Ellis Chrysler Japan Company, Ltd. Bruce J. Ellsworth Johnson & Johnson Family of Companies James Foster Microsoft Japan Harry Hill (Chubu) Oak Lawn Marketing, Inc. Tad Johnson Pratt & Whitney Aftermarket Japan KK John Kakinuki GE Consumer Finance Co., Ltd. Jiri Mestecky Kitahama Partners L.P.C. Patricia Oâ&#x20AC;&#x2122;Keefe USC International Offices-Tokyo Douglas L. Peterson Nikko Citi Holdings Inc. Nicole W. Piasecki Boeing Japan Jay Ponazecki Morrison & Forester LLP Mitsuyo Teramura Federal Express Corporation Jim Weisser PBXL ACCJ Executive Staff Samuel H. Kidder Executive Director Aron Kremer Deputy Executive Director ACCJ Committees American Auto Industries Rick Brown Architecture, Construction & Real Estate Kevyn Johnson/Michael P. King Asia Business Philip C. Jones B2B Sales Karl Hahne/Craig Saphin Banking and Finance Thomas Clark/Ernfred Olsen Capital Markets Douglas Hymas Charity Ball Barbara Hancock Competition Policy Task Force Robert Grondine Corporate Social Responsibility Patricia Bader-Johnston Direct Marketing Joseph Peters Environmental Rebecca K. Green Financial Services Forum Charles D. Lake II Food and Agriculture Collin Benson Foreign Direct Investment Nicholas Benes Government Relations Ira Wolf Healthcare Steve Plunkett Human Resource Management Chris Lamatsch, Adam Kassab Independent Business Doug Jackson Information, Communications & Technology Darren McKellin, Ann Rollins Insurance Nate Graddy/Jonathan Malamud Intellectual Property David Case International Education Patrick Newell Internet Economy Task Force Yoshitaka Sugihara Investment Management David Monroe Leadership Forum Michael J. Alfant/Kumi Sato Legal Services Arshad Karim/Eric Sedlak Corporate Counsel Clair Chino Marketing Programs Koichi Hama Membership Relations Andrew Silberman Privatization Task Force David Hoover Retail TBA Soft Landing Task Force Adam Kassab/Mariko Nakazono Special Events Barry Bergmann Young Professionals Group John Ghanotakis/Daniel Lintz Taxation Jack Bird/Michael Shikuma Toiletries, Cosmetics & Fragrances Yukiko Tsujimoto Transportation and Logistics Jeff Bernier/Jeremy Goldstrich Travel Industry Kayoko Inoue/Vincent You University Briefing Program Richard May/David Satterwhite Kansai Chapter Business Programs Pabel Delgado Community Service Kojiro Dan External Affairs Kiran Sethi Living in Kansai Barry Louie Membership Paul Dupuis Women in Business Mari Nogami Chubu Chapter Community Service Steve Burson Independent Business Chris Oostyen/Jason Morgan Living in Chubu Lowell Sheppard Membership Relations Chris Zarodkiewicz Programs Steve Brown American Chamber of Commerce in Japan Masonic 39 MT Bldg. 10F, 2-4-5 Azabudai Minato-ku, Tokyo, Japan 106-0041 Tel: 03-3433-5381 Fax: 03-3433-8454 www.accj.or.jp / www.ecentral.jp The ACCJ is an independent membership organization with no affiliation with any government or other chamber of commerce. The ACCJ is a member of the Asia Pacific Council of American Chambers and values its relationships with Japanese, American and other nationsâ&#x20AC;&#x2122; business organizations.

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Journal

Publisher Vickie Paradise Green paradise@paradigm.co.jp Editor-in-Chief Simon Farrell simonfarrell@paradigm.co.jp Senior Editor David Umeda Art Director Paddy O’Connor Graphic Designer Akiko Mineshima COLUMNISTS Tom Baker, Nicole Fall, Jesper Koll CONTRIBUTORS Alana R. Bonzi, Geoff Botting, Martin Foster, Justin McCurry, Tony McNicol, Anthony H. Rowley, Julian Ryall, Catherine Shaw

Saturday, September 12

PHOTOGRAPHERS / ILLUSTRATORS Tony McNicol, Jeremy Sutton-Hibbert, Darren Thompson, Mattias Westfalk Published by Paradigm

All donations will go to this year’s Charity Ball charities: ● YMCA/ACCJ

Ohisama Camp—a Tokyo YMCA Center program held in late summer in cooperation with the ACCJ, where an expected 40 children with learning/developmental disorders can participate in camp activities.

● No

no Hana no Ie—a secure home-like environment for hundreds of children who are the victims of abuse, neglect and other inhumane treatment.

● Waku

Waku Workshop—a safe place for those with sight, speech or hearing disabilities to improve their involvement in the community.

ACCJ members, families and their guests can conveniently sign up via the normal event registration process for 2,500 yen, with kids under 18 only 1,000 yen. Sponsors include the “careful movers” Allied Pickfords, Coca-Cola, HSBC, the law ﬁrm Latham & Watkins LLP, Reebok, and United Airlines.

www.accjcharityball.org/teamList See page 40 for full details.

President Vickie Paradise Green Creative Director Richard Grehan Advertising Sales Eileen Chang, Sarit Huys, Helene Jacquet, Leai Kubotsuka Kamiyama Ambassador 209 18-6 Kamiyama-cho, Shibuya-ku Tokyo, Japan 150-0047 Tel: 03-5478-7941 Fax: 03-5478-7942 e-mail: inquiries@paradigm.co.jp www.paradigm.co.jp

Published monthly in Tokyo, on the 25th of the month, since 1964. Indexed in the PAIS BULLETIN. All rights reserved. The views and opinions expressed herein (other than editorials from the ACCJ itself) are solely the opinions and views of their authors. The ACCJ is not responsible or liable for any portions thereof. Subscription rates for non-ACCJ members One year ¥9,000; two years ¥15,000; three years ¥22,000. ¥800 per copy. Rates include domestic postage or surface postage for overseas subscribers. Add ¥7,500 per year if overseas airmail is preferred. Please allow eight weeks for changes of address to take effect. Subscription requests should be sent to info@accj.or.jp The ACCJ Journal welcomes story ideas from readers and proposals from writers. Letters to the editor may be edited for length and style. The ACCJ Journal is produced entirely on Apple computers

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NOTE FROM THE EDITOR

Great Relations

ver wondered how to influence the policy-makers in Japan’s corridors of power? Gone are the days of Bubble era table-thumping and loud demands from foreign businesspeople perplexed by an inscrutable culture with frustrating trade practices and invisible barriers at every turn. Out of this came an industry called government relations. In the latest of our Roundtables, you’ll see how ACCJ leaders are mastering government relations with a multipronged approach. One thing remains the same, though: the fate of your business is still in the hands of Diet members and ministry officials. With a number of advocacy issues put on hold until after this year’s elections in the U.S. and Japan, perhaps we’ll soon see more activity in this field. In fact, the ACCJ has already started getting to know the Obama Administration. After just missing the Journal’s July issue deadline, we feature on page 41 photos of the ACCJ delegation meeting newly appointed high-level U.S. officials during the Washington, D.C. Doorknock in June. Following the theme of good relations is our profile of Homare

Takenaka—public relations, in fact. The CEO of LBS, Co., Ltd. talks on page 50 about founding a PR company after a long corporate career at an age when most people would be winding down. He also offers some classic anecdotes about foreign and Japanese perceptions based on his own valuable experiences.

Meanwhile, for the Japanese government’s view on related domestic business issues such as tax reform, investment and banking see our interview with Financial Services Agency Commissioner Dr. Takafumi Sato (page 24) and an Opinion Leader by State Minister in Charge of Financial Services, Administrative Reform and Public Servant System Toshimitsu Motegi (page 29). Then there’s Jesper Koll’s monthly take on the economy—this time on savings, and the next “conﬁdence trick” he says the government must pull off (page 32). Finally, if you are traveling abroad in August, we wish you a safe and pleasant trip. But for those staying in Japan, you might ﬁnd some ideas for things to do in our Events Line-up on page 38. Either way, next month has two major events to look forward to: the ACCJ Charity Ball Walkathon on September 12 and the Green Simon Farrell Marketplace Forum on simonfarrell@ paradigm.co.jp September 30, both featured on page 40. ■

PRESIDENT’S MESSAGE

Adjusting to the New Order

he rainy season is over and the discomfort of being damp, moldy and wet is replaced by being baked, sweaty, and burned. Excitement over the lower house election at the end of August is muted since there has been so much talk for so many months that the event may be an anti-climax. The results should be interesting, nevertheless. The ACCJ said goodbye to cheerful Aska Kuwabara, who will go to the U.S. for graduate school. Many of us are away or going away and there are not a lot of blockbuster events on our calendar. This makes it a good time to take in a matsuri in the neighborhood. Or visit the beach. Kamakura is nice this time of year (but don’t drive there). Following our Board meeting in Nagoya and their successful Walkathon, the Chubu Chapter has continued to work with the Greater Nagoya Initiative to help promote Foreign Direct Investment into the Chubu region. Chubu is also considering how to better engage more Japanese businesspeople and younger people, including an “ACCJ Business Certiﬁcate” program. I think that all the Board members who went to Nagoya were impressed with the high level contacts and relationships the Chubu Chapter has developed. On October 2, the Board will have a meeting in Osaka and the Kansai Walkathon will be held on October 3. The Opening Ceremony will feature a Board warm-up session with Billy Blanks of Boot Camp fame. Depending on how hearthealthy this version of “Rajio Taiso” is there may be new openings on the ACCJ Board.

The Kansai Chapter is taking advantage of its higher proﬁle to establish its own External Affairs Committee chaired by Kiran Sethi to coordinate relations with local government, business and other organizations. They will be asking their members for ideas and support on a Kansai-speciﬁc White Paper. They also are developing a new Web site that will link to Kansai area governmental local sites. The Nominations Committee under Chairman Darren McKellin is evaluating members to prepare a slate of candidates for the fall election. If you know anyone who you think should be considered (including your esteemed self), please send Darren or Aron Kremer an email. The ACCJ needs to change and adjust to new member needs and circumstances. This year, we have re-energized

the Environment Committee under Chair Rebecca Green; refocused the Aerospace and Defense Committee, and set up a Golf sub-committee. We have also re-established a Practice Liberalization sub-committee under the Legal Services Committee to address recent changes in the environment affecting our members’ ability to practice as lawyers in Japan. Vice President Bill Bishop thinks that the ACCJ could increase its membership if we identify and offer a forum for business groups in Japan that may be under-represented. Please think about this and let us know if there is a disenfranThomas Whitson is chised group you think we ACCJ President. should be representing. And twhitson@accj.or.jp have a great summer! ■

August 2009 | The Journal | 11

ACCJ Government Relations Roundtable Moderated by Geoff Botting Photos by Tony McNicol

There was a time in Japan when government relations by U.S. companies were more about being an adversary than an advocate. The outside world saw Japan’s bureaucracy as a brick wall that shut off foreign businesses through a raft of trade barriers. The only way to get inside the system, many people believed, was to break down that wall. Fast forward to 10 or 15 years later, and now those days are well over. People working in government relations on behalf of U.S. companies have since learned to work quietly within the Japanese system as well as outside of it, where a burgeoning civil society has quickly taken shape. But one thing hasn’t changed—decisions by senior key Japanese Diet members or ministry ofﬁcials can still determine whether businesses succeed or fail. The ACCJ Journal spoke with four experts in the ﬁeld of government relations.

12 | The Journal | August 2009

ACCJ GOVERNMENT RELATIONS ROUNDTABLE

Participants:

E. Keith Henry Principal Officer of Asia Strategy, a business strategy and government policy consultancy

Ira Wolf ACCJ Government Relations Committee Chair Japan Representative, Pharmaceutical Research and Manufacturers of America

Geoff Botting: Many of your efforts are focused on advocacy, trying to effect changes in regulation or helping shape policy, etc. But in the hypothetical “perfect world”—a world of no trade barriers and of totally sympathetic governments—would businesses still need to spend time and money on government relations? Keith Henry: Sure. From a corporate standpoint, government relations deal with the intersection of public policy and corporate strategy. Effective government relations assist business leaders to better understand how public policy deﬁnes the competitive environment, creates new business opportunities, and presents new challenges or obstacles to expanding their business in Japan. Senior business executives know when their government-relations program is running on all cylinders when they’re in a position to understand why publicpolicy changes occur so that they can anticipate policy developments and adjust corporate strategies before their competition has a chance to do the same. Of course, government-relations nirvana occurs when the ﬁrm can combine a

William Bishop Director of Government and Public Affairs, Nippon Becton Dickinson Company, Ltd.

deep understanding of the “how” and “why” of public policy with an ability to shift the debate on public-policy outcomes to those that favor the speciﬁc interests. Ira Wolf: Even in a totally unregulated industry, say, in consumer products, where there are no restrictions or barriers, there still will be rules and regulations, such as safety regulations, labor rules and tax laws. Things can develop quite suddenly with such regulations. So you need to have a core program to deal with this. If you do have a trade issue, your biggest problem will be going into a government ofﬁce cold. So you need some infrastructure within your company to deal with this. Vivian Tokai: There are basically three types of government relations. One is crisis management. So if something unexpected happens in the government, you have someone who can handle the government relations to minimize any impact on the company. Another is to deal with regulation as a kind of countermeasure activity. This is important for

Vivian Tokai Director of Government Relations, GE Japan Corporation

highly regulated industries, such as the airlines or transportation, to deal with short-term, day-to-day activities. The third function is applicable to all industries: to frame policy or shape policies for the mid- or long-terms through dialogue with government policymakers. William Bishop: Having a governmentrelations function allows you to interface with the people who are formulating policy, as opposed to those simply executing regulatory mandates. Many foreign companies come to Japan, establish a presence but then ﬁnd they don’t have a robust government-relations function, although they do have a regulatory function. My ﬁeld, healthcare, is a public issue often high on the political agenda; it is in this arena that the government and political dimension comes into play. IW: Even in the perfect world, you will always be affected by government actions. For instance, if you’re an American exporter, then the terms of, say, a free trade agreement (FTA) between Japan and another country are critical for you. The rules that get established can determine your success or failure.

August 2009 | The Journal | 13

How can bilateral agreements that exclude the U.S. be critical to U.S. companies? IW: If you’re exporting products that are manufactured in Japan or providing services from Japan through a subsidiary here, then you’re involved. If you export to Japan from a third country that has an FTA with Japan, you need to understand that FTA. In addition, the content of one FTA that Japan signs can inﬂuence any subsequent FTAs that, say, the target country has with the U.S. So it gives you an advantage to know about the items in the original FTA. VT: Bilateral agreements involving Japan and other countries can have quite a large inﬂuence on the business of U.S. companies. Take the nuclear-power business, for example, which GE is involved in. One or two key components of power plants must be procured from Japanese

14 | The Journal | August 2009

manufacturers. In other words, GE and Westinghouse cannot make their power plants without these Japanese exports. So even though the U.S. has nuclearpower bilateral agreements with, say, India or the United Arab Emirates, unless Japan also has bilateral agreements with these countries, then the U.S. companies would have a difficult time doing business with them. So you can see how important government relations are in this whole process. Right now, on both sides of the Pacific, Tokyo and Washington are handing out plenty of fiscal-stimulus money to be spent on infrastructure and other projects. How does this affect your job? KH: This raises a key, though frequently underappreciated, aspect of government relations. That is, the leverage it can provide to businessdevelopment activities that normally

have fairly long fuses before actual sales can be registered. I call this “B2G,” or how government relations can assist business to take advantage of government-created business opportunities. For instance, the signiﬁcant line items in the latest economic stimulus packages have been under discussion for at least 12 months. Participating in these discussions, or at least monitoring the debate, a ﬁrm would have been well positioned to shift marketing strategies to more fully take advantage of the hundreds of billions of dollars the government of Japan will be using to expand use of computers in public schools, solar panels in the commercial and residential sectors, digital medical records in the healthcare sector, or technology to drive the creation of a “smart grid” in Japan. These are concrete examples where the government is playing a key role in what

ACCJ GOVERNMENT RELATIONS ROUNDTABLE

I’d call the “market development” of key business sectors. In Japan, where the boundaries between public and private sectors are especially blurred, market development initiatives of the government are frequent and pronounced. This makes the role of government relations in assisting the ﬁrm to take advantage of these opportunities even more important, especially since a typical businessperson involved in market or business development doesn’t have the time or the bandwidth to pay attention.

So what sort of an approach should one take? WB: Well, that’s why companies come together to form associations like the ACCJ. Companies can pursue sectorspeciﬁc activities while leveraging the clout of the organization as a whole to provide that extra voice and added ampliﬁcation, which you hope will start to resonate within the system.

As representatives of foreign companies or industries in Japan, you are outsiders. How do you work the system when you’re outside of it? IW: One of our challenges is availability of resources. A lot of government-related activities in Japan are done by industry associations. And it’s these groups that have most of the direct interface with the government. The Japanese corporations will dispatch their employees to serve on the association fulltime on loan for a year or two years. Most foreign companies just don’t have the resources to do this. Meanwhile, those dispatched employees are bringing home lots and lots of information. KH: So that’s the challenge of government relations. It’s not simply a matter of going down to the “government,” such as the Diet or the ministries, and saying hello. As I said earlier, the boundaries between the public and private sectors are very blurred, with these industry associations as a case in point. These organizations are neither from the private nor public sector. But since these associations serve as the neutral arena where firms and government gather to debate and determine policy that impacts the competitive position of a firm, it is important that an effective government-relations program monitors and participates in these discussions. Of course, in the current economic environment, it is sometimes difficult to pry

Do you ever feel that your efforts are too often not paying off? That “the system” here is working against you? IW: A vacuum salesman doesn’t mind having the door slammed in his face 99 times, as long as he makes the sale the 100th time. You learn from your failures. WB: In the recent supplementary budget, for example, there was an item that almost seemed to have been cut and pasted from an ACCJ Viewpoint on the value of Preventive Healthcare. We had advocated this during a Diet Doorknock; and in the Viewpoint we pointed out that cancer screening rates in Japan were low, and we offered basic data and a recommendation on breast and cervical cancer screening. As it turned out, the supplementary budget allocated money for a national program for breast and cervical cancer screening. Though similar program recommendations have had strong advocates in the Diet, there is no way to know for sure what additional voices may have helped to drive this policy-decision forward. The key thing in advocacy is to ensure your voice is heard. In this case, it turned out to be a win-win for policymakers and patients alike. Shifting to a system of early screening, early detection, early diagnosis and early aggressive treatment yields both better patient outcomes and long-term cost savings. IW: Maybe no speciﬁc measure was key to that success, but it was all part of an

loose the resources to invest in these activities. But, then again, with no investment there’s no return.

environment that was developing. And so the approach is to try to influence this environment. In this case, we could feel that our efforts contributed to this success. It can’t be measured, which is always the internal problem. Unfortunately, head office will want to know: “What’s the metric? How do you justify all the money we’re spending on this?” WB: So the measurement you use is “Did it happen or not?” The key point is that we knew where we wanted to go and what items would be useful, and it turned out favorably. But that’s what advocacy is all about. It’s about taking a multi-pronged approach; it’s about multiple points resonating toward a single goal. KH: We’re involved in a competition over ideas. But this is not simply an esoteric debate on politics. Outcomes do impact the bottom line of U.S. businesses in Japan. However, it is impossible to control the debate and, therefore, the outcomes. But as with baseball, you don’t need a .500 batting average to consider your government relations program a success. VT: It is difficult for a foreign company to operate as an outsider. That’s why we take this multi-pronged approach, as a way of keeping up with the Japanese companies. I often see ourselves as second-class citizens, which means we need to be both careful and creative. The Japanese government makes policies for Japanese people using Japanese taxpayers’ money for the benefit of Japanese society. Back in the 1960s and ’70s, foreign companies were always complaining, saying the system here was discriminatory. Well, it was discriminatory, yet attacking the government wasn’t going to cause it to change. More recently, however, American companies have realized that they needed to change their approach, to become creative in using this multipronged approach.

August 2009 | The Journal | 15

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働きながら、MBAを取得できます。

ACCJ GOVERNMENT RELATIONS ROUNDTABLE

Is that why the slew of bilateral trade disputes between the U.S. and Japan of the 1980s to mid-’90s, which were marked by antagonism and hard feelings, are now a thing of the past? Is it because U.S. businesses and negotiators have evolved? WB: There was a time when foreign and U.S. companies came to Japan and said, “This works everywhere else in the world. How come it doesn’t work here?” There was a belief that Japan wasn’t playing ball. But, at the same time, those companies didn’t want to learn the local rules of how ball was played when Japan had home field advantage. Meanwhile, companies’ head offices were willing to make adjustments for Germany or France, or markets in Europe (before the creation of the European Union’s single market), which they weren’t so ready to do for Japan. Companies tended to be Eurocentric. But now, perhaps due to the effects of globalization, U.S. companies are much more willing to accommodate the idiosyncrasies of the Japanese market, as long as market access can continue to be assured. I think that explains a lot about the success of our advocacy efforts. IW: There has been enormous change in my field. In the 1980s, Japan’s bureaucracy was quite closed to foreign pharmaceutical companies. But a decade and a half of discussions and negotiations have led to a dramatic change in the way the pharmaceutical industry is managed and regulated by the Japanese government. We’ve now reached a point where the Japanese and foreign industries are in total agreement, completely joined together. Much of what we would try to do in other countries vis-à-vis the government we don’t need to do because the Japanese industry is doing it already. So we offer support and look for ways by which we can add value to their efforts. Of course, sometimes we have our own distinct approach. But we’ve become part of the process.

VT: The situation is evolving. Back in the 1970s/1980s, there were hardly any foreign companies engaged in foreign relations. Keith was one of the pioneers. And until recently, all such people in their field were Americans. But now, more Japanese people, such as myself, are working for U.S. companies. KH: But, at the same time, the Japanese public sector has also evolved. At the end of the day, people and governments act in their own self-interest. This means that, over the years, the government of Japan has come to seek out new ideas delivered by firms not based in Japan. The result is that firms that were once outsiders in the policymaking process of Japan are being encouraged by government policymakers to become more actively engaged in the policymaking process. In that sense, American-based companies have a source of competitive advantage over domestic firms in that they have broad global experience that provides them with unique insights and knowledge that are being sought out by the government and politicians. It is essential to learn to speak Japanese and learn the intricacies of Japanese social etiquette, but it’s pointless to try to actually be like Hitachi or Mitsubishi; you just can’t match their government-relations resources. It’s not only futile, but dangerous because you risk losing your competitive advantage— which is that you ARE foreign. WB: Japan’s civil society has made great strides. The Kobe earthquake (in 1995) was the genesis. At that time there was only a handful of NPOs here. People said there is no volunteerism here. But the law was changed to allow NPOs, and now there are nearly 40,000 of them. Now we have a civil society that’s trying to gain its voice, and multiple points of advocacy leverage within the system, as opposed to just a small number of powerful groups in control of each industry sector. IW: In the medical field, patient groups didn’t exist 10 years ago. But now they

clearly have inﬂuence on decisionmaking in Japan. WB: The media is playing a huge role in development of this civil society. There seems to be more angles and different tenors out there within the media than before, when much of the reporting was cut and paste. Now we can use the media to get reach on our message. When that’s done, you can inform and educate from a variety of angles. The cornerstone of effective advocacy is education. IW: There are more professionals in the press corps in Japan than 10 or 20 years ago. There are journalists who have been writing about healthcare for 20 years and so the reporting seems a lot more thoughtful. Over time, this has had an impact on policy. KH: This is all part of the growing pluralism taking place in Japanese society, more people having a voice. For government relations, this means there are more opportunities to participate. As the bureaucrats give greater value to ideas, rather than just on relationGeoff Botting ships, that creates opportuis a freelance nities for outsiders to play journalist based in Tokyo. the game. ■

August 2009 | The Journal | 17

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MEDIA WATCH

“Gaman-tsukare” Deﬁnes Midyear Product Hits

Consumers who have held back on spending during the current recession are finally starting to loosen their purse strings, and some clear winners have emerged in the marketplace. In its midyear 2009 hitto shohin banzuke (ranking of hit products like in sumo), the Nikkei Marketing Journal (June 17) gave the top nod on the prestigious “East” division to automakers Honda and Toyota for their new hybrid models, the Insight and the Prius (above), and on the “West” division to “fast fashion,” as the competition between Uniqlo, H&M, and the recently opened Forever 21 heats up. Fourth down on the Nikkei list was “President Barack Obama,” who impacted on the Japanese economy through sales of 480,000 copies of his collected speeches (original plus translation). The new First Lady also is said to be having an influence on women’s fashion. Nikkei describes the mindset

of consumers who are finally letting loose in their buying habits as gamantsukare (tired of practicing self-restraint). While buyers continue to exercise thrift, astute marketers are tapping into latent discretionary spending by introducing new concepts aimed at boosting product

recognition and provide added value. One successful example is the “990 yen jeans” for men and women marketed by Tokyo-based g.u. (pronounced “gee you”); monthly sales of which were projected to reach 1 million units in their first month— double the initial projection.

Price-cutting has become widespread in the residential market as well. To attract buyers to unsold new condominiums, more realtors are offering so-called “outlet manshon” typically discounted from 20 to 30%. The action film Red Cliff, based on a Chinese classic novel, reaped over ¥10 billion in sales, and looks to be Asia’s top box-office hit of the year. The neologism “Won Travel” entered the lexicon. More Japanese have been visiting South Korea to take advantage of an exchange rate that favors the yen, making shopping and beauty treatments in that country real bargains. In the JanuaryMarch period, the number of visitors was more than twice that for 2008. Finally, McDonald’s Japan launched sales of its Quarter Pounder burger—let’s face it, “110 grams” just doesn’t sound the same—and, by the end of May, had sold 30 million kuotaa paundaa.

August 2009 | The Journal | 19

Ofﬁce Glut The Nikkei-Dow average might have bounced back to the ¥10,000 level, but

the picture for office rentals has turned increasingly gloomy. Nikkan Gendai (June 13) reports that office vacancies in Tokyo’s five central wards (Chiyoda, Chuo, Minato, Shibuya and Shinjuku) rose 0.17 points to 6.96% in May, the 16th month in a row in which increases were posted in offices leasing 100 tsubo (about 330m2) or more of space. The situation was especially severe for buildings completed within the previous 12 months, which in May rose another 2.53 points to reach 30.83%. “That’s because tenancy fees are high for new buildings with outstanding facilities,” says Mikiro Namiki, an analyst at the Daiichi Life Research Institute. “More companies are moving their offices to older, smaller buildings in the suburbs, where rents are cheaper.”

In January 2008, new buildings enjoyed nearly full capacity, with a vacancy rate of just 1.73%. By September, new building vacancies had risen to 6% and by November, a mind-boggling 41.49%. In the meantime, construction of offices in Marunouchi and Otemachi continues apace, with an additional 500,000m2 of office floor space due to open from this year through 2011. Despite the lack of tenants, moreover, major developers such as Mori Building, Mitsui Real Estate, etc. are unwilling to reduce their fees for prestige buildings. “If business picks up, I suppose more companies will want to move in; but the real estate market won’t improve until their bottom line recovers,” says Namiki, who adds he doesn’t see that happening for at least another six months.

Ethical Concerns Over Endorsements While Japan’s Fair Trade Commission discourages the practice of comparative advertising, there’s nothing to prevent operators of Web sites and blogs from posting comparisons, which is why such sites like Kakaku.com have been thriving. Shukan Asahi (Jun. 19) reports that, in March 2009, year-onyear visitors rose 50% to 3.8 million; and, equally important, the number of user reviews posted an all-time high of 10,000. Yasuyuki Endo of Community Master is quoted as saying that traffic to the Kakaku.com site began picking up sharply from last September, as the economic downturn set in and more consumers began tightening their purse strings. Likewise, from last October, customer reviews of purchases on the Rakuten Ichiba portal were running at about 40% over the year before, and reached a cumulative total of 20 million reviews in January. But this so-called CGM (consumer-generated media) may have its pitfalls, as the magazine warns about the motives of posters of kuchikomi (word-of-mouth endorsements), which may be spurious. One example was the “Walkman Experience Diary” blog set up by Sony following the introduction of a new personal music player in 2005. An investigation into the posts by users allegedly determined that a professional writer posing as a consumer had fabricated his

20 | The Journal | August 2009

evaluation of the product and, furthermore, had disparaged the product of a competitor. Susumu Fujita, president of Cyber Agent, notes that word-ofmouth endorsements may account for as much as one-fourth of some sites’ hits, and the figure is rising. “Kuchikomi is one of the most effective means of advertising on the Internet,” says Fujita. “It enables an actual feeling of trends in consumption. “Unlike TV commercials or other advertising endorsed by celebrities, blog posts and others have a ring of authenticity and are credible,” he adds. The problem is that such posts have become commercialized. From February of this year, Google Japan stirred controversy when it initiated a PPP (pay per post) system, offering bloggers a small gratuity (of several hundred yen). The practice is not unknown among other firms, which allegedly arrange for favorable remarks to be posted via the staff of their ad agencies. Moves are now under way by various parties in the industry to organize a WOM Marketing Association, which will set down by this July the guidelines for word-of-mouth communications. The organization is expected to achieve legal hojin status within the year.

MEDIA WATCH

One-Coin Checkups Consumers seem to like the notion of wan koin (one coin) for its simplicity. Whether the denomination is ¥100 or ¥500, you know in advance that that’s all you’ll be paying. Monthly Takarajima (July) reports that this concept has now been applied to medical diagnostics. Takashi Kawazoe, who holds degrees as a registered nurse and public health nurse, decided to leave his job at the diabetic ward of Tokyo University Hospital and strike out on his own. Last November he founded Carepro, Japan’s first “one-coin” checkup facility, located five minutes from JR Nakano Station. No health insurance card or paperwork is needed. For ¥500, Carepro will test blood sugar, cholesterol, or neutral fat, and provide results on the spot. For an additional ¥500, visitors can

test their BMI, blood pressure, and bone density. A “full course” of all four items is discounted to ¥1,500. Before a test, you are advised to wait until at least four hours after eating. Carepro also creates a personal electronic medical record that can be checked via mobile phone or on the Internet, with full user confidentiality preserved. According to Takarajima, some 337,000 households in Japan are virtually without health insurance, and another 3.85 million households (18.5% of the total) are in arrears on their national health insurance payments. The number is said to be particularly high among people in their twenties and thirties, and is on the rise. The service operates at a loss, but earns income from referrals; and this eventually may make it possible to perform the tests free of charge. “People who feel their condition is worsening but don’t have the funds to go to a hospital should come to us for a consultation,” urges Kawazoe.

After Five How about drinks after work? It’s still a tried-and-true formula for smoothing over job relationships, if Livedoor Research’s survey of 3,419 workers is to be believed. Quaffing a brew in a bar or pub is looked forward to by 72% of subordinates and 86.8% of superiors. Another 44.8% and 37.5%, respectively, said they just enjoy going out for drinks. It’s also a good time to receive (or give) work-related advice, or so said 40.6% and 32.4%, respectively. Among the reasons for not wanting to go for a drink with the boss (or a subordinate) included it’s boring to talk about work (47.3% and 32.5%, respectively); followed by it’s a waste of time (42.4%, 53%); it’s a waste of money (31.5%, 43.4%); and don’t really like him or her as a person (18.8%, 9.6%). The same survey also delved into the effects of alcohol on romantic

relationships, specifically, how someone being approached felt when a person coming on was under the influence of Dutch courage. Results were mixed. With multiple replies, 32.7% said such behavior was “cute” and 24.2% said they were happy to be approached. But 22.4% said they felt it showed cowardice; 21.6% believed it was crude; and 18.5% said such behavior was sneaky. In response to the, perhaps, purposely vague question, “Have you ever moved a relationship with the opposite sex up a notch while imbibing alcohol?”—48.6% of the males and 50.7% of the females gave positive replies (Dime, July 7).

August 2009 | The Journal | 21

ACCJ Event LUNCHEON WITH JEFFREY IMMELT, CHIEF EXECUTIVE OFFICER OF GENERAL ELECTRIC COMPANY By Julian Ryall Photos by Tony McNicol

22 | The Journal | August 2009

ACCJ EVENT

“We have to go out and re-earn our place in the global economy.”

nce in a decade, give or take a year or two, the world experiences a recession. Once in a generation it suffers a fundamental economic reset. What the global business community has witnessed in the last year has been little short of a disastrous combination of both recession and reset, according to Jeffrey Immelt, chief executive officer of General Electric Company. The good news, he told members of the Chamber at a luncheon event at the Conrad Tokyo on May 28, is that the worst is already over. “We live in incredible times,” said Immelt, who has been named one of the world’s best CEOs three times by Barrons since taking over at Fairfield, Connecticut-based GE in 2001. “The financial crisis that enveloped the world started in the summer of 2008 and boiled over into 2009, and has led to this global recession is well chronicled. But I feel more confident today than I felt last year.” Capital markets have improved, governments moved quickly to stabilize their respective systems; liquidity has improved, debt is under control, which has led to stability; and that has made a dramatic improvement in the overall situation, he said. That just leaves the business community with a recession to deal with. GE’s approach to that problem is to aggressively go in search of the orders that will keep it in the black, adjusting to the new realities of the business world, and sticking to the company’s long-term strategy for growth. Add to that good, honest hard work, accelerated investment in the future of the company, and improved communications— both internally and externally—and Immelt believes the firm is on the right track, Not, of course, that anything will be quite the same once the dust settles on the economic reset that few had predicted. And companies that are merely “looking to manage the cycle and survive” are missing the point, he believes, as the new world order in business is going to be very different. Immelt pointed to five areas where he expects major changes to impact the companies in the GE stable, which ranges from power generation to technology and media. The first sector he identified was financial services, where he predicts broad restructuring, additional regulation from government, fewer competitors, and increased specialization. In time, financial services will return to being the lubricant of the economy, he said, while within GE specifically he expects this arm to be more focused and connected to the core of the company’s activities. The second major change will be in government as a partner to business, Immelt said.

“During this crisis, governments have moved in and they’re not going to leave,” he said. “The interface between government and businesses will change; it will be more regulated, there will be more partnerships, and there will be a tighter association between government and business— particularly in financial services, healthcare and so on. “We have to get better at it and deal with it—as it’s a long trend that will not bounce back when the economy bounces back,” he said. The companies that emerge on the other side of the recession also will have to do more things better, Immelt believes. They may have benefited from a long tailwind driven by demographics and easy access to loans, but they need to be ready with more research and development spending, additional services, and more attractive price points for customers. Essentially, they need to be bigger and move faster if they are to grow, he said. The fourth major change is facing a world that has been reordered and reset, with China increasing its GDP at a rate of around 10% a year—and will continue to evolve into an economic powerhouse of massive dimensions. This expansion is helped by the fact that China is a one-party state, Immelt pointed out, which enabled the government in Beijing to implement stimulus measures while Washington was still discussing the best steps to take. “If I have learned one thing, it is that the government always wins in China,” he added. And while many in the U.S. still tend to see the country as a low-tech, low-cost center, “there is as much technology in China today as anywhere else in the world,” he said. The company or organization that underestimates China in this regard is likely to come off second-best. The final area where Immelt foresees far-reaching change is in corporate brands and reputations. “We have to go out and re-earn our place in the global economy,” Immelt said, “and the way we at GE are going to do that is to link our brand to clean energy and affordable healthcare.” Immelt went on to underline Japan’s importance to GE—today it is a $5 billion component of the company’s business—and a market in which the company plans to continue to invest and build new alliances, he said. He ended on an upbeat note. “Most recessions are fixed by consumers, but we can’t count on them this time,” Immelt said. “There has to be re-creation based on focus, confidence and optimism. And we will Julian Ryall is The Daily have to take risks before it becomes clear Telegraph’s Tokyo where the paybacks are appearing.” ■ correspondent.

August 2009 | The Journal | 23

Takafumi Sato COMMISSIONER, FINANCIAL SERVICES AGENCY By Julian Ryall Photos by Tony McNicol

Takafumi Sato has seen the Japanese economy emerge from the homegrown crisis of the 1990s, only to be dragged back into the global meltdown last year. It has been a traumatic 12 months for Japanese companies, but he remains optimistic that the worst has been overcome. Are the mega-banks or are regional banks more at risk regarding greater numbers of non-performing loans? Difﬁculties regarding rising credit costs will affect both the larger banks and the small, local banks. In the case of the larger banks, their exposure to major companies will affect their balance sheets; but they also have the capability to manage their solvency and liquidity in a more sophisticated way. For the smaller, regional banks, their lending to small and medium-sized enterprises really depends on the local economic situation. It also depends on the overall real economy, which, for Japan, is heavily dependent on external demand. We have to be careful, but we hope the real economic situation will be in better shape in the near future. Does the government’s extended loan guarantees mean the burden has simply been shifted to the government’s balance sheet? 24 | The Journal | August 2009

It is true that, together with the Bank of Japan’s purchases of commercial paper, risk sharing by the public sector is also increasing; but this is a global phenomenon. In Japan’s case, the ﬁnancial system is relatively sound and is being increasingly relied upon to support the activities of the real economy—so this is both a global trend and a local factor. On the public ﬁnance side, the authorities are quite aware that these measures to support the real economy are extraordinary and on a temporary basis, so the mediumterm and longer-term pictures should be kept in mind. The mega-banks have been able to raise funds in the capital markets, so will they not have to turn to the emergency measures? There are only a few major banks that have used the capital injection scheme because its purpose is not simply to inject capital, but to encourage the banks to lend. If the majority of banks can manage to retain

SNAPSHOT FSA ■ Established: June 1998 ■ Location: Headquartered in Kasumigaseki, Tokyo, with 11 regional offices ■ Main aims: Ensuring the stability of Japan’s financial system, including supervising private financial institutions and monitoring transactions ■ Web site: www.fsa.go.jp/en/index.html

their financial intermediary functions without public money—if they are confident they have sufficient capital, or if they can raise capital in the market on a private basis—then that would be much better than being forced to use this public scheme. I am not disappointed at all by the present situation. It is also a good thing that Japan’s big banks voluntarily went to the capital markets to raise capital in a rather forward-looking way. Do you think that if the U.S. and Europe had implemented the Basle II provisions earlier they would have fared better? Basle II promoted better risk-management

ON THE SPOT

“There may have been some factors that would have mitigated the seriousness of the situation, but I don’t think Basle II has all the answers.” BIOGRAPHY Takafumi Sato ■ Age: 59 ■ Born: Yokosuka, Kanagawa Prefecture ■ Education: B.A. degree from Hitotsubashi University, a Master of Philosophy in Economics from the University of Oxford, and a Ph.D. in Economics from Nagoya University ■ Other language: English ■ Hobbies: Listening to the works of Johann Sebastian Bach and playing the piano ■ Career: Previously served in the Ministry of Finance and taught at Nagoya University from 1999 to 2001

for Japanese banks—for instance, the so-called look-through process—which means that, when they invest in a fund, the banks are supposed to check the underlying assets and apply different risk rates. The banks have a strong incentive to clearly verify the contents of their investments, and that has certainly helped the banks’ risk management. But would the Basle II provisions have helped our fellow jurisdictions if they had introduced them earlier? That question is very difficult to answer. There may have been some factors that would have mitigated the seriousness of the situation, but I don’t think Basle II has all the answers. In comparison with foreign institutions, Japan’s mega-banks have very little core capital. Are you considering action in this area? The positions of Japan’s three mega-banks [#1 Mitsubishi UFJ Financial Group; #2 Mizuho Financial Group; and #3 Sumitomo Mitsui Financial Group] vary, so we can’t treat them as one single group. Heated discussions are going on regarding the capital regime, not only in the Basle committee on banking supervision, but also the Financial Stability Forum and other arenas. From a regulatory point of view, the role of capital for banks is essentially to absorb unexpected losses and enhance the banks’ sustainability. The quality of capital should be evaluated by its ability to act as a buffer in the bank’s balance sheet, by the clarity of the capital or by the ease with which banks can raise funds at difficult times. My attitude is to be firm on the basics of the capital regime; and since different

types of capital play different roles, we should be pragmatic on how to combine these different types of capital so that each bank can achieve the best position for its situation. How do the amounts of non-performing loans today compare with the situation in the 1990s? We can now see that the losses incurred by the Japanese financial sector in the 1990s, part of which was shared by the public sector, is something between ¥90 trillion and ¥100 trillion. That burden was scattered over a period of almost 10 years, which is why we could absorb these losses unilaterally, and we caused no harm to any other markets or countries in terms of loss-sharing. The problem is that we can only know the exact figure after the fact; it is very difficult to find an accurate figure when we are in the midst of the turmoil because new situations are always emerging and evolving. Even if we could grasp a fairly accurate figure at a certain point, in three months’ or six months’ time, the figures would be obsolete. What is the government’s position on the outstanding loans from the previous crisis? We injected around ¥9.60 trillion into the system in the late 1990s and something like ¥8.45 trillion has already been repaid. On that repayment, we have earned some ¥1.4 trillion in capital gains on top of each year’s dividend, so, in retrospect, it was good business. It is also true there are some banks that have not yet repaid their loans, and our basic policy is summarized in the three principles of the Deposit Insurance Corporation of Japan. First, we have to make sure that the bank’s soundness will be maintained after the repayment; second, the repayment will not cause any turbulence in the market, especially the capital markets; and, third, the benefit to the taxpayer is achieved. Might other regulators benefit from Japan’s knowledge in this area?

The fact that Japan was able to earn a profit out of the operation could be used to persuade people that the use of public money is not to save the individual bank, but to save the financial system as a whole Julian Ryall is and to stabilize financial The Daily markets. If our fellow regulaTelegraph’s Tokyo tors use it in that way, then correspondent. we would be very happy. ■ August 2009 | The Journal | 25

Sustainability in the Hospitality Industry THE CHALLENGES OF GREEN HOTELS AND SERVICED APARTMENTS By Catherine Shaw

oing green may be fashionable when it comes to driving a hybrid car or refusing plastic grocery bags. When it comes to the luxury hospitality industry, though, sometimes the greatest obstacle to achieving environmental sustainability is the guest. “Obviously when business is tough it can be difﬁcult to move forward with some new environmental ideas, but that is not the only challenge facing us,” said Keren Miers, Oakwood Residence general manager, speaking at the March meeting of Green Mondays (greenmondays.ning. com), a Tokyo-based monthly event focusing on green business and sustainability issues established by Laurence

26 | The Journal | August 2009

Smith, Vice President, Human Resources Learning & Development, GE Money Asia. “We’d actually like to do far more to improve Oakwood Residence environmental General Manager sustainability, but Keren Miers the reality is that we can’t ram an environmental message down our guests’ throats,” said Miers. There is plenty of evidence to show that judicious investment in green measures to improve long-term sustainability increases a hotel’s or serviced apartments’ value, and reduces operating

costs over time. The very nature of the hospitality business means it is resourceintensive, operating 24 hours, 7 days a week—compared to commercial buildings occupied primarily during business hours. However, while hotels in the United States have noted a paradigm shift toward sustainable hospitality experiences, particularly from corporate bookings, Japan has yet to see this trend emerge. “There is an expectation of a certain standard of luxury at our hotel, so it is often difﬁcult to have customers do things that may not seem synonymous with the luxury experience,” explained co-presenter Ellie McFatridge, Grand Hyatt Tokyo assistant to the general manager. I call it the “Green Conundrum,” said

SUSTAINABILITY IN THE HOSPITALITY INDUSTRY

Miers. “Everyone knows we need to be more sustainable, but do guests and staff really care enough to make it really happen?” Developing a strong environmental value system for your staff is critical to achieving long-term change, the presenters concurred. “We do whatever we can to engage staff and celebrate their environmental efforts,” added McFatridge. “In 2008 we launched a ‘Hyatt Earth’ initiative creating ‘Green Teams’ in every Hyatt hotel worldwide. Made up of a cross section of staff, they are responsible for minimizing environmental impacts, and have been very successful. It’s like having 90,000 environmental ambassadors!” Oakwood Residence here has adapted the well-known committed environmental staff program, “The Oakwood Green Initiative,” championed by Founder,

Chairman and CEO Howard Ruby. “Our campaign is much more subtle in the Asia-Pacific,” explained Miers. “We try to focus on raising environmental consciousness by educating guests, employees and vendors on environmental awareness. At the same time, we are identifying and implementing a variety of environment-friendly improvements to our processes, procedures and equipment. “Training staff doesn’t cost a lot of money, and it’s a common-sense approach that can really make a big difference in the long run,” he said. “We’ve asked all of our vendors and suppliers to cut back on wasteful packaging; and so far, it’s worked well—although we haven’t had much luck with reducing individually plastic-wrapped laundry items. “We do, however, collect and return clothes hangers,” added Miers. “It’s important to focus on the fundamentals; every little bit makes a difference,” explained Grand Hyatt Tokyo Sales Executive Markus Daisuke Nagaki. “Our Green Team meets monthly and has introduced a change of suppliers of amenities and the use of auto timers. We’ve also been able to significantly minimize excess packaging and introduce a scheme that allows farmers to compost our raw garbage. “There are many other green measures we use when appropriate. For example, if hotel occupancy is low, we can close down one whole floor to save energy costs. The use of room cards instead of keys also helps cut down on energy, while Hyatt Regency Kyoto is using rooftop grassing to absorb heat and help cool the building,” he added. “We obviously haven’t reached full cycle yet, but we’ve made great improvements.” Noted a Green Monday attendee: “Perhaps guests feel their personal efforts to reduce environmental impact by, say, showering for a shorter time or keeping towels for a day longer are just costcutting measures that benefit the business more than the environment. “If the cost savings were directly re-invested in environmental improvements and the information provided to guests,” she suggested, “that may provide more of an incentive.”

“We do try to encourage guests to think how they would live in their own home,” explained Miers. “Oakwood residents are slightly different to hotel guests because they treat our serviced apartments like a home, but their expectations of a luxury experience are similar. It’s all about educating, encouraging, and gentle reminders.”

There is plenty of evidence to show that judicious investment in green measures to improve longterm sustainability increases a hotel’s or serviced apartments’ value, and reduces operating costs over time. “In Japan, for instance, we provide clear information about how to sort waste into plastic and papers. Even small measures can have an impact,” he added. “We’ve banned disposable chopsticks for staff, provide bicycles for guests, and have a linen reuse program, energy-efﬁcient lighting and plumbing, and organic cleaning products. The housekeepers also make a big difference by ensuring the television and lights are switched off when guests are away from the room.” There are obviously many more opportunities, say the presenters, for environmental savings with new buildings or retroﬁtting existing buildings. In the meantime, both of these forwardlooking companies keenly anticipate a time when Catherine Shaw their green credentials are is a freelance journalist based considered as important as in Tokyo. hospitality ratings.” ■

August 2009 | The Journal | 27

OPINION LEADER

ILLUSTRATION FOR THE ACCJ JOURNAL BY DARREN THOMPSON

Toshimitsu Motegi 茂木敏充 Improve investment, tax system.

投資と課税制度の改良

I believe there is still underutilized money in the Japanese economy. For one thing, although Japanese household financial assets total ¥1,500 trillion, their generational distribution is skewed in favor of people over 60 years old. In 1970, the generation of those in their thirties and forties used to hold more than half of the financial assets, as compared to 18% by the over-sixties. The ratio now is completely reversed: more than 60% is held by the over-sixties, whereas only 20% by those in their thirties and forties. Furthermore, in Japan, more than half of the financial assets are held in the form of cash and deposits, and less than 10% as investments in equities or as investment trusts. In contrast, in the U.S. or in Germany, the proportion of cash and deposits is much lower, and more than 20% is held in the form of equity investments. Changing these features in Japan will pose a major policy challenge in the period ahead. I think that the issue of skewed distribution of household financial assets among generations needs to be addressed by reforming taxation on donations among family members before inheritance. As regards the composition of financial products that calls for “from saving to investment” policies, a review of taxation on securities investment will be a crucial point of discussion for the fiscal year 2009 tax reforms. At the end of 2008, the reduced rate of 10% applied to the capital gains and dividends on listed stocks was terminated and replaced by the standard rate of 20%, with the exception that a reduced rate of 10% will be applied to capital gains up to ¥5 million and dividends up to ¥1 million until the end of 2010. I believe, however, that the review and further enhancement of this scheme is essential for accelerating the momentum in the trend “from savings to investment.” In this respect, it is also very important to increase the number of small investors through special tax treatment on securities investment up to a specified amount. Furthermore, around 30% of business activities by Japanese companies are performed outside Japan. Profits from such operations increased four times between 2001 and 2006, and over 30% of profits come from overseas activities. Also, profits from those operations remain overseas and are not sent back to Japan, partly because of the Japanese tax system. The total surplus retained in Japanese overseas companies exceeds ¥17 trillion. This is the second issue to be addressed. The main drive behind such a huge retained overseas surplus is Japan’s international taxation system. There are broadly two types of international tax systems. One is called “Foreign Source Income Exemption System,” adopted by 21 OECD countries including France, Germany and Canada, whereby corporate taxation is reflected only in income sourced from the domestic territory. Japan, the U.S., UK and the other six OECD countries have adopted the “Worldwide Income Tax System,” in which corporate taxation is imposed on any income arising anywhere in the world at the rate set by its own tax laws. Thus, a Japanese company may also need to pay for tax rate differences between Japan and overseas. Such a tax system has prevented sending profits back to parent companies in Japan, and thus requires a review, including adoption of a Foreign Source Income Exemption System.

日本経済にはまだ十分活用されていない大量の資金があります。まず第一に合計で1500兆

Toshimitsu Motegi is State Minister in Charge of Financial Services, Administrative Reform and Public Servant System.

円にものぼる日本の個人金融資産ですが、これらの大半を保有しているのは60歳以上の世代です。1970年当時は、金融資産の5割以上を30代、40代が持っていて、60代以上の世代の保有割合は僅かに18％でした。ところが、現在ではその比率が逆になり、30代、40代は2割程度、60代以上の世代が6割超の貯蓄を持っています。また、日本の場合、個人金融資産の半分以上は現金・預金という形で保有されており、株式投資等の割合は10％以下に過ぎません。これに対して、ドイツやアメリカでは、現金・預金の割合が日本より圧倒的に低く、一方で、株式投資等の割合が2割を超えています。これらの歪みを是正することが今後の大きな課題になると思います。世代別の歪みの問題については、生前贈与に関する税制の見直しが必要だと思います。それから「貯蓄から投資へ」の流れを促進する観点からは、証券税制の見直しが2009年度の税制改正でも議論の正念場になってきます。上場株式の譲渡益及び配当については、現在10％の軽減税率が適用されていますが、2009 年からは本則の20％が標準適用されることになります。ただし、譲渡益が500万円以下の場合と、配当が100万円以下の場合に限って、2010年まで10％の軽減税率が適用されます。しかし、本格的にこの「貯蓄から投資へ」の流れを作っていくには、もう一度この証券税制について検討して深堀りする必要があるのではないかと考えています。これに関連して言えば、小口投資家の拡大策が必要であり、小口投資家向けに、毎年一定額までの投資に対する優遇措置を設けることも検討すべきです。日本企業の海外生産比率は約3割に達します。海外でのオペレーションが増えるにしたがって、海外であがる利益も、例えば2001年から2006年で4倍に増えています。日本企業の利益の源泉でも、海外の比率が3割を超えるところにきています。この海外であげた利益が、税制上の問題もあって、日本国内には還流せずに海外にとどまっているというのが現状です。日本企業の海外法人・子会社の内部留保残高は、実に17兆円を超えております。これが日本の金融資産に関する２つ目の課題です。資金が日本に還流しない主な要因は、国際租税制度の問題にあります。国際租税制度には大きく分けて2つの方式があり、1つはフランス、ドイツ、カナダ等のOECD21カ国が採用している「国外所得免除制度」です。これは、法人課税の対象を原則国内の所得に限定して、海外子会社からの受取配当には課税しないという方式です。日・米・英およびその他OECD6カ国は、「全世界所得方式」というものを採用しています。これは例えば、日本の会社があげた所得であれば、国内外を問わず、全て日本の法人税率を課すというものです。つまり、海外でかかった税金と日本での法人税の差額分については、海外からの送金があれば日本で課税をされるということになります。こういう制度のために、海外から日本国内に資金や利益が還流しないという問題があり、国外所得免除制度の採用の可能性も含めて再検討が必要だと考えています。

茂木敏充衆議院議員・国務大臣（金融、行政改革、公務員制度改革担当）

August 2009 | The Journal | 29

FINANCIAL SERVICES PROVIDERS Special Advertising Section

AP Outsourcing Ltd. Address

Iidabashi Bldg., 7F, 1-18, Ageba-cho, Shinjuku-ku, Tokyo

Tel

03-5228-1820

Fax

03-5228-1830

E-mail

contact@apol.jp

Web site

www.APOutsourcing.jp

Year established

2004

Staff Size:

Company Activities / History AP Outsourcing (APO) is an independent outsourcing provider of Accounting and Payroll with Big Four experience (Arthur Andersen and KPMG). It was separated from Azsa Audit Corporation (the audit group of KPMG Japan) in April 2004. AP Outsourcing provides bilingual staff with extensive experience and knowledge of financial operations, payroll and tax, helping you compete better and accomplish your goals. Start-up Support: APO provides business start-up support for new foreign corporations and venture companies, including legal registration, tax and social insurance applications. Project Management: Effective and efficient project management support for outsourcing migration. Outsourcing Operations: Well-qualified bilingual accountants, tax/social insurance specialists and system experts accurately and promptly provide outsourcing operations, focusing on the confidentiality of accounting/payroll information. Loan Staff: Accounting/payroll processes are facilitated by the placement of our own specialist staff in the clients’ offices for specific periods. APO also offers other specific services and support on request. For more information on how we can help you to simplify your business processes, call AP Outsourcing at 03-5228-1820.

Coface Japan Address

Toranomon Kotohira Tower 5/F, 1-2-8 Toranomon, Minato-ku, Tokyo 105-0001

Tel

03-5521-2180

Fax

03-5521-2189

E-mail

marketingjp@coface.com

Web site

www.coface.jp/

Year established

1995

Staff Size:

60 in Japan

Contact

Jonathan Perez, Coface Japan, Marketing & Communications

Company Activities / History Coface’s mission is to facilitate global business-to-business trade by offering its 130.000 customers four product lines to fully or partly outsource trade relationship management, and to finance and protect their receivables: company information, receivables management, receivables protection (notably through credit insurance), and receivables financing (notably through factoring). Coface also offers, in France, management of government export guarantees. Thanks to the worldwide local service delivered by 7,000 staff in 65 countries, over 45% of the world’s 500 largest corporate groups are already customers of Coface. Leveraging its global presence, Coface offers local services in 97 countries through its partners in the CreditAlliance network, united by shared credit risk management systems. The Common Risk System, a high-performance database that enables the Coface’s employees (in particular, the 337 underwriters) and clients to track more than 55 million companies across the globe on a real-time basis, is the backbone of the Coface offering. From now on, Coface offers a universal company search and identification system built around a single identification number: Easy Number. With the establishment of a local office in 1995, transformed into a fully licensed branch in 1999, Coface showed an early and strong commitment to the Japanese market. Coface Japan is a leading provider of credit risk management solutions in the Japanese market, through protection of accounts receivables to companies of all sizes, including export credit insurance since May 2005. Coface Japan launched its factoring services in 2006.

30 | The Journal | August 2009

Address

World Trade Center Building, 31st Floor, 2-4-1 Hamamatsu-cho, Minato-ku, Tokyo 105-6131

Tel

03-4577-6000

Fax

03-4577-6099

E-mail

RFujino@HL.com

Web site

www.HL.com

Year established

1970

Staff Size:

More than 800 globally

Contact

Ryuta Fujino, Managing Director

Company Activities / History Houlihan Lokey, an international investment bank, provides a wide range of advisory services in the areas of mergers and acquisitions, financing, financial restructuring and valuation. The firm was ranked the No. 1 M&A advisor for U.S. transactions under $2 billion in 2008 and the No. 1 U.S. fairness opinion advisor over the past 10 years by Thomson Reuters. In addition, the firm advised in 11 of the 15 largest corporate bankruptcies and on over 500 restructuring transactions valued in excess of $1.25 trillion in the past 10 years. With nearly 40 years of leadership in the field of valuation, Houlihan Lokey is recognized as a premier advisor on valuations in connection with tax and financial reporting, dispute resolution and transaction-related opinions. The firm has over 800 employees in 14 offices in the United States, Europe and Asia. The firm’s stability, integrity, technical leadership and global capabilities make it a trusted advisor for clients worldwide. Each year it serves more than 1,000 clients ranging from closely held companies to Global 500 corporations. For more information, visit www.HL.com.

Okamoto & Company Address

Hirakawacho Daiichi Seimei Building, 1-2-10 Hirakawacho, Chiyoda-ku Tokyo 102-0093

Tel

03-5276-0900

Fax

03-5276-0950

E-mail

contact@okamoto-co.com

Web site

www.okamoto-co.co.jp

Year established

1992

Staff Size:

Over 50 bilingual accounting professionals

Contact

Richard Okamoto, Partner

Company Activities / History Okamoto & Company, an independent group of over 50 bilingual accounting professionals, provides professional services to foreign entities in Japan in the following areas: IFRS/US GAAP conversions – Reporting under a single set of accounting principles is becoming increasingly popular, but requires up-to-date technical knowledge. Shared Service Center Support – Are your overseas shared service centers having problems complying with Japanese tax regulations? Temporary Accountants – Our accounting professionals can cover for your departing accountant or assist in project work, such as conversions of accounting systems. Accounting, Payroll, Cash Management Outsourcing – Compiling financial statements in accordance with US GAAP and IFRS, process payroll, and even make salary and vendor invoice payments on your behalf. Internal Audits – We have experience assisting dozens of U.S. subsidiaries in documentation, testing related to SOX; and we often work with corporate internal audit departments in conducting procedures. Taxes – Through our association with Hanato Tax Accountant Office, we can prepare a variety of corporate tax returns. Auditing – We can conduct financial audits, agreed-upon procedures on your behalf. We have many other services available.

August 2009 | The Journal | 31

FINANCIAL SERVICES PROVIDERS | Special Advertising Section

Houlihan Lokey

Conﬁdence Tricks

apan has remained a very export-oriented economy. In the last economic upswing between 2002 and 2007, a full 140% of growth came from exports. Yes, that’s right—exports were the sole engine of growth. Domestic demand was actually a net drag. Despite various promises of policy change to revitalize domestic activity, Japan remains the ultimate “free-rider” economy: when the world booms, so does Japan. And when the world goes bust, Japan implodes. Why? Unfortunately, there is no single answer. A declining population? Yes, this is certainly a long-term structural negative. But in the long term, we are all dead anyway. So let us focus on something more immediate and tangible—consumer conﬁdence. What drives the “animal spirits” of Mr. & Mrs. Watanabe? What

32 | The Journal | August 2009

causes the mood swings, the ups and downs, the willingness to go out and spend money? For an economist, the ultimate indicator of consumer confidence is savings. When you are confident about the future, you save less of your income and are happy to go out, seize the day and consume. When you are worried and scared, you become frugal, you save more and spend less. In America during the great boom of the early 21st century, the household savings rate actually went negative—Americans were so confident about the future that they spent more than they earned, ever confident they could earn even more in the future to pay back the debt. Now, of course, the opposite is true. The U.S. savings rate is surging as consumers are scared of the

JESPER KOLL WRITES (12 month moving average,%)

Japan Savings Rate All households excluding Agricultural, Forestry

17 16 15 14 13 12 11 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

future, eager to rebuild their nest eggs and forced to pay back debt. In Japan, the swings in the savings rate are just as dramatic and offer just as much insight into what is actually going on in the domestic economy. The chart above outlines the domestic household savings rate since 1995. You’ll notice four distinct periods of sharp increases, i.e., a collapse in confidence, a surge in frugality—and thus a downturn in domestic consumer spending. The first surge in savings came in 1997–98, with the savings rate rising from about 12% of income to almost 16%. This alone meant a cut in spending of about 4%. Here, the trigger was the banking crisis and the start of real restructuring by corporate Japan, compounded by the hike in the consumption tax and the Asian currency crisis. This surge is comparable to the savings dynamics observed in America over the past year or so—a full realization that the boom is over and times of hardship have begun. But you see that, in early 1999, the savings rate started to come down again. Why? Newly elected Prime Minister Obuchi put into place a massive economic and financial stabilization program. Obuchi successfully pulled off a confidence trick. Slowly but surely the “animal spirit” returned and the drop in the savings rate helped support consumer demand. The second spike occurred in 2001–02. Here the biggest trigger was the collapse of the technology bubble externally, compounded domestically by rekindled fears of a financial crisis. This shock was much less dramatic than the previous one and, with the help of then-Prime Minister Junichiro Koizumi and the unfolding global economic boom, Mr. and Mrs. Watanabe became more and more confident. By early 2006—just before Koizumi retired—the savings rate had actually dropped back to about 12%, the level seen before the start of the mid-1990s financial crisis. But then it starts to get interesting. In early 2007, Japan’s savings rate shot up, all the way back to 16%. There were no external factors. Remember, 2007 was a global boom year with expansion clocking the best growth rate in almost a generation. Japanese car, steel and electronic companies all posted record profits. Summer bonuses surged more than 30% in many industries. And nobody worried about subprime problems. No, the loss of confidence cannot be blamed on external factors. It was entirely due to domestic ones. Mr. and Mrs. Watanabe were forced to save more by policy action. The future

became darker because of a triple tightening of policy: taxes went up, credit was cut-off, and in many industries rules and regulations were tightened. Make no mistake—the 2007 savings shock was homegrown policy driven. What exactly happened? Well, first Japan raised taxes. As the local resident tax-rate structure was changed, about 80% of Japanese households got hit with paying higher local taxes. The net effect was a cut in disposable income of almost 2%. Second, we got a credit squeeze forced by the government crackdown on consumer finance companies. At the core, the policy had good intentions with the government looking to clean up the mob loan shark business. However, the dramatic change in policy actually cut off an important part of finance for many small and medium-sized companies that relied on short-term bridge financing to pay wages and for other working capital from smaller consumer finance companies. Bankruptcies began to surge, with construction and real estate companies, small wholesalers and merchants hit particularly hard. Clearly, the squeeze on consumer credit forced a loss of confidence among many households in Japan. And finally, Japan got ensnared in a major regulatory mishap that served to undermine confidence in the future. When the government announced that it had lost almost half of the pension records, fear over lifetime savings being lost and fear of the future surged dramatically. Combine all this and you see why savings surged, why Mr. and Mrs. Watanabe lost confidence in the future—despite the world enjoying a huge boom, employment rising and bonuses going up. The most recent rise in the savings rate came in the middle of 2008. As the global financial crisis gathered momentum, Japanese consumers—just as consumers everywhere else in the world—started to become more and more cautious. There is some good news in all of this. The domestic savings shock in 2007 actually brought on a lot of the policy tightening that was needed. Consumer finance is, slowly but surely, beginning to flow again, with better rules and regulations allowing, hopefully, for more prudent borrowing than before. Also, the fact that the pension problem has been revealed and is being slowly fixed should offer some hope that future negative surprises have become less likely. Of course, what is really needed is for Japan to rediscover its passion for growth—to cast off fatalism and begin to believe that a better future is actually possible. Rekindle domestic animal spirits and faith, and trust in a better future here in Japan. This is the all important confidence Jesper Koll is President and trick the next government must CEO of Tantallon pull off. Without it, Japan will Research Japan. stay stuck as little more than a free rider on global growth. ■

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MICE Special Advertising Section

MICE | Special Advertising Section

The New Reality The industry is gearing up for what will continue to be a crisis-management mode, but so should the consumer. The hospitality industry is usually one of the first to feel the economic ups and downs; and it was no different when the subprime sector started to unfold. Hotels in Tokyo, especially international chain hotels, felt the ripples of the impact from early 2008 when financial institutions started to cut back on expenses and travel. As the crisis deepened and other industries started to feel the credit restriction effect, domestic travel also was affected. By the first quarter of 2009, it became apparent that, despite the vast amounts of government aid around the world being injected into the finance sector, the downturn deepened—to the point where we now can no longer talk about a crisis, but that we have to begin to deal with the “new reality.” All industries possess tried and trusted methods to enable them to deal with a crisis, such as short-term discounting, value-added measures in order to maintain market share. As a result, great bargains were to be had for the savvy buyer. As we are about to enter into the 2010 rate negotiations, some pundits may expect great rates and bargain offers to continue. But is this a realistic expectation?

Like all commercial enterprises, travel — and, especially, hotels — do have cost structures that are geared to meet customer expectations. This year is one of consolidation — to enable us to adapt to living in the new reality. We have addressed costs, looked for new markets, and re-imagined our business. It is fair to expect that most hotels and travel providers are prepared to thrive in this new environment; and so I would not expect bargains to continue. Will it be still possible to secure good deals? Yes. But consumers should expect that, in order to acquire lower prices, they need to make concessions in regard to quality and also lower their expectations. That is their new reality. Andreas Trauttmansdorff General Manager The Westin Tokyo

August 2009 | The Journal | 35

MICE Special Advertising Section

Air Canada Tel:

03-5405-8800 (in Tokyo)

Toll-free: 0120-048-048 (from outside Tokyo) Web:

www.aircanada.jp

Air Canada, together with Air Canada Jazz provides scheduled and charter air transportation for passengers and cargo to more than 150 destinations, vacation packages to over 90 destinations, as well as maintenance, ground-handling and training services to other airlines. Canada’s ﬂag carrier is recognized as a leader in the global air-transportation market by pursuing a strategy based on valueadded customer service, technical excellence and passenger safety. Air Canada offers electronic ticketing and Web check-in on most North American and international routes, and continues to expand convenient online services, simpliﬁed fare products, innovative multitrip Flight Passes and self-service check-in kiosks.

ANA Crowne Plaza Osaka Tel:

06-6347-1112

Web:

www.anacrowneplaza-osaka.jp/english/

As part of the IHG ANA Hotels Group Japan, the ANA Crowne Plaza Osaka represents the newest luxury hotel in Osaka—offering the highest international standards of quality and service. As “The Place to Meet” for business or pleasure, the ANA Crowne Plaza Osaka offers 478 newly renovated guest rooms, excellent banquet and business facilities, an award-winning lobby and lounge featuring live entertainment, seven restaurants, an indoor pool, 24-hour ﬁtness center and luxurious Club Floor rooms with a Club Lounge—all supported by a friendly bilingual staff. Guests are also provided the ﬁnest modern amenities, including a fully equipped business center with high-speed Internet access and PC; copy, fax and printing services for all your business needs. The hotel is centrally positioned in the main business district of Umeda, known for its dining, shopping and entertainment. A conveniently located 10-minute walk from JR Osaka Station, Umeda

36 | The Journal | August 2009

Station on the Hankyu and Osaka City Subway lines, provides easy access to all major transit hubs in Osaka, as well as to Kobe, Nara and other key Kansai regional destinations. Whether in town on business or with the family, make the ANA Crowne Plaza Osaka your ﬁrst choice of accommodations in the Kansai area.

Crowne Plaza Kobe Tel:

078-291-1121

Fax:

078-291-1151

E-mail:

Banquet@cpkobe.com

Web:

www.cpkobe.com www.crowneplaza.com

Crowne Plaza Kobe, a well-known landmark, is quickly becoming the meeting place of choice for discerning guests from all over the world. Some 592 accommodations are fully equipped with free highspeed broadband. A wide variety of restaurants and bars include Japanese, Italian, Chinese and other cuisine to meet your needs. Some 23 function rooms range from small meeting rooms to large banquet rooms accommodating 2,500 guests buffet-style. Our staff assist in planning and managing your event, right down to the ﬁner details. We provide the optimum in facilities for your successful business meetings and events. Being adjacent to Kobe’s Shinkansen Station, and only a 10-minute walk from Sannomiya, our hotel has easy access to major transportation options. The Kobe Airport is 20 minutes away, Kansai International Airport only 65 minutes away. After your meetings, Crowne Plaza Kobe becomes a relaxing amenity. The hotel is perfectly located on the hillside of the National Park to view Kobe’s famous night-time panorama. Other specialties are a world-famous Angsana Spa that gives you the refreshing blend of treatments to rejuvenate the body, mind and spirit, as well as swimming pool, sauna and training gym. The hotel provides refreshment after your busy day. Kobe’s “Place to Meet”—Crowne Plaza Kobe.

MICE | Special Advertising Section

The Leading Hotels of the World The preparation is ours — the performance is yours The Leading Hotels of the World offers the largest collection of luxury hotels, resorts and spas –from grand palaces, to intimate city hideaways, from luxury tent enclaves to expansive self-contained resorts to private island retreats. We offer you the ﬁnest venues, facilities and services for your special events. From executive conferences, board meetings, and international conventions, to creative incentive programs, group functions, weddings and product launches, our expert team can assist you with all phases of planning and execution, down to the last detail. Whatever the occasion, The Leading Hotels of the World delivers meticulous service, attention to detail, expert support and outstanding cuisine, making every event that much more memorable. With just one call, our group sales teams will save you time and simplify your planning process by providing a variety of free-of-charge services from 24h turn-around time to quality assurance including global DMC support and private air charter. Visit our latest state-of-the-art tool, the Leading Online Meeting Planner at www.leadinggroupsales.com or call group planning specialists at (03) 5551-0085.

The Westin Tokyo Tel:

03-5423-7760

Fax:

03-5423-7766

Web:

www.westin-tokyo.co.jp

A respite in the heart of the city, The Westin Tokyo’s understated European elegance creates an ideal venue for productive and successful meetings, where delegates can rejuvenate the body, energize the mind and reflect on the business at hand. Sophisticated, yet welcoming surroundings reflect rich textures, fine furnishings and absolute comfort. Unprompted, distinctive service awaits delegates on arrival and during their conference or meeting.

Superb facilities, creative, delicious cuisine and unconstrained, attentive service are hallmarks of The Westin Tokyo’s ﬁne reputation for meetings, conferences and events. From large-scale events in the opulent Galaxy Ballroom, to small gatherings in one of eight other function rooms, the options are ﬂexible, with expert staff on hand to offer advice and assist in making the right venue choice. Whether the event is a business lunch meeting or an elaborate themed banquet for 600 people, the hotel’s culinary team produces imaginative and personalized menus fashioned from the freshest local ingredients to suit each occasion. As well as the elegant surroundings, the banquet and conference facilities are also equipped with state-of-the-art technology, including audiovisual and lighting systems, and simultaneous translation.

Yaesu Fujiya Hotel Tel:

03-3273-2111

Fax:

03-3273-2180

Web:

www.yaesufujiya.com

Situated ﬁve minutes from the Yaesu south exit of Tokyo Station, the hotel is within easy walking distance to Tokyo International Forum or the Ginza area. With quick access to eight rail and subway stations, connecting to 20 transit lines, it is an ideal location for business and tourist travelers alike. Also you can directly access Narita International Airport by taking an airport limousine. We have a wide range of accommodations, from practical Westernstyle rooms to quiet, restful Japanese rooms, so that you can enjoy a relaxing stay. Internet connection is available in all rooms. We provide excellent culinary options with Dining and Bar Wisteria offering delicious fare for breakfast, lunch, dinner and cocktails, as well as Japanese restaurant Katsura. Our versatile facilities, including banquet halls and conference rooms, can meet all of your needs: be it for a party, wedding reception, business meeting or other kinds of functions. We look forward to serving you soon!

August 2009 | The Journal | 37

6th 2009 Laser Radial World Championships July 25-August 2 (women) August 3-10 (men & male/female youth) www.karatsu-sports.jp/yacht/english.html

The 2nd MSJ-SI August 1-13 http://mathsoc.jp/meeting/msjsi09/

The Mathematical Society of Japan’s Seasonal Institute 2009 is on arrangements of hyperplanes, and comprises a series of lectures and several individual talks. Participants are young researchers in Japan as well as from Asia (incl. China, South Korea, Taiwan and Vietnam), and other parts of the world (incl. Brazil, Canada, France, Germany, Greece, Israel, Italy, the Netherlands, Romania, Spain, Sweden, the UK and the U.S.). Conference Hall, Hokkaido University, Sapporo, JR Sapporo Station, Nanboku (green) Line

IPC-9 There are two boat races back-to-back daily. The Qualifying Series runs July 28-30 and August 5-8; and the Finals Series takes place July 31-August 2 and August 9-10. Trapezoid courses with inner and outer loops provide an upwind ﬁnish. Target time for the ﬁrst boat in each race is 70min. Saga Yacht Harbour, Karatsu City, Saga, Kyushu, JR Karatsu Station, Shinkansen

38 | The Journal | August 2009

August 2-8 www.ec-inc.co.jp/ipc9/ The 9th International Phycological Congress includes a symposium, exhibition and tours. Japan is one of the most important world centers of phycology, and algal biologists from participating nations can learn much from each other, especially in regard to the planet’s future sustainability.

National Olympics Memorial Youth Center, Yoyogi Park; Shibuya Station, JR Yamanote, Tokyu Toyoko and various Tokyo Metro Lines

Hiroshima Peace Memorial Ceremony August 6 www.city.hiroshima.jp/shimin/shimin/ shikiten/shikiten-e.html At 8:15 (exact time atomic bomb was dropped) is the ringing of the Peace Bell. The Memorial service takes place by the Peace Flame, which remains lit until all nuclear arsenals are decommissioned, and where white doves are released each year. In the evening, small lanterns are ﬂoated downstream in the Motoyasugawa River that passes the Genbaku Dome, the hypocenter of the atomic blast.

10th Summer Sonic August 7-9 www.summersonic.com/09/english/ One of the most popular rock festivals; key bands perform at both the Osaka and Tokyo venues. Headliners include Los Angeles mega-hit maker Linkin Park,

EVENTS LINE-UP

London alternative rock Placebo, Cleveland industrial rock Nine Inch Nails, New Jersey rock My Chemical Romance, Boston pop-punk Boys Like Girls, Oklahoma alternative rock The Flaming Lips, New York experimental rock Sonic Youth, contemporary electronic Aphex Twin, Scottish post-rock Mogwai and 49 other bands, which include long-timers Elvis Costello & the Imposters, and Joan Jett & the Blackhearts. Tokyo’s Chiba Marine Stadium and Makuhari Messe; and Maishima Stadium near Osaka Castle

Nagasaki Peace Memorial Ceremony August 9 www.at-nagasaki.jp/foreign/english/ spot/002.html The Ceremony is held in front of Nagasakan sculptor Seibou Kitamura’s 9.7mhigh Peace Statue. The raised right hand points to the heavens to signify the threat of nuclear weapons, while the left is held horizontally to symbolize the desire for eternal peace. The calm face expresses divine grace, and the gently closed eyes are in prayer for the repose of the bomb victims’ souls.

Daimonji Gozan Okuribi August 16 20:00-20:30 www.jnto.go.jp/eng/ Five mountains in the Kyoto basin glow with the spectacular okuribi bonfires, which signal summer’s end. Some fires are in the form of gigantic Chinese characters: dai (large) on Mt. Daimonji, and myo and ho (Buddha’s wondrous teachings) on Matsugasaki Nishiyama and Higashiyama mountains. Other fires are motifs: funa-gata (ship) on Mt. Funayama, and torii-gata (shrine entrance gate) on Mt. Manadarayama. The dai dimensions: 80m upper horizontal first stroke, 160m second stroke, and 120m curved third stroke. At 75 locations, pine-tree split firewood and needles are set ablaze all at once. The

bonﬁres serve to light the gate from where the souls of ancestors, who had returned at the start of Obon, depart.

45th Japan DIY Homecenter 2009 August 27-29 (27th & 28th trade only) 9:30-17:00 (last day: -16:00) www.diy-show.jp/2009/e/

Takarazuka August 20-31 (Osaka) September 5-15 (Tokyo) http://kageki.hankyu.co.jp/english/ Capcom and the Takarazuka Revue, a popular female operetta group, are collaborating on another Phoenix Wright song-and-dance, dubbed Phoenix Wright: Ace Attorney 2. The successful Capcom hit game series has sold over 3 million units since its debut (Oct. 2001), and spawned comics, novel and cellphone versions and merchandise. Actress Ranju Tomu is the attorney defending a falsely accused client in the musical written and directed by Kei Suzuki. Takarazuka Bow Hall (500 seats), Osaka, Takarazuka Station, JR Fukuchiyama Line; and the Takarazuka Revue’s Akasaka ACT Theatre (1,236 seats), Tokyo, Akasaka Station, Tokyo Metro Chiyoda Line

The theme is “DIY, the Power to Reform Our Lives”; and organizers expect top executives, managers and buyers of home improvement products, suppliers and home centers to attend. Last year, 420 companies, from 10 countries/regions, exhibited at over 1,000 booths, attracting 62,739 visitors. Makuhari Messe, Halls 5-8, Chiba, Kaihin-Makuhari Station, JR Keiyo Line

G10 Prize Winners 2009 Yokohama International Triathlon World Kids’ Triathlon Competition World Kids’ Sports Summit in Yokohama August 21-23 www.jtu.or.jp/yokohama/english/event/ index.html The City of Yokohama is observing its 150th anniversary of U.S. Commodore Perry opening the Yokohama port (July 1, 1859) after 250 years of self-imposed isolation by the ruling Tokugawa Shogunate in Edo (present-day Tokyo). August 21 is set aside for the Sports Summit, supported by the International Olympic Committee, under the theme “Let’s create a better future through the spirit of fair play!” at the Paciﬁco Yokohama, and involves presentations by the captains of each country/region being represented and a keynote address by a celebrity, along with pronouncement of the ofﬁcial Summit declaration.

August 28 www.gsa-world.org/gsa10th/english/prize The Global Sports Alliance, whose GSA World Center is in Shibuya, is a network of sports enthusiasts who want to leave a healthy environment for future generations. The GSA is working to promote environmental awareness and action among more than 1 billion sports enthusiasts worldwide by spreading a new concept, Ecoplay, as a fundamental part of good sportsmanship. Ecoplay aims to enrich nature (greening and better use of rainwater), save energy (using bicycles, public transportation), and reduce material consumption (rather than emphasizing recycling). The G10 Prize Project, open only to GSA David Umeda is Local Teams worldwide, is Senior Editor at Paradigm commemorating the GSA’s 10th Anniversary.

August 2009 | The Journal | 39

ACCJ UPCOMING EVENTS

2009 ACCJ Charity Ball Walkathon On Saturday, September 12, the ACCJ Charity Ball Walkathon will take place at the Imperial Palace from 9:30 a.m. with the walk commencing at 10:00 a.m. Starting and ending at Chidorigafuchi Park, participants will walk one 5K-lap around the perimeter. Our sponsors include the “careful movers” Allied Pickfords, CocaCola, HSBC, the law ﬁrm Latham & Watkins LLP, Reebok, and United Airlines. ACCJ members, families and their guests can conveniently sign up via the normal event registration process for 2,500 yen, with kids under 18 only 1,000 yen. Since this is a lead-in event to our Annual Charity Ball, all participants will be able to solicit donation pledges from family and friends via this Ecotech-designed Walkathon Donation Web site sponsored by Latham & Watkins: http://www.accjcharityball.org/teamList

Participants can sign up online as individuals or as teams, and simply e-mail the donation URL above. Potential donors can access the Web site, locate the desired individual or team, and make pledges through their credit card or Pay Pal account. It’s as easy as that. Participants will also be able to see their supporting pledges grow. The ACCJ will inject some competition into the process by awarding Prizes from the sponsors—two round-trip tickets to Hawaii on United Airlines—to the participants that raised the most in donations, and products from Reebok and Coca-Cola to the top walkers. Even if you just come for the walk, everyone will leave with a T-shirt commemorating the event, compliments of Allied Pickfords; refreshments will be provided by Coca Cola and HSBC. All donations will go to this year’s Charity Ball charities:

1. YMCA/ACCJ Ohisama Camp—a Tokyo YMCA Center program held in late summer in cooperation with the ACCJ, where an expected 40 children with learning/developmental disorders can participate in camp activities. 2. No no Hana no Ie—a secure home-like environment for hundreds of children who are the victims of abuse, neglect and other inhumane treatment. 3. Waku Waku Workshop—a safe place for those with sight, speech or hearing disabilities to improve their involvement in the community. Barry Bergmann ACCJ Special Events Chairman

Green Marketplace Forum: The Future of Where We Live & Work and How We Get Around Wednesday, September 30 (8:30-18:00) — Four Seasons Hotel Tokyo at Chinzan-so The Green Marketplace Forum (GMF) is an interactive event that explores the future trends and business challenges and opportunities around core areas of sustainability—integrated economic, social and ecological needs and opportunities. This GMF will focus on Green Design/Building and Green Mobility/ Transportation as they relate to our lifestyle and the many changes resulting from efforts to achieve a Carbon emission-free society. The GMF brings us together as policy-makers, thought leaders, organization leaders, innovators, entrepreneurs, experts, students and citizens—and provides us with a process to begin moving from dialogue to action in these core areas of our lives. The GMF builds on the success of last year’s Kanreki “Faces of CSR” event that attracted 264 people to hear keynote addresses by Lord Michael Hastings and former Minister Yoko Kamikawa; ask questions of a panel of Japan leaders such as Mr. Christopher LaFleur of JPMorgan, Mr. Peter Sykes of Dow Chemical Company,

40 | The Journal | August 2009

Mr. Eiji Wakiwaka of BP, and Mr. Tom Pederson of Shinsei Bank; and engage in a facilitated group dialogue and the sharing of best practices around Authenticity, Diversity, Energy & the Environment, and NPO Collaboration. The launch of the GMF will be held at the Four Seasons Hotel Tokyo at Chinzan-so on Wednesday, September 30. This event is led by the American Chamber of Commerce in Japan’s CSR Committee with support from the ACCJ Environmental Committee, the ACCJ ACRE (Architecture, Construction and Real Estate) Committee, and the ACCJ American Automotive Industries Committee. We are also engaging with other Chambers of Commerce, the Keidanren, and the EU-Japan Centre for Industrial Cooperation. The GMF Task Force would like to extend a special thanks to the Four Seasons Hotel Tokyo at Chinzan-so, who has come on as our extremely generous Grand Sponsor for the event.

OUT AND ABOUT

ACCJ Washington, D.C. Doorknock

The annual ACCJ Washington, D.C. Doorknock was held on June 10-11. The delegation of 10 ACCJ leaders attended more than 30 meetings with U.S. Administration ofďŹ cials and Congressional representatives. Photos By Ryan Armstrong

Briefing at the U.S. Chamber of Commerce.

ACCJ representatives (from left) Ryan Armstrong, Samuel Kidder, Andrew Conrad, Laurence Bates, William Bishop, U.S. Secretary of Commerce Gary Locke, ACCJ President Thomas Whitson, Christopher LaFleur, Harry Hill, John Kakinuki and James Foster.

A hallway encounter with Congressman Steve King.

ACCJ Vice Presidents William Bishop (left) and Laurence Bates in front of the U.S. Supreme Court.

ACCJ representatives (from left) Laurence Bates, William Bishop, Christopher LaFleur and James Foster in the U.S. Capitol Building.

August 2009 | The Journal | 41

FDI PORTFOLIO

Visa Card-Use Deﬁes Recession

Despite a challenging economic environment, international tourism remains resilient, according to the new Tourism Outlook: USA report from Visa Inc. The report indicated that Japanese travelers spent $3.1 billion on their Visabranded credit cards while visiting the U.S. in 2008, a 5% increase over 2007. Despite the fact that the 3,249,578 total visits to the U.S. in 2008 by Japanese travelers represented an 8% annual decline, the number of transactions remained roughly unchanged at 20.2 million. The average ticket was $153.07, up 8% on the year, and the largest average ticket for any country of origin covered in the survey. Japan was among the top 10 contributors to inbound tourism spending in the U.S. during 2008, as measured by Visa card use. In 2008, Visa cardholders from around the globe spent more than $53 billion on their cards while visiting the U.S. Other top contributors to the U.S. tourism economy include Canada ($15.3 billion), the UK ($4.7 billion) and Mexico ($2.5 billion). At the same time, U.S. Visa cardholders who visited Japan were strong contributors to the national tourism economy, contributing $647 million to tourism revenues in 2008, up 11% over 2007.

U.S. residents, on the other hand, made a total of 768,345 visits to Japan in 2008, down 5.8% from the year before, while the total payment amount increased year-onyear. The average amount of a Visa card transaction by travelers from the U.S. while visiting Japan was $144.62. Tourism Outlook: USA also analyzed traveler attitudes and intentions, based on a survey of 11 key source markets for international tourism. Key findings include international travelers are fairly resilient. Only one in four are less willing to travel now due to the socio-economic climate; and 23% are more likely to travel internationally. However, no one is unaffected by the economic environment. Some 83% may adjust their international travel plans, with 52% opting for travel during off-peak seasons, and 33% choosing destinations where the cost is lower. “For businesses that rely on tourism, data such as [that of] the Tourism Outlooks is vital, particularly considering the current economic climate and external events that have had an impact on tourism,” says Bill Sheedy, president, North America, at Visa Inc. “This data enables businesses to improve their offerings and marketing strategies to ensure that they appeal to travelers around the globe.”

The U.S. continues to be a leading destination for international travelers. Almost half of respondents have visited the U.S. at least once. According to Visa’s international survey, 81% of Japanese respondents are likely to visit the U.S. in the future. How are travelers from Japan and around the globe meeting payments while abroad? Tourism Outlook: USA indicated a strong preference for electronic payment among international travelers. Some 55% of respondents reported they prefer to use credit cards while traveling, with the next most popular method being cash (20%). Survey respondents are opting for a payment method largely based on convenience (69%), security (53%), and ease of access to funds (46%). Some 74% of Japanese respondents reported they prefer credit cards when traveling, followed by cash (19%). For the Visa international tourism survey, 5,539 adult consumers aged 18 and over were interviewed as part of an online panel survey hosted by GMI (Global Market Insite, Inc.). Fieldwork took place between December 11, 2008 and January 8, 2009. During the research process, questions were posed to a panel of consumers and data collected until various predefined sampling quotas were reached. The results were then analyzed and tested at a 95% confidence level. The cited data on Visa cardholder spending emanates from a review of card activity in the U.S. by international visitors from key source countries during the calendar years 2008 (Jan. 1 – Dec. 31, 2008) and 2007 (Jan. 1 – Dec. 31, 2007). The reports also draw from a review of tourism spending by American travelers using Visa-branded payment cards in key source countries. The findings are based on VisaVue® Travel data, which was introduced by Visa to the U.S. tourism industry in 2009, and shared with a broad audience of destinationmarketing entities such as state, and convention and visitors bureaus.

August 2009 | The Journal | 43

Educated Expansion

Masahiro Kuroda, president of Koeki University, and Bruce Stronach, dean of TUJ

Temple University, Japan Campus (TUJ) and Tohoku Koeki Bunka University (Koeki University) have agreed to collaborate on a program that will allow the

latter’s Japanese students to study English at TUJ. This month, three extended Englishlanguage programs will commence during

the summer break. TUJ has developed the programs in response to a request from Koeki University to help advance its aims to improve the linguistic proficiency of its students, and promote a liberal arts education backed by critical thinking skills. High school students and adults also will be accepted into the program. In a break with the typical focus of most English-language programs in Japan on basic conversation practice and entrance exam preparation, TUJ created courses to serve as the first steps in mastering the use of English in a global society. “Intensive English study through the summer programs offered by TUJ will, without a doubt, lead to the enhancement of practical linguistic skills,” said Masahiro Kuroda, president of Koeki University, “which is one element of our university’s commitment to the practical application of education.” “We at TUJ believe partnering is essential to developing the high-quality academic and educational programs necessary for success,” added Dean Bruce Stronach of TUJ, “both here in Japan and around the world.”

Taiwanese Convenience It’s a burgeoning business and Japan is clearly the place to be to understand it better. We are talking about convenience stores, of course. Uni-President Enterprise Corporation, a Taiwanese conglomerate, established its President Chain Store Corporation Tokyo Marketing K.K. to observe the industry more closely. In Taiwan, President Chain Store (PCS) specializes in the retail and service industry, and is a major operator of several well-known

44 | The Journal | August 2009

chain stores, including 224 Starbucks Coffee shops, 4,810 SevenEleven convenience stores, 14 jointly managed MUJI outlets and 45 jointly managed Mister Donuts eateries. Since PCS focuses on Japanese retail products, the opening of a Tokyo office earlier this year enables a closer scrutiny of local consumer trends that conceivably could become global, and offers firsthand insight into possibly why certain products become best sellers here. PCS Tokyo Marketing engages in product development, and the import and export of goods as well. While its business is identifying new products for its Seven-Eleven stores in Taiwan, it may be just a matter of time before PCS applies its expertise and experience to more heavily populated markets such as China.

FDI PORTFOLIO

Fukuoka Trends

According to local news reports, Barneys Japan Co., Ltd. is launching a new branch of Barneys New York department store in Fukuoka, Kyushu, in the near future. Plans are at an early stage; but Barneys Japan, which operates three

stores currently under license from Barneys New York, Inc., is eyeing up a potential spot in the busy Tenjin shopping and entertainment area of Fukuoka. The store has been slated to take advantage of the new Kagoshima route for the Kyushu Shinkansen Line—connecting

Kagoshima, Kyushu’s southernmost major city, with Fukuoka to the north— which will be completed in 2011. Barneys Japan potentially can draw revenue from consumers all over Kyushu who have the means to spend at the premium department store. Further expansion includes plans to open a flagship store in Kobe, Hyogo Prefecture, in the spring of 2010, as well as pursue new outlets in Osaka and Nagoya. The joint subsidiary of Sumitomo Corp. and a fund operated by TOKIO Marine Capital Co., Ltd. is under license from Barneys New York, which was sold to Istithmar World P.J.S.C., the investment arm of Dubai World Corporation, in September 2007.

Ron Herman Tokyo

This month sees the launch of the first international branch of the trendy Los Angeles-based fashion retailer Ron Herman, Inc. in Tokyo’s Sendagaya district. Ron Herman Tokyo flings open its doors on the 29th, in an apparent response to years of fielding requests from Japanese

companies to open a store here. The Melrose Avenue store’s eclectic mix of forward-thinking labels and new brands has been a long-time favorite among celebrities. Herman decided to take up Sazaby League, Ltd. on its offer. “Nobody has ever had the real guts to actually pick it up, and transport it and re-establish it in Japan because everybody does an interpretation of it,” said Ron Herman to fashion trade bible WWD (Women’s Wear Daily). “We are not taking that road at all. We have decided to do the authentic store.” The manufacturer and retailer Sazaby League also owns the Japanese subsidiary of Starbucks, in addition to trendy U.S. retailer American Rag Cie. The

new 278.7m2 boutique will feature emerging designers from L.A. and Sazaby’s signature high-end denim lines. Herman believes this partnership with Sazaby League could spawn the first in a series of international locations in Europe and Asia. Sazaby was using the new store as a showroom, a convenient spot since it also rents the same building as its headquarters, and has a Starbucks in the same space. The location Contact Nicole Fall at nicole@ is just a few minutes walk ﬁvebyﬁfty.com if from Harajuku’s main you have ideas shopping thoroughfare for this column. and Omotesando.

August 2009 | The Journal | 45

RELOCATION SERVICES Special Advertising Section

RELOCATION SERVICES | Special Advertising Section

Relocation: More than Moving

elocation Service … When you hear this, what jumps to

the successful transition of their employees. If their staff could get

mind? Most people immediately think of moving — from

settled and focused on work as quickly as possible, then their success

one home to another, sometimes one country to another.

rate increased and overall costs decreased. This led to the expansion

But nearly all of us think of moving — having a company

of services that can start from their arrival at the airport, and not end

send in packers and material, to safely transport our per-

until they have returned to their home country.

sonal possessions and furniture to a new location.

Another “move” that has paralleled this is the transition of the expa-

That is still true.

triate functions from Purchasing Department to HR Department. As

But it is only a small portion of an industry that now supplies real

more focus has been placed upon staff wellbeing, the HR Department

estate services, tenancy and expense management, visa and immigra-

has taken on a larger role in managing this important aspect of the

tion services, ongoing technical support, and repatriation services. The

company. And the Relocation Industry has responded with outsourcing,

old model of a big truck, with strong men, coming into our home to

staff support, and staff implants. Companies with a large expatriate

“move us” has changed — and most people are blissfully unaware of it.

population have found that, by having their Relocation supplier actu-

As more focus has been given to quality-of-life issues, cost, and

ally work within their ofﬁce environment, issues and support can be

assignment longevity, the industry once known as “Moving and Storage”

provided faster and cheaper. From this arrangement, the relationship

has been replaced by the “Relocation Industry.” There is even a global

between vendor and supplier has become blurred; but it has improved

organization dedicated to providing and enhancing services related to

the overall experience of those receiving the services.

employee transfers, and all aspects of sending and supporting staff

Companies in this Special Advertising Section that supply reloca-

around the world. The Employee Relocation Council was established as

tion services offer support that can vary, in both scope and depth of

a forum for Human Resources managers, suppliers and customers, and

detail. Some are very specialized, while others offer a wider variety of

to exchange information and improve the way in which people who are

client-designed services. You owe it to your staff and the bottom line to

moving around the world are assisted and supported.

contact any of these companies if you or your company are looking for

The old way of sending employees overseas and expecting them to

support in the essential area of relocation and expatriate services.

survive and thrive on their own is long past. New services, new support systems, and new companies have risen to the challenge to supply a

Joseph Webber

myriad of services that only 15 years ago were unheard of. Multina-

Managing Director

tional corporations learned that their success was dependent upon

Santa Fe Relocation Services Japan K.K.

August 2009 | The Journal | 47

RELOCATION SERVICES Special Advertising Section

Allied Pickfords Japan

ReloJapan K.K.

Tel: Fax: Web:

Tel:

03-5549-6200 03-5549-6201 www.alliedpickfords.co.jp

At Allied Pickfords, we understand that you are not just moving your belongings from one place to another. Your life is changing before your very eyes. And, with everything you have to think about during your upcoming relocation, you shouldn’t have to worry about the move itself. Moving over 1,000 families every day in more than 175 countries, Allied is the largest, most recognized moving company in the world; and our experience and expertise will help you get through your move with the minimum of disruption. With local ofﬁces in both Tokyo and Kobe, our combination of highly skilled multilingual local and expatriate staff, supported by English-speaking move supervisors and trained packers ensures a trouble-free relocation, whether you are moving domestically or internationally. So relax a little! Let us help reduce the stress of relocating your life.

03-5575-6321 (Tokyo) 052-973-3973 (Nagoya) E-mail: InfoRequest@ReloJapan.com Web: www.ReloJapan.com Your First Friends in Japan ReloJapan understands that people come to Japan with their own needs and requirements—and so the demand for customized service. Without professional guidance and assistance, employees, their families, and the host ofﬁce staff can often become overwhelmed with the enormous task of completing all necessary details involved with undergoing an international assignment. ReloJapan aims to eliminate the burden in your relocation process with professional services that have been carefully designed after years of customer feedback and satisfaction. For professional relocation services (www.ReloJapan.com), driver’s license conversion (www.JapanDriversLicense.com) or Japan Information (www.JapanInfoSwap.com), there is no other company like ReloJapan. Contact us today! We are waiting to help you ... professionally—and on a personal level.

Asian Tigers Premier Worldwide Movers Co., Ltd. Tel: Fax: E-mail: Web:

03-6402-2371 03-6402-2305 sales@asiantigers-japan.com www.asiantigers-japan.com

Move Like a Tiger Relocating into a strange culture can be a nerve-racking and stressful experience. It need not be so. The Asian Tigers group’s unmatched expertise in the move management and relocation industry makes any employee transfer a simple and smooth experience. With 27 offices in 13 countries and employing over 1,500 staff, the Asian Tigers group is Asia’s leading moving and relocation group. And we show it by offering a service of unparalleled support in relocating throughout Asia and the rest of the world. With our co-ownership and memberships in the industry-recognized OMNI and FIDI groups, we have over 480 partner/affiliated offices representing every country on the globe. Contact us today for a no-obligation corporate consultation and/or free estimate for any staff you may have that will be relocating soon. Contact: Andrew Olea, Director of Sales & Marketing. Call 03-64022371, andrew.olea@asiantigers-japan.com or visit our Web site at www.asiantigers-japan.com 48 | The Journal | August 2009

Santa Fe Relocation Services Tel: Fax: E-mail: Web:

03-3589-6666 03-3589-0420 santafe@santafejapan.co.jp www.santaferelo.com

Santa Fe Relocation Services is a leading relocation company operating throughout Asia, providing high-quality relocation services to individual and corporate clients. As a full-scale relocations services provider, Santa Fe provides home and school search, tenancy management, familiarization programs, settling-in assistance, visa and immigration services, household-goods moving and much more. Each year Santa Fe handles in excess of 10,000 relocations throughout the world, and is proud to be a major player in the global relocation industry. The mission of Santa Fe is simple: To provide premium relocation service to corporations and families in a manner that minimizes the negative impact on the environment.

BEHIND THE BOOK

Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition By Guy Kawasaki Portfolio, 474 pp, $29.95 Reviewed by Tom Baker Common sense and good manners will get you far. That, in a nutshell, is the basic message of Guy Kawasaki’s 474-page tome, Reality Check. But even though you now know the bottom line, the book is still compelling. Kawasaki started out in the jewelry business, but switched to computers in the 1980s, working first for an educational software company, and then for Apple—promoting the new Macintosh. Subsequently, he has worked for, or founded, a number of Silicon Valley businesses, and has had published eight books on business or computing. Not surprisingly, some of his advice in Reality Check, especially in the early chapters, pertains most directly to technology startups; but as you get deeper into the book, the pointers become more universal. Kawasaki covers the waterfront, offering advice in 12 sections—on topics such as raising money, marketing, communicating, working, and hiring and firing. Divided into 94 chapters, it’s an easy format for dipping into. Each chapter is brief because brevity is a virtue the author loves to preach. He lays down, for example, a “10/20/30 Rule” for pitch presentations, under which you should show no more than 10 slides in no more than 20 minutes, with the text font size at no less than 30 point. The numbers compel you to pare down your message to its essence, with the last figure also helping to make the slides legible to “the oldest

person in your audience” (who may very well be the decision-maker). Kawasaki also has a penchant for lists—albeit rarely exceeding 10 items. His many list-based chapters enumerate general principles, but he also provides specific examples through interviews with experts—and even inviting them to write certain chapters. On financial modeling, he has Glenn Kelman, cofounder of the Redfin real estate Web site, list his young firm’s planned and actual expenses under 14 categories, with commentary on each. Kawasaki details his own surprisingly low costs in setting up the Web site Truemors, which he later sold. On recruiting, he has Craig James, a former top recruiter at Hewlett-Packard, describe the deep, daylong interview process followed there. On public speaking, he points out techniques used by urban environmental activist Majora Carter at a TED (Technology, Entertainment and Design) conference, and provides actual time codes as reference should you watch online a video of her speech. Perhaps more eye-catching now than when Kawasaki wrote it, a piece of advice appears in his chapter on getting investors to support a new company. “Get an introduction by a partner-level lawyer … this is part of the reason you should use a well-known corporate finance attorney … You’re paying for connections, not only expertise.” As an example, he mentions “my buddies at Wilson, Sonsini, Goodrich, and Rosati.” Tom Baker is Kawasaki’s buddies are well connected, a staff writer indeed. As of this writing, the CEO of that law at The Daily firm, John Roos, is on track to becoming the next Yomiuri. U.S. Ambassador to Japan. ■ We are giving away 3 copies of Reality Check. Simply e-mail editor@paradigm.co.jp by August 15. The winners will be picked at random. Winners of Creative Capitalism: Timothy Connor, Newport Co., Ltd; Jon Jenni, Ernst & Young; Andrew W. Silberman, Advanced Management Training Group, K.K..

August 2009 | The Journal | 49

Homare Takenaka CHAIRMAN AND CEO, LBS CO., LTD. Text and photos by Tony McNicol

fter a long and successful career at IBM Japan, Homare Takenaka could easily have just decamped quietly to the golf course. But he had other plans. In 1993 he founded LBS Co., Ltd., an afﬁliate of his former employer. Today, 30 employees work in an open-plan ofﬁce, and LBS’ client list includes a number of large foreign companies in Japan. Offering PR, advertising and sales promotion solutions, the company holds to its motto of “Bringing the world to Japan and Japan to the World.” “I wanted to contribute to change and the betterment of Japanese society through my second career,” says Takenaka.

50 | The Journal | August 2009

As he tells it, though, the initial steps in his business career were less surefooted. When he graduated from university in 1960, he chose IBM purely for the relatively generous ¥18,000 a month starting salary. No one he knew had even heard of the company, and it was only after the interview that Takenaka himself realized it wasn’t Japanese. “My family, friends and my teachers said, ‘Going to work for an American company! Are you crazy?’” laughs Takenaka. They told him he would be ﬁred at the drop of a hat, and not compensated properly however hard he worked. In 1960 IBM was still making calculating machines, and Takenaka’s ﬁrst job was selling punch card systems. He quickly realized, however, that he

BIOGRAPHY Homare Takenaka ■ Age: 73 ■ Occupation: Chairman & CEO, LBS Co., Ltd. ■ Raised in: Wakayama (his father was a local doctor). ■ Educated at: Keio University, BA in Economics ■ Speaks: English, Japanese, German (“only reading now”) ■ Family: Wife and two identical twin sons ■ Hobbies and interests: Golf and mahjong

had made the right choice. The number of IBM employees had increased from 1,000 to 2,300 within a year of his joining. And unlike at Japanese companies where 10 years of slogging were required to reach even the humble kakaricho (junior manager) level, promotion for the ablest at Big Blue was rapid.

BUSINESS PROFILE

SNAPSHOT LBS Co., Ltd. ■ Established: June 1993 ■ Employees: 30 ■ Location: Tamachi, Tokyo ■ Main business: Public relations ■ Major clients: Foreign companies in Japan ■ Web: http://lbs.co.jp ■ E-mail: request@lbs.co.jp ■ Tel: 03-3769-1350

Takenaka was a kacho (assistant section head) in just ﬁve years. “I think I was one of the luckiest salaried people in Japanese society,” he says. During his time at IBM, Takenaka shed many of his preconceptions about America—and Japan. Before a posting to New York he received some supposedly sage advice from friends. The ﬁrst: “The women are different, so you should not expect them to serve you tea.” The other: “Don’t work overtime. Over there, if you do that, they will assume you are unproductive and not smart.” On arrival, though, he found his secretary offering him coffee and donuts each morning, as well as his coworkers cheerfully coming to work on the weekends. His long experience of “looking at Japan from the outside” has been applied

to his addressing the needs of foreign companies in Japan. While LBS—which stands for “Love, Beauty and Smile”— assists with media relations, advertising, events and internal communications, its bread and butter is PR. However, Takenaka dislikes the word’s implications to the Japanese. “When Japanese people say PR, it just means press releases and stopping negative articles,” says Takenaka. “My deﬁnition of PR is to help companies build healthy relationships with their stakeholders.” In essence, LBS facilitates inbound Foreign Direct Investment. In 2007 the Japanese government pledged to double FDI by 2010, an ambitious target—albeit still a shockingly low level compared to other developed economies. The barriers, according to Takenaka, include an expensive price structure, overly strict government regulations and opaque business practices. “Now the top concern is the corporate business tax, which is higher than the U.S. or advanced countries in Europe,” says Takenaka. “If you ask the Japanese side, the answer is more vague. They say that foreign companies are not bringing the products and services that Japanese people need. I think that both sides are partially right.” Compounding the situation is the current recession. His company is already feeling the pinch on FDI endeavors. Some clients are demanding, for example, that LBS reduce its retainer fees by 10% or more. “All in all, the atmosphere is very cautious,” he says. Takenaka thinks

the economy will be a little better by the end of the year, and much better next year. “The government’s recovery package is encouraging,” he says, “if it is quickly implemented.” Though he believes the environment for FDI is improving, Takenaka feels it is not fast enough.

“My family, friends and my teachers said, ‘Going to work for an American company! Are you crazy?’” Homare Takenaka

“The changes in this society are so slow,” he says. “There are so many discussions about deregulation and opening the market, but not much has changed. The problem we have been facing over the last 20 or 25 years is a big change in the environment surrounding us—globalization.” The Japanese have always been good at working within their group, but “globalization tends to turn the strength of Japanese people into weakness,” says Takenaka. Now the Japanese need to work with foreigners as well. He hopes that greater FDI can serve to cure Japan’s economic and political paralysis. “My solution is to have as Tony McNicol many successful foreign is a freelance journalist based companies as possible in Tokyo. in Japan.” ■

August 2009 | The Journal | 51

Advocacy Update ACCJ Viewpoints are the core products of ACCJ Advocacy. An ACCJ Viewpoint is a brief paper, generated by a committee, that expresses the Chamber’s official position on a specific issue. Viewpoints are primarily used to express opinions on current policies, policies under consideration by the Japanese and/or U.S. governments, and policies under discussion in bilateral or multilateral forums. They are also used to raise new concerns about issues not currently on the Japanese government agenda.

Ensure Regulatory Policies and Procedures that Treat Customers of American Vehicle Importers Fairly

Enhance Investment and Stimulate Economic Recovery Through Extension of the Net Operating Loss Carry-Forward Period

Achieve Transparency in the Rulemaking Process Through Greater Access to and Participation in Shingikai

American Auto Industries Committee

Foreign Direct Investment Committee, ACCJ Financial Services Forum, Taxation Committee

Valid Through December 2009

Valid Through November 2009

Legal Services Committee

Valid Through May 2010

Recommendation

The American Chamber of Commerce in Japan (ACCJ) urges the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), the Ministry of Economy, Trade and Industry (METI) and the Government of Japan (GOJ), to ensure that regulatory policies and procedures treat customers of United States (U.S.) vehicle importers fairly. Specifically, the ACCJ urges the GOJ to:

To promote greater long-term investment in new business in Japan, and hasten economic recovery, The American Chamber of Commerce in Japan (ACCJ) recommends that Japan lengthen the carry-forward period allowed for companies to utilize net operating losses (NOLs) from the current seven years to an unlimited period. The ACCJ also recommends that the extension be applied retroactively by several years. This step would maximize the stimulative impact of the extension by ensuring that firms that have accumulated losses over recent years – and in particular, those that have continued to invest during the current economic downturn – will benefit to the maximum extent possible.

The American Chamber of Commerce in Japan (ACCJ) strongly urges the Government of Japan (GOJ) to make the procedures governing the establishment, composition and operation of study groups and advisory councils that govern the process of public comment regarding rules and regulations specific to the various industries (collectively known as “shingikai”), more uniform and transparent. Affording a broad range of industry participants and individuals a meaningful opportunity to participate in this process, through involvement in the deliberations of the relevant shingikai, submission of comments, and assurance that comments will be duly considered by the GOJ, will result in well-informed policies and legislation. In particular, leading U.S. companies and other foreign companies and organizations conducting business in Japan should be invited to serve as full members, not just observers, of relevant shingikai deliberating rules or regulations that materially impact their operations in Japan.

Maximize the regulatory harmonization of automobiles between Japan and the U.S. by working with global standards bodies such as the World Forum for Harmonization of Vehicle Registrations (WP-29). The ACCJ believes the adoption of global standards will benefit all manufacturers and countries by lowering costs, improving the technical quality of automobiles, and providing customers with better purchase choice. Ensure transparency in the creation and implementation of Technical Guidelines (Guidelines) and eliminate unique requirements on low volume automotive importers, their dealers, and their customers. Streamline and reduce automotive related taxes that place an unfair burden upon automotive owners, including the “temporary” Supplemental Acquisition and Consumption Taxes that have been imposed for over 30 years.

Expansion of the Legal Profession is Critical for Judicial System Reform Legal Services Committee Valid Through December 2009

Recommendation The American Chamber of Commerce in Japan (ACCJ) supports the goal of the Government of Japan (GOJ) of expanding the nation’s pool of legal professionals to increase access to legal services throughout the country. The ACCJ also strongly encourages the GOJ to fulfill its plan of increasing the number of newly licensed attorneys by specific numeric targets.

Released ACCJ Viewpoints can be read in full in the Advocacy section of www.accj.or.jp 52 | The Journal | August 2009

ACCJの「意見書」は、特定の問題に対してのACCJの公式見解を表明する委員会が作成した簡潔な提言書であり、提言活動の中核を成しています。現行の政策や、日本又は米国政府で検討中の政策、二国間もしくは多国間で協議中の政策についてだけでなく、新たな関心を高めるために現在日本政府の課題となっていない問題についても意見を述べています。

米国製自動車輸入業者の顧客への

欠損金繰越期間の延長を通じた投

審議会への参加機会の大幅な増大

基準の策定、施行の公平性の確保

資の促進と景気回復の推進

を通じた透明性の高い立法過程へ

について

対日直接投資委員会、ACCJ金融サービスフォーラム、税制委員会

の到達

アメリカンオートインダストリー委員会 2009年11月まで有効英語正文

2010年5月まで有効英語正文

法務サービス委員会 2009年12月まで有効英語正文

提言

在日米国商工会議所（ACCJ）は、国土交通省、経済産

日本での新規事業に対する長期投資を促進し景気回復

在日米国商工会議所（ACCJ)は、日本政府に対し、様

業省、及び日本政府が、米国からの自動車輸入業者の顧

を早めるため、在日米国商工会議所（ACCJ）は、企業

々な業界に特有の規則に関する民間意見の集約過程を

客を公正に取り扱う基準、施策を施行するよう要望する

に欠損金の繰越しが税務上認められる期間を現行の7

取りまとめる研究グループや諮問委員会（総じて「審議

ものである。特に、日本政府に対して以下を申し入れる。

年から無期限に延長することを日本政府に提言する。ま

会」として知られているもの）の設置・構成・運営を規律

１．自動車基準調和世界フォーラム（WP29）等の世

た、繰越期間の延長にあたり、過去数年間に生じた欠損

する手続きについて、その一層の統一性と透明性を図る

界標準機関との協調により、日米の自動車基準調

金についても遡及適用することを進言する。遡及適用が

よう強く要請する。関連審議会の検討への関与、意見の

和を最大限にすること。ACCJは、世界基準の採用

認められれば、近年欠損金が累積している会社、特に現

提出及びその意見が日本政府によって適切に検討され

在の不況下でも継続して投資を行ってきた会社にとって

ることの保障などを通じ、上記の意見集約過程に産業

も恩恵を受ける機会が広がり、繰越期間延長の景気刺

界の多くの関係者及び個人が参加できる意味のある機

激効果を最大限引き出すことが可能になるだろう。

会を設けることは、広い意見を踏まえた政策及び立法を

は、すべての国々の製造者のコスト低減、自動車の品質技術の向上に寄与し、顧客に対しての車両購入の選択幅を広げるものであると考える。２．技術指針（ガイドライン）の作成、採用における透

可能にさせるものである。特に、日本において事業を行

明性の確保と、少数台数輸入業者、販売会社及び

っている有力な米国企業及びその他の外国企業・団体

その顧客に対する独自の要件の撤廃。３．既に3 0 年以上課せられている「暫定」自動車取得税と消費税を含む自動車保有者に対して不公平な負担を課している自動車関連の税金の簡素化と軽減。

提言

法曹の増加は司法制度改革において決定的に重要である法務サービス委員会

は、日本における運営に重大な影響を及ぼす規則を検討する審議会において、単なるオブザーバーではなく、正式のメンバーとして役割を果たすために招請されるべきである。

2009年12月まで有効英語正文提言在日米国商工会議所(ACCJ)は、日本において司法サービスを受ける機会を増大させるため、国内の専門家人口を増加させるという日本政府の目標を支持する。また ACCJは、日本政府が、資格を取得した新人弁護士を一定数増加させるという計画を完全に遂行するよう強く求める。

ACCJが公表した意見書の全文は、www.accj.or.jp の政策提言活動でご覧頂けます。 August 2009 | The Journal | 53

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n July the Nominations Committee began meeting to prepare a slate of candidates to be presented at the annual Ordinary General Meeting in the fall. As a volunteer organization we have been blessed with outstanding leaders at all levels. So many have contributed so much of their time and expertise to make the ACCJ the most respected American chamber in the world. If you are interested in serving on the Board or if you have suggestions on who might be a good candidate, please let Nominations Committee Chair Darren McKellin or Vice Chair William Swinton know. Next year will be a pivotal time for the ACCJ and your involvement is very important. The landscape where our members operate their businesses is going through unprecedented changes. Our next generation of leaders will ensure that the Chamber meets the challenges of adapting to these new conditions. Now that we are half way though 2009 it may be useful to take a short look at how the Chamber is faring in these difficult economic times. We are clearly not immune to the ills that affect the Japanese and world economies. In the first six months of the year we have seen a decline of just over 8% in membership. This, of course, is a worrisome figure but the Membership Relations Committee is working hard to reverse this trend and there are some early indications that we may be bottoming out in this indicator. In the category of Corporate Sustaining Members we have seen an increase from 42 to 43 so far this year and we are very pleased to see that IBM will be upgrading to CSM this month. Incidentally, fewer than half of our Board members are from these 43 companies and of our committee, subcommittee and task force leaders only about one quarter are from CSM companies. I think these figures show that while our premier members, the Corporate Sustaining Member category, are key contributors to the organization, the leadership and membership are broad and diverse. These characteristics have helped us to maintain our strength during a period of general economic weakness. As I mentioned several months ago, despite hard times in the economy both programs and advocacy are holding up very well. At the half-way point of 2009 we have had 1% more events than in the same period last year, with a 2% decline in attendance. With the production of the Internet Economy White Paper, a successful Washington Doorknock and February Diet Doorknock, and a second Diet event planned for the fall, 2009 is proving to be a bumper year for advocacy. Samuel H. And the importance of getting our views in front of Kidder is ACCJ Executive new administrations in both countries makes this Director. dimension of ACCJ’s activities all the more critical. ■