The Canadian Autumn 2016 by CCCJ The Canadian

The Canadian A QUARTERLY MAGAZINE OF THE CANADIAN CHAMBER OF COMMERCE IN JAPAN | AUTUMN 2016 | VOLUME 16 | ISSUE 04

WE CAN * ACHIEVE MORE TOGETHER THAN WE CAN APART

Kathleen Wynne | Strength to Strength *THE ONTARIO PREMIER ON SHARING NEW INDUSTRY INFORMATION AND RESEARCH WITH JAPAN TO GENERATE FASTER RESULTS

The Canadian

CONTENTS

AUTUMN 2016 VOLUME 16 ISSUE 04

Canadian Chamber of Commerce in Japan La Chambre de commerce du Canada au Japon The Canadian Chamber of Commerce in Japan is a private sector, not-for-profit business organization that has, since 1975, promoted the develºpment of commerce between Canada and Japan. Chairman Ron Haigh Toyota Motor Corporation ronhaigh@icloud.com Vice-Chairman Neil van Wouw Vanten K.K. neil@vanten.com

Executive Director Jim Zhang jim.zhang@cccj.or.jp Senior Advisor David Cotter david.cotter@cccj.or.jp Office Manager Jody Pang jody.pang@cccj.or.jp 7F Parkside Sepia 3-13-10 Nishi-Azabu Minato-ku, Tokyo Japan 106-0031 Tel: +81 (0)3 5775-9500 Fax: +81 (0)3 5775-9507

The new Canadian Chamber of Commerce in Japan team (from left to right) executive director Jim Zhang, office manager Jody Pang and senior advisor David Cotter.

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Chairman’s Perspective

Executive Director’s Note & Advisor’s Message 09

Embassy Message

www.cccj.or.jp LinkedIn: cccjapon Facebook: www.facebook.com/cccjapon Twitter: @cccjapon YouTube: cccjapon

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Housing Trends

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Special Report

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Cover Story

Member Profile

Employer Insights

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Asia Pacific View 024 / Timeline 026 Calendar 028 / Chamber Voices 030 / Retrography 031 Members Directory 032

On the cover: Ontario Premier Kathleen Wynne in the east wing of the Ontario Legislative Building at Queen’s Park in Toronto, September 2016. The Canadian is the official publication of the Canadian Chamber of Commerce in Japan (CCCJ), published quarterly in Tokyo. The views and opinions expressed herein are solely the opinions and views of their authors and do not necessarily reflect those of the CCCJ or GPlusMedia. © 2016 GPlusMedia Co. Ltd. All rights reserved.

The Canadian / 03

Chairman’s Perspective

RON HAIGH

CCCJ CHAIRMAN

OLD ENDINGS AND NEW BEGINNINGS The Stoic Seneca observed that every new beginning originates from some other beginning’s end. After a series of particularly forceful typhoons have unlocked summer’s heated grip on Japan, we find ourselves in autumn — a season full of endings and beginnings. Trees shed their leaves and flowers lose their life essence as kids return to school. A sudden influx of overseas visitors inundate Tokyo while the pace at which projects are launched and deals are closed accelerates. New beginnings often introduce new faces. Here at the cccj, some governors have ended their terms and we see a new vice-chairman, Neal Van Wouw, and four new governors with strong business credentials join the board. With these appointments, the chamber needs to restart various committees (communications, events, new members, external affairs, csr and others) and engage with the membership to get more people involved. The cccj itself is back firing on all cylinders with a highly qualified new management team. Our new executive director Jim Zhang, senior advisor David Cotter and office manager Jody Pang will work to expand our membership and more effectively give voice to issues that matter to the chamber. To help create new business opportunities, in this edition of the magazine Warren Arbuckle outlines a new guidebook project the cccj is launching to encourage more foreign direct investment (fdi) in both Japan and Canada. If you are interested in supporting this guide, I hope you will contact us. On the diplomatic front, we want to extend a warm welcome to new Ambassador of Canada to Japan Ian Burney and a new Nagoya consul, Chénier LaSalle. Inside, Consul Lasalle outlines the unique types of support that the Canadian consulate in Nagoya can provide. We hope to feature Ambassador Burney, who was previously Canada’s top trade negotiator in an upcoming issue of The Canadian. His father, Derek Burney, incidentally, also was a diplomat who served in Japan and was Canada’s Ambassador to Korea. Ontario has been Canada’s leading manufacturing province for many decades but is building an exciting new

reputation for itself as an information and communications technology (ict) and biotech mecca. Premier Kathleen Wynne will soon make her first visit to Japan — the first by a sitting Ontario premier in 10 years — and we are delighted that the feature story for this edition of The Canadian can help her tell the story of what makes the province so successful and attractive to Japanese direct investment: its highly-skilled workforce, its diversity and its proven ability to build partnerships that shape the future. To provide an example of this, Ross McKenzie explains why WatCAR in Southern Ontario can be considered the most advanced automobile research centre in North America. All this and more is packed inside the winter edition of The Canadian. If you enjoy the magazine, please share the digital version with your friends and business associates. Stay warm and keep busy!

The Canadian / 05

Executive Director’s Note

JIM ZHANG

CCCJ EXECUTIVE DIRECTOR

I am honoured to be the new executive director of the Canadian Chamber of Commerce in Japan. My story in Japan goes back a long way, from being a student in an inaka (countryside) elementary school in Kagawa Prefecture to being the coordinator for international relations in the Japan Exchange and Teaching (jet) Programme in Ishikawa Prefecture. More recently, I worked at the Canadian embassy in Tokyo in the public affairs and trade sections. Having lived in China, Japan and Canada for nine, six and nine years respectively, I bring with me a variety of multicultural experiences and perspectives that will help in my new role championing the cccj. As the executive director, my familiarity with Japan and Canada will allow me to improve on the existing partnerships between Canadian and Japanese businesses. With the help of our team, the board of governors and every single member of this chamber of commerce, I will work to make it more sustainable by developing and refining management practices, meeting and exceeding financial goals, fostering warmer associations between our Canadian and Japanese members as well supporting and cultivating our membership — all while offering potential members new and innovative reasons to join an engaged chamber. I look forward to meeting and working with all members in the upcoming months. If you have any questions or comments about upcoming events at the cccj or becoming a member, feel free to contact me at jim.zhang@cccj.or.jp.

Advisor’s Message

DAVID COTTER

CCCJ SENIOR ADVISOR

I am very excited at this opportunity to work with the CCCJ as we build a more dynamic, responsive and sustainable chamber. My background is in corporate social responsibility (CSR), electoral politics, government, NGOs and nonprofits in the environmental sector. Over the coming year, my focus will be on membership growth, stakeholder relations, communications and event development. Our events will become more frequent, offering more value to members and those thinking of becoming one. These won’t just be social events for those who already know one another, but true opportunities to meet people who will help our businesses to grow both in Canada and Japan. I look forward to meeting and hearing from many of

you over the coming months. In this role, I will need your help. I want to know what the CCCJ can do for you and how we can better meet your needs. I will also need your help as we grow our membership. I would love to hear from you if you know of people, organizations or companies that would benefit from being a member. We will find new and innovative ways for you to bring friends and colleagues to events and develop interesting offers that will give them practical reasons to join the CCCJ. This CCCJ has a 40-year history of helping Canadian businesses to prosper in Japan, and Japanese businesses to grow and expand in Canada. With a new leadership, a committed board of governors and your continued participation and support, I’m committed to ensuring another next forty years of success.

The Canadian / 07

Embassy Message

REGIONAL TIES

Chénier La Salle is consul and senior trade commissioner at the Consulate of Canada in Nagoya, Japan.

BY CHÉNIER LA SALLE

Coming Back To Nagoya DEVELOPING CANADIAN BUSINESS IN JAPAN’S SECOND AND THIRD LARGEST METROPOLITAN AREAS My wife, my three children and I all arrived in Japan on the first of August this year. For my wife Noriko, coming back to Nagoya is a homecoming after leaving her native Japan in 2004 and spending the last 12 years abroad following her husband across Canada (Edmonton, Calgary and Ottawa) and the United States (Houston). She now gets to reside in the comfort of her hometown Nagoya. For me, it means returning to a country where I lived from 1994 to 2004. It also means coming back to a city where I went to university, met my wife and where our first two children were born. Nagoya, the heart of Japan’s third largest metropolitan area, is my second posting with Global Affairs Canada after Houston, Texas. What first struck me when I returned this year were the changes around the city’s main commuter rail terminal. Toyota Motor Corporation has built a flagship office around Nagoya station, breathing new life into that part of the city. I’ve also noticed that the central government, local prefectures and municipalities are joining forces to support the development of a Nagoya-based aeronautics industry centred on Mitsubishi Heavy Industries and its Regional Jet project. This strategy presents both a challenge and an opportunity for Canada’s own aeronautics industry. Although the consulate is located in Nagoya, it’s responsible for a large area in central Japan that includes the Tokai, Kansai and Shikoku regions — with a combined population of 42 million people. Just an hour southwest of Nagoya city, you’re in Osaka, the nexus for the country’s second largest metropolitan area with 19 million consumers. Its industrial and commercial footprint touches on all sectors: pharmaceutical, industrial manufacturing and a sizeable it presence, as well. Doing business in Japan for Canadian companies isn’t easy. It’s a challenging environment. For those willing to put in the effort, however, the rewards can make it all worthwhile. Beyond the obvious test posed by language, Canadian companies need to understand how the local market works and who the major players are — and these may change depending on the region. They also need to get good advice on how to pursue op-

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portunities. That’s where the Consulate of Canada in Nagoya can help. Trade development is a priority for us. All members of the team are locally engaged staff hired for their experience and extensive network of contacts in the region. Japan is a country with many regions with a dispersed population and industry. If your business is putting all its eggs in the same basket, it risks missing opportunities. Canadian companies wishing to explore the markets outside Tokyo — in Japan’s second and third biggest metropolitan areas — can rely on the Canadian Consulate in Nagoya’s expertise. Give us a call and let’s talk about your plans in the region. Consulate of Canada in Nagoya Nakato Marunouchi Bldg., 6F 3-17-6 Marunouchi, Naka-ku Nagoya 460-0002, Japan Telephone: +81-52-972-0450 (International) 052-972-0450 (Domestic)

The consulate is responsible for a large area in central Japan with a combined population of 42 million people

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Embassy Message

BOARDING PASS

Leniency Period Extended FOR CANADA’S NEW ELECTRONIC TRAVEL AUTHORIZATION To give travellers and airlines more time to prepare for changes when flying to or transiting through Canada, the government is extending the leniency period for the Electronic Travel Authorization (eTA) requirement until November 9, 2016. Canadian citizens, including dual citizens, cannot apply for an eTA and will need a valid Canadian passport to board their flight, starting November 10, 2016. Travellers without a valid Canadian passport may experience delays. All visa-exempt travellers (except U.S. citizens) will need an eTA to board their flight. In March 2016, Canada introduced the eTA requirement for visa-exempt foreign nationals travelling to Canada temporarily by air. A six-month leniency period was put in place so that travellers who are unfamiliar with the eTA could still board their flights to Canada. For more information (including information in multiple languages), please see http://bit.ly/canadaeta.

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The Canadian / 09

Special Report

HQ VANCOUVER

BY YUEN PAU WOO

A Natural Choice THE PACIFIC COAST CITY MAKES A PERFECT NORTH AMERICAN BASE FOR JAPANESE COMPANIES Vancouver is a prime example of a 21st century headquarters city. On its own, this sounds like a throwaway marketing phrase — brochure bland and just as disposable. But peel back the gloss and you discover what it really means: that Vancouver has the combination of geographic location, infrastructure, higher education, quality of life and competitive government policies to attract investment needed to pull together the diversity of talent and resources that define the 21st century global hub. It is the ideal setting for the modern company to set up shop, and all surrounded by the Pacific coast’s inspiring natural beauty. Japanese firms have been contributing to the British Columbia economy for many years — in sectors as diverse as automotive, heavy industry, infrastructure, energy and resources, technology, and digital media. Mitsubishi Corp. and Japan Airlines have had their Canadian offices in Vancouver for over four decades. But the business environment has only improved since these firms first set up shop in the city. A decade ago, the Asia-Pacific Gateway initiative coordinated government and private sector investments in upgrading metro Vancouver’s connective infrastructure — road, rail, port and airport — to improve the movement of goods and people within

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the region and to/from our major markets. Today, Vancouver International Airport offers 27 flights per week to Japan, the most from any Canadian airport, to Tokyo-Narita, Tokyo-Haneda and Osaka. In turn, Port Metro Vancouver is Canada’s largest and North America’s most diversified port, offering 27 marine cargo terminals and moving 138 million tonnes of cargo (95 per cent of it internationally) in 2015, valued at C$200 billion. Japan ranked second in 2015 in two-way trade with Canada in containerized goods handled by Port Metro Vancouver (over 2.6 million metric tonnes). Vancouver has long been Canada’s most important Pacific trading gateway, but that is not the end of the story, not the only thing that makes the city the budding global hub that it is. Vancouver is also an ideas and cultural gateway: a place for innovation and collaboration in the arts, sciences and technology. Its academic institutions are connected to research networks that span the globe. Sectors such as technology and digital media recruit top local talent, and design and produce for many markets, relying on their culturally diverse workforces to ensure their products (e.g. business software, mobile video games) will be successful and applicable in North America and beyond. Reinforcing all of this is the city’s high standard of living, essential

Special Report Yuen Pau Woo, is president of HQ Vancouver, a public-private partnership set up to attract head office activities of international businesses to Vancouver and the province of British Columbia. www.hqvancouver.ca

in attracting and holding onto the talent that helps drive all this innovation. Vancouver makes particularly good sense for Asian firms’ headquarters in the coming century. Its location on the edge of the Pacific Rim gives it a competitive edge: the Asian practice groups of many national professional services and advisory firms are led from Vancouver (many with a presence in Japan), and they offer excellent access and support to Japanese firms who do business and invest in British Columbia and across Canada. hq Vancouver, formed in 2015 as a public-private initiative between the governments of Canada and British Columbia, and the Business Council of British Columbia, is mandated to attract and facilitate the establishment of new head offices in the region. hq Vancouver also facilitates business community connections for these newly established bases, including with its wide network of mou partners in the advisory and professional services fields. Such collaborative efforts are yielding results for Japanese firms and for British Columbia’s economy. In spring 2016, hq Vancouver joined the government of British Columbia in celebrating Tokyo’s Valhalla Game Studios’ decision to open its international headquarters and North American studio in Vancouver. In July

2016, hq Vancouver signed a memorandum of understanding with Mizuho Bank Canada to jointly promote Canada-Japan business by encouraging Japanese firms to establish North American head offices in Vancouver. Many of its head office success stories cite common factors for their decision to locate in Vancouver, including: • • • •

competitive business setting (lowest corporate tax rate in North America) location (access to the Canadian and North American market) talent (highly educated, creative, skilled and culturally diverse local workforce) stable regulatory environment and high quality of life

For a city to be a world leader and shaker in this century — a headquarters nexus — it cannot be just a port city, or just a university town or a railway town. It must be all these things and more, all bound together in mutual support and enhanced by the promise of a fulfilling lifestyle for all who come there to work, to innovate, to keep that virtuous cycle rolling. That is what Vancouver has, and that’s why more and more international companies are locating “mind

Vancouver is an ideas and cultural gateway: a place for innovation and collaboration in the arts, sciences and technology

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and management” here, resulting in a diversity of head office functions from regional hqs to global product mandates to centres of excellence. Japanese companies looking for a North American base to access international markets need look no further than British Columbia — a home for global business.

Photo courtesy of McCarthy Tétrault

The Canadian / 011

Housing Trends

LENDING FRENZY

Adam German is from Brantford, Ontario. He’s lived in Japan for 13 years working with the most widely used, international real estate platforms across all levels of property management. Got a question? german@housingjapan.com

BY ADAM GERMAN

DIVE INTO REAL ESTATE FINANCING OPTIONS IN JAPAN ARE INCREASING FOR FOREIGNERS Real estate financing options, foreign and Japanese alike, have been getting better and better as the year progresses. And it’s a trend that looks to continue at least until the Olympics. In January of this year, the Bank of Japan shocked economists worldwide by announcing a tiered negative interest rate policy compelling every bank operating in Japan to hold a certain amount of its cash reserves in the BoJ. Any capital held in excess of that will have a -0.01 per cent interest rate applied to it. This means that the value of this cash will dwindle if the banks continue doing what they have been doing for the past 20 years: which mainly is hoard cash in the Bank of Japan. Why do this? A core tenet of Prime Minister Shinzo Abe’s financial plan — or “Abenomics” — holds that corporations will reinvest their artificial profits from last year’s weak yen into their employees in the form of raises. The thinking went that if employees were receiving regular raises, the average Japanese consumer would be more confident in planning their own future and thus would spend more of their savings. By extension, in addition to increased consumer spending, Mr. & Mrs. Tanaka would also be more apt to take on more debt in the form of loans — housing loans for example. Unfortunately, the reality is that corporations and labour unions alike have agreed on less wage increases this year compared to the previous one. A main reason often cited was the perceived worry about the sustainability of economic

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recovery under Abenomics. Abe, on the other hand, had basically done everything a government can conventionally do to assist the economy and blames the mega banks for strangling the country. So when the Bank of Japan announced negative interest rates in January this year, it hit retail banks large and small right in the gut. The BoJ’s message — lend or lose money. The basic premise being: easier access to capital should spur large purchases and innovation, which in turn breeds sustained success and thus a maintainable economic recovery. Why does this matter to you as a foreign individual or corporate entity in Japan? Whether you are long on Abenomics or not, if you have a home or investment property loan taken out prior to January 2016, it’s time to call your bank and ask for an interest rate reduction. Lending institutions are now targeting their competitor’s clients and are approaching them with lower interest rates. What is happening now is basically a refinancing frenzy. If you don’t own property and are put off from purchasing by rising prices in Tokyo (or Japan in general), remember that even without a permanent resident visa, you are still able to get financing that wasn’t available to international residents before. Purchasing a million dollar property with only $200,000 down in equity makes the investment dynamic a lot different than what was available previously — and a lot more immediate.

Chamber Insights Warren Arbuckle, is a governor of the CCCJ and founder of Focus Cubed, in Japan. www.focus-cubed.com

BILATERAL CONNECTIONS

BY WARREN ARBUCKLE

BUSINESS SUPPORT IN TWO LANGUAGES A CCCJ GUIDE FOR COMPANIES EXPANDING INTO JAPAN OR CANADA It’s one of the older truisms: There’s no such thing as money for nothing. In the language of the entrepreneur, this means that in order to make money one needs to spend an immense amount of time and effort finding the newest and most accurate information on setting up a business — especially in a foreign locale. Then there is the matter of support. There are in fact a fantastic number of resources for Canadians looking to do business in Japan and for Japanese looking to go the other way. However, without a map to these treasure troves of aid, the ambitious businessperson on a foreign shore may find themselves stuck on the beach asking, “How do I find them?” and “Who do I talk to?” Recently, Andres Fehr, a long-time Tokyoite and founder of Embermedia, came to me with an intriguing idea: to develop a business support guide as a one-stop source that collected and connected all of these assets. The guide would enable anyone to find what was available and provide the links and contact data to information that is often buried very deep and scattered all over the internet. As a member and governor of the Canadian Chamber of Commerce in Japan, I became enamoured with this idea. It fit perfectly with our mission to enhance relations and business endeavours between our two countries, providing a practical tool for many of our members. The main drawback for me was that assembling it sounded like a daunting task. But then, when I heard that Mr. Fehr had successfully produced two similar guides — one for the Swiss and one for the Japan Exter-

nal Trade Organisation (jetro) — I was convinced. Both guides continue to be featured prominently at official events in Switzerland and Japan. A INFOGRAPHIC HYBRID

The Canadian version is a close cousin of the Swiss example. After much analysis and discussion with cccj board members, jetro and a few very insightful suggestions from Arun Alexander and his team at the Canadian Embassy’s commercial section, we hit on a concept: a business support guide that combines the Canadian world in Japan with the Japanese world in Canada in a single volume with an emphasis on infographics — available both online and in print. The reason for dispensing with the oceans of dense text one might associate with business guides in favour of infographics is twofold. First, today there is just too much information out there. The infographics will allow readers to spot what’s relevant and useful without committing time to tedious sifting. Second, by using infographics we will be able to substantially increase the amount of data on each page. We will then provide links that connect to a huge number of sites for when you do want to deep dive into nitty-gritty specifics. The guide will have sections prominently featuring provinces, prefectures and industries in both countries, local support initiatives and the advantages of doing business there. Another feature is our directory of Canadian and Japanese businesses already established in each country, with a special emphasis on promoting cccj member companies.

The guide is being paid for by advertising revenues from businesses that wish to reach executives interested investing or expanding in Japan or Canada. We plan to publish in 2017 and are now canvassing to give our cccj members first option to advertise. Air Canada and the Alberta Office in Japan are the first cccj members to have signed on.

The guide provides the links and contact data to information that is often buried very deep and scattered all over the internet

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If you are looking for a way to work with the cccj, or if you or your company would like to become a member or advertise in the guide, please contact our office. Contact details are at www.cccj.or.jp

The Canadian / 013

014 / The Canadian Kathleen Wynne, the first female leader of Ontario, Canadaâ&#x20AC;&#x2122;s most populous province

Cover Story

MISSION ONTARIO

Supporting Innovative Collaborations PREMIER KATHLEEN WYNNE AIMS TO INCREASE TRADE AND PARTNERSHIPS WITH JAPAN What is the most important ingredient for economic success? If you ask Ontario Premier Kathleen Wynne, she’ll say talented people. “Without a doubt, our people are why Ontario is a magnet for investment and how we have stayed competitive in a global market,” she says. Since being elected as the first female leader of Canada’s most populous province in 2013, the premier has been busy building one of the world’s most promising knowledge economies — improving upon Ontario’s high graduation rates and Organisation for Economic Co-operation and Development (oecd)-leading levels of post-secondary achievement. To help create economic growth and good jobs — her number-one priority — the premier’s plan is helping more people get and create the jobs of the future by building a competitive, low-carbon business economy driven by innovative, high-growth, export oriented businesses. And a big part of that is attracting international investment and partnership to accelerate innovation and productivity in Ontario and around the world.

”Strong, meaningful relationships with international political and business leaders are critical to Ontario’s success,” says the premier, who also serves as Minister of Intergovernmental Affairs and has led several overseas missions during her time in office. That’s why the premier will travel to Japan this fall to meet with political representatives, business leaders and innovators in Tokyo and Nagoya. Along with the delegation from Ontario, Wynne will encourage partnerships within Japan’s strong information and communications technology (ict) sector. During her last three international business missions, Ontario companies signed over 200 agreements, delivering close to C$2.92 billion and generating up to 2,050 jobs. “Backed by our trusted financial markets and growing economy, Ontario is a top North American destination for investors from around the world,” says Wynne. She highlights Ontario’s highly skilled workforce, commitment to innovation and low business costs as key attractions. Ontario also provides easy access to

the US$20 trillion North American Free Trade Agreement (nafta) market and is internationally recognized as a hub for research and development in a diverse range of fields, including cleantech, ict and life sciences. The combination of these factors helped Ontario be named “the best place to invest in Canada” by Site Selection magazine. Ontario is Canada’s leader in attracting foreign capital investment and the fourth highest in North America. As the birthplace of OpenText, Ontario is home to world leaders in big data, cloud computing, microelectronics, security encryption, gaming, mobile payments, telecom and digital networks. Seven of the 10 largest tech companies in the world conduct research and development in the province and Ontario’s ict sector is larger than the economies of half of the world’s countries — accounting for almost C$32 billion of Ontario’s gdp in 2014. Through partnerships with Ontario companies, Japan can gain access to one of the largest ict markets in North America and continue to be at the leading edge of innovation on both sides of the Pacific.

The Canadian / 015

Premier Wynne tours Honda’s manufacturing plant and teaching location in Alliston, Ontario

Japanese automotive giants Toyota and Honda both launched their Canadian headquarters in Ontario

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“Japan is a valuable partner for Ontario, with two-way trade totalling more than $11 billion last year,” says the premier. “With our many shared priorities, it’s not hard to see why these numbers are growing and how we can continue to develop as economic partners.” But ict is only one natural area for collaboration between Japan and Ontario. Another shared strength is auto manufacturing. With advanced R&D facilities, world-class academic institutions and leading business solutions, Ontario is a hub of automotive breakthroughs. In January, Ontario was the first province in Canada to test automated vehicles and related technology on-road. With nearly 100 companies and institutions involved in the connected vehicle and automated vehicle industry in the province — it made perfect sense.

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Beyond their obvious novelty, these connected and automated vehicle technologies will deliver tangible improvements to the driver, the community and the environment — helping to improve fuel efficiency while reducing traffic congestion, greenhouse gas emissions and driver distraction. Ontario researchers are working to develop the next generation of vehicles for the low-carbon economy. Advanced lightweight materials and coatings, more efficient manufacturing processes, and alternative fuels will be key to Ontario’s continuing competitiveness. Japanese automotive giants Toyota and Honda both launched their Canadian headquarters in Ontario, from which they sold over 700,000 vehicles to markets across North America last year. Recognizing Ontario’s outstanding production quality and topnotch talent, Toyota now assembles Lexus vehicles in the province — the first time this had been done outside Japan. Honda has made its Ontario location a teaching plant for the manufacturing of Civics for all other Honda facilities worldwide. Because of these existing partnerships with Japan and other top manufacturing countries, Ontario has developed a reputation for generating leading automotive ideas and transforming globally-traded commercial products, especially automated and electric vehicles. This past summer, Fiat Chrysler Automobiles Canada announced Ontario as the production location for the world’s first plug-in hybrid electric minivan, and General Motors Canada chose Ontario to open its new Innovation and Urban Mobility centres. ict and auto manufacturing are just two examples of the many priorities and goals Ontario and Japan share, says Wynne. “Developing innovative, sustainable and strong economies in both Ontario and Japan is how we will enjoy shared prosper-

Cover Story ity, pioneer new technologies and bring more products to the global market.” This includes products that will help address emergent issues like climate change and aging populations. For instance, in Ontario over $14 billion is spent each year on R&D for projects ranging from life-saving vaccines to sustainable, connected devices. “Innovators thrive in our strong entrepreneurial system — we support them by accelerating the development, growth and success of their ideas from concept, to reality, to marketplace,” says Wynne. Ontario is a North American hub for innovation. It has the fastest-growing environmental and cleantech sector in

Japan is a valuable partner for Ontario, with two-way trade totalling more than $11 billion last year

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Canada, with $8 billion in annual revenues, 3,000 companies and employing over 65,000 people. The province is also a major centre for cleantech finance. The Toronto Stock Exchange (tsx) and tsx Venture Exchange (tsxv) list more cleantech and renewable energy companies than any other exchange in the world: 110 companies with a total market capitalization of $30 billion. Ontario is also a leader in the life sciences sector, exporting $83 billion in product and employing more than 61,000 people at about 1,900 organizations. As home to seven of the top 10 Canadian research hospitals, Ontario is one of the largest biomedical research centres in North America. Working across borders will support strong, innovative life science sectors in Japan and Ontario. “New discoveries in life sciences will help people in their everyday lives — from improving conditions for our aging populations to finding innovative cures to diseases,” says Wynne, who acknowledges that collaborative partnerships are the lifeblood of such sectors as life sciences, ict and cleantech. “Seeking new ways to share information and research will help generate results faster and with fewer resources for both Japan and Ontario,” she says. “We can achieve more together than we can apart.”

Ontario Premier Kathleen Wynne will be in Japan to build partnerships and promote Ontario’s strengths from November 28 to 30 before departing for South Korea.

QUICK FACTS •

Two-way trade between Japan and Ontario exceeds C$11 billion

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Japan is Ontario’s second-largest trading partner in Asia and fifth-largest globally

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Japan is the largest Asian investor in Ontario, with 279 Japanese companies employing over 23,000 people

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Since 2006, Ontario has had a trade office in Tokyo to promote investment, trade, science and technology opportunities

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Ontario is home to more than a third of Canada’s Japanese population

ONTARIO IS… •

#1 for investment in Canada, as per Site Selection magazine

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Canada’s leader in attracting foreign capital investment and fourth highest in North America

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Home to five major global automotive assemblers — including Honda and Toyota (including Hino)

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The first location outside of Japan where Toyota assembles Lexus vehicles

Premier Wynne and students in a first-year chemistry lab at University of Toronto Mississauga

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Cover Story

SPOTLIGHT

Ross McKenzie is the managing director of WatCAR at the University of Waterloo. In September, he presented at the G7 transport ministers meeting in Karuizawa, speaking on connected and autonomous vehicle activity in Canada.

BY ROSS MCKENZIE

Collaborative Research WATCAR: A DISTINCT CANADIAN ADVANTAGE

The University of Waterloo has engaged in automotive research for over 50 years. From a base in Canada’s largest engineering school, the activity has expanded across the campus and now encompasses all six faculties. Over 130 professors engage in automotive relevant research under Watcar, the Waterloo Centre for Automotive Research, one of the top five facilities in North America. In the last four years, significant investments in additional laboratory infrastructure have opened, providing even greater resources for automotive industry partners to utilize. Watcar researchers collaborate with all five assemblers building passenger vehicles in Canada, including Toyota and Honda. Watcar also works with Japanese partners through both the traditional automotive supply chain, including Denso and Showa, as well as the rapidly emerging in-vehicle information technology segment. Ideally located in the centre of Canada’s automotive cluster, a 425 km stretch running from Toronto to Detroit, Waterloo is surrounded by 700 automotive parts manufacturers, materials suppliers, transportation systems companies and service providers. In addition, Watcar is at an anchor end of the 100 km Toronto– Waterloo Region technology corridor, the second largest technology cluster in North America, home to 15,000 technology companies and over 5,200 tech startups. This overlay of clusters is the only one of its kind in North America, if not the world. Watcar researchers are at the centre of an in-vehicle fusion of technologies that is disrupting the automotive and transportation sectors with: • Next generation wireless communications and complex software • Highly connected vehicles and autonomous driving

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• •

CIARS Anechoic Chamber shown with Canadian made Lexus RX350 SUV. Courtesy Waterloo Centre for Automotive Research.

Vehicle lightweighting and structural crashworthiness Advanced powertrains and emissions reduction.

The University of Waterloo Centre for Automotive Research is an accomplished destination for companies looking to engage in North America-based collaborative research, testing and evaluation. Collaborative research offers industry an opportunity to engage specific expertise within academia, typically with funding support from government. Canada offers a more industry friendly approach, one that is often overlooked by private sector companies with operations in Canada. This applies to companies based in both Japan and the United States. In Japan, collaborative research is usually a prescribed process where industry applies to government for funding of a research project. The application is then reviewed and when funding is granted, the government can specify at which institution the project will be undertaken. The Canadian way is to reverse both processes, to industry’s advantage. Under its Scientific Research & Experimental Development (SR&ED) investment tax credit program, Canada offers some of the most lucrative tax credits in the world. In addition, Canada spends more per capita on its education system than any other country in the G7 and is among the top three countries for education spending. Japanese companies with Canadian operations are well advised to consider the advantages of collaborative research with an academic institution in Canada. Canada has a wealth of professors with specialized research competenPhoto credit / info cies at universities from coast to coast to partner with.

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Member Profile

YUKO NAKAMURA

BY JEFF W. RICHARDS Yuko Nakamura took a well-calculated risk leaving a safe and successful job as an executive head hunter in Japan and moving to Montreal. Wanting to elevate herself and get out of her comfort zone, she had a dream to become an entrepreneur. Montreal, with its great blend of European and North American culture, was the perfect destination People in Montreal highly regard women with entrepreneurial skills and being Japanese added that intriguing “Je ne sais quoi” quality to the mix that made her stand out from the other executives. She now divides her time between Canada and Japan working with the Akuntsu digital and serving on the cccj Board of Governors. Where in Japan are you from? Yuko Nakamura: Sagamihara, in Kanagawa. What started your interest in Canada? Do you speak English and French? YN: When I was a teenager, I saw Alegria and dreamt of working for Cirque du Soleil, so I left for Montreal hoping to work with them. Cirque du Soleil are now one of my clients. I am fluent in English and learning French by watching movies (with subtitles) and listening to French music like French singer Charles Aznavour and Harmonium from Quebec. How often are you in Canada? YN: I now spend half of my time in Canada, and the other half of my time in Japan since we have clients in both countries. You’re currently with the Akuntsu digital agency based out of Montreal and Tokyo. What is your position there? YN: I’m a senior partner, co-founder and vice-president for strategic operations at Akuntsu. In Tokyo, I am the head of our office. Since day one, I have been working exclusively with executives and decision makers in the sport, entertainment and lifestyle industries. What are Akuntsu’s brand liaison service in a nutshell? YN: We essentially help Canadian brands tap into the Japanese market and do the same for Japanese brands looking to go the other way. We believe that in a more

globalized economy, there is a growing needs for this kind of expertise. Currently, we mostly focus on sport, entertainment, lifestyle and technology brands. Sum up the biggest challenge about your current position in 10 words or less… YN: Transitioning a strictly service-

on trends, storytelling and members — similar to what The Canadian provides in each issue — it will continue to attract interest. The chamber needs to continuously take the time to explain the added value of becoming a member of the cccj. While it’s mostly about business, the chamber at its core is about the members and its ecosystem.

We need more Japanese women in business leadership roles based company to a service and product development one. What is the most innovative digital or mobile project you’ve worked on at Akuntsu? YN: Winning the worldwide contest to design the medals for the inaugural 2010 Youth Olympic Games was very special to me. We had to propose a design and get the world to vote for it via social media. From the top 10 short list, a jury unanimously selected our design. As the ioc president at the time told us: “You have made Olympic history.” The Olympic Museum in Lausanne, Switzerland now displays our design. You’ve been a member of the cccj since 2012. What made you want to join and eventually become a governor? YN: I wanted to become a governor because we need more Japanese women in business leadership roles. I am on a mission to help and inspire them to become entrepreneurs. Women’s entrepreneurship is the future of Japan. What is one thing the cccj could do to improve its social media presence and engage with its members? YN: The cccj has made progress in the last two years. If we continue to focus

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What is your favorite social media platform and why? YN: LinkedIn by far. I’ve connected with many executives that have become clients, strategic partners and many of them — ultimately — friends. Most of all, LinkedIn is about business — and I love doing business with great decision makers and innovative leaders. What are some common mistakes companies make when trying to leverage social media? What are some simple steps can they take to avoid them? YN: Never forget that it’s social first — then media. When we launched the first Uniqlo fan page on Facebook the byline was: “For the fans by the fans.” It’s about the community, not just the brand. What’s your favorite Canadian pastime? Are you a Habs fan? YN: Attending cultural events, like each new Cirque du Soleil show or other performances in theatre and film — especially those of my friend Francois Girard. He is well known in Japan for the show Zed and his work with Japanese artists. No, I’m not a Habs fan, but I do follow every step of the Canadian team during the winter and summer Olympics. My heart beats for the Japanese Olympic team first, though!

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CANADIAN CHAMBER OF COMMERCE IN JAPAN CHAMBRE DE COMMERCE DU CANADA AU JAPON

BECOME A MEMBER OF THE CCCJ

Benefits of Membership New and useful business contacts Exposure and promotion Local knowledge expertise Opportunities to participate Weekly Canadian newsletter What You Will Receive When You Join the CCCJ Entry to all events at member rates and exclusive invites to VIP functions Access to joint events sponsored by fellow chambers Special business and government briefings Listing in the annual Membership Directory Subscription to the The Canadian, CCCJâ&#x20AC;&#x2122;s magazine & digital app Periodic bulletins on key issues facing business in Japan Contact Us Email: members@cccj.or.jp Tel: +81 (0)3 5775-9500 7F Parkside Sepia, 3-13-10 Nishi-Azabu Minato-ku, Tokyo 106-0031 Japan

www.cccj.or.jp

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Employer Insights Colin P.A. Jones is a professor at Doshisha Law School in Kyoto and a director for the ManpowerGroup Japan, one of the oldest foreign-capitalized firms in Japan. With 126 offices around the country. Contact: colin.jones@manpowergroup.jp

WILLING AND ABLE

BY COLIN P.A. JONES

Photo courtesy of ManpowerGroup Japan

HIRING PEOPLE WITH DISABILITIES JAPAN ENCOURAGES MEANINGFUL SUPPORTED WORK PROGRAMS I recently asked a room full of non-Japanese law students to imagine a new legal ruling that they thought would make society better. One suggested requiring companies to have a workforce that is comprised at least 0.5 per cent of people with disabilities. He doubtless thought this was a revolutionary, highly progressive idea. The Japanese government, however, is already way ahead of him — by about 400 per cent! One of the things that can make doing business in Japan confusing for foreign companies is the different ways in which its government policies make them a part of the social welfare system. This is illustrated by a legal requirement that businesses with 50 or more full-time employees need to have at least 2 per cent of their workforce comprised of people with disabilities. This ties into an official benefits system of ranking disabilities based on type with those employees considered to have severe mental and or physical challenges allowing the com-

pany to receive more resources from the government to help with supported work programs and providing added incentive for smes to hire and train people with differing abilities. Conversely, failure to provide people with disabilities meaningful work invites a number of negative results — including administrative guidance and other heightened scrutiny from employment regulators, potentially being publicly named as non-compliant, and paying what amounts to a fine of ¥50,000 per month per disadvantaged employee below the quota. Unfortunately, while the goal of employing those with disabilities may be admirable, the reality is that many workplaces in Japan are not designed to be readily accessible to those with impairments, and even if they were, commuting is another significant hurdle to full participation in the work force. Accordingly, some companies simply accept the fine as a cost of doing business, though there are various offsetting

benefits and government subsidies from attempting to comply, particularly for smes. Alternatively, some use remote working schemes that enable workers who have disabilities to do data entry or piece work from home. Corporate groups are also able to establish special subsidiaries that can satisfy the employment requirements for the entire group. Note the requirement cannot be satisfied through the use of dispatched workers. The government is expected to increase the quota that employers must meet in 2018. Somewhat ironically, there is already said to be a “shortage” of disabled workers, and competition for these human resources is fierce. As one of Japan’s oldest workforce solutions providers and a World’s Most Ethical Company, ManpowerGroup is committed to actively fostering employment of those with disabilities. It also offers placement and recruiting services for handicapped workers as part of its full-service suite of workforce solutions.

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Asia Pacific View

LETTER FROM VANCOUVER

BY JOSEPH CARON

Due Diligence DON’T ASSUME YOU KNOW HOW TO DO BUSINESS IN JAPAN Whether we’re talking about doing business in Canada or Japan, everything begins and ends with you and your company — its balance sheet, overall strategy and business objectives, financial capacity, short- and long-term priorities, managers’ expectations, staff, customers and shareholders (if publicly traded). In addition, since we are addressing a market outside Canada, it is necessary to recognize that, from a business perspective, this is about managing costs and resources over the long term. It’s useful to think that there are two companies involved: your company now in 2016 and your company as you envision it in, say, 2020. Simply put — businesses can sell or source goods or services to Japan. They can also encourage Japanese to invest, either as a shareholder or an M&A partner of one sort or another. Businesses can then use Japanese marketing and investment skill sets to penetrate other markets or access Japanese technology. They can integrate some of their activities within Japanese-led manufacturing chains. Your first challenge in thinking this through will likely be from within your own company: why go to long-stagnant Japan — with the attendant costs in airfare, hotels, meals and interpreters — when you can go to China or Indonesia or India (where growth is higher), or the good ol’ u.s.a., still Canada’s No. 1 economic partner? I have three responses to this skepticism: Japan’s economy is still large, complex and a key driver of global business; its macroeconomic variability means ample opportunities for Canadian firms; and Canada’s already high market penetration in resources plus foodstuffs, services and technology.

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DOING YOUR HOMEWORK

I always advise Canadians to do their homework well before getting on the plane. I encourage them to take advantage of today’s connectivity and transparency to get market and other information to help decide if your business objectives align with Japan. Doing your work in advance is also a chance to identify Japanese firms relevant to your business, as well as to familiarize yourself with trading companies and government-backed bodies such as the Japan External Trade Organization (jetro) and the Japan Oil, Gas and Metals National Corporation (jogmec) — both with offices in Canada — looking for investment and tech opportunities. Part of your due diligence is determining which of these organizations can help you define the opportunities and challenges in Japan. You need to have this kind of information to justify the time and expense of discovering if there are business opportunities for your company in and with Japan. A FEW JAPAN LESSONS

The most important lesson I learned over 40 years of involvement with Asia is this: never assume anything. Yes, Japan has banks and contracts and customs tariffs and regulations that look similar to their Canadian counterparts on the surface, but we can’t let what these things mean to us get in the way of what’s really going on. It’s vital to ensure that your understanding of products and services, distribution channels and attendant costs, as well as regulations, business transaction documents and financial arrangements,

Asia Pacific View Joseph Caron is the former Ambassador of Canada to Japan, an honorary professor with the Institute of Asian Research at the University of British Columbia and a distinguished fellow with the Asia Pacific Foundation of Canada. www.josephcaroninc.com

are correct. For example, do not assume that a contract is a contract is a contract, as it is generally understood in the u.s. or Europe. A contract in Japan can be closer to a conditional gentlemen’s agreement — with implied flexibility. As the majority of Japanese do not speak English, make sure to bring your own interpreter who is informed of your business objectives and is as determined as you are to understand all of the elements of the deal. Do not rely on your business partner’s interpreter, as they may be using Japanese understanding of words and concepts. Even if you are dealing with English-speaking business people, do not assume that their understanding of issues is the same as yours. Confirm and verify. It’s not that Japanese business people are any less honest than the average Canadian. Indeed, ethical behavior in Japan is among the most exemplary in the world. But the mechanics of institutions and practices are frequently different from our own. Canadians and Americans in particular cannot stand a vacuum in any conver-

sation. We all feel the need to fill it. Don’t. Let your Japanese business partners tell their stories. Draw them out. Of course, fully respond to their questions, but focus the attention on them and their company, business practices and experience. Also, don’t hesitate to ask the same question from another angle until you are sure you understand the response. Probe, listen, and learn. If your company is selling goods or services that have high public policy content, make sure that you situate your offering within the Japanese regulatory framework. Despite the eroded credibility of some institutions, bureaucrats still hold tremendous negative — and some degree of positive — power. Doing business in Japan is no simpler than doing business in Canada. Going outside your comfort zone only makes sense if the market can help you achieve your objectives. The case for doing business with your Japanese corporate counterparts and in the Japanese market is found within your business objectives and the diligence you devote in matching these with opportunities available in Japan.

The most important lesson I learned over 40 years of involvement with Asia is: never assume anything

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Timeline

LOOKING BACK

PAST EVENTS CHAMBER GOINGS ON AND BEYOND

CCCJ AGM & BOARD OF GOVERNORS ELECTION — September 29 The CCCJ held its annual general meeting at the Canadian embassy in Tokyo on September 29, 2016. The meeting was a review of the year past and an opportunity to announce the election of a new vice-chair to replace outgoing Eric De Groot (who is staying on as a governor) and four new members of the CCCJ Board of Governors. The new vice-chair of the CCCJ board is Neil van Wouw (Vanten K.K.). Newly elected or re-elected were Kiyo Weiss (Air Canada Japan), Claire Deronzier (Quebec Delegate General to Tokyo), Warren Arbuckle (Focus-Cubed) and Shawn Lawlor (Canada Wood Group). Following the meeting, guests enjoyed an evening of fine Canadian wine, sipping on nine selections from the Okanagan Valley, Nova Scotia and Niagara along with some perfectly paired breads and cheeses.

5TH GENDER DIVERSITY ROUNDTABLE — July 14 The final edition of the gender diversity think tank — led by CCCJ honorary board advisor Akiko Kosuda — discussed the importance of engaging top executives to promote equality in the workplace. A group of 12 executives composed of women and men from Japan and abroad met the Roppongi Hills Club to share ideas about how and why executives must understand the economic reasons for increased diversity at work.

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A NIGHT OF SAKE — September 16 Over 200 thirsty guests crammed the ballroom of the Tokyo American Club for the first annual charity sake tasting night, held in partnership with the American, German, South African and Danish chambers of commerce. Over 60 different types of nihonshu (sake) from 22 breweries were enjoyed at the event that raised ¥140,000 for the Nadia organization, an NPO founded after 3/11 and dedicated to helping disaster victims in Japan.

MCGILL MBA WORKSHOP

— September 30 Members gathered for a workshop at the Roppongi Hills Club on the art of the deal. Attendees learned how to prepare for key negotiations, the importance of separating relationship building from hard-nosed deliberations and how to weaken the other side’s position. Organized by McGill MBA and the CCCJ, participants were taught never again to leave so much value on the table. We will close only good deals from now on.

Calendar

DATEBOOK

Events/

AUTUMN 2016

DECEMBER

CCCJ Joint Chamber Bonenkai 2016 Mark your calendars for the 23rd annual Joint Chamber Bonenkai, the year-end networking party that attracts a diverse crowd of approximately 300 businesspeople from a variety of domestic and international business chambers from across Japan. Guests will be welcomed to the Canadian Embassy in Japan for one of the finest bonenkai parties in Tokyo, complete with a grand standing buffet, free flow drinks, prizes and entertainment. Last year’s party attracted a lively crowd from 10 different chambers of commerce. CareerEngine — partner with 13 different chambers of commerce in Japan, representing more than 2,000 companies — our generous sponsor, will be providing an array of eclectic prizes along with sparkling wine to help get everyone in the spirit. This is a great chance to network, make new friends and maybe even develop a few new business leads — or even walk away with some great door prizes! Date: December 8, 2016 | Time: 6:30-8:30 p.m. | Location: Embassy of Canada to Japan | Cost: ¥8,500 (members), ¥12,000 (non-members) www.cccj.or.jp/en/event/cccj-joint-chamber-bonenkai-2016

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Calendar

DATEBOOK

28 9

NOVEMBER

Cross-Cultural Mediation Skills Training Doshisha University and the Straus Institute of Pepperdine Law School are for the first time offering in Tokyo an international version of Pepperdine’s popular intensive mediation training program. Open to lawyers, managers and other professionals who study or deal with dispute resolution, this all-English program will give participants the skills needed to help resolve disputes in a crosscultural context. CCCJ members who sign up before October 31 will receive an additional ¥20,000 discount. Contact Colin Jones (cjones@mail.doshisha.ac.jp) for details.

OCTOBER

Okayama Art Summit 2016 ) The Okayama Art Summit 2016 is the first edition of a new contemporary art triennial in Okayama City featuring 31 artists from across the globe — including Canada. Visitors explore this exhibition across the city via two routes — either as an individual ”camera” or as “collective subjects.” with interaction between visitors and artworks, other visitors and local people.

Date: Nov. 28 - Dec. 3, 2016 Time: 9 a.m. Location: Doshisha University Tokyo Satellite Campus Cost: ¥240,000 http://law-school.doshisha.ac.jp/00_info/pdf/mediationskillstraining01.pdf

Date: Oct. 9 – Nov. 27 Time: 9 a.m.-5 p.m. Cost: ¥1800 Location: Okayama Castle and surrounding facilities www. okayamaartsummit.jp

NOVEMBER

Cirque du Soleil Totem The world-famous Cirque du Soleil will finish its 13th tour of Japan in March 2017 with Totem. The production recently finished its Tokyo run and will now head to Nagoya before performing its final Japanese shows in Fukuoka. This evolution-themed performance traces the fascinating journey of humans from the original amphibian state to the ultimate desire to fly by exploring how curiosity, ambition and passion drive us to make the impossible possible. A colourful and humorous spectacle for all to enjoy. Date: Nov. 10-Jan. 15, 2017 (Nagoya), Feb. 3-Mar. 19, 2017 (Fukuoka) 2016 Cost: ¥6,500-13,500 Location: Nagoya Big Top & Fukuoka Big Top www.cirquedusoleil.com/totem

March CCCJ Maple Leaf Gala The CCCJ is once again planning its popular annual Maple Leaf Gala. This is the flagship Canada-Japan community event in Tokyo and 2017 will mark its 38th year. As always, the CCCJ events committee is preparing a festive evening of prizes, entertainment and, of course, an excellent selection of fine Canadian food and wine. Date: March 2017 Time: 6:30-11:45 p.m. Cost: TBA Location: Tokyo American Club www. cccj.or.jp/en/events

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Chamber Voices

BLEND TRENDS

Karl Pires is an M&A partner at the international law firm White & Case based in its Tokyo office focusing on crossborder transactions involving Japanese corporations.

BY KARL PIRES

EMERGENCE OF CONVERGENCE TECHNOLOGICAL INTEGRATION IS FUELLING LOCAL M&A GROWTH FinTech. Digital health. The Internet of Things (iot). You may have recently heard these terms or other trending new terminology bandied about around the water cooler or at a networking event. Or perhaps you have noticed them popping up with rising frequency in your Twitter feed or in articles posted by your LinkedIn connections. And there will undoubtedly be an increasing flow of newly emerging jargon to match the newly emerging technology that appears to appear with each passing day. Most of this lingo has a common underlying basis: it reflects the onset of a new era of rapidly advancing and converging technology with traditional industries that has resulted in the ongoing global transformation of the manner of delivery of goods and services worldwide — from health care (like remote robotic telesurgery) to entertainment (Apple tv and Netflix) and telecommunications (smart phones) to transportation (driverless cars). In order to gain an edge on competitors (or often to simply remain competitive and viable as an industry player) it’s critical for many companies to be able to offer the latest technologies and have an research and development team that is capable of developing new applications from them. As a result, global corporate growth strategies revolving around technological convergence have triggered a surge in cross-sector, cross-border M&A transactions that are intended to achieve these objectives as quickly and efficiently as possible. Why do companies consider M&A to be an effective means of successfully attaining their convergence goals? Let’s consider this strategy within the burgeoning digital healthcare sector. Digital healthcare blends life sciences

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and technology. By exploiting cutting edge advances in areas such as collecting and analyzing data, remote monitoring and wearable devices, traditional healthcare companies have the opportunity to not only improve early diagnosis and patient outcomes but also potentially greatly reduce healthcare costs through improved efficiencies and synergies among the var-

Global corporate growth strategies revolving around technological convergence have triggered a surge in cross-sector, cross-border M&A transactions

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ious participants in the global healthcare market. For a country like Japan, which faces escalating healthcare costs due to its aging population and is plagued by a highly inefficient and wasteful decentralized system of healthcare delivery, both cost reduction and improved efficiency are essential to maintaining a workable and effective healthcare system in the coming decades. Accordingly, it will be critical for life science companies to be in a position to easily access and implement leading digital healthcare technologies.

But a traditional life sciences company is not usually equipped with the infrastructure or personnel to organically grow on the purely technological side. They likely would not have a team of software developers with expertise in data analytics software sitting on the bench waiting to jump over the boards to get in the game when called upon. And, as a life sciences company, it would likely prove to be quite difficult to convince any such software developers with the desired expertise to leave their existing technological company employer to join an industry they are unfamiliar with. For these reasons, among others, a life sciences company eager to jump start its digital healthcare capability would likely find it much easier, quicker and less costly to identify and acquire an appropriate technology company target via an M&A transaction rather than to try and organically develop such capability internally on its own. Even if a significant premium may need to be paid above the enterprise value of the target company, the potential future gains from the synergies that may be realized through technological convergence would likely significantly outweigh the initial investment in the long run. The pursuit of M&A that will accelerate technological convergence strategies of a company has not only had a meaningful impact on the global M&A market in terms of the number and aggregate value of deals but has resulted in corresponding increases in M&A activity — both inbound and outbound — in Japan. Given the prominence of Japan globally in both the healthcare and financial industries, we can only expect even greater M&A activity in the Japanese market as technological sectors such as digital healthcare and FinTech continue to fuse.

Retrography

SILVER PRINT

PHOTO COURTESY EMBASSY OF CANADA, TOKYO

FIRST LEGATION — Dr. Hugh Llewellyn Keenleyside Born in Toronto in 1898, Hugh Llewellyn Keenleyside was an academic, public servant and diplomat posted to Tokyo in 1929 where he assisted in opening Canada’s first legation in Japan — only seven months after joining the department of external affairs. He served as secretary and later chairman of the Permanent Joint Board of Defence during World War II and during that time also co-founded an Ottawa college that later become Carleton University. Throughout the war, Keenleyside maintained an uncompromising opposition to the incarceration and the suspension of rights of Canadian Japanese. Keenleyside wrote in-depth books on Canada and the United States as well as two volumes of memoirs. He received the Pearson Peace Medal of the UN Association of Canada in 1982. Shortly before his death in 1995, the University of British Columbia established an endowment in his name for studies in Canadian diplomacy.

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