So you’re thinking about international expansion to Japan! Like all business moves, there are risks, but if the opportunities outweigh, then Japan may just be the ideal destination for your global business expansion. A few areas to consider for Japanese expansion potential include economic stability, industry strengths, labor market, and investment opportunities.
Japan’s economy is a highly developed free-market economy that has long been ranked highly, especially for competitiveness. Japan is still in recovery from the pandemic, but the government vows to reinvigorate the sluggish economy through strong fiscal measures.
Japan is a global leader in science and technology, especially automobiles and robots. The government is looking to increase automobile exports, but with heavy reliance on imported raw materials, that may prove not easy. Japan’s current largest sector is the service industry, accounting for about 70% of its total economic output. Still, Japan’s industries are very diversified, and most sectors are advanced and highly successful.
Japan’s labor market includes lifetime employment and seniority-based career advancements. Unfortunately, the labor force has been decreasing slowly over the years, so companies have used different strategies to secure labor, such as employing women and foreign workers, on top of relying on the high participation of the elderly.
Cumbersome regulations can slow new business growth, but a combination of structural changes and undervalued equities has made Japan a candidate for growth in the near future. Investors can take advantage of the political stability, stringent corporate governance, and low valuations that make Japan an excellent investment.
Before expanding to Japan, business leaders should consider the risks and find ways to mitigate them if there are opportunities that align with their business goals.
If you’re interested in entering a market with growth potential, Japan might be your next destination. For more information, please download our Destination Guide: Japan below.
