“Japan Market Entry” for High Tech Ventures
Mr. Ryoichi Nakano, Osaka Chamber of Commerce and Industry, Manager, GVF Secretariat

Global Venture Forum (GVF) is a global business matching event for high-tech venture companies that has been held in October every year since 1995 by the Osaka Chamber of Commerce and Industry (OCCI). This event started with the purpose of offering opportunities for companies around the Kansai area to be matched with Japanese and foreign high-tech venture businesses. One of the major reasons why GVF is so highly respected is that the participating companies are required to pass various assessments of items such as their creativity, novelty and the marketability of their business plans- the Nominating Committee at OCCI does the assessing (20-25% are accepted). At the event, there are “pre-arranged business meetings” and a 25-minute presentation allowing each presenter a chance at technology/business alliances, joint research opportunities, and fund-raising. This month’s Bridge Builder is Mr. Ryoichi Nakano, Manager and GVF Secretariat for the Osaka Chamber of Commerce and Industry who works on the implementation of Japan entry by foreign ventures.

Q. Mr. Nakano, will you tell us about yourself and your career with OCCI?

A. Right after graduating Osaka City University with a Law major in 1985, I joined the Osaka Chamber of Commerce and Industry. At the beginning, I was involved with various project facilitations around the Osaka and Kansai areas through the Regional Development Division. After that, I was assigned to the International Division where I began being engaged in business matching between Japanese and foreign companies through implementing various events such as the World Fashion Fair 89 and the Global Business Opportunities Convention. Later, at the Venture Business Promotion Office of the Industry Division, I was involved in fostering and support of both domestic and overseas companies mainly related to IT and biotechnology industries. During this period, I also worked for the Embassy of Japan in Pakistan as an Economic & Commercial Attache for 2 years (1991 through 1993) performing economical analysis of Pakistan and work on promotion of traded and investment between Japan and Pakistan.

Q. Please describe the Osaka Chamber of Commerce & Industry and GVF in more detail.

A. Our organization is involved with support for both domestic and international venture companies. In particular, the Global Venture Forum (GVF) is responsible for helping overseas venture firms enter the Japanese market. For last year’s GVF, we selected from 90 international applicants allowing 25 companies from 7 different countries and 10 Japanese companies to participate. Of the 25 foreign companies, 15 were from the United States; the number of participants from California is always the greatest (4 participants last year). Many Japanese companies visiting GVF as attendees recognize it as a business event for international ventures with a high level of technology. Besides GVF, we also welcome some high-tech companies to Osaka that are dispatched through International economic organizations. For example, we received Korean IT venture companies last year and facilitated a convention of business-plans presentation for biotechnology related venture companies and organizations from the Pennsylvanian Government in March of this year. With these activities, we are trying to make Osaka/Kansai a hub for interaction between Japanese and international companies.

Q. GVF and your role sound very exciting. What is the most interesting thing about working with Ventures?

A. As I mentioned before, the companies that participate in GVF are all selected for the superb quality of their technology or because they have business plans with great potential. In the process of selection, we often recognize unique technologies and/or business plans that cannot be found among Japanese companies, and this is extremely interesting. On the other hand, sometimes we spend lots of time and effort figuring out suitable matching, because technologies can be too complicated or highly developed for some Japanese firms. I feel most helpful to participants when a business meeting between companies leads to something positive. This is the moment that I feel a sense of fulfillment of my responsibilities at the GVF.

Q. On the other hand, what are the challenges you encounter?

A. First of all, it is a challenge to appropriately identify as many Japanese companies as possible that meet the needs of foreign companies. For some complicated technologies we need to explain to the Japanese firms the great potential demand for the technologies in the near future. However, it seems to be difficult for them to be interested in technologies that they can’t get in operation right away. Another challenge is cancellation from participants at the last minute. There can be cases of Japanese companies that wind up with no meetings at the GVF if all three foreign applicants call off their participation. This affects not only our administrative ability, but also the perceived reliability of those companies and their countries as well.

Q. Japan is seen by many US high-tech companies as a double-edged sword. It's a very attractive market but also difficult to penetrate. What are some of the success stories you've seen of Japan Market Entry though GVF and what were the keys to those ventures' success?

A. In comparison with European markets, Japan might seem to be more difficult for U.S. companies. It is not an easy task to bridge the communication gap due to the language barrier. Japan probably has the smallest population of English speakers among all the developed countries in the world. However, we should remember that every country has its own business habits, systems and preferences. Thus, it is necessary for countries planning to enter foreign markets to do careful research beforehand. In that sense, I don’t think that Japan is a special case. Japanese companies have a tendency to put greater weight on name value and past results to measure reliability than do companies from other countries. Even though a foreign company has excellent technology and a great business plan, it should know exactly where to approach first in Japan. The foreign firm might end up wasting time and money by sending out direct mails and e-mails to strangers at Japanese companies. From my experience, it is faster for these companies to start with either people or companies that have good access to the Japanese market. This improves the perceived stability and reliability of the company. GVF can provide foreign companies with an opportunity to gain “trust” from Japanese companies because of the stringent screening process. Last year there was a U.S. company that had a technical consultant who used to work for a leading electronic appliance maker in Japan. A number of companies lined up for business meetings with this U.S. company not only because it was selected, but also because the Japanese companies could sense the reliability of the consultant’s background. This company actually has closed a business deal with one of the Japanese companies.

Q. I understand you are presenting GVF in more detail in April here in Silicon Valley. What should we expect to hear at this seminar? Details?

A. At this point, we are planning to hold an orientation of the GVF in San Jose either on April 18th or 19th (you can check the specific date in our website later). We’ll show attendance at past events and results through video, and introduce them to our announcements, application process, criterion for selection and schedules as well as what the GVF does.

Thank you Mr. Nakano. High-tech companies that are interested in Japan market entry and the GVF, Please contact Mr. Nakano at nakano@osaka.cci.or.jp Also you can take a look at the contents of the GVF from their website at http://www.gvf.ne.jp/e

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