Blogs and Articles from Third Way Forum Membrs
Feb 16, 2023
Discussion#2
“Concept “New Dejima”: Can we create a separate international business district in Japan and make it a regional business hub?”
Blogs from The Third Way Working Group
- To create a special economic zone, exclusivity is important. Japan has been trying to boost business by designating several big cities such as Tokyo, Osaka, Nagoya, Fukuoka etc as National Strategic Special Zones（国家戦略特区）but this approach does not provide any exclusivity and the majority still remains as domestic Japanese people conducting business in domestic ways in those areas.
- Density of international people is necessary to create an international business hub. Transforming a small local town into an international hub for a specific business purpose is an realistic approach and it’s happening with some ski resorts in Japan. For instance, Niseko in Hokkaido already has 90% of its people as foreigners.
- Once you secure the density of international people as the majority, more foreigners come to join them. Just like in good old days in Roppongi at night. (not any more…)
- Some cities are organically increasing foreign residents such as Nishikawaguchi(Chinese), Nishikasai(Indian), Warabi(Muslim), Ooizumimachi(Brazilian) etc. and they are developing their own ethnic flavors. Although this type of cities may grow as immigrant cities, they probably don’t develop as international business hubs due to the density of one particular ethnic group. More like a China town rather than an international hub.
- The fundamental necessity is accessibility for foreigners to fulfill their basic needs to conduct sound life and business activities in English without complicated Japanese process. There should be no daily communication difficulty for foreigners at all as the bottom line.
- Setting up a subsidiary in Singapore was very easy for Charles. Also, when I was just searching some info about Dubai’s free trade zones, some live chat popped up several times from Dubai people ready to help me set up a business there!
- In Japan, still many foreigners can not even open their private bank accounts in English without going through super complicated process with many paper works. (Is it going to change if it all becomes paperless and/or Crypto currency?)
- In order to create a business hub, just securing a density of international people is not enough. We need to create a scheme to attract foreign businesses. Special Economic Zones overseas often attract foreign businesses/talent in the following manners:
> Massive tax benefits (no corporate tax, no income tax, 50 year tax examption etc)
> 100% foreign ownership
> A very quick and simple process (HK announced its plan to accept 10,000 knowledge workers in December 2022 and already 7,000 people’s visa got approved in February 2023!)
> Designating districts for specific industries, e.g. banking district, health care district, tech district etc, to gather like-minded business people together to boost the industry itself in a concentrated manner.
- As financial services are the core of the business activities, it is essential that we create an international financial hub. Tokyo has been trying to be an international financial hub for decades but miserably failed so far. One of the reasons is that HK and Singapore markets are clearly focused on off-shore businesses. Global companies come to be listed there for offshore businesses. London and NY markets are clearly focused on on-shore businesses. Global companies come to be listed there for onshore businesses. For foreign companies, Tokyo is not for off-shore and not attractive for on-shore either. So they have no compelling reason to be listed there. But without companies coming to be listed in the Japan’s markets, Japan can never be a financial hub.
- So what are the kind of businesses and industries we are trying to invite from overseas in our New Dejima? Just being international is not good enough. We need some attractive differentiation.
- Until recently, many blue collar workers have lost their jobs due to automation. Now due to ChatGPT and advanced AI, white collar workers will lose their jobs too. Smart cities are popping up everywhere in the world. And now the knowledge workers are divided into two groups, namely, white collar workers whose jobs will be taken over by AI and “Gold Collar” workers whose creative jobs can not be replaced by AI. In this case, we should aim at creating a new business district focused on Gold Collar workers.
- But what would be the Gold Collar jobs that can not be replaced by AI and can make Japan super competitive and advanced in the global business world? Anime?
- Given the majority of old people in Japan, it seems very challenging to compete in the digital tech field with other countries like India where there are much more digital native young people. Just as a wild-card idea, how about offering a super international but analogue district where people can be free of smart phones? There is a growing movement among Generation Z who want independence from their phones and going back to analogue ways of communications. If our New Dejima offers all English global standard practices, but when it comes to communications among people, they actually meet and talk with each other just like in good old 1980’s, maybe as a totally different and liberating experience, a lot of young people from all over the world may want to come. Also, the older Japanese can add value in strong Japanese analogue technologies and omotenashi services etc as long as they speak fluent English and have global mindset.
- Or……we can go another extreme and make this Dejima a total virtual experience maybe in Metaverse?
- We will continue the discussion next time.
- Density of international people is necessary to create an international business hub. Transforming a small local town into an international hub for a specific business purpose is an realistic approach and it’s happening with some ski resorts in Japan. For instance, Niseko in Hokkaido already has 90% of its people as foreigners.
- Once you secure the density of international people as the majority, more foreigners come to join them. Just like in good old days in Roppongi at night. (not any more…)
- Some cities are organically increasing foreign residents such as Nishikawaguchi(Chinese), Nishikasai(Indian), Warabi(Muslim), Ooizumimachi(Brazilian) etc. and they are developing their own ethnic flavors. Although this type of cities may grow as immigrant cities, they probably don’t develop as international business hubs due to the density of one particular ethnic group. More like a China town rather than an international hub.
- The fundamental necessity is accessibility for foreigners to fulfill their basic needs to conduct sound life and business activities in English without complicated Japanese process. There should be no daily communication difficulty for foreigners at all as the bottom line.
- Setting up a subsidiary in Singapore was very easy for Charles. Also, when I was just searching some info about Dubai’s free trade zones, some live chat popped up several times from Dubai people ready to help me set up a business there!
- In Japan, still many foreigners can not even open their private bank accounts in English without going through super complicated process with many paper works. (Is it going to change if it all becomes paperless and/or Crypto currency?)
- In order to create a business hub, just securing a density of international people is not enough. We need to create a scheme to attract foreign businesses. Special Economic Zones overseas often attract foreign businesses/talent in the following manners:
> Massive tax benefits (no corporate tax, no income tax, 50 year tax examption etc)
> 100% foreign ownership
> A very quick and simple process (HK announced its plan to accept 10,000 knowledge workers in December 2022 and already 7,000 people’s visa got approved in February 2023!)
> Designating districts for specific industries, e.g. banking district, health care district, tech district etc, to gather like-minded business people together to boost the industry itself in a concentrated manner.
- As financial services are the core of the business activities, it is essential that we create an international financial hub. Tokyo has been trying to be an international financial hub for decades but miserably failed so far. One of the reasons is that HK and Singapore markets are clearly focused on off-shore businesses. Global companies come to be listed there for offshore businesses. London and NY markets are clearly focused on on-shore businesses. Global companies come to be listed there for onshore businesses. For foreign companies, Tokyo is not for off-shore and not attractive for on-shore either. So they have no compelling reason to be listed there. But without companies coming to be listed in the Japan’s markets, Japan can never be a financial hub.
- So what are the kind of businesses and industries we are trying to invite from overseas in our New Dejima? Just being international is not good enough. We need some attractive differentiation.
- Until recently, many blue collar workers have lost their jobs due to automation. Now due to ChatGPT and advanced AI, white collar workers will lose their jobs too. Smart cities are popping up everywhere in the world. And now the knowledge workers are divided into two groups, namely, white collar workers whose jobs will be taken over by AI and “Gold Collar” workers whose creative jobs can not be replaced by AI. In this case, we should aim at creating a new business district focused on Gold Collar workers.
- But what would be the Gold Collar jobs that can not be replaced by AI and can make Japan super competitive and advanced in the global business world? Anime?
- Given the majority of old people in Japan, it seems very challenging to compete in the digital tech field with other countries like India where there are much more digital native young people. Just as a wild-card idea, how about offering a super international but analogue district where people can be free of smart phones? There is a growing movement among Generation Z who want independence from their phones and going back to analogue ways of communications. If our New Dejima offers all English global standard practices, but when it comes to communications among people, they actually meet and talk with each other just like in good old 1980’s, maybe as a totally different and liberating experience, a lot of young people from all over the world may want to come. Also, the older Japanese can add value in strong Japanese analogue technologies and omotenashi services etc as long as they speak fluent English and have global mindset.
- Or……we can go another extreme and make this Dejima a total virtual experience maybe in Metaverse?
- We will continue the discussion next time.
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