A more insightful look at Japan
Mr. LE Trieu Dzung
Multilateral Trade Policy Department
Ministry of Industry and Trade
The Institute for International Studies and Training has been operating the CLMV Leadership Program since 2006 to promote trade and investment and other economic activities in the Mekong region and strengthen economic ties between Japan and the CLMV countries. The 5th CLMV Leadership Program took up the theme of promoting industries using local resources. The 12 program participants included government officials in charge of SME promotion and senior executives from economic associations from Cambodia, Laos, Myanmar and Vietnam. One participant, Mr. Le Trieu Dzung from Vietnam’s Ministry of Industry and Trade, contributed his thoughts on the program.
With the ever increasing integration in Southeast Asia, Cambodia, Laos, Myanmar and Viet Nam (CLMV), as newer members of the Association of Southeast Asian Nations (ASEAN), are making efforts to bridge development gaps with other more developed economies in the regions. Sharing the common advantage of having natural endowments, including local resources, and all are industrializing their economies, the 5th CLMV Leadership Program, which focuses on local industry promotion policies, including through utilization of local resources, is an excellent opportunity to learn from Japan’s development experiences. The Program also provides a more insightful look at how Japan’s small and medium sized enterprises develop through their consistent philosophy and innovative approaches in operation.
When talking about Japan, we often think of a country of strong resilience, hardworking and major corporations like Sony, Honda, Toyota, etc, but few of us have chances to discover how normal people and enterprises work, utilize their local resources, to develop the economy and to bring Japanese quality to the world. During the one-week Program (from 4 to 10 December 2011) which spans three cities, from Tokyo to Kagawa and Kyoto, participants from Cambodia, Laos, Myanmar and Viet Nam had that chance, not only to discover Japan’s experiences on local industry promotion, utilizing local resources but also to understand Japan’s entrepreneurship and culture, which may be useful for their countries’ development and fostering more cooperation between Japan and CLMV.
For local industry promotion, including SME promotion policies, perhaps the most important experiences from Japan is to create a level playing field for SMEs, supported by financial preferences from Government’s institutions. SMEs account for more than 90 percent of the number of enterprises in Japan and even a higher proportion in CLMV, so most participants were very interested in Japan’s experiences in the area, and we have found the information that METI provided was of much usefulness for consideration to apply in each country. This is even more significant when CLMV, together with other ASEAN countries, are promoting the third pillar of the ASEAN Economic Community- towards a region of equitable economic development, in which the development of SME is an important component.
An invaluable aspect of the Program is Japan’s experiences, information and case studies on utilization of local resources. Participants had chances to listen to interesting examples of utilizing local resources from Mr. Masato Kuroda (Royal Silk Foundation), including the story on how Mr. Tomoji Yokoishi*1 has successful changed Kamikatsu from an old and destructed rural town into lively place a successful by using local resources through the Irodori project*2. An overview on how to create new industries by using the community’s power also help participants understand the importance of developing regional brands for the creation of successful local products. Previously, we often think that in order to brands as a marketing tool which need huge amount of investment, however, through the Program, we understand that developing regional brands may not need such huge investment but more importantly, we should take advantages of regional resources, being creative and find or develop suitable market demands. The experiences are very useful for CLMV because we do not have sufficient expenditures to build major brands while have abundant regional resources. As a result, the approach for developing regional brands by Japan, to a large extent, can be applied by CLMV to develop new industries and products.
The Program also helps participants to understand the philosophy of work and life by many Japanese entrepreneurs. From the introduction by Kitaboshi Pencil’s president on the meaning of a pencil linked with the ideas on how husband and wife are linked together to the idea of Ikasareteiru of Yushin-Brewer Co, the tradition of Kamada Soy Sauce company and the story of Kodama-san*3 on her tapestry research and creation activities, we know that deep inside each product, especially local products and are the soul and philosophy of the producers and artists. Only by having such soul and philosophy will a small and medium sized enterprise sustain and develop through ups and downs of their development.
Perhaps the most interesting part of the Program is to learn and discover creative approaches taken by Japanese SME to develop. We carefully and fondly study the innovative idea of Kitaboshi to introduce Mokunensan *4, the rice power project by Yushin-Brewer, using rice to create new products such as cosmetics and fermented products, or the total “solution” approach for noodle by Yamato. From the those examples, we understand both the way to take advantage of local resources but also the innovations to meet changing demands of markets. Rice is the major products of CLMV, so the path that Yushin-Brewer have explored, i.e. finding more values from traditional materials, should be studied and followed by our enterprises. Moreover, we also find out that not only major companies in the IT sector like IBM can offer total solution from hardware to software, but Yamato, a producer of noodle making machine company, and perhaps many other SMEs in CLMV can take similar approach also. Not only in production, the innovative distribution model taken by Kamada Soy Sauce and the way Kagawa has changed its main shopping street have provided good suggestions for participants on how to find niche markets as well as the a solution to plan cities.
The visit to Kagawa University also left special impression when participants had opportunity to meet international students, including those from China, Thailand and Viet Nam, participating in the Career Development Program for Foreign Students in food industry in Japan. The experiences from the White Foods Co., Ltd on how it started and develops its activities in China should be a good food for thought for participants when working with foreign investors, especially SMEs. A particularly useful session for participants was the presentation on traceability from Ajinomoto Frozen Foods Co., Inc. Enterprises from CLMV, especially Viet Nam, and Japan are now working closely with each other in the food processing industry so the education in Kagawa University and experiences from Japanese companies like White Foods and Ajinomoto will promote this cooperation. Moreover, as frozen foods is new and has much potential for growth in CLMV, Japanese enterprises’ experiences, management systems, etc, will be a good advantage for both sides to tap the potential.
I do believe that the Program has deepen our understanding on Japan’s local industry promotion and how to take advantage of local resources by innovative approaches. More importantly, we see that Japan’s small and medium sized enterprises have strong entrepreneurship and are innovative in developing their business, even with very traditional products and are adaptive to changing market conditions. With these quality, they will absolutely continue to be successful, not only in their operation in Japan, but also when they decide to look outward, expanding abroad at a time when Japan is further integrating its economy with the region, including CLMV. This, of course, will require appropriate support from the government. Not only Japan, but also CLMV, will need to facilitate SME, to protect our beautiful traditional culture and craftsmanship during our integration process. We also found a lot of opportunities for cooperation between Japanese and CLMV’s SME and do hope that these opportunities will be realized in the near future, especially when Japan and CLMV are making steps to bring their economies closer.
That said, a very important factor that makes the Program a success was the careful preparation and excellent organization of IIST. On behalf of all participants, I would like to express our appreciation and deep thanks to METI and IIST for bringing us together in this very useful Program in Japan. For me, although having been to Japan several times, but the 5th CLMV Leadership Program was the most impressive and memorable one. We are very convinced that the knowledge and the bond developed during the Program will help us in our work, including cooperation activities with Japan.
With my best regards.
(original article : English)
*1:The instigator of the project, an advisor at the Kamikatsu-cho Agricultural Cooperative at the time
*2: A successful project whereby a mountain village in Tokushima Prefecture has created a new market by providing tree leaves for restaurants and hotels to use for decoration
*3:Ms. Shicen Kodama : Nishijin brocade traditional craftsperson
*4: Clay made by reusing sawdust from pencil manufacturing
• The 5th CLMV Leadership Program in Japan (FY2011)