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IIST e-Magazine (For the Japanese version of this article)

All-Kyushu Government-Private Sector Partnership Toward East Asia Business Expansion | Mikihito Murakami, Director-General International Affairs Department Kyushu Bureau of Economy, Trade and Industry METI [Date of Issue: 30/March/2012 No.0205-0835]

Date of Issue: 30/March/2012

All-Kyushu Government-Private Sector Partnership
Toward East Asia Business Expansion

Mikihito Murakami
Director-General
International Affairs Department
Kyushu Bureau of Economy, Trade and Industry
METI


Japan’s gateway to swiftly-growing Asia, Kyushu is viewed as a potential driver for the Japanese economy, well-positioned to use its favourable investment environment and other advantages to absorb Asia’s vitality. METI Kyushu and the Kyushu Economic Federation have developed a strategic policy partnership with the various local authorities and other parties to pursue the expansion of East Asia business through an ‘All-Kyushu’ government-private sector partnership.


Evolving from business based on friendly exchanges to solution-based corporate alliance business and an ‘all-Kyushu’ approach

Kyushu is located almost exactly in the middle of East Asia. It is the closest part of Japan to Korea and China geographically, while historically too it has served the role of Japan’s gateway to East Asia, seizing business chances arising from a diverse range of friendly interaction among industrial associations, universities and other parties, as well as sister-city relations. In recent years, however, the focus has shifted to corporate alliance-based business geared to meet demand-side needs for energy and environmental technologies, where Kyushu stands on the leading edge. Particularly in the water business area, the Kitakyushu Overseas Water Business Association, which was set up in March 2010 through government-private sector partnership, is currently participating in water infrastructure projects in Vietnam and Cambodia and taking on consultant contracts. The plan is to develop international marketing and sales using Water Plaza Kitakyushu (a New Energy and Industrial Technology Development Organization-built facility including demonstration and testing facilities) as a hub for the development and trial operation of leading-edge desalination and water recycling system technologies and the deployment of these in offshore business.

In December last year, a joint application by Fukuoka Prefecture, Kitakyushu City and Fukuoka City saw the Green Asia International Strategic Comprehensive Special Zone designated as a comprehensive special zone for international strategy. This is expected to promote the creation of environmental infrastructure packages to meet growing needs in Asia, as well as the development of industrial hubs driving green innovation, opening the way for Kyushu to absorb Asia’s vitality and stimulate the regional economy. The aim is to create additional sales of around five trillion yen by 2020 (10 percent of the national goal of 50 trillion yen).

With such corporate alliance business spreading throughout the Kyushu region, the Kyushu Economic Federation (KEF) plans to set up an Asian Business Center this July to promote joint exports of small lots of food products from Kyushu companies, further enhance support functions for Kyushu small and medium enterprises (SMEs) expanding their operations offshore, train global industrial human resources*1 to serve as a bridge between Japan and Asia, and support the utilization of these personnel, as well as promoting BOP and PPP projects based on Kyushu-based corporate alliances. In addressing the above, the center will also work with other support institutions from an ‘all-Kyushu’ perspective. Over the medium to long-term, the aim is to create a Kyushu Asia International Center with enhanced functions for developing the conditions for international business, attracting foreign investment, cultural exchange, and global infrastructure development.
KEI Steering Committee meeting on March 3, 2012

KEI Steering Committee meeting on March 3, 2012

Given these developments, it has become essential to put in place a system to promote strategic policy partnership from an all-Kyushu perspective, and it was accordingly decided to use Kyushu Economy International (KEI; established in 2001 as a platform for the internationalization of Kyushu) Steering Committee*2 meetings as a venue for discussing issues related to internationalization. One issue for future consideration will consequently be how to reflect recommendations from the KEI Steering Committee in the Kyushu Area Strategy Conference.

As the coordinator of the all-Kyushu internationalization drive, KEI will address the three key initiatives of (1) promoting the formation of a Yellow Sea Rim Economic Zone, (2) creating a Kyushu brand for local agricultural produce and food and promoting the development of an export platform targeting Hong Kong and other markets, and (3) training and utilizing global industrial human resources.

Promoting the formation of a Yellow Sea Rim Economic Zone

11th Yellow Sea Rim Economic and Technological Conference in November 2011

11th Yellow Sea Rim Economic and Technological Conference in November 2011

With the Trans-Pacific Partnership and other moves toward regional partnership and integration taking hold worldwide, Kyushu has been developing wide-ranging economic exchanges among government institutions, local authorities, economic groups and universities in the Yellow Sea Rim*3 area which embraces parts of China, Korea and Japan, working to deepen Yellow Sea Rim Economic Zone-based exchanges.

The Yellow Sea Rim Economic and Technological Conference has been held annually since 2001, hosted in turn by Kyushu, China and Korea. The 11th Conference took place last November in Daejon, Korea, with members discussing issues such as boosting service industry productivity and promoting exchanges among clusters. The 18th Korea-Japan Kyushu Exchange Conference was held at the same time, proposing cooperation in the functional food area, etc.

Economic exchanges with ASEAN outside the Yellow Sea Rim Economic Zone are also being pursued. According to a questionnaire survey which the KEF undertook among member firms, those countries outside the Yellow Sea Rim Economic Zone which companies are considering for the future expansion of their business operations are the ASEAN nations of Vietnam, Thailand and Indonesia, as well as India, which has a massive market and is experiencing strong economic growth. In February 2009, the KEI concluded an MOU with the Vietnamese Ministry of Planning and Investment on economic exchange, helping to develop the offshore investment environment for Kyushu businesses. The formation of similar MOUs with Thailand and Indonesia, and, over the medium term, India, is also being considered, and these should further improve offshore investment conditions for Kyushu firms in the South China and Indochina Economic Zones.

Creation of Kyushu-brand agricultural products and food and development of an export platform targeting Hong Kong and other markets

The main markets for Kyushu’s agricultural products and food exports are Hong Kong, Taiwan and Singapore. Hong Kong in particular has shown great interest in Kyushu’s agricultural, forestry and fishing resources, and is looking for Kyushu to establish a single ‘all-Kyushu’ point of contact. Creating a mechanism to respond to Hong Kong’s needs has therefore become an urgent task. The Joint Council for Positioning Kyushu Agriculture as a Growth Industry (provisional title) will be established in March this year as an export platform, and this organization is expected to serve as a driving force behind the creation of an all-Kyushu brand and an export framework. KEI will collaborate with the Council to organize all-Kyushu booths at food fairs in key export destinations such as Hong Kong and Taiwan in order to widen sales channels.

Training and using global industrial human resources as a bridge to Asia

November 28, 2011 Kyushu Consortium establishment meeting

November 28, 2011 Kyushu Consortium establishment meeting

To absorb the dynamism of rapidly growly Asia and grow together with the region, it will be critical to train and utilize talented personnel from Asia and elsewhere as global industrial human resources who can serve as a bridge between Japan and the world. In November 2011, the Kyushu Global Industrial Human Resources Council (Kyushu Consortium) platform was established as a joint government-industry-university initiative to organize internships, corporate ‘briefings’ at which students have the opportunity to hear company heads explain their philosophies, policies and operations, and fairs for exchange among companies and foreign students, as well as to support job-hunting.

The recently released Kyushu Economic White Paper noted that while Kyushu manufacturing was struggling with the strong yen and a multitude of other difficulties, automakers and other companies were increasingly clustering their R&D and production bases in Kyushu. It was suggested that if Kyushu takes advantage of such merits as its location as a gateway to rapidly-growing Asia and a favorable investment environment (low personnel costs and prices), the region should be able to absorb a great deal of Asian dynamism and become a driver of the national economy. We anticipate the all-Kyushu initiative and the government-private sector partnership driving it to be picked up and imitated in other regions as the Kyushu model for achieving economic vitality.

*1 Global industrial human resources comprise those human resources which companies can use in developing offshore business, including foreign students with fluent Japanese and Japanese students fluent in foreign languages and familiar with conditions offshore.

*2 KEI members include the various prefectures, senior officials in charge of commerce and industry in ordinance-designated cities, economic groups, the Kyushu District Transport Bureau and METI Kyushu, etc.

*3 The Yellow Sea Rim encompasses the Yellow Sea coastal area from Dalian through to Shanghai in China, Incheon through to Busan in Korea, and Kyushu in Japan. The area accounts for around six percent of world population and five percent of world GDP (well above ASEAN’s share).

(original article : Japanese)
(For the Japanese version of this article)


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