Exploiting Hokkaido’s Strengths and Special Features to Accelerate Offshore Expansion Action Plan for Hokkaido Conference on Supporting SMEs in Overseas Business 2012
International Affairs Division
Hokkaido Bureau of Economy, Trade and Industry
At the Hokkaido Conference on Supporting SMEs in Overseas Business, the various support organizations have worked together to create an action plan detailing specific actions to be taken to encourage the overseas expansion of SMEs. Here we outline the content of that action plan.
On 5 October 2010, the Conference on Supporting SMEs in Overseas Business was established under the leadership of the Minister of Economy, Trade and Industry with the aim of coordinating efforts among the relevant organizations to encourage the overseas expansion of small and medium enterprises (SMEs). On 29 October, Hokkaido responded to this initiative by setting up the Hokkaido Conference on Supporting SMEs in Overseas Business. The Hokkaido Bureau of Economy, Trade and Industry (METI Hokkaido), JETRO Hokkaido and the Hokkaido branch of SME Support, Japan (now the Hokkaido Head Office) serve as the secretariat. The group initially comprised 17 organizations including related support organizations, economic associations and financial institutions and local governments at the outset, with membership swelling to 26 organizations as at May 11, 2012.
The Hokkaido Conference has been supporting the offshore business efforts of Hokkaido SMEs by looking at ways to boost the effectiveness of business talks and exhibitions and to expand sales channels for Hokkaido products, as well as by using the competitive food and agricultural machinery areas as model initiatives. The fourth meeting of the Conference, held 22 March 2012, created an action plan comprising specific actions to be taken to support the overseas business of Hokkaido SMEs in 2012.
In forming the action plan, the process of companies’ offshore expansion was broken down into the three stages of preparation, trial and independence, across which five specific actions—gathering and providing information, marketing, training and securing human resources, procuring capital, and improving trade and investment conditions—will be taken in line with each particular stage (see attached figure).
Looking first at gathering and providing information, in recent years more Hokkaido firms have been participating in offshore trade shows and business talks, but it tends to be the same companies every time. Why aren’t more companies taking part? One reason seems be a lack of information on how to participate.
To address this problem, as of this year the Hokkaido Conference will begin publishing collections of offshore expansion success stories. The aim is to present the stories of firms which have already launched offshore operations so that other firms in the same industries can garner hints as to how they might resolve the challenges they face and take the next step.
In addition, reflecting strong needs among companies and other parties in relation to the Guidebook for Supporting SMEs in Overseas Business, the Hokkaido Conference aims to publish an updated and enhanced 2012 version this summer. The Guidebook outlines for firms wishing to expand their business overseas where they can go for counselling and what support measures the relevant organizations have in place, as well as information on seminars, business talks and other events.
Active efforts will be made to build awareness and educate firms about offshore expansion, including a series of offshore business seminars hosted by North Pacific Bank, JETRO Hokkaido and the Hokkaido Head Office of SME Support, Japan, the first of which will kick off on 24 May in Asahikawa City. The seminars will be held in the five key regions of Hokkaido where industrial clusters are located, with themes geared to local needs. Seminars on business in developing countries will also be held for the first time in conjunction with JICA Hokkaido, which participated in the fourth meeting of the Hokkaido Conference for the first time as a member organization.
As of April, the Conference has also been utilizing the overseas expansion support section of METI Hokkaido’s website to host information on business in China provided by personnel from Hokkaido and Sapporo City, the North Pacific Bank and the Hokkaido Bank who are currently stationed in China. To ensure the more timely provision of information, the Conference is boosting the frequency of mail magazine send-outs and otherwise bolstering information supply functions. These initiatives are expected to draw out new players from the Hokkaido business community.
The second strategy is support for marketing. Offshore buyers have indicated that Hokkaido isn’t sufficiently strategic in its approach to exhibitions and business talks. For example, if Hokkaido organization A conducts food business talks in Hong Kong and then two weeks later Hokkaido association B also holds food business talks, because there is little to differentiate either the participating companies or the products they present, buyers fail to see their appeal. In addition, where companies and groups do not coordinate their efforts, they shoulder the demerits of limited information acquisition and weak bargaining power.
The Conference will address these issues by gathering information on exhibitions, business talks and other events planned by the relevant organizations and providing feedback, as well as serving as a co-host for those events in which partnership is possible, making proposals that encourage larger, ‘all-Hokkaido’ efforts. The information on exhibitions and business talks garnered through this initiative will also be provided to companies via the METI Hokkaido website, helping to expand the range of Hokkaido players in offshore business from this angle too.
Thirdly, the Conference will address the issue of training and securing human resources. Interviews with companies have pinpointed a lack of experience in relation to trade practice and unease over possible communication difficulties as perceived hurdles to offshore expansion. Because of their smaller scale, SMEs in particular find it difficult to secure and train staff to station in offshore markets, and this hampers their efforts to develop business overseas. To deal with this issue, the Conference will arrange lectures on trade practice by trade advisors and other experts and provide level-based language training, providing chances for human resource development toward offshore expansion.
The last two actions are intended as support for companies which have gained a certain amount of offshore experience and built up a track record, moving them from the ‘trial’ to ‘independence’ stage. The fourth action, procuring capital, will comprise encouraging the use of the subsidies and assistance, lending schemes and export insurance schemes operated by organizations within the Hokkaido Conference. The fifth, improving trade and investment conditions, will be addressed by providing the necessary information for establishing offshore operations through guidebooks, websites and other media.
While most Hokkaido companies are probably still at the preparation and trial stages, the Conference will strengthen collaboration amongst member organizations and move forward strongly with its 2012 program to enable more firms to step up to the independence stage.
(original article : Japanese)