1. 1 Doing Business in Japan 2010 Road Show Presentation Presented by Sumio Shibata State of North Carolina Japan Office

2. 2 Population Japan 127 million Tokyo Metropolitan Area : 33 million Osaka Metropolitan Area : 21 million Greater Nagoya : 15 million Fukuoka : 5 million Hokkaido : 5 million KANSAI

3. 3 Ties to the U.S. Japan is the United States 4th largest Export Market, after Canada, Mexico and China. Second largest foreign investor in the U. S., with more than $230 billion invested, second only to U. K. The U. S.-Japan alliance is a cornerstone of U. S. security interests in Asia and is fundamental to regional stability and prosperity. (Source: U.S. Commercial Service / 2010 Country Commercial Guide)

4. 4 Japanese Subsidiaries in the Piedmont Triad Region (Manufacturers only)

5. 5 in Tokyo NC Investment in Japan

6. 6 *Total Export : $ 51 billion (2008 : 65 billion) Unit : $ 1 million Source : WISERTrade Top 10 U.S. Exports to Japan (2009)

7. 7 NC Exports to Japan (2010) NC is 10th among all US states for exports to Japan $1.5 billion in NC exports to Japan Japan is 4 th largest market for NC exports (HondaJet at GSO) (Source : SMARTrade)

8. 8 Emerging Sectors for NC Export 1) Biotechnology 2) Nanotechnology 3) Renewable Green) Energy 4) Senior Market

9. 9 1) Biotechnology/Pharmaceuticals in Japan Market size of Biotech industry : $24.3 billion in 2008 (+27.9% over 2007) Leading sub-sector : medical biotech $6.85 billion (Source : Fuji Keizai) Therapeutic antibodies Molecularly targeted cancer therapies Japanese pharmaceutical companies eagerly seek new drug candidates and pipeline identified or developed by US biotech companies to be further developed into new drugs (Source : U.S. Commercial Service)

10. 10 Biotechnology/Pharmaceuticals (cont d.) Key market segments for Biotech Medical Care Food Bio Tool & Information (Bioimaging analysis equip., DNA Chips, Protein/Gene Analysis Equip) Environment & Energy

11. 11 1) Biotechnology/Pharmaceuticals World second largest consumer of pharmaceuticals American pharmaceutical firms have a market share of almost 20% Japans aging population is generating increased demand for pharmaceutical treatments for cardiovascular problems, metabolic, gastrointestinal, CNS. Generic drugs have good potential

12. 12 2) Nanotechnology METI s Strategic Technology Roadmap 2009 designated Nanotech as one of most important fields(*) in science and technology to promote R & D investment in the public & private sectors. (*) Life Science, Information & Communications, Environmental Sciences, Energy and etc. (The Ministry of Economy, Trade, and Industry)

13. 13 Nanotechnology (contd) Market :$60 billion in 2010 (estimated) $230 billion by 2015 Market Segment : Electronics, Energy/Environment, Medical Applications, Measurement Instruments (Source : Nomura Research Institute)

14. 14 Seven-Eleven Eyes 20,000 Green Stores Worldwide In 5 Years LED technology for signs and lighting, generate electricity from solar power, and feature hot-water systems utilizing waste heat from air conditioners. Some will even have rechargers for electric vehicles. Green technology is seen slashing store energy consumption by as much as 30% and will also cut greenhouse gas emissions (Source : Nikkei April 6, 2010)

15. 15 4) Senior Market Average saving of households of people aged 60-69 years old: $245,000 (after debt) Average income : $59,000 Comparison of aged population Percentage of age 65 and older Japan 19.7(%) USA 12.3 Average Life Expectancy Women Men Japan 86 79 USA 79 76 2000 (Source : JETRO)

16. 16 Deflation Makes Older People Key Consumers CPI in 2009 : -1.2% Households of persons aged in 60s : Net savings of $230,000. Consumption rose 1.2% in 2009 Households of persons aged in 30s : Net debt of $19,700. Consumption dropped 1.1% in 2009 (Source : Nikkei April 5, 2010)

17. 17 Opportunities for NC Exporters Aerospace Computer Software Electronic Components Medical Equipment Safety & Security Furniture

18. 18 Aerospace Aerospace industry is shifting the focus from Defence (56%) to Civil (44%) in 2008 Japanese makers such as Mitstubishi Heavy Industries, Kawasaki, Fuji are supplying 35% of Dream Liner, or 787 content to Boeing (Fuselage, and etc.) Best Prospects : Aircraft parts and supplies, Avionics

19. 19 Computer Software Best Prospects : Smartphone applications, security, SaaS(*), Smart Grid, Cloud Computing (*)Software as a Service

20. 20 Computer Software (contd) Key Elements to launching in the Japanese market : a) Localization : translation, testing, customization b) Support Capability : Japanese language support is mandatory c) Products Quality : High quality control is a very important consideration for Japanese users

21. 21 Medical Equipment Best Prospects : For chronic and life- style diseases, medical devices alleviate pain, complement lost functions, improve quality of life.

22. 22 Safety and Security Biometric-related solutions Drug/explosive detection equipment & systems Personal/container screen systems Nuclear/biological/chemical preparedness equipment and medicines Best Prospects :

23. 23 Furniture Japan is 3 rd largest importer of NC furniture after Canada, and Saudi Arabia. Largest importer of NC Mattress 2 nd largest importer of NC Wood furniture Best Prospects : a) Compact and high- end, medium-high furniture (Area of average Japanese house : 900 sqft. Vs. U.S. house : 2,300 sqft.) b) Unique furniture

24. 24 Bottom Line World s second largest market Open business climate with transparency and rule of law Resources ready to assist your firm in entering the market The Japanese market is one of the most competitive in the world. But if you find success in Japan, you can use Japan as gateway to Asia.

25. 25 Prepare written company information Company profile including company history Profile of president Sales/Statistics (incl. paid-in Capital) Your objective Product/Service information Emphasize positive aspects such as Uniqueness, Originality Domestic Market Successes (Track Record) Tips for successful entry Preparation On Paper before contacting potential partners Tips

26. 26 Tips for successful entry (cont. d) Attitude aimed at success Communicate in simple English and quick follow-up Stress uniqueness of Product Have patience with Trial and Error Be flexible Keep schedules, promises, commitment is key Tips

27. 27 Most Common Mistake Made by Foreign Partners Cold calling prospective buyers in Japan The Japanese prefer to do business with someone only when they have been properly introduced Rely on an introduction by a go- between, such as the North Carolina Department of Commerce representative in Tokyo Tips

28. 28 What can the NCDOC Tokyo Office do for you? We work seamlessly with ITD BDMs (Business Development Managers) to provide you with – Market research – Basic Translation services – Temporary office space in central downtown Tokyo location – Trade show assistance – Logistics/lodging assistance – Fast Track partner search services

29. 29 Where to start? Contact International Trade Division, NC Department of Commerce BDMs ( Business Development Managers) tel. 919-733-7193 http://www.nccommerce.com/en/BusinessServi ces/InternationalBusiness/InternationalTrade Services/ Contact Sumio Shibata, NC Trade Representative in Tokyo info@nctokyo.com tel +81-3-3435-9301 fax +81-3-3435-9303