#28 Upcoming key trend of Japan with Emerging markets

Behind the challenges are plenty of opportunities

More diversified and deeper and wider understanding and mixing  

The number of foreign nationals residing in Japan hit a record high of over 3.2 million in 2023, as more workers entered to meet demand created by the country's labor shortage.

Significant increases were seen in the number of specified skilled workers, who are immediately able to take on jobs in designated industries without the need for training, as well as trainees taking part in the country's technical internship program.

By residential status, permanent residents were the largest group at 880,178, up 1.9% from December 2022.

By type of working visa, technical interns totaled 358,159, up 10.2%, and engineers, specialists in humanities and international services, including foreign language teachers, rose 10.9% to 346,116.

The number of specified skilled workers rose to 173,101, up 32.2%.

By nationality, China has the most nationals in Japan, followed by Vietnam and South Korea.

This trend wouldn’t be stopped, and at the same time, their Japan would need to attract high skilled and experienced professionals and entrepreneurship minded talents as well even from emerging markets having authentic ambition to make somethings new happens not only in Japan but from Japan to the global fields, trying to inspire mass workers and management leaders in Japan who don’t have actual sense and capability doing so and fill the gap.  

So now, Japan started planning to let foreign entrepreneurs live in the country for two years without a place of business or investment, looking to help them get their business off the ground by easing residency requirements.

The move marks Tokyo's latest attempt to energize Japan's economy with an injection of international talent.

Current rules require foreigners to secure a place of business and at least two full-time employees or an investment of 5 million yen ($33,000) to qualify for business management residency.

The investment requirement is daunting for fledgling companies that may not even be profitable. A two-year grace period would let owners focus on growing their businesses.

their Japan would need to attract high skilled and experienced professionals and entrepreneurship minded talents as well even from emerging markets having authentic ambition to make somethings new happens not only in Japan but from Japan to the global fields

Even our clients and business partners etc around us, like big Japanese corporations and middle sized Japanese enterprises have not lost their appetite for investment to the startups, so the startups have prospects for attracting funding and certain businesss collaborations well in and from Japan.

Japan ranks 21st out of 24 countries in attractiveness as a destination for potential startup founders, the Organisation for Economic Co-operation and Development reports, based on factors such as the number of multinational companies, tax policy and the ability to acquire the nationality etc, but that is why Japan's venture sector is less mature than that in the U.S. and lacks enough talent to support it, but that means that there are still a plenty of spaces to enter in if you can successfully enter the market with right local support and win-win collaborations.

Foreign tourists flood return, and appetite for their wealthiest  

Japan's real estate companies are ramping up their investments in hotels as foreign tourists return to the country with a vengeance.

Nittetsu Kowa Real Estate is entering the business and will invest 40-50 billion yen (around $270 million to $330 million) in hotels over five years.
NTT Urban Development will increase the number of hotel rooms it supplies in the next three years by 50% over pre-pandemic levels.
Various type of business and add value opportunities around and within foreign tourists flood in Japan.

Travel agency JTB and property developer Mitsui Fudosan are among Japanese companies trying to entice affluent foreign tourists with exclusive medical services, luxury dining or opportunities to experience nature. 

Specifically, those companies want to capture demand among travelers who spend over 1 million yen ($6,700) per person on a trip. High-spenders are expected to bring an economic impact nine times that of regular tourists.

At the same time, Asian ultra-luxury resort companies are expanding into Japan to tap demand from wealthy overseas travelers and take advantage of the weak yen.

Singapore-based Soneva Holdings plans to open resorts in Japan as early as 2027. The company has already signed a contract to purchase a remote island in Okinawa prefecture and plans to acquire land in Myoko, Niigata prefecture, in central Japan, just to name a few.

real estate companies are ramping up their investments in hotels as foreign tourists return to the country with a vengeance

One of the challenges of Japan's inbound tourism is that tourists tend to overcrowd at certain famous tourist spots. Issues such as tourism pollution and labor shortages are also emerging on the ground.

On the other hand, I often feel from my friends living outside Japan that they especially in the middle class and/or above are looking for more broader and deeper experiences when visiting Japan, including those from emerging countries. The number of people who want to deeply and widely learn about Japan’s culture, history, and people has been gradually increasing. Behind the challenges are plenty of opportunities.

Office market flood in emerging market

On the other hand, Japan's Sumitomo Realty to pump $3.3bn into India development, embarking on a 500 billion yen ($3.34 billion) redevelopment project in downtown Mumbai, India, as Japanese developers flock to fast-growing emerging economies with healthy office markets.
The Japanese developer plans to build offices, a hotel and commercial facilities on a roughly 80,000-sq.-meter former factory site. This will be among the largest real estate projects in India to be handled by a foreign company on its own.

Their real estate development giant would keep shifting their investment budget more to their emerging markets than developed matured market worldwide in not only short but mid-long term perspective.

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