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With a history steeped in international trade and entrepreneurialism, modern-day Osaka offers world-class skills and a highly attractive business culture.
A large port city and the recognised commercial centre for Honshu, Japan’s main island, Osaka is ideal for businesses looking to expand into the region. It has long flourished as the political, cultural and economic heart of Japan, says Isamu Takagi, senior partner at Grant Thornton Taiyo LLC in Japan, and was the first capital of Japan during the 16th century.
“The city and wider Kansai region have a unique culture that preserves the best of old Japan while appealing to foreign investors and entrepreneurs,” explains Takagi.
“Built by merchants, Osaka was the centre of agriculture production and trade in Japan for centuries. Its key strengths have been its location and logistical infrastructure, from the harbour to Kansai Airport today.”
Osaka’s advanced transport network provides excellent access not only to the rest of Japan – Tokyo is a two-hour bullet-train ride away – but also to cities in Asia and around the world, Takagi says.
But he points out that the Kansai region alone, including cities such as Kobe and Kyoto, presents a fantastic opportunity for businesses moving into Japan. It is a market equivalent in size to a major western economy such as the Netherlands, for example.
People power
“Osaka is all about the people: not only are they kind and welcoming to new businesses and investors, but we can also boast a high level of skills thanks to our world-leading schools and universities,” says Takagi.
The area has developed significant industrial capabilities in sectors such as precision engineering, electronics and pharmaceuticals: “There are a number of internationally renowned companies that have emerged from Osaka, such as Panasonic, Sharp and Suntory.”
The even better news for companies considering locating in the area, Takagi says, is that costs are typically much lower than in Tokyo. “Keeping down fixed costs such as rent, land prices and labour costs contributes greatly to a business’s continued success,” he explains.
“Businesses can save approximately 30% on office rent and 15% on labour costs in Osaka when compared to Tokyo. And it is worth mentioning that employers can find it hard to recruit high-quality people in the capital due to the exorbitant cost of living.”
New business incentives
In recent years, the authorities in Osaka have ramped up their efforts to attract international businesses. The city government offers subsidies aimed at helping establish innovation that contributes to the generation of new businesses.
“And new businesses that are set up within designated areas of Osaka City and are engaged in the advanced fields of new energy and life science can apply for municipal and prefectural tax reduction of up to 100% for the first five years and 50% for the following five years,” explains Takagi.
There are also a number of public organisations, such as Invest Osaka, that work with foreign investors and businesses to help them find real estate or establish partnerships with local entities.
Economic hub – with Olympic potential
Meanwhile, Osaka is set to benefit from the interest generated by the 2020 Olympics in Tokyo, as well as Expo 2025 in Osaka in the more distant future.
“Osaka has traditionally been considered Japan’s economic hub,” says Takagi. “And for international businesses, thanks to the culture here as well as the infrastructure and the regional access, that is more the case today than at any point in the past.”
Osaka’s location, entrepreneurial spirit and openness makes it the ideal gateway for companies looking to expand into the Japan as well as into other east Asian markets. To find out more about establishing your business in the region, contact Isamu Takagi.
Osaka quick facts
- Location: Central Japan, Kansai region
- Time zone: Japan Standard Time GMT +0900
- Population: 20 million in greater Osaka area (including Kobe)
- GDP: US$610.7 billion (2016) [1]
- Industrial strengths: Electronics, engineering, pharmaceuticals
- Growth sectors: Life sciences, alternative energy
- Regional access: Tokyo 2h30m by bullet train, 1h10m by air; Seoul 1h45m; Beijing and Hong Kong 3h30m; Singapore 6h.
[1] GlobalData.com