As Japanese companies seek out innovative solutions to maintain their edge in an increasingly competitive global economy, more and more are looking toward Israel, industry stakeholders told The Jerusalem Post on Monday.
“When we talk about what the Japanese companies are looking for in Israel, it’s innovation,” said Ze’ev Weiss, chairman of Israel-Japan Chamber of Commerce and Friendship Association and a senior partner at Weiss Porat & Co.
“What they seem to lack, in their opinion, is the innovation they can find in Israel,” he continued. “Innovation is in everything, which means it’s not only limited to the classical hi-tech like cyber or IT [information technology]. It’s everything.”
Although the Israel-Japan Chamber of Commerce and Friendship Association is marking its 60th anniversary this year, trade relations between the two countries – particularly in the hi-tech and innovation sectors – have begun to accelerate recently, Weiss explained. In the past few years, many major Japanese companies have opened research and development or sales offices in Israel, while business delegations are continually flowing into the country.
Relations between the two countries received a significant boost following Prime Minister Benjamin Netanyahu’s visit to Japan in 2014 and Japanese Prime Minister Shinzo Abe’s visit to Israel in 2015, Weiss said. Between these visits, the Economy Ministry’s Chief Scientist’s Office signed a collaboration for joint industrial R&D projects between Israeli and Japanese companies, in July 2014. Meanwhile, in the coming weeks, another agreement will be signed between the two governments to ensure investment protection for companies, according to Weiss.
“When I say that these are dramatic days, I mean that there is no precedent for such huge development in the relationship between the two countries, and of course I refer to the business and economic relationship of the two countries,” he said. “This phenomenon started about two years ago, and in 2016 it reached unbelievable peaks. We see it already in 2017.”
Although a cultural gap does still exist between Israeli and Japanese businesses, substantial Japanese investments are taking place in Israeli startups, and more and more Israeli companies are also looking at the Japanese market as an attractive outlet, Weiss said.
“We see the trend from both sides,” he continued.
Among the most popular Israeli fields of expertise among Japanese companies are medical devices, autonomous driving technology and cybersecurity, according to Weiss.
“Like everywhere else in the world, Japanese companies are looking for Israeli cybersecurity technology for the companies themselves, to protect themselves, and also for defense oriented cybersecurity because of the geopolitical situation,” he said.
As far as autonomous driving technologies are concerned, car manufacturers that once looked to Israel as only a sales point are now exploring the country’s innovation sector, he added.
Citing data from Israel’s Economy Ministry, Weiss pointed out how significantly investment and trade volume between the two countries has increased in the past several years, jumping from $2.05 billion in 2011 to $3.69b. in 2015.
Yet these numbers only represent a fraction of the partnerships taking place, as they account only for goods entering and leaving through the Customs Authority, Weiss explained.
“When we talk about investments and transfer of services, which is mostly being done in the hi-tech industry, these numbers don’t have any record with the Customs Authority,” he said.
One Japanese company that recently entered Israel is the information technology equipment giant Fujitsu, which opened a sales office in Ra'anana about three months ago. Fujitsu is the largest IT company in Japan and the fifth largest in the world.
Raanan Biber, country manager for Fujitsu Israel, said that since the opening, company executives have come in from around the world, engaging with many potential partners, customers and startups. Fujitsu's representative office in Israel is currently focused on introducing the company's products to the Israeli market through its business partners.
“Obviously, the Israeli market is very interesting for the company, especially in the cybersecurity area,” said Biber, who has worked at a variety of international companies like Motorola, Hewlett-Packard and Dell. “We are looking for new innovation, new products, because this is what a global leader like Fujitsu should seek.”
Although like Weiss, Biber acknowledged that a cultural gap does exist between Israeli and Japanese people, he too emphasized that this gap is far from insurmountable.
“There are some layers. The most common language between the two common cultures is the business language,” he said. “The business language is actually the same.”
Adding that “gaps can be narrowed,” he stressed the importance of learning “to play the rules in a positive way,” such as adopting the modesty and politeness of the Japanese culture.
“When it comes to business, I think it is less complex,” Biber said.