Startup firms, innovation key to ties: Roos

by Eric Johnston

KYOTO — Innovation and entrepreneurship will not only revitalize Japan’s economy but also help strengthen and build upon Japan-U.S. relations that have become strained by security issues, U.S. Ambassador to Japan John Roos told senior Kansai business leaders Friday afternoon.

With concern in Tokyo and Washington mounting that the stalemate over the relocation of U.S. Marine Corps Air Station Futenma in Okinawa is negatively impacting bilateral relations, participants at the two-day Kansai Economic Seminar spent Thursday and Friday morning in discussions that were often highly critical of Prime Minister Yukio Hatoyama’s handling of Futenma.

On Friday afternoon, Roos attempted to soothe concerns by concentrating on the role of technological innovation and the creation of startup companies, especially in green technologies, an issue that as a former lawyer in Silicon Valley he feels passionately about.

“I know that there’s concern with regard to the current issues. I’m confident that we’ll work through them,” he said.

“What is very clear to me is that the Japan-U.S. strategic and underlying relations are critically important to both countries. It’s been the cornerstone of U.S. policy in Asia for the past 50 years and will be for another 50 years,” Roos said.

“Both of our countries also face big economic challenges. But Japan and the U.S. are two of the most, if not the most, innovative countries in the world. Forty-two percent of the world’s research and development takes place in the U.S. and Japan, and over half of the international patents are filed on behalf of either U.S. or Japanese companies,” Roos said, adding that despite international attention to the rise of China, Japan may be a sleeping giant when it comes to startup companies.

For the past 16 years, since the opening of Kansai airport, Kansai’s official relationship with the United States has been a distant second priority to relations with East Asia, especially China.

In 2007, 48 percent of Kansai’s exports went to, and 59 percent of its imports came from, the Asian region, according to the Ministry of Economy, Trade and Industry. Less than 21 percent of Kansai’s exports and just 15 percent of its imports came from the U.S.

Although the Kansai Economic Seminar was designed to focus on economic issues, this year marked the first time the seminar has met since the Democratic Party of Japan-led coalition took power last fall.

This year’s focus was on how national political issues affect local international trade strategies, especially on how to balance Kansai’s growing dependence on trade with Asia against the role Japan is expected to fulfill under its treaty obligations with the U.S.

At times, participants pushed for the kind of relationship officials under former President George W. Bush once envisioned, one similar to America’s ties with Britain.

Though the analogy is rarely used today by politicians in Washington and Tokyo due to the inherent political and cultural differences between the U.S.-Britain and Japan-U.S. relationships, Takushoku University professor Takashi Kawakami invoked the comparison to say Tokyo’s ties with Washington should be based on the U.S.-Britain relationship in terms of power-sharing.

Meanwhile, Masahisa Miyazaki, of the Okinawa Association of Corporate Executives, warned participants Thursday afternoon that with the election of an antibase mayor in Nago, it was no longer inevitable that Futenma’s relocation would be to Nago’s Henoko district. This prompted other participants to worry that the Nago poll outcome may hurt bilateral relations.

“Unless the 2006 agreement between Japan and the U.S. is honored, the economic aspects of the bilateral relationship will also be affected,” said Yukiyoshi Okano, president of Daikin Industries Ltd.