Kansai’s cutting-edge small firms turn attention to markets abroad

JIJI

Smaller businesses based in the Kansai region are looking overseas with their cutting-edge technologies as the domestic market shrinks.

One example is crossEffect Inc., which has three-dimensional computer tomographic technology for producing models identical to the original objects, including the human heart.

Masatoshi Takeda, president of the Kyoto-based firm, which has a workforce of 22, decided to pursue the development of accurate replicas of human organs, including their slimy surfaces, after talking to a medical doctor.

“True models of human organs may contribute to surgery for seriously ill patients and medical education,” Takeda said.

After extended research, crossEffect first developed a surprisingly accurate model of Takeda’s own heart.

Following the world’s first cardiac simulator of its kind, the company developed a transparent simulator of a patient’s liver, in cooperation with Kyoto University Hospital. After using the model for operations, doctors at the hospital highly praised it for clarifying processes they had previously struggled to understand.

After a cardiac simulator that crossEffect displayed at academic conferences in the United States and Europe aroused strong interest from doctors, the company won an order to produce the simulators from a major U.S. medical equipment manufacturer.

Takeda estimates the potential demand for organ simulators at more than ¥20 billion worldwide, about seven times more than the level of domestic demand.

“Initially, we would like to sell inexpensive cardiac simulators, priced at less than ¥100,000, in the large U.S. market,” Takeda said.

Last July, the Kansai Bureau of the Ministry of Economy, Trade and Industry established a council to pave the way for joint moves by smaller firms to expand business in Vietnam. A number of companies have already filed for such support, and the council hopes to launch model projects in 2014.

“Japanese technology and etiquette are always praised and welcomed overseas,” said Masanori Hori of the Kansai head office of the Organization for Small & Medium Enterprises and Regional Innovation, which backs small firms’ operations abroad.

“The hurdles for moving into a market are by no means low, but managers (of smaller companies) should be more confident,” Hori said.

Nationwide, an increasing number of small and midsize companies are turning to overseas markets amid growth in emerging economies and shrinking demand at home.

Nearly 6,000 smaller manufacturers exported their products in 2009, up 50 percent from a decade earlier, according to the Small and Medium Enterprise Agency. Direct overseas investment by smaller firms, including for local production, is also increasing.

China remains the top overseas destination for smaller Japanese companies. After violent anti-Japan protests last September and rising labor costs in China, however, attention is turning to Vietnam and other untapped markets, as well as to the United States and Europe, where there is strong interest in special products such as organ simulators.

The government supports smaller companies that wish to do business overseas.