The auto and electronics industries have served as the economy’s main locomotives for decades, but now they are being eclipsed by heavier global competition, particularly from their aggressive Asian rivals.
To offset the dip in dominance, the government is turning to Japan’s cultural exports, including animation, fashion and food, to promote Japan’s “soft power” in a PR strategy called “Cool Japan.”
Following are questions and answers about Cool Japan:
What is the strategy about?
The Ministry of Economy, Trade and Industry is in charge of Cool Japan, the goals of which are to promote the nation’s creativity-based industries both at home and overseas.
These industries have about a ¥2 trillion share of the global market, which is projected to surpass ¥900 trillion in 2020. Cool Japan aims to expand that share to between ¥8 trillion and ¥11 trillion by then.
METI hopes to facilitate the global entry of some of Japan’s small and midsize companies, while luring their creative foreign counterparts here to give them a competitive edge.
It is hoped that the increased presence of Japanese cultural products will attract more international travelers and boost domestic tourism, METI said.
The trade ministry uses the term “creative industries” to describe the businesses targeted by the soft power strategy. But since there is no strict definition of them, the term can cover everything from manga, “anime” and art to food, traditional crafts, fashion, tourism and music.
METI formed the Creative Industries Division last July to take on the job of promoting the Cool Japan strategy.
Aren’t cultural mainstays like manga and anime already popular overseas?
Yes, but their global expansion has been scattershot, a disorganized approach that has not significantly cultivated merchandising opportunities.
In many cases, such creative industries are represented by small and midsize firms that often lack the wherewithal or finances to run a global operation, said Saeko Tani, chief administrator of Creative Industries Division.
For example Japanese fashion magazines for women are popular in China, but not many designers and apparel makers have entered that market despite the business potential, Tani said. Smaller firms face high hurdles in exporting their items, including high costs and the cumbersome procedures that come with running a business in China, she added.
Anime is definitely popular, too, but creators have been struggling amid a decline in sales of packaged media, such as DVDs, and the increase in free content from video-sharing sites.
Japan’s anime industry saw overseas sales peak at ¥16 billion in 2006, but by 2010 sales had fallen to ¥9.2 billion.
What are the challenges facing the Cool Japan drive?
A panel at METI has been discussing ways to improve the promotion and sales of cultural exports, but they say strategic footholds are needed overseas to promote and supply such products.
Even if foreigners find Japan’s cultural goods attractive, if they aren’t supported by a platform in the target market the business opportunity will go down the drain, just like fashion did in China.
The panel thinks small providers should tie up with department stores or shopping malls to open stores overseas and create space for their goods.
Another problem is profit margins. While popular, anime and other cultural media turn little profit if marketed solely through TV.
“It’s crucial for anime (firms) to engage in the content-related product business or copyright business to make a profit. Otherwise, we can’t earn enough to create the next anime content,” said Hidenori Oyama, an executive at Toei Animation Co., during a panel discussion March 28.
Then there’s the government, which experts say should focus on being an intermediary to facilitate collaboration in different fields. Japan should look to South Korea to learn how various businesses collaborate to promote Korean products, they said.
They also said the government should actively negotiate with other countries to ensure overseas markets are more receptive to Japanese competition there. For instance, the government should push for curbs on the distribution of pirated Japanese content to level the playing field.
Have there been any actual projects?
During fiscal 2011, METI sponsored 13 Cool Japan projects in eight countries — the United States, France, China, South Korea, Singapore, Brazil, Italy and India. All of the ideas were generated by private-sector players and screened to determine if they qualified for government subsidies.
One success story was a fashion project in Singapore in which 15 popular apparel makers from Tokyo’s Harajuku district teamed up to hold sales in a 50-sq.-meter site in a shopping mall for three months, selling more than ¥20 million in goods. The project made it easier for smaller makers to go overseas by teaming up and securing a hub to sell their wares. Because of the popularity of the project, the team gained a distribution channel to sell their products in Singapore, said Tani at METI.
Also in March, the ministry hosted a gathering of companies looking to sell their products overseas and those hoping to collaborate with them.
The event drew 53 content providers and 36 product suppliers, and some have paired up and are preparing to enter the Indonesian market, METI said.
The Weekly FYI appears Tuesdays. Readers are encouraged to send ideas, questions and opinions to email@example.com
IN FIVE EASY PIECES WITH TAKE 5