NRI Suggests Roles for Japan Based on “Asia’s Growth Scenario”
— Japan to Contribute in Areas of Capital and Technology—
October 12, 2006
Nomura Research Institute, Ltd.
Nomura Research Institute, Ltd. (NRI: Tokyo, Japan; Akihisa Fujinuma, President, CEO & COO) has created a growth scenario for Asia during the 2010s based on the findings of our survey and research activities. This scenario has been built through means of our on-site surveys along with discussions and interviews with researchers in China, India, Thailand and Vietnam, as well as with the executives of local Japanese companies.
From 2010 to 2015, Asian countries will increasingly engage in discussions and negotiations to enter into agreements such as a Free Trade Agreement (FTA) and an Economic Partnership Agreement (EPA) to establish and strengthen cooperation and partnerships in Asia. These efforts will bring about a framework in Asia, on which Japan, NIEs, ASEAN, China and India will base their cooperation with each other to grow dynamically. Under this framework, each country will correspondingly perform certain roles. Specifically, China and India will serve as vast consumption markets. The primary roles of Japan, South Korea, Taiwan and Singapore will be to provide capital and technology. The ASEAN countries will use the invested capital and technology to provide production functions. Establishing closer relationships based on such separation of roles that makes the best use of the characteristics of each country/region will further accelerate the growth of the Asian economy in the 2010s.
As further growth is achieved in Asia, Japan will meet with increased expectations. While China can take the lead in Asia in terms of consumption and investment activities, it is difficult to imagine that China will support the creation of a high value-added industrial structure, which is what other Asian countries most desire, as well as develop and train sufficient human resources to achieve this goal. China's growth will benefit neighboring Asian countries. At the same time, however, China's increased prominence will give rise to the danger of being lost in competition. In an effort to improve competitiveness, each country considers it desirable to promote further cooperation with Japan. In addition, we believe that Japan can contribute in a number of fields such as resource and energy savings and environmental measures. Accordingly, we also believe that Japan will be expected to play greater roles in these spheres in Asia in the future.
By considering these circumstances, Japanese companies should redesign their Asian strategies for the future. To fully utilize the advantages generated through closer regional tie-ups and partnerships in Asia, Japanese companies should implement management reforms to operate businesses embracing all of Asia, rather than implementing business strategies targeting specific countries/regions as in the past. Definite measures for this purpose include the development of human resources well versed in Asia as a whole, the rebuilding of company-wide functions to enable the formulation of strategies envisioning all of Asia and decision making from a perspective that covers Asia as a complete entity.
Both the Japanese government and Japanese companies should be more strongly committed to Asian issues and contribute to the establishment and promotion of mutual tie-ups and partnerships within the region.
NRI plans to publish our projections on the outlook for Asia in the 2010s and our proposals for business strategies to be taken by Japanese companies as a book entitled “2010-nen no Asia to Nihon (Asia and Japan in 2010)” on November 2 by Toyo Keizai Inc. In the future, NRI will continue to analyze business trends in Asia and propose appropriate directions for business throughout all of Asia.
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Yukako Seto / Ai Ohara
Corporate Communications Department
Nomura Research Institute, Ltd.
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