In recent years, the business landscape of Japan’s major cities has been undergoing profound changes. Driven by trends such as globalization, digitalization and sustainable development, cities such as Tokyo, Osaka, Nagoya, Fukuoka and Sapporo are actively adjusting their industrial structures to create new economic growth points. This report aims to provide Chinese companies interested in entering the Japanese market with the latest and most comprehensive analysis of business development trends and help them formulate effective market entry strategies.

Our research team adopted multi-faceted research methods, including field visits, expert interviews, policy document analysis, and big data mining. The data sources include official Japanese government statistics, industry association reports, academic research results, and market analysis by well-known consulting companies. By integrating and analyzing this diverse information, we strive to present an objective, comprehensive and forward-looking picture of Japanese urban business development.

This report will provide an in-depth interpretation of the latest national and local industrial policies, analyze the industrial advantages and innovation ecosystems of major cities, and combine it with the predictions of authoritative experts to provide readers with valuable market insights and practical suggestions. We believe that this report will become an important reference for Chinese companies to understand and seize the opportunities in the Japanese market.

Overview of Japan’s macroeconomic and business environment

The Japanese economy is in a critical period of transformation and faces unique challenges and opportunities. In 2023, Japan’s GDP growth rate will reach 1.9%. Although it is lower than some emerging economies, it performs well among developed countries. This growth is mainly due to the rebound in consumption in the post-epidemic era and the export advantage brought by the depreciation of the yen. However, structural challenges remain severe. The aging of the population has led to labor shortages and also brought new opportunities to the silver economy. It is expected that by 2025, the proportion of Japan’s population over 65 years old will exceed 30%, which will further promote the development of industries such as medical health, elderly care services and intelligent solutions. The Japanese government is actively responding to these challenges and stimulating economic growth and social development through a series of innovative policies.

In terms of national business policies, the Japanese government has launched a number of strategic initiatives. The “Society 5.0” strategy aims to create a human-centered super-intelligent society, focusing on the development of artificial intelligence, the Internet of Things and robotics to solve social problems and create economic value. The “Digital Garden City National Concept” is committed to revitalizing the local economy through digital technology and alleviating the problem of concentration in Tokyo. The “green growth strategy” is reshaping Japan’s industrial structure and plans to increase the proportion of renewable energy to 36-38% by 2030, promoting the development of clean energy industries and the green transformation of traditional manufacturing.

The “Open Innovation Acceleration Plan” and the “Global Entrepreneurship Ecosystem Strengthening Plan” together form the core of Japan’s innovation policy. The former promotes industry-university-research cooperation and cross-industry innovation, while the latter is committed to enhancing Japan’s competitiveness on the global entrepreneurial stage. These policies are reshaping Japan’s innovation and entrepreneurship ecosystem, making it more open and dynamic. In 2023, total venture capital investment in Japan reached 1.2 trillion yen, a record high, reflecting the vigorous development of the entrepreneurial ecosystem.

“Working style reform” is a comprehensive policy aimed at increasing labor productivity and improving work-life balance. Its core measures include limiting overtime hours, promoting flexible working systems and promoting equal pay for equal work. This will not only help solve Japan’s long-standing overwork problem, but also create conditions for increasing the labor force participation rate of women and the elderly. At the same time, the “Cool Japan” strategy focuses on improving the international competitiveness of Japan’s cultural industry, covering animation, fashion, food, tourism and other fields, aiming to transform Japan’s soft power into economic advantages.

Japan’s innovation and entrepreneurship ecosystem is showing unprecedented vitality. The government’s “J-Startup” program provides comprehensive support to high-potential startups, including financing, overseas expansion, and talent introduction. It is particularly worth noting that Japan’s open innovation model is on the rise, with large companies and startups cooperating increasingly closely. For example, Toyota Motor is collaborating with a number of AI startups to develop autonomous driving technology, a model that is becoming a major feature of Japan’s innovation ecosystem.

However, challenges remain. Japan has made relatively slow progress in digital transformation, especially in the small and medium-sized enterprise sector. Despite the government’s efforts to promote work style reforms, Japan’s labor productivity remains below the G7 average. These factors will be key variables affecting Japan’s future economic growth.

These macro trends and policy directions not only shape the current business environment, but also indicate future opportunities. For foreign companies interested in entering the Japanese market, it is necessary to have an in-depth understanding of these complex and interrelated factors , which will provide important guidance for the company to formulate effective market strategies.

An in-depth interpretation of Japan’s national industrial policies

2.1 “Society 5.0” strategy and its impact on urban development

The “Society 5.0” strategy is essentially Japan’s systematic solution to structural problems such as population aging, labor shortages, and declining international competitiveness. The core of this strategy is to reconstruct the social operating mechanism through digitalization and intelligence, and its impact on urban development goes far beyond superficial technological applications.

From the perspective of economic structure, “Society 5.0” is promoting the transformation of Japanese cities from traditional manufacturing centers to knowledge-intensive service industry centers. Taking Tokyo as an example, the financial technology and artificial intelligence industries are rising and forming new economic growth points. This transformation has not only changed the city’s employment structure, but also reshaped the urban spatial layout, promoting the development of commercial districts in the direction of multi-function and mixed use.

At the social governance level, “Society 5.0” introduces the concept of “digital twin cities” to optimize resource allocation and decision-making processes by building virtual city models. Osaka City is piloting this system, which uses real-time data analysis to predict traffic congestion, disaster risks and other issues, significantly improving urban management efficiency. However, this has also triggered controversy about data privacy and algorithm fairness, reflecting the deep-seated contradiction between technology and society.

At the cultural level, “Society 5.0” is reshaping the model of citizen participation. The “My City Report” application launched by the City of Kobe allows citizens to report urban problems in real time, which not only improves the efficiency of problem solving but also enhances citizens’ sense of ownership. But at the same time, this digital participation also faces the challenge of the digital divide. How to ensure the participation rights of vulnerable groups such as the elderly has become a key issue.

2.2 Policy Analysis of “National Concept of Digital Garden City”

The “Digital Garden City National Concept” is essentially a strategic policy aimed at reshaping the spatial structure of Japan’s land. Its core goal is not only to alleviate the problem of one-pole concentration in Tokyo, but also to redefine urban-rural relations through digital means and achieve coordinated regional development.

From the perspective of industrial layout, this policy is promoting the “counter-urbanization” trend of the industry. By providing infrastructure such as high-speed Internet and shared office spaces, some small and medium-sized cities have successfully attracted talents from industries such as IT and design to return. Taking Tottori Prefecture as an example, its “Work-ation” (work + vacation) plan has attracted many urban professionals to stay for a long time, driving the upgrading of the local service industry and the prosperity of innovative and entrepreneurial activities.

In terms of social structure, this policy is reshaping Japan’s population mobility pattern. The traditional path of “graduating from college and entering employment in a big city” is being replaced by diversified career options. For example, Shimane Prefecture has successfully retained a group of high-quality talents through the “Local Entrepreneurship Talent Support Plan” to provide financial and mentorship support for returning entrepreneurs. This not only changes the local demographic structure, but also injects new innovative vitality into the local area.

However, this policy also faces challenges. The first is the contradiction between the high cost of digital infrastructure construction and local financial pressure. Secondly, how to protect and inherit local cultural characteristics during the digitalization process and avoid the risk of homogenization of “a thousand cities have the same characteristics” is also an issue that needs to be carefully considered during policy implementation.

2.3 The guidance of “green growth strategy” on urban industrial transformation

The “green growth strategy” is not only Japan’s action plan to deal with climate change, but also an industrial policy aimed at reshaping the country’s competitive advantage. The impact of this strategy on urban industrial transformation is multi-level, involving multiple dimensions such as industrial structure, technological innovation and international competitiveness.

From the perspective of the industry chain, this strategy is promoting the green transformation of the entire industry chain. Taking the automobile industry as an example, not only vehicle manufacturers are transitioning to electrification, but related supporting industries such as parts, materials, and charging facilities are also developing rapidly. This transformation of the entire industry chain is reshaping the city’s industrial ecosystem. For example, Toyota City in Aichi Prefecture is transforming from a traditional automobile city to a comprehensive new energy industry base, driving the rise of emerging industries such as hydrogen energy and smart grids.

In terms of technological innovation, the “green growth strategy” is accelerating the commercialization of disruptive technologies by establishing national-level R&D projects and providing tax incentives. Take next-generation solar cells as an example. The Japanese government has invested a lot of resources in supporting the research and development and industrialization of perovskite solar cells, with the goal of achieving commercial application by 2030. This is not only expected to revive Japan’s international status in the photovoltaic industry, but will also bring about fundamental changes in the urban energy structure.

However, this strategy also faces challenges. The first is the issue of employment structure adjustment during the transformation of traditional industries. For example, as the internal combustion engine automobile industry shrinks, how to help related workers transfer jobs has become a thorny issue. Secondly, the contradiction between the high cost of green technology and market acceptance also requires policy balance. The Japanese government is exploring internalizing environmental costs through mechanisms such as carbon pricing, but finding a balance between environmental protection and economic growth remains a challenge.

2.4 The role of “open innovation” policy in promoting industry-university-research cooperation

Japan’s “open innovation” policy is essentially a systematic reform aimed at breaking down the barriers of the traditional innovation system and restructuring the national innovation system. This policy not only encourages industry-university-research cooperation, but also redefines the relationship between innovation subjects and reshapes the allocation mechanism of innovation resources.

From the perspective of institutional design, this policy is reshaping the roles of universities, enterprises and governments through the revision of a series of laws and regulations. The “Basic Law on Science and Technology” revised in 2018 incorporated “innovation” into law for the first time, clarifying the dominant position of universities in innovation. This change has prompted universities to transform from mere knowledge producers to active innovation participants and promoters. For example, the “Industry-Academic Collaboration Promotion Headquarters” established by the University of Tokyo is not only responsible for technology transfer, but also directly involved in the planning and implementation of industrial innovation projects, reflecting a fundamental change in the role of universities.

In terms of resource allocation, “open innovation” policies are promoting the cross-border flow and reorganization of innovation elements. The government has established platforms such as the “Innovation Network Council” to promote the flow of talents, technology and capital between large enterprises, start-up companies, universities and research institutions. This mechanism not only breaks the traditional closed innovation model, but also reshapes Japan’s industrial ecosystem. For example, in the field of artificial intelligence, the “AIP Network Laboratory” jointly established by RIKEN, NEC and a number of start-up companies has achieved seamless connection between basic research, application development and commercialization, greatly accelerating the industrialization process of technology. .

However, this policy also faces challenges in its implementation. The first is the complexity of intellectual property management. In an open innovation environment, how to balance knowledge sharing and patent protection has become a thorny issue. Secondly, universities and enterprises have differences in innovation cycles, risk tolerance, etc. How to coordinate these differences to achieve effective cooperation also needs further exploration.

These policies reflect Japan’s efforts to reshape the country’s competitive advantage through systematic and innovative policy design when facing structural challenges such as an aging population and industrial hollowing out. These policies are not only interrelated and together constitute a complete national development strategy system, but also reflect Japan’s strategic positioning in the context of globalization, digitalization and sustainable development. Understanding the underlying logic and potential impact of these policies is crucial to grasping Japan’s future development trends and business opportunities.

Tokyo: The rise of a global financial technology center

Tokyo is Japan’s economic engine, with an economy as large as some countries’ gross domestic product. In 2023, Tokyo’s GDP will reach approximately US$1.1 trillion, accounting for nearly 20% of Japan’s total GDP. This economic size makes Tokyo occupy an important position in the global urban economic system, and ranks as the world’s three major financial centers alongside New York and London.

Tokyo’s economic structure is highly diversified, but the service industry, especially financial services, dominates. The financial industry contributes about 15% of Tokyo’s GDP and employs about 8% of the labor force. In recent years, with the vigorous development of the digital economy, financial technology is gradually becoming a new engine driving Tokyo’s economic growth. But at the same time, Tokyo is facing structural challenges such as an aging population and labor shortages. To address these challenges, the Tokyo Metropolitan Government is actively promoting industrial upgrading and digital transformation, with financial technology being seen as a key breakthrough.

Tokyo’s financial technology ecosystem is rapidly taking shape, forming an industrial cluster with the Otemachi-Marunouchi-Yurakucho (“Daimaru” for short) area as the core and radiating to the surrounding areas. The formation of this cluster benefits from Tokyo’s unique advantages: a deep financial industry foundation, intensive scientific and technological talents, complete infrastructure and government policy support.

In this cluster, large financial institutions, technology giants and start-ups form a complementary and symbiotic relationship. For example, Mitsubishi UFJ Financial Group has partnered with Israeli fintech company OurCrowd to launch innovative financial products for Japanese investors. At the same time, SoftBank Group actively invests in global financial technology innovation companies through its Vision Fund, injecting international innovation elements into Tokyo.

Tokyo’s financial technology cluster shows obvious characteristics of subdivisions. Areas such as payments and remittances, personal wealth management, and insurance technology are developing particularly rapidly. For example, PayPay, Japan’s largest mobile payment platform, has exceeded 40 million users in just three years, demonstrating Tokyo’s huge potential in consumer finance innovation.

3.1 Government support policies and measures

The Japanese central government and the Tokyo Metropolitan Government have introduced a series of supporting policies and initiatives to promote the development of financial technology. The most representative one is the Banking Law revised in 2016, which for the first time provided a clear legal positioning for financial technology companies and cleared institutional obstacles for industry development.

In terms of supervision, the Financial Services Agency (FSA) has launched a “regulatory sandbox” system to allow financial technology companies to test innovative products and services within a limited scope, greatly accelerating the marketization process of new technologies. As of the end of 2023, more than 100 projects have been tested through this mechanism, involving cutting-edge technologies such as blockchain, artificial intelligence, and big data.

In addition, the government supports fintech innovation through financial incentives. The “J-Startup” program provides financial support and international promotion to high-quality financial technology start-ups, and has cultivated a number of unicorn companies.

3.2 Interpretation of the Tokyo Metropolitan Government’s financial technology support policies

The Tokyo Metropolitan Government has formulated a series of more targeted localized support policies under the policy framework of the central government. At its core is the “Global Financial City: Tokyo” plan, which aims to build Tokyo into Asia’s leading financial innovation center.

A key initiative of the plan is the establishment of the “Tokyo Fintech Accelerator Program”. This plan not only provides financial support for start-ups, but more importantly, builds a communication bridge between start-ups and traditional financial institutions and regulatory authorities. Through regularly held “Fintech Innovation Lab” activities, start-ups can directly demonstrate their innovative solutions to potential customers and regulators, greatly shortening the innovation cycle.

Another important policy is the “Fintech Talent Training Plan.” The Tokyo Metropolitan Government has cooperated with many universities to establish professional courses in financial technology and provides scholarships to attract international talents. At the same time, local talents are encouraged to devote themselves to financial innovation through activities such as the “Tokyo FinTech Awards”.

The Tokyo Metropolitan Government attaches special importance to cross-border financial technology cooperation. By signing memorandums of cooperation with financial centers such as Singapore and London, an interoperability mechanism for financial technology companies has been established, which provides convenience for local companies to explore international markets.

3.3Experts ’ predictions on the development of Tokyo ’s financial technology in the next five years

Industry experts generally believe that Tokyo’s financial technology industry will enter a period of rapid development in the next five years. Analysts from Nomura Research Institute predict that the Tokyo financial technology market is expected to reach 1 trillion yen by 2028, with an average annual growth rate of more than 20%.

In terms of technology trends, artificial intelligence and blockchain are regarded as the most disruptive technologies. The chief innovation officer of Mitsubishi UFJ Financial Group predicts that AI-based robo-advisory services will account for more than 30% of the Japanese personal investment market within five years. At the same time, the blockchain-based digital currency pilot project “Digital Yen” is expected to enter a full testing phase in 2026, which may completely change Tokyo’s payment ecosystem.

In terms of market structure, experts predict that there will be more cross-border cooperation and mergers and acquisitions. The boundaries between traditional financial institutions and technology companies will be further blurred, and comprehensive financial technology groups may become the dominant force. At the same time, with the gradual improvement of supervision, the field of compliance technology (RegTech) is expected to become a new growth point.

The development trends of Tokyo’s financial technology industry are mainly reflected in the following aspects:

• The degree of personalization and intelligence of financial services will be greatly improved. As big data and AI technologies mature, financial products will become more relevant to individual needs. For example, dynamic insurance pricing models based on behavioral data may become mainstream.
• The Open Banking ecosystem will accelerate its formation. With the development of the API economy, data sharing and business collaboration among banks, financial technology companies and other service providers will become closer, which is expected to give rise to new business models.
• Regulatory technology will become an important growth point. As financial innovation accelerates, regulatory agencies have an increasingly urgent need for real-time supervision. Intelligent supervision solutions based on AI and big data are expected to achieve large-scale application in the next five years.
• Cross-border financial services will usher in new opportunities. As the Japanese government promotes international cooperation in the digital economy, Tokyo is expected to become an important hub connecting Asia and global financial markets. Especially in areas such as digital currency and cross-border payments, Tokyo’s financial technology companies are expected to play an important role.

Tokyo is at a critical stage in its transformation into a global fintech hub. Although it faces fierce competition from Asian financial centers such as Singapore and Hong Kong, Tokyo hopes to occupy a more important position in the future global financial technology landscape with its strong financial industry foundation, complete innovation ecosystem and strong government support. For international fintech companies and investors, Tokyo is a market worth paying close attention to.

Osaka: a hub for life sciences and medical innovation

As Japan’s second largest economic center, Osaka plays a pivotal role in the country’s economic development. In 2023, Osaka Prefecture’s GDP will reach approximately US$380 billion, accounting for about 7% of Japan’s total GDP. The city’s economic structure is diversified, but manufacturing and service industries dominate. Among them, the life sciences and medical industries are becoming new engines driving Osaka’s economic transformation and upgrading. Osaka’s economy is characterized by its strong industrial base and tradition of innovation. As the core of the Kansai region, Osaka is home to many R&D centers and production bases of Fortune 500 companies. In recent years, Osaka has actively promoted industrial upgrading, focusing on the development of high-tech industries such as life sciences, medical health, and artificial intelligence, gradually forming an innovation ecosystem with life sciences as its core.

Osaka’s life science industry map shows obvious clustering characteristics. A comprehensive life science innovation network has been formed with the Kitaosaka Life Sciences Park as the core and radiating to the surrounding areas. This network covers the entire industry chain from basic research to clinical application, including biopharmaceuticals, medical devices, regenerative medicine, digital health and other subdivisions. Among them, Osaka University School of Medicine and its affiliated hospitals are important supports for this ecosystem. At the same time, Osaka has also established a number of professional parks, such as Saito Life Science Park, which gathers many biotechnology start-ups and research institutions. It is worth noting that Osaka has a global leadership in the field of regenerative medicine, and the establishment of the iPS Cell Research Center further consolidates this position.

Osaka’s industry-university-research cooperation model is a key factor in the booming development of its life sciences industry. This cooperation model is represented by the “Osaka Life Sciences Innovation Alliance”, which closely links universities, research institutions, enterprises and government agencies. Through this platform, basic research results can be quickly transformed into market-ready products. For example, a collaborative project between Osaka University and Takeda Pharmaceuticals has successfully developed a number of innovative drugs. In addition, Osaka has also established a “Health Data Bank” to integrate health data from medical institutions, enterprises and individuals, providing valuable data support for precision medicine and health management. This open innovation model not only accelerates the transformation of scientific research results, but also attracts talents and capital in the global life sciences field.

In order to promote the development of the life sciences industry, the Osaka Prefectural Government has formulated a series of highly targeted support policies. The “Osaka Life Sciences Promotion Plan” is the most representative policy framework among them, aiming to build Osaka into Asia’s leading life sciences innovation center by 2030. The plan includes a number of specific measures, such as establishing a life sciences innovation fund to provide financial support from seed to Series A for start-ups; establishing a “regulatory sandbox” system to allow innovative medical technologies to conduct clinical trials in specific areas; launching talent The attraction plan provides special visas and settlement convenience for high-end overseas life science talents. In addition, Osaka Prefecture has also established a regional cooperation mechanism with surrounding cities such as Kobe and Kyoto, forming a larger life science industry belt. These policies not only provide strong support to local companies, but also greatly enhance Osaka’s attractiveness in the global life sciences map.

Industry experts are optimistic about the future development of Osaka’s life sciences industry. Analysts from the Japan Economic Research Center predict that by 2028, the market size of Osaka’s life sciences industry is expected to exceed 2 trillion yen, with an average annual growth rate of more than 15%. In terms of technology trends, regenerative medicine and precision medicine are considered to be the areas with the most development potential. The research team at Osaka University School of Medicine predicts that regenerative medicine treatment solutions based on iPS cell technology will achieve large-scale clinical application within five years, which may completely change the treatment model of certain chronic diseases. At the same time, precision medical solutions that combine artificial intelligence and big data are expected to be widely used in Osaka’s medical system in the next 3-5 years, significantly improving treatment effects and reducing medical costs.

The development trends of Osaka’s life science industry are mainly reflected in the following aspects:

• The integration of the industrial chain will be further deepened. As technology becomes more complex and R&D costs rise, more cross-field collaborations and mergers and acquisitions are expected to emerge, forming a full-industry chain giant covering everything from drug discovery to patient services.
• Digital transformation will accelerate. Innovative models such as telemedicine, AI-assisted diagnosis, and digital therapy are expected to be the first to be applied on a large scale in Osaka.
• The level of internationalization will increase. As the Osaka World Expo approaches, it is expected to attract more international life science companies to set up R&D centers or Asia-Pacific headquarters here.
• The integration of life sciences and other emerging technologies will create new growth points, and cutting-edge fields such as biocomputing and brain-computer interfaces are expected to produce world-leading innovations in Osaka.

Osaka is at a critical stage of its transformation into a global life sciences innovation hub. With its deep industrial foundation, comprehensive innovation ecosystem and strong government support, Osaka hopes to occupy a place in the global life sciences landscape in the future. For international life science companies and investors, Osaka is a market full of opportunities.

Nagoya: Intelligent Manufacturing and the Transformation of the Automotive Industry

As Japan’s fourth largest city and the economic center of the central region, Nagoya plays a key role in the country’s industrial development. In 2023, the GDP of Aichi Prefecture (where Nagoya is located) will reach approximately US$400 billion, accounting for approximately 7.5% of Japan’s total GDP. The city’s economic structure is dominated by manufacturing, especially the automobile industry, which contributes about 40% of its industrial output value. In recent years, Nagoya has actively promoted industrial upgrading, focusing on the development of high-tech technologies such as intelligent manufacturing, new energy vehicles, and artificial intelligence, gradually forming an innovation ecosystem with intelligent vehicles as the core.

Nagoya’s automobile industry chain is complete and powerful, from parts manufacturing to vehicle assembly to sales and services, forming a highly integrated industrial cluster. With Toyota Motor as the core, a huge supplier network has been formed in the surrounding areas. This industry chain is undergoing intelligent transformation, and traditional mechanical manufacturing is deeply integrated with emerging technologies such as artificial intelligence and the Internet of Things. For example, Toyota is promoting the “e-Palette” concept in many of its factories, turning factories into highly automated and interconnected smart production systems. At the same time, Nagoya has also established a number of smart manufacturing demonstration parks, such as Toyota City’s “Woven City” project, which aims to create a future city prototype that integrates smart transportation, clean energy and artificial intelligence.

In terms of Industry 4.0 policies, Nagoya’s implementation progress is remarkable. The Japanese government’s “Society 5.0” strategy has found its best practice location in Nagoya. Through platforms such as the “Aichi Robot Industry Promotion Council”, the government, enterprises and research institutions jointly promote the research and development and application of intelligent manufacturing technology. By the end of 2023, more than 60% of medium and large manufacturing companies in the Nagoya area have achieved varying degrees of intelligent transformation. Especially in the field of automobile manufacturing, the application of flexible production lines, collaborative robots and digital twin technology has become an industry standard.

In order to promote the development of intelligent manufacturing, the Aichi Prefectural Government has formulated a series of highly targeted support policies. The “Aichi Smart Manufacturing 2030 Plan” is the most representative policy framework, aiming to build Nagoya into a world-leading smart manufacturing center. The plan includes a number of specific measures, such as establishing a 1 billion yen smart manufacturing innovation fund to provide financial support for technology upgrades to small and medium-sized enterprises; establishing a “Manufacturing Digital Transformation Center” to provide enterprises with one-stop intelligent solutions; launching The “Future Craftsmen” training program focuses on cultivating highly skilled talents with interdisciplinary knowledge. In addition, Aichi Prefecture has also established a regional cooperation mechanism with neighboring Mie Prefecture and Gifu Prefecture, forming a larger intelligent manufacturing industry belt. These policies not only provide strong support for local enterprises, but also greatly enhance Nagoya’s competitiveness in the global smart manufacturing landscape.

Industry experts are cautiously optimistic about the prospects of Nagoya’s automotive industry transformation. Analysts from the Japan Automobile Manufacturers Association predict that by 2028, the output value of intelligent connected vehicles in the Nagoya area is expected to account for more than 40% of the entire automobile industry. In terms of technology trends, electrification, intelligence and sharing are considered to be the most disruptive development directions in the next five years. The research team at Nagoya Institute of Technology predicts that autonomous driving technology based on 5G and artificial intelligence will achieve large-scale testing in downtown Nagoya within three years, which may completely change urban transportation patterns. At the same time, the application of hydrogen fuel cell technology in the field of commercial vehicles is expected to make breakthrough progress in the next five years, providing Nagoya with new growth points.

The development trends of Nagoya’s smart manufacturing and automotive industry are mainly reflected in the following aspects:

• The industrial ecosystem will be further optimized. As technology converges and industry boundaries blur, more cross-industry cooperation is expected to occur, such as in-depth cooperation between automobile manufacturers and technology companies.
• Value chain reconstruction will accelerate. With the advancement of electrification and intelligence, the traditional automotive industry value chain will undergo fundamental changes, and software and services may become the core competitiveness in the future.
• The level of internationalization will increase. As the Japanese government promotes open innovation, more international companies and talents are expected to enter Nagoya’s automotive and smart manufacturing fields.
• Sustainable development will become a core issue, and green manufacturing and circular economy models are expected to be the first to be applied on a large scale in Nagoya.

Nagoya is in a critical period of transformation from a traditional manufacturing center to a global smart manufacturing innovation hub. With its deep industrial foundation, complete innovation ecosystem, and forward-looking government policy support, Nagoya hopes to occupy an important position in the future global smart manufacturing and automotive industry landscape. However, Nagoya also faces fierce competition from other global manufacturing centers, especially in the fields of new energy vehicles and artificial intelligence. How to achieve leapfrog innovation while maintaining traditional advantages will be a key issue that needs to be solved for Nagoya’s future development.

Fukuoka: Emerging Technology and Entrepreneurship Ecosystem

As the economic center and emerging technological innovation base in the Kyushu region of Japan, Fukuoka has played an increasingly prominent role in national innovation and development in recent years. In 2023, Fukuoka City’s GDP will reach approximately US$75 billion. Although its scale is smaller than that of major cities such as Tokyo and Osaka, its growth rate ranks among the highest among major Japanese cities. The city’s economic structure is transforming from traditional business and service industries to a knowledge economy driven by emerging technologies and innovation and entrepreneurship. The Fukuoka City Government actively promotes industrial upgrading, focusing on the development of cutting-edge technologies such as artificial intelligence, the Internet of Things, and blockchain, gradually forming a vibrant entrepreneurial ecosystem.

Fukuoka City’s entrepreneurial support policies are exemplary in Japan. Since being designated a national strategic special zone in 2012, Fukuoka has implemented a series of bold reform measures. The “Startup City Fukuoka” plan is one of the most representative policy frameworks, aiming to build Fukuoka into Asia’s leading entrepreneurial center. The core contents of the plan include: reducing company registered capital requirements, allowing foreign entrepreneurs to obtain special visas, and providing entrepreneurial subsidies and tax incentives. The implementation of these policies has achieved remarkable results. As of 2023, the annual growth rate of the number of new startups in Fukuoka City will remain above 15%, much higher than the national average in Japan. It is particularly worth mentioning that Fukuoka has achieved remarkable results in attracting international talents. The proportion of foreign entrepreneurs among the founders of new startups has increased from 5% in 2015 to nearly 20% in 2023.

In the field of emerging technologies, Fukuoka is making breakthroughs in several key directions. The first is artificial intelligence and machine learning. Fukuoka University has collaborated with a number of start-up companies to achieve world-class research results in the fields of medical image analysis and natural language processing. Next is the Internet of Things and smart city technology. Fukuoka is building the “Fukuoka Smart East” project to turn part of the city into a smart life experimental area covered by 5G networks. In addition, Fukuoka is also at the forefront of blockchain technology applications, especially in the fields of supply chain management and digital identity authentication. It is worth noting that Fukuoka is also developing marine science and technology, taking advantage of its unique geographical location to conduct innovative research in marine energy and marine biotechnology.

The Fukuoka City Government has formulated a series of carefully designed policies to build a complete entrepreneurial ecosystem. “Fukuoka Innovation Ecosystem 2030” is one of the most forward-looking strategic plans, aiming to create a self-sustainable innovation and entrepreneurship environment. The plan includes a number of specific measures, such as establishing a 500 million yen entrepreneurial seed fund to provide financial support for early-stage entrepreneurial projects; establishing a “Fukuoka Innovation Laboratory” to provide entrepreneurs with full-process support from concept verification to market promotion; Launched the “Global Innovation Talent Attraction Plan” to attract high-end international talents by providing housing subsidies and children’s education support. In addition, Fukuoka City has established strategic partnerships with global innovation centers such as Silicon Valley and Tel Aviv, Israel, to promote international resource docking. These policies not only provide strong support for local entrepreneurs, but also greatly enhance Fukuoka’s attractiveness in the global innovation map.

Industry experts have a positive attitude towards the development prospects of Fukuoka’s emerging technologies. Analysts from the Japan Information Technology Industry Association predict that by 2028, the scale of Fukuoka’s emerging technology industry is expected to exceed 1 trillion yen, with an average annual growth rate of around 20%. In terms of technology trends, the combination of artificial intelligence and medical health, sustainable energy technology and quantum computing are considered to be areas with the most development potential. The Kyushu University research team predicts that new material design technology based on quantum computing will achieve a breakthrough in Fukuoka within five years, which may bring revolutionary changes to the new energy and environmentally friendly materials industries. At the same time, smart city solutions combining 5G and edge computing are expected to be widely used in Fukuoka urban area in the next three years, significantly improving urban management efficiency and residents’ quality of life.

The development trends of Fukuoka’s emerging technology and entrepreneurial ecosystem are mainly reflected in the following aspects:

• The field of innovation will be further diversified. In addition to its existing areas of advantage, Fukuoka is expected to make breakthroughs in cutting-edge fields such as biotechnology, new materials, and space technology.
• Industry-university-research cooperation will be more in-depth. It is expected that more high-tech startups spun out of universities will emerge to promote the rapid transformation of basic research into commercial applications.
• The degree of internationalization will continue to increase. As Fukuoka’s international influence increases, it is expected to attract more international venture capital and multinational companies to set up innovation centers here.
• Sustainable development will become a core theme, and innovative projects related to green technology and circular economy are expected to receive more support and development opportunities in Fukuoka.

Fukuoka is in a critical period of transformation from a regional economic center to a global emerging science and technology innovation hub. With its flexible policy environment, comprehensive entrepreneurship support system, and open and inclusive urban culture, Fukuoka is expected to occupy a more important position in the global innovation landscape in the future. However, Fukuoka also faces fierce competition from domestic metropolises such as Tokyo and Osaka, as well as Asian innovation hubs such as Singapore and Seoul. How to enhance global influence while maintaining local characteristics will be a key issue for Fukuoka’s future development.

Sapporo: Digital Economy and Sustainable Development

Sapporo, as the administrative and economic center of Hokkaido, Japan, has made significant progress in the fields of digital economy and sustainable development in recent years. As of 2023, Sapporo’s GDP will reach approximately US$63 billion. Although its scale is smaller than that of major cities such as Tokyo, its growth rate and innovative vitality rank among the best in northern Japan. Sapporo is gradually transforming from a traditional economic structure dominated by tourism and service industries to a modern economic system with digital technology and green industries as its core.

In 2023, the digital industry will account for more than 20% of Sapporo’s GDP, and the annual growth rate will remain above 10%. Sapporo’s advantages in software development, data centers, cloud computing and other fields are increasingly prominent. Especially in game development and digital content creation, Sapporo has become a leading city in Japan’s northern region. The “Digital Sapporo 2025” plan launched by the Sapporo City Government has attracted many domestic and foreign technology companies to set up R&D centers here by providing tax incentives, talent training subsidies and other measures.

Sapporo has great innovations in sustainable development strategies and green technology . As the first large city in Japan to propose the goal of “zero carbon city”, Sapporo has formulated an ambitious sustainable development plan. The “Green Sapporo 2030” strategy focuses on the development of clean energy, smart buildings and green transportation systems. In the field of clean energy, Sapporo is actively developing geothermal resources and building large-scale geothermal power stations. In terms of smart buildings, Sapporo has promoted a series of energy-saving technologies, such as smart HVAC systems and high-efficiency insulation materials, to cope with severe cold climate conditions. In addition, Sapporo is also developing an electric vehicle charging network and smart public transportation system, aiming to create a low-carbon travel environment.

The recent “Hokkaido Comprehensive Policy on Digital Economy and Sustainable Development” issued by the Hokkaido government has injected new impetus into the development of Sapporo. The policy aims to turn Hokkaido into Japan’s “digital oasis” and “ecological innovation center.” The core contents of the policy include: establishing a 10 billion yen digital innovation fund to focus on supporting innovative projects in the fields of artificial intelligence, big data, and the Internet of Things; launching the “Hokkaido Green Technology Incubation Plan” to provide comprehensive support for environmental protection technology entrepreneurs ; Establish a “Digital-Green Integrated Development Demonstration Zone” to promote the application of digital technology in environmental protection, agriculture, energy and other fields. These policies provide strong support for innovative development not only in Sapporo but also in the entire Hokkaido region.

Industry experts are optimistic about the future development of Sapporo’s digital economy. Analysts from the Japan Information and Communications Research Institute predict that by 2028, Sapporo’s digital economy is expected to exceed 1.5 trillion yen, with an average annual growth rate of around 15%. In terms of technology trends, experts believe that Sapporo has the greatest development potential in areas such as digital content creation, artificial intelligence applications, and green data center technology. Especially in terms of energy-saving technology for data centers in cold climate conditions, Sapporo is expected to become a leading global innovation center. In addition, combined with Hokkaido’s unique natural environment, experts predict that Sapporo will achieve major breakthroughs in the application of digital technology in ecological monitoring, smart agriculture and other fields.

Sapporo’s digital economy and sustainable development trends are mainly reflected in the following aspects:

• The deep integration of digital technology and traditional industries will accelerate. It is expected that Sapporo’s traditional advantageous industries such as tourism, agriculture, and manufacturing will gain new growth momentum through digital transformation.
• Green technological innovation will become a new engine for Sapporo’s economic development. As global attention to climate change increases, Sapporo’s innovations in clean energy, energy-saving technology, circular economy and other fields are expected to gain more international attention and investment.
• Sapporo will further strengthen its position as a training base for digital talents in northern Japan. Through in-depth cooperation with universities and enterprises, Sapporo is expected to create a team of high-quality digital economy talents.

Sapporo is in a critical period of dual-wheel drive of digital economy and sustainable development . With its unique geographical location, good innovation environment and forward-looking development strategy, Sapporo has the potential to become an emerging center of digital green economy in Japan and even Asia. However, Sapporo also faces challenges such as an aging population and brain drain. How to make full use of digital technology to solve social problems while maintaining a balance between economic growth and environmental protection will be a key issue for Sapporo’s future development.

Cross-city comparison and comprehensive analysis

8.1 Comparison of industrial advantages of various cities

In the industrial pattern of major cities in Japan, we can observe distinct differentiated development paths. As the economic center of Japan, Tokyo has absolute advantages in financial services, information technology and creative industries. In 2023, Tokyo’s financial industry will contribute nearly 20% of the city’s GDP, and the information technology industry will account for 15%. In contrast, Osaka performs well in the manufacturing and life sciences fields, especially in medical devices and biotechnology, accounting for more than 30% of the national market share.

With its strong automobile and machinery manufacturing base, Nagoya is at the forefront of the country in the fields of Industry 4.0 and smart manufacturing. In 2023, the output value of Nagoya’s automobile-related industries will account for nearly 40% of the city’s GDP, of which the growth rate of smart manufacturing-related technologies and services is as high as 25%. In stark contrast, Fukuoka is rapidly emerging as an important base for Japan’s emerging technology and entrepreneurship, especially in the fields of artificial intelligence and the Internet of Things. Data shows that the number of technology startups in Fukuoka has increased by 300% in the past five years, making it one of the fastest growing cities in Japan.

On the other hand, Sapporo is gradually establishing its dominant position in digital content creation and green technology. In 2023, Sapporo’s digital creative industry will account for 12% of GDP, while the growth rate of clean energy and environmental technology-related industries will exceed 20%. This unique industrial structure gives Sapporo a clear competitive advantage in the Hokkaido region.

The respective industrial advantages of these five cities , including Tokyo’s financial technology, Osaka’s life sciences, Nagoya’s smart manufacturing, Fukuoka’s emerging technology entrepreneurship, and Sapporo’s digital creativity and green technology, together constitute the diversified pattern of Japan’s innovation economy.

8.2 Evaluation of innovation policy effects

Japan’s major cities have adopted a series of unique policy measures to promote innovation, and their effects deserve in-depth exploration. Since its implementation in 2017, the Tokyo Metropolitan Government’s “Global Financial City Tokyo” plan has successfully attracted more than 100 international financial technology companies to set up branches in Tokyo. The key to this policy is to provide a regulatory sandbox environment that allows financial technology companies to test innovative products under controlled conditions, greatly reducing innovation costs and risks.

In contrast, Osaka’s “Life Science Innovation Center” plan adopts a strategy of deep integration of industry, academia and research. By establishing interdisciplinary research centers and providing R&D subsidies, Osaka has successfully increased the efficiency of converting university research results into commercial applications by 40%. Especially in the field of regenerative medicine, Osaka has become one of the world’s leading research centers.

Nagoya’s “Aichi Industry 4.0 Plan” adopts a government-guided and enterprise-led model. By establishing an industrial upgrading fund and organizing a cross-enterprise cooperation platform, Nagoya has successfully promoted the transformation of traditional manufacturing into smart manufacturing. Data shows that the productivity of small and medium-sized enterprises participating in the program has increased by an average of 30%.

Fukuoka’s “Entrepreneurship Zone” policy is particularly effective. By simplifying the company registration process, providing tax incentives and setting up business incubators, Fukuoka’s new startup survival rate has reached 75%, which is much higher than Japan’s national average. Especially in terms of attracting international talents, Fukuoka’s entrepreneurial visa policy has led to a 500% increase in the number of foreign entrepreneurs in five years.

Sapporo’s “Digital-Green Integrated Development” strategy embodies new ideas for policy innovation. By combining the application of digital technology with environmental protection goals, Sapporo has successfully cultivated a number of innovative companies in fields such as smart energy management and environmental monitoring. This policy not only promotes economic growth, but also enables Sapporo to be named one of the “Cities with the Most Sustainable Development Potential” by the United Nations in 2023.

The long-term effects of these innovation policies remain to be seen. However, they all embody development ideas that adapt to local conditions and highlight characteristics, providing valuable experience for other cities. Especially in terms of promoting industry-university-research cooperation, optimizing the innovation ecosystem, and attracting international talents, the successful experiences of these policies deserve in-depth study and promotion.

8.3 Comprehensive evaluation of investment environment

A comprehensive evaluation of the investment environment in major Japanese cities needs to consider multiple dimensions, including economic vitality, innovation capabilities, human resources, infrastructure, quality of life, and policy support. According to the latest data from the World Bank and the Economist Intelligence Unit, we can make the following assessment of the investment environment in these five cities:

Tokyo still maintains its leading position in overall investment climate. As one of the global financial centers, Tokyo has a mature business ecosystem and rich international talent resources. However, high operating costs and fierce market competition are also factors that investors need to consider. According to the 2023 Global Financial Centers Index (GFCI), Tokyo ranks fourth among 190 assessed cities, demonstrating its strengths in financial services and business environment.

Osaka performs well in life sciences and advanced manufacturing investments. Compared to Tokyo, Osaka offers lower operating costs and a more relaxed regulatory environment. Especially in the fields of medical devices and biotechnology, Osaka’s R&D infrastructure and industrial cluster effects provide investors with unique advantages. According to a survey by the Japan External Trade Organization (JETRO), Osaka has ranked among the top three Japanese cities in the satisfaction evaluation of foreign companies for three consecutive years.

Nagoya’s investment environment is known for its strong manufacturing base and efficient supply chain network. Especially in high-end manufacturing fields such as automobiles, machinery, and aerospace, Nagoya provides investors with a comprehensive industrial ecosystem. Nagoya ranks fifth among Asian cities according to the 2023 Global Manufacturing Competitiveness Index, reflecting its strength in manufacturing investment attractiveness.

As an emerging innovation center, the biggest highlight of Fukuoka’s investment environment lies in its flexible policy support and active entrepreneurial ecosystem. Fukuoka stands out in areas such as ease of starting a business, cost of living and work-life balance. According to the 2023 Global Cities Startup Ecosystem Report, Fukuoka has jumped to the top 30 globally in the ranking of emerging startup hubs, demonstrating its potential as an investment destination.

Sapporo’s investment environment reflects a unique balance. Although smaller than other metropolitan areas in terms of economic size, Sapporo excels in areas such as quality of life, environmental sustainability and digital innovation. Especially in the fields of green technology and digital content creation, Sapporo offers investors unique opportunities. Sapporo ranks third among Asian cities according to the 2023 Global Liveable Cities Index, an advantage that helps attract and retain high-quality talent.

The investment environment in Japan’s five major cities will continue to evolve. As the Japanese government promotes digital transformation and sustainable development strategies, more targeted investment incentive policies are expected to emerge. Especially in areas such as artificial intelligence, clean energy, and solutions for an aging society, these cities may introduce more attractive investment conditions. At the same time, healthy competition among local governments is also expected to further optimize the business environment in each city and create more opportunities for domestic and foreign investors.

Forward-looking analysis of urban commercial development by top Japanese experts

Authoritative figures in Japanese economics have provided profound insights into the transformation of urban economic structure. Kenichi Sato, professor of economics at the University of Tokyo, pointed out that in the next ten years, Japan’s major cities will experience a significant transformation from traditional manufacturing to high value-added service industries and knowledge-intensive industries. He predicted that by 2030, the service industry in major cities such as Tokyo and Osaka will account for more than 80% of GDP, with digital economy, financial technology and creative industries becoming the main growth points. At the same time, Professor Sato emphasized that this transformation will lead to major adjustments in the labor market, and it is expected that more than 30% of jobs will face restructuring or transformation.

Taro Yamada, chief economist at the Japan Economic Research Center, is concerned about the trend of regional economic differentiation. He predicted that the Tokyo metropolitan area and the Osaka-Kyoto-Kobe metropolitan area will further strengthen their status as innovation centers and international hubs, while small and medium-sized cities need to maintain their competitiveness through characteristic industrial clusters and smart city construction. Yamada specifically pointed out that population aging and urban shrinkage will become key factors affecting the economic structure of Japanese cities. It is expected that by 2035, more than 40% of Japan’s small and medium-sized cities will face serious population reduction problems, which will force these cities to reposition their economies. Function.

In the field of technological innovation, Dr. Suzuki Ichiro, director of the Artificial Intelligence Research Center of RIKEN, Japan, made a forward-looking analysis of the future urban innovation ecosystem. Dr. Suzuki foresees that by 2030, Japan’s major cities will form a highly integrated innovation network, characterized by in-depth cross-disciplinary and cross-industry collaboration. He particularly emphasized the importance of the concept of “innovation districts” and expected that Tokyo’s Roppongi Innovation District and Osaka’s Nakanoshima Innovation District will develop into Asia’s top innovation clusters, attracting the world’s top talents and capital.

At the same time, Professor Seiko Takahashi, Dean of the School of Future Social Creation at Kyoto University, pointed out that the urban innovation ecosystem will pay more attention to sustainability and social impact. She predicts that by 2028, more than 50% of urban innovation projects will directly address social challenges such as environmental protection and population aging. Professor Takahashi also emphasized that open data platforms and citizen participatory innovation will become a new trend in urban innovation in Japan. It is expected that by 2030, every major city will establish a comprehensive urban data platform to support the collaboration of various innovation entities.

In terms of industrial development trends, Masakazu Tanaka, a senior analyst at Nomura Research Institute, provided unique insights into key industries in Japan. Tanaka predicts that by 2030, Japan’s robotics and automation industry will triple its current size, with an annual output value exceeding 10 trillion yen. He specifically pointed out that as the aging of the population intensifies, the health care and elderly care service industries will usher in an unprecedented wave of innovation. It is expected that the market size in this field will exceed 100 trillion yen by 2035.

Mika Sato, chief industry analyst at Mitsubishi UFJ Research and Consulting Company, is concerned about the development prospects of new energy and environmental protection technologies. She predicted that by 2032, Japan’s hydrogen energy industry chain will achieve full commercialization, and the annual output value is expected to exceed 5 trillion yen. Sato also emphasized that circular economy-related industries will become a new growth point for Japan’s urban economy. It is expected that by 2035, the market size in areas such as resource recycling and environmentally friendly materials will reach five times its current size.

In the eyes of multinational company executives, Japan’s business environment is undergoing profound changes. Koji Yamamoto, President of IBM Japan, pointed out that Japan is accelerating digital transformation and it is expected that by 2028, more than 80% of large Japanese enterprises will achieve full cloud and digital operations. He particularly emphasized that the application of artificial intelligence and big data analysis in Japanese companies will increase significantly. It is expected that by 2030, AI-assisted decision-making systems will be widely used in more than 70% of large Japanese companies.

Naoko Kitagawa, CEO of Amazon Japan, is concerned about changes in Japan’s e-commerce and digital services. She predicts that by 2030, Japan’s online retail penetration rate will rise from the current around 10% to 30%. At the same time, new digital services based on artificial intelligence and virtual reality technology will occupy an important share of the Japanese service industry market. Kitagawa also pointed out that Japan is accelerating the opening of the data center and cloud service market, which will create more opportunities for international technology giants to expand their business in Japan.

To sum up, the analysis of these top experts revealed several key trends in Japanese urban business development: the transformation of the economic structure towards service and knowledge-intensive industries, the deepening and internationalization of the innovation ecosystem, the intelligent upgrading of traditional industries, and the full penetration of the digital economy. These trends will not only reshape Japan’s urban economic landscape, but also bring new opportunities and challenges to domestic and foreign investors and enterprises. In the face of these changes, governments, enterprises and individuals all need to actively adjust their strategies to adapt to and grasp this dynamic new era.

Suggestions for Japanese companies wishing to go overseas

In terms of Japanese market entry strategies, companies need to adopt a step-by-step approach and adapt measures to local conditions. First, in-depth market research is an indispensable step. The Japanese market is highly mature and highly competitive, and consumers have extremely high requirements for product quality and service levels. Therefore, companies should invest sufficient resources in conducting detailed market analysis, including consumer behavior research, competitor analysis and regulatory environment assessment. Secondly, choosing the appropriate market entry mode is crucial. Considering the particularity of the Japanese market, many companies may find that establishing joint ventures or strategic alliances with local companies is an ideal option. This not only reduces initial investment risk, but also allows you to quickly gain local market insights and business networks. In addition, a staged market penetration strategy is also worth considering. For example, first test the market response through an e-commerce platform, and then gradually establish physical sales channels. For some specific industries, such as high-tech or professional services, you can consider setting up an R&D center or representative office first, and gradually accumulate market experience and customer base before fully entering the industry.

In terms of localized operations, understanding and respecting Japanese business culture is the key to success. First of all, the localization of products and services is not just language translation, but also requires an in-depth understanding of the preferences and habits of Japanese consumers. For example, appropriate adjustments need to be made in packaging design, product features and even pricing strategies. Secondly, human resource management requires special attention. Japanese corporate culture emphasizes collectivism and long-term employment relationships, so companies need to adjust their talent management strategies and may need to place more emphasis on team harmony, career development and job security. Furthermore, establishing an effective local supply chain and distribution network is also an important part of localized operations. Business relationships in Japan are often built on long-term trust, so they require patience and continued investment. Finally, companies should actively participate in local community activities and demonstrate corporate social responsibility, which not only helps brand building but also promotes the development of relationships with local stakeholders.

When looking for potential partners, businesses need to comprehensively evaluate several factors. First, carefully study the market position, technical strength and financial status of the potential partner. Although many small and medium-sized enterprises in Japan are not large in scale, they have unique technological advantages or market shares in specific fields. Second, assess cultural fit and alignment with strategic goals. Japanese companies usually focus on long-term partnerships, so it is crucial to find partners who share the same corporate culture and development vision. Furthermore, consider the partner’s industry relationship network. In Japan, the influence of industry associations and business groups cannot be ignored, and companies with good relationships with these organizations can often provide more market opportunities. In addition, attention should also be paid to the innovation capabilities and international experience of potential partners. As the Japanese market changes, companies with innovative thinking and international perspectives are more likely to become ideal long-term partners. Finally, it is recommended to directly contact potential partners and establish preliminary relationships by participating in industry exhibitions, business exchange meetings and other activities.

Risk management and compliance are important challenges faced by companies in the Japanese market. First, companies need to establish a sound legal compliance system. Japan’s legal environment is complex, especially in terms of labor laws, consumer protection laws and intellectual property laws. Therefore, hiring a professional advisor who is familiar with Japanese law is a necessary investment. Secondly, enterprises need to pay special attention to data protection and privacy security. Japan’s regulations in this area are becoming increasingly strict, and non-compliance can result in serious legal and reputational risks. Furthermore, financial risk management also requires special attention. Yen exchange rate fluctuations, tax complexities, and Japan-specific business practices (such as long-term accounts receivable) can have a significant impact on a company’s financial position. It is necessary to establish a sound internal control system and conduct regular risk assessments. In addition, companies also need to develop detailed crisis management plans, including natural disaster response, product recall procedures, etc., to deal with possible emergencies. Finally, ongoing compliance training and corporate culture building are also important components of risk management to ensure that all employees understand and comply with relevant regulations and corporate policies.

Taking advantage of Japanese government policy dividends is an important way for companies to gain competitive advantages in the Japanese market. First, companies need to pay close attention to the Japanese government’s industrial policies and regional development strategies. For example, the Japanese government has vigorously promoted digital transformation, renewable energy development and medical and health industry upgrades in recent years. Companies investing in these areas may receive various forms of support, such as tax incentives, subsidies or financing facilities. Second, companies should actively participate in Japan’s innovation ecosystem. Many local governments have set up innovation centers and incubators to provide foreign companies with opportunities to collaborate with local research institutions and start-ups. Participating in these projects not only provides financial and resource support, but also accelerates technological innovation and market adaptation. Furthermore, companies should make full use of Japan’s free trade agreement network. As a party to several important free trade agreements, Japan can serve as a springboard for some companies to enter other markets. Understanding and taking advantage of the preferential provisions of these agreements can significantly reduce cross-border trade costs. In addition, the Japanese government has provided a variety of support measures to promote foreign direct investment, such as simplifying administrative procedures and providing investment consulting services. Companies should proactively establish contact with official agencies such as the Japan External Trade Organization (JETRO) to obtain the latest policy information and support. Finally, companies should also pay attention to Japan’s regional revitalization policies. Many local governments have provided additional incentives to attract foreign investment, such as providing office space, talent introduction support, etc. Choosing the right area to locate can significantly reduce operating costs and obtain more policy support.

Conclusion and outlook

The commercial development of Japanese cities is showing a complex and dynamic overall trend. Digital transformation is profoundly reshaping the urban business landscape. From retail to financial services, from manufacturing to healthcare, all walks of life are undergoing intelligent upgrades. Facing the challenges of an aging population and labor shortage, the application of automation technology and artificial intelligence is accelerating, promoting improvements in production efficiency and service quality. The concept of sustainable development has become one of the core driving forces for urban business development, and green technology, circular economy and socially responsible investment are shaping new growth points. In addition, Japanese cities are working hard to improve their international competitiveness and reshape their status as Asia-Pacific economic hubs by optimizing the business environment and attracting global talents and capital. These trends not only affect the Japanese domestic market, but also bring new opportunities and challenges for international companies to enter the Japanese market.

Japan’s interaction with the global economy is entering a new stage. With the implementation of multilateral and bilateral free trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and the Japan-EU Economic Partnership Agreement (EPA), Japan’s cooperation space in areas such as international trade, investment and technological innovation has further expanded. Especially in the fields of high-end manufacturing, new energy, medical health, and digital economy, Japan has complementary advantages with many countries and regions, and there is huge potential for cooperation. Japan’s experience in managing an aging society provides valuable reference for many countries facing the challenge of population aging. At the same time, Japan is also actively absorbing global innovation resources, especially in emerging technology fields such as artificial intelligence and the Internet of Things. In addition, as Japan further opens its market, the development opportunities for companies from various countries in the Japanese market are also increasing, especially in innovative technology applications and regional revitalization projects.

Future research directions should pay more attention to global perspectives and interdisciplinary analysis. First, there is a need to conduct in-depth research on the impact of digital technologies on urban business ecosystems, especially how emerging technologies such as artificial intelligence, blockchain and the Internet of Things are reshaping business models and consumer behavior on a global scale. Secondly, research on social factors in the commercial development of Japanese cities should be strengthened, such as the impact of changes in demographic structure, innovation in work styles and evolution of consumer culture on the business landscape, and how these changes interact with global trends. Furthermore, comparative research has become more and more important. By comparatively analyzing the urban business development models of Japan and other developed and emerging economies, more universal conclusions can be drawn and provide reference for global urban development. Finally, exploratory research on new models of international economic cooperation should be strengthened, especially in the fields of digital economy, green development and innovation ecosystem construction, to provide theoretical support and practical guidance for national policy formulation and multinational enterprise strategies. These studies will not only help understand Japan’s development trajectory, but will also provide valuable insights into global urban business development.