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Rooted in history, driven by innovation

During last year’s commemoration of the 70th anniversary of the end of World War II, Japanese Prime Minister Shinzo Abe traveled to Washington D.C. and became the first Japanese prime minister to address a joint session of the U.S. Congress.

The event was the highlight of a weeklong visit that saw the two countries reaffirm their relationship and map out new ways to further strengthen their ties.

While visiting Washington D.C. and Boston, Abe shared his insights on the strong ties that bound Japan and the states of the Eastern United States, with trade issues dominating the discussions.

2015 was a breakthrough year for the much-anticipated Trans-Pacific Partnership agreement, a trade pact among 12 countries in the Pacific Rim. After years of negotiations, an agreement was finalized in October. As signatory countries now work toward ratification, all have expressed optimism on the future of trade across the region.

Virginia Tourism Corp. President and CEO Rita McClenny

Meanwhile, other areas of business continue to thrive and create two-way opportunities that have reaped rewards for both sides. Tourism, for example, remains an important component of the economic ties between Japan and the Eastern United States.

“We love the Japanese traveler,” said Virginia Tourism Corp. President and CEO Rita McClenny, whose state exceeded the national average in terms of growth of inbound Japanese tourism.

Valued at around $22.4 billion and creating 217,000 jobs, tourism has played an important role in Virginia’s overall economic development. Within that sector, international tourism significantly contributed to those positive figures.

Japan has been in the top 10 in terms of inbound traffic to the capital region, which includes Virginia and Maryland. Of the 93,000 tourists who visited in 2014, close to a quarter of them specifically came to Virginia, which is known for its history, art, nature and gastronomy.

Further up, New England — comprising the states of Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island — is a growing, yet still under-appreciated region of opportunity for the Japanese. At the center of it all lies Massachusetts, arguably the engine of innovation that drives global research.

“What’s special here is the solid research foundation that one can find. Universities in this area produce so much intellectual property. The ecosystem has been developing for over 30 years. They transform great ideas into real, actual investments and products. Many Japanese realize this potential, so they send Japanese companies here to find great examples and success stories,” explained Consul General of Japan in Boston Tsutomu Himeno.

Consul General of Japan in Boston Tsutomu Himeno

Indeed, some Japanese companies have recognized what this ecosystem has to offer and have opted to invest significantly in the area. For instance, Sumitomo Dainippon Pharma of Osaka acquired Boston Biomedical, a Cambridge-based leader in cancer stem cell therapeutics, in 2012.

What has stood out in this evolving relationship, however, is how the two sides have integrated.

“The process that we have developed here is key. Everyone understands the importance of innovation, so we collaborated to export the Boston biotech culture by establishing a cancer institute in Japan, where we are applying entrepreneurial approach to innovation,” said Boston Biomedical President and CEO Chiang Li, M.D.

“At the same time, we brought over a Japanese team to Cambridge so that we could better integrate our cultures and provide seamless communication to advance our product development, manufacturing and collaboration more efficiently. We are now seeing in real-time how U.S. biotech culture is being integrated into corporate Japan and vice versa. And this leads to first-in-class innovation,” he added.

While some Japanese are approaching investments in this area cautiously, some have spearheaded efforts to change the way drugs and developed, among them Strategia Therapeutics, a Boston-based company headed by Japanese CEO Dr. Keizo Koya.

“The patients must always come first in drug development. Large drug development organizations often lose sight of this simple concept. We must do everything we can to bring meaningful new therapies to patients in clinical trials to test their effectiveness in the most efficient manner possible and to the marketplace so as to make these new therapies accessible to patients at large who need them,” Koya said.

Strategia Therapeutics has established an innovative approach to R&D by emphasizing the strength of experience and individual collaboration, rather than following the old model of large, inefficient infrastructure on which traditional drug research and development has been built and operates yet today.

As collaboration multiplies in life science, so do opportunities in other sectors.

One driver of growth is air travel between Tokyo, Boston and Washington, D.C. While flights between the Japanese and U.S. capitals have existed for 25 years, direct flights from Boston began only in 2012, thanks to Japan Airlines. It was the first-ever direct connection between New England and Asia.

City of Boston Chief of Economic Development John Barros

“This flight has opened many avenues, and it has certainly helped people from both sides to visit both countries. That would bring additional support in encouraging or facilitating collaboration. The direct flight really helps. It can also have greater impact on tourism. There is a great potential in this regard not only for Boston but also for surrounding areas and states,” the Japanese consul pointed out.

Outside the country, among several successes scored amid challenging circumstances, MassMutual Life Insurance Co., based in Springfield, Massachusetts, has reaped the benefits of its unwavering confidence in the Japanese market and agility to adjust its business model accordingly.

While Boston and the surrounding areas caught on to the so-called Japanese advantage, efforts to develop business with Japan have continued and new areas of investment are expected to increase.

“We would like to invite Japanese companies to continue to come. Most people come to Boston because of the talent. We feel that Boston will continue to be highly competitive in that space. We want to make sure that they have a government partner here that is easy to work with,” said Boston's Chief of Economic Development John Barros.


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Eastern USA 2016 was prepared for and originally printed in The Japan Times Newspaper.

PDF of the printed report

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