Stretching from the vast expanse of the Appalachian Mountains in the east to the Rocky Mountains in the west, the Midwestern states have been traditionally referred to both as the country’s bread basket and the manufacturing hub of the United States, supplying the country and the rest of the world with essential food and important machinery, vehicles and other finished goods.
Because of its excellent infrastructure and well-developed transport links, the centrally located region has become an important logistics center, a position that local and international businesses appreciated more in light of the protracted COVID-19 pandemic that strained supply chains across the globe and stunted economic growth.
However, more than two years into the pandemic, the states in the U.S. Midwest are showing signs of a strong recovery. Many businesses have seen new opportunities for growth and technological innovation, reminiscent of the boom that characterized the postwar era in the United States.
“Over the past five years, the number of locations of Japanese businesses and industries increased 23%, while the number of jobs grew 17%. In April 2021, Nippon Express built a logistics center in Wood Dale, Illinois (close to Chicago O’Hare International Airport), and moved its headquarters from New York to this new location,” said Consul General of Japan in Chicago Hiroshi Tajima.
That same month, car giant Toyota announced an $800 million investment to expand its manufacturing facility in Princeton, Indiana, a move that is expected to create 1,400 jobs. Meanwhile, in Nebraska, Kawasaki Motors Manufacturing will spend around $200 million for an expansion program that will generate another 550 jobs.
“The Midwest region is a $4 trillion economy. In terms of gross domestic product, it’s on par with Germany and larger than France. Our population is on par with those two. Japan, on the other hand, is our No. 1 foreign direct investor,” said Midwest U.S.–Japan Association Chairman Gordon Dobie.
“We have transitioned from the Rust Belt to the industrial heartland of the United States and an economic powerhouse. With something like 16,000 Japanese businesses here that employ 150,000 Americans, Japan has played a really important role in our development,” Dobie also said. “During the pandemic, we had to sustain ourselves via digital, online means. In 2022, we will host our 52nd Annual Conference, to be held in Chicago, from September 11-13.”
The rest of the numbers are also impressive. Over the past decade, Japanese foreign direct investment in the United States has nearly doubled, growing 183% to around $679 billion. In 2019, of the 979,000 jobs created in the U.S., 527,000 were by Japanese manufacturers.
The Midwest’s economic stability and growth, according to Tajima, would not have happened without close cooperation on both sides.
“I was really impressed by the welcoming of Japanese investment at the state and municipal levels, the long history of sister city relationships, and the abundance of Japan-related events across the region. I believe that strong ties between Japan and each of these states or regions will further strengthen the economies of Japan and the Midwest,” the Japanese diplomat said.
“I’d like to strengthen our relationship not only with Japanese people here, but also with Japanese–Americans and other Americans who are interested in Japan. Take advantage of the consulate. Please do not hesitate to contact us,” Tajima also said.
Another well-known attitude of the Japanese toward business decisions is the long view on markets and their partnerships, which requires building trust and getting to know both sides deeply over many years.
“Get to know a Japanese-owned company in your area and interview the manager to see what he thinks about the community. Also, go interview Americans who run a business like yours and get their views about how to run a business in the United States. Seek out joint ventures between a Japanese and an American and find out where they may see new business opportunities,” said James McClung, founder and CEO of global business advisory firm Lismore International, who is also a director of the Japan America Society of Chicago.
“One step that is often overlooked is the political. You need to know the government officials, whether it be the mayor, governor, senator or a State Department official. That can make a huge difference because the information we get back becomes much broader and more insightful,” McClung added.
JETRO Chicago Chief Executive Director Ralph Inforzato values that similar interaction between official channels: “In the Midwest, we reached out to Japan via digital videos. Of the eight states that took part, four videos were headlined by the governors of Nebraska, Michigan, Indiana and North Dakota. We succeeded in keeping communication links between Japan and the state and federal government officials during our JETRO Digital Investment Initiative. Those videos are still on our website.”
Meanwhile, home-grown Geis Companies, now run by its third generation, is ready to expand its business beyond the Midwest and grow its international client base.
“Our goal is to expand our foreign relationships, no matter where that may be. If there’s an international group looking to relocate or expand its operations, whether it’s for distribution, manufacturing or for any other use, we want to be the company that is called first. We can help steer them in the right direction,” Managing Partner Conrad Geis said.