Nate Nossal essay on how free enterprise and small-business establishment in Japan is stifled

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Hi Blog.  As Debito.org is a forum for voices that might not otherwise be heard, let me turn the keyboard to Debito.org Reader Nate Nossal, who shares his experiences at being an entrepreneur in Japan.  As somebody who has also done the arduous task of founding his own company in Japan, I am simpatico.  Over to Nate.  Dr. ARUDOU, Debito

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JAPAN: A COUNTRY LARGELY OPPOSED TO FREE ENTERPRISE
By Nate Dossal Ph.D., Ishikawa Prefecture, Japan
Exclusive to Debito.org, March 25, 2016

Japan is a country which is largely opposed to free enterprise. As one who has studied economics and subscribes to the notion that the ability for individuals to do business is integral to a society’s wealth and commerce, as well as that society’s ability to solve problems generally, I find this condition amusingly shortsighted. As one who is living in and attempting to do business in Japan I find this condition depressing. After all, what is it that individuals can do best as entrepreneurs? We stand to make money by solving problems for other people. I will discuss some extraordinary barriers to business created by just a few layers of legal or bureaucratic excess which discourage or disable free enterprise in two examples of personal experience. It is assumed that there is some reason that people have gone through such troubles to erect these legal barriers, and I can only speculate what some of those possible reasons might be. On the microeconomic level, the effects of the clearly anti-business atmosphere created by those specific barriers are devastating. Businesses which could and should be thriving, multiplying, growing, and revolving multiples of yen back out into the local economy are stopped dead. Theoretically, all money gets spent somewhere, but inevitably some of that money which would have been spent in the local Ishikawa ken economy (where these stories take place) gets saved, sent away, or spent elsewhere and the greater Ishikawa ken economy suffers for this.

Case 1: Japan Advanced Institute of Science and Technology (JAIST) Souvenir Goods classic failure of lost opportunities on several levels… This writer did soon after beginning his graduate studies in a national Japanese university discover that something was missing. Despite searching high and low throughout the dingy offices and one store on campus, there was a peculiar, complete absence of any commercially available souvenir goods from that university. Not a shirt, not a cap, a notebook or a pencil with “JAIST” written on it was for sale. It was especially noticeable just for one very personal reason: I wanted to be able to send my dad in the U.S. a t-shirt. I always sent him a t-shirt from the companies or the universities of which I became a member. Indeed, this may seem very peculiar to any person who may have ever worked in the marketing office of any-sized university. The sale of such school “pride” items can be profitable in itself, but at any rate is costless to the university, even after taking into account the price of design and production, maintaining stock and administration for the sale of goods. Even a small market makes up for all of this since the target market is highly invested in the product, the supplier is decidedly monopolistic by nature, and the turnover from new staff and students assures some consistent demand for the products. All of that is of course aside from the main point–schools need name recognition and the sale of pride products is a major source of free advertising in this aspect.

As a graduate student I mistakenly saw this as a great opportunity to accomplish three related good deeds, and get a JAIST golf shirt made for my dad too: I would design and have produced several items that would surely be of interest to students and staff of the university, market and sell them–which would satisfy that same demand which I myself sensed. With no commitment from or involvement of the university required at all, except for their permission to do so, I could single-handedly increase my university’s name recognition in the community, and presumably around the world to some small degree. Finally, I could make some small profit as a reward for my efforts, which I would surely need to help support my research and living expenses. This was to be a slam-dunk. A no-brainer. BANG! What a bonanza, I thought. I engaged the staff I knew in this conversation, and a meeting was arranged for me to discuss this radical new idea being offered to them free of charge. I spent a couple of days researching suppliers for this kind of goods, and had some mock-ups of the proposed goods made, which I included with a bi-lingual proposal for a license to use the university’s existing logo and images. Six men and women came to hear my awkwardly foreign Japanese presentation, but they were all visibly impressed. At the end I was told that although no firm decision could be made by such a group of self-described office functionaries, they assumed that the benefits I was offering, and the price I was asking (zero) would make it a good idea for the university. Mere days later, I received an email from one of the lowest level office workers that the vice president of the university said “no.” I would be better off focusing my energies on my research rather than trying to help them solve the problems of the university.

After also having noticed that no student council had existed, three years later, I established one with the political assistance of my professor. Among the many reasons for establishing a student council, one of them would be to re-assess this weird lack of JAIST shirts and coffee mugs. The road to market was a barrage of nay-naying from surprising sources: a very provincial type woman belonging to the management of the single university store deigned to meet with me to discuss the possible placement of our Student Council brand official JAIST Goods in the store. I was expecting some discussion of division of profits and liabilities, a contract, some discussion of their standard business practices and process, maybe the need for some assurances or money. The first thing this lady said to me though was, irrelevantly enough, that she didn’t think Japanese students would buy those goods. In fact they did buy, and large quantities of goods were requested. Orders from Japanese professors and administrators of 20 and 100 came. The university president (Japanese, of course) wanted a golf shirt, a cap and a mug. But none of this would be made available with any help or assistance from the university store, or the university itself whatsoever. In fact, the Council received a threatening email from someone in the “labor management section” about infringing on the JAIST copyright. That person had been alerted to our proposed activities by none other than the anti-business store manager! Is it possible? That people would be so steadfastly in opposition to me making a few hundred yen while serving their own needs? Anyway, we enlisted the student body in a competition to design our own logo, to avoid any trouble with the now rabidly anti-business office staff. Even still, we received truly unending innocuous-seeming requests for increasingly invasive information (including financial information of the proposed private business, the names, contact information and prices of my suppliers, and my own personal financial information) from the office of student affairs apparently aimed at infringing upon or discouraging our entrepreneurship. It seems the university office workers were quite keen on ensuring that no student ever makes any kind of profit from any kind of sales of any kind of product on any national university grounds…Like, it was more abhorrent to them than the thought of consuming cherry vodka fanny bangers at a faculty disciplinary hearing. In the end, even our advisor and protector, the Dean of the school was disparaged, and we were kindly requested NOT to attempt to address this problem of no-JAIST-goods for them anymore. It was a mixed success: We managed to design, produce, market and distribute exactly one cycle of a much desired product, and I broke even on the venture. It would be the last time ever for this want-to-be capitalist at that institution, however. That was fine, anyway I would graduate soon and had bigger ideas to entertain.

Case 2: A friend of mine, a German pilot and safety officer for EU pilots would fly into Komatsu International Airport a couple times of year and stay for two or four days while his plane was prepared to fly again. During those days, he complained, he would have nothing much to do except hang around his hotel room, roam the streets in search of any intelligible (English) communication and inevitably drink copious quantities of hotel bar alcohol. What he and his company needed was some local person who could provide the kind of guidance I could give, and take the pilots to the beach or the mountains, maybe offer a bicycle rental. In fact though, it wasn’t just the pilots flying in and out of Komatsu. Since Kanazawa opened up its first Shinkansen train line last year, literally thousands of foreign, mostly non-Japanese speaking, illiterate and largely lost and out-of-place tourists have been wandering through the well-preserved feudal-era narrow streets of this place. I know this is true because I routinely hear the laments of my Kanazawa Hotel and Inn Association English students–they are so busy now; their rooms are always full; they need more staff; they need to hurry up and try to learn more English to cope with the many language problems that have resulted. The real test though is the Starbucks test. Not the economic barometer of disposable income, but this: ten years ago, it was often possible, but not at all guaranteed to encounter even one other foreigner at Starbucks. This year, Kanazawa Station Starbucks and M-za Starbucks are packed almost exclusively with foreign clientele of European descent. I am sure that none of these people live here, either. They’re all carrying cameras and backpacks, and most are of retirement age. These people desperately need no-nonsense, English speaking tour guides, and I am willing to bet that many of them would be happy to pay money for that privilege.

Over the last several months, I carefully developed a website to address this need and to help to those tourists who may want a little more help to navigate this unforgivingly non-English speaking corner of the north. They could also use my help parting with some of their much-needed money while they are temporary participants in this local economy. To do that, I need only impart a sliver of the bounty of knowledge of this place which I have amassed in 13 years of research, learning and teaching. They also need transportation, some equipment in case of going kayaking, skiing, or mountain climbing, for example, and of course oodles of accident and life insurance. I expected that much. What I didn’t expect was this: about the time I was really feeling ready, in fact overdue to launch that exact business, I was sternly warned by my wife who informed me of recent news reports of Chinese nationals in the Tokyo area who were arrested for operating a similar-type business without a license. While living in a country where I am aware that a license for serving tea exists, it quite honestly never for a moment occurred to me (or maybe to those Chinese business operators) that I could need a license to show people around my hometown. After being juggled around on the phone between several Japan legalese-only speaking tourism offices, I dutifully arranged an in-person meeting with my prefectural travel and tourism bureau.

I was welcomed by the panel of three officers–two from tourism and one from legal. The three were not personally difficult or offensive in any way. They even apologized for the fact that none of the the three of them, and no one in the national tourism offices ANTA and JATA could speak English. Pretty soon though, the air sucking through teeth began. “Mmmm, muzukashii…” That is the beginning of almost every un-scripted conversation foreigners have with Japanese standing behind a service counter. It is the calm but firm discouragement I suffer at every mention of trying to improve my station, assume a level-appropriate role in almost anything, or help to fix even the most obvious of problems. “It would be easier if you had a Japanese partner,” one said bluntly. I told him that while I appreciated his suggestion, I came to get the information on doing it myself, or with my wife. “Umm…” he stammered until the lawyer could help out “Well your wife has a job,” the lawyer said, “so it would be against her working conditions to engage in any outside business activity.” Which although it is true enough, if completely aside from the point. Let me tell this to you straight: after 13 years of working in Japanese schools and companies, there is no possibility of me having an equal partner. No matter what I do or how good I may be, I will always be held in lower regard than, and held back by my Japanese counterpart. They nodded in apparent understanding without need for example, and bit by bit laid out the separate processes as best as they themselves understood them. If I could do it, they said, I would be a pioneer.

The news they had for me was not good: I need not merely to prove my financial worthiness to the state and present insurance certificates. I need to pass a national test for a travel agency. It’s only offered in Japanese of course, and full of Japanese legal jargon. Maybe I can get some help for this, but the test is offered only once per year! Once. That’s pretty bad. On top of that, if I am actually thinking of transporting people in my car (um, I thought that was what cars were FOR) then I can’t do that with just a regular passenger car license. I need a taxi driver’s license, which the tourism agency told me would be practically impossible for (a foreigner) to accomplish. “Oh, so all of those hotel van drivers have taxi licenses?” I asked. The panel of three gave each other those uncomfortable Japanese glances and the lawyer said no, that was different. Be that as it may, I thought how this touches directly on another issue, Japan’s reinterpretation of the Geneva Convention covering international driving privileges. I had a commercial 10 ton license with air brakes certification, and the chauffeur and taxi license when I came here, but I just didn’t have the extraordinary resources of time required for transferring all those licenses and testing and re-testing individually for each one of them after all I went through just to get my regular car and motorcycle licenses back. OK, so in order to take foreign people to the beach and get paid for it, I need a travel agent’s license and a taxi driver’s license, and I need to register my business (no kidding, a 14 part process) which includes depositing no less than 100,000 yen (about $9,000) cash with the Japanese government, presumably interest free, or maybe with negative interest. I also need to show and maintain a similar balance in my company account. No doubt, this is an extraordinary, if not cock-blockingly prohibitive set of artificial barriers to free enterprise. Some of this is understandable, as I said. Companies need insurance. If I were in a position to do harm to the environment or local population, some financial assurances (though probably not a “deposit” like as with some shyster landlord) would be expected. On top of all this, though, and I really don’t think I could ever invest 200,000 yen in licensure before ever even getting a company started to be honest, but on top of all this, at the end of my meeting in the Ishikawa ken cho I was asked in all seriousness where my office would be located. This is significant, the lawyer said, because for the lowest level of licensure (the 200,000 yen one) I could only do business within one municipality’s distance from my home office. After going the processes outlined already, and they are extreme, I would get a license that wouldn’t even include Kanazawa. The license for the type of small business I envisioned requires an 18 million yen commitment.

I go deadpan. I search in vain for the hidden cameras, wait hopelessly for the comedian in the yellow suit and giant bow tie to jump out laughing. This is real though. This is the anti-business environment they have created. It kills any small businesses before they could ever get started, and for what? What does all this process and licensure get for Japan? A few badly-needed interest-free loans? Probably that is an emergency of their own making. Is it enough to make up for the multiplied effects of dampening the business spirit? John Maynard Keynes wouldn’t say so. Does it prevent ill-intentioned or unqualified players from entering the market? Surely it must, since this condition would seem to prevent MOST players, qualified or not from entering the economy. With my PhD, my Global Human Resources doctoral certificate, and my advanced Japanese credential from a national university, as well as years of volunteer and professional service in the field which I would like to work independently, probably no one would say I am at all unqualified to take foreigners on local side trips, even for money.

I am not saying I was singled-out or unfairly discriminated against for being a foreigner necessarily. While this is a positively horrible set of conditions, and terrible treatment of a prospective entrepreneur who should be met with open arms, Japanese law and government treats its own citizens just as badly. The outright hostility of the Japanese government towards small businesses like these assure larger market share to larger entities–or else they just assure that some markets will simply never be, for lack of active, qualified and viable suppliers. The people at my former university will continue to want, and not get university logo-emblazoned items to send back home. The local citizens will continue not knowing what JAIST is, or even that it exists at all–possibly the most hilarious marketing failure in the country. And foreign tourists will sip a few coffees and walk themselves around downtown for a day or two and go on to Kyoto or home. Many of them will say how wonderful and enigmatic that dusty old Kanazawa town was, but it might be better. If they could have had a locally-educated English speaking guide to show them the most beautiful and meaningful places in the Ishikawa countryside, I would at a minimum explain the history of the Farmers’ Rebellion, the importance of the Shirayama Hime Jinja, Bassho’s passage, or the City of Temples. They also would be sure to spend more money while they were here, and that money could support not only me and my family, but the people I would have employed in the company that I fear now will never be.

-Nate Nossal Ph.D., Ishikawa Prefecture

ENDS

29 comments on “Nate Nossal essay on how free enterprise and small-business establishment in Japan is stifled

  • Ha ha, I had to go back and re read it. so many of us have tried the same thing;

    “I went through just to get my regular car and motorcycle licenses back. OK, so in order to take foreign people to the beach and get paid for it, I need a travel agent’s license and a taxi driver’s license, and I need to register my business (no kidding, a 14 part process) which includes depositing no less than 100,000 yen (about $9,000) cash with the Japanese government, presumably interest free, or maybe with negative interest”

    My take away from my experience was that they dont want gaijin doing those tours, they want to keep that market protected for retired Japanese. Yes, you are very correct, there is a huge niche there, just waiting to be exploited by native speakers. BUT, those hoops keep you out. After all, who best to extol the grandness of japan to foriegners but real japanese oyaji? Ah yes, my friend, been there done that. For you the gaijin, its just too turn key, too easy, cant have that now can we? of course, there is the need for safety and insurance, but that can easily be done. sorry you had to to go through all that, its a taxing experience.

  • @Nossal,

    You watch, though. Wait a few months or years. your idea will have been copied and implemented by some Japanese. they do this all the time, Ive seen it. They wait for you to bring up the innovative idea, shut you down, then later there is a version of what you floated )

    The recent BNB is a sort of work around grey area I think to this crap that some gaijin have exploited, now its going main stream, watch the Japanese take it over. I think in terms of business in Japan, you must think in opposites, like perhaps not have a website somebody could copy, or put it up in English only. Yes, the joys of business in Japan,gotta respect your efforts )

  • As a fellow resident of Ishikawa, this one hit home. Back when I was unemployed after my contract wasn’t renewed after five years, I seriously considered setting up some kind of one-man personalized travel service in the area. Researching about how to do go about doing so crushed all hope. The hurdles are too great to even get started, so I gave up.

    Now I am thinking about setting up short-term rentals through the various websites that have cropped up and, again, am hitting some ridiculous barriers. I want to do it legally, but the current system is too broken to even begin. It would be easier to tear down my house and build anew than to get it registered as a minshuku or something similar since I need paperwork from when the house was finished in the 90’s (I bought it 5 years ago) that may or may not exist in order to make a legal change for the building’s use, just to give an example. With so many impossible barriers, the old adage that it is easier to ask for forgiveness than ask for permission seems particularly apropos. It’s just all so cripplingly frustrating.

  • I know of a number of people who have been very successful in business in Japan. The main commonpoints are as follows.

    1) Few or no regulatory issues relating to starting up the kind of business that it is
    2) Few or no direct Japanese competitors (wagons will generally circle if there are)
    3) Little reliance on Japanese banks for capital (good luck getting business loans)
    4) Not overly reliant on support from locals who have no incentive to be cooperative

    So it’s not impossible but the barriers are definitely there.

  • Loverilakkuma says:

    This ethnographic essay well illustrates the heart of the problem with Japan’s local bureaucracy. It’s extremely challenging to start business in regional area, since many prefectural governments and local municipalities have their own policy that is immune to the scrutiny of central government or supreme court. My impression is that these bureaucrats seem to be more interested in protecting the vested interest of local business community; they just don’t believe that allowing new comers in the marketplace will help stimulate local economy in the long term. They don’t like the presence of any entity that doesn’t belong to their community, but they might want the scapegoats to bash so that they will meet phony accountability to make an excuse for their bad business decision(e.g., Onsen owners faulting foreign clienteles for bankruptcy).

    I think Ivan Hall critiqued this kind of insular mindset, which, in my opinion, is the other side of extreme in the hubris of business/political establishment. I still remember the time when western universities opened an extended campus in Japan more than a couple of decades ago. I know three schools used to have a campus in regional prefectures: Koriyama(Texas A&M University: 1991-1994); Akita(Minnesota State University:1990-2002), and Nakajo(Southern Illinois University: 1988-2006). All of those are the things of the past. No single foreign-based university is available outside Tokyo as of today.

  • These asinine rules and regulations here are the reason that P & G moved there office to Singapore last year, they left kobe city as soon as there lease was finished. And Citibank also left japan at the end of last year because this is a unfriendly business environment and even worse since ABE took over things. I see a lot of red flags here now!

  • @Johnny T

    Your exactly right, you can be successful, but you have to either go all the way with a registered company, get all the myriad of permits etc, pass this on as expenses OR deal only with the foreign community, either through exports or tourism. There are niches, but they are grey. A litmus test migh be, “would your biz plan make it on a japanese TV show” you know, the ones where some cutsy voice walks the viewer through the gambaru gaijins business in a very japan sanitized way? If not, well then it might not pass the publics perception of the safe gaijin. I can understand some protectionism, after all, you dont want some nihongo gakko grad on a work visa exploiting all the biz opportunities they can find; it would shut out all the pensioners living their dreams. But somebody who has a J wife and kids, whats the issue?

  • Dear Ladies and Gentlemen, When I woke up and read a lot of kind and supportive posts in response to the article I recently posted here, I felt grateful. For now I would like to respond to them generally, starting with “A” san’s–LOL, Indeed why do we stay? But this essay is narrowly focused on an issue, not a general complaint. Personally I wish some things were different, but I still recognize that my wishes are particular to me and my investments and desires. Obviously, when I weigh the goods and evils of living here or elsewhere I continue to recognize the privileges of living in a safer, albeit socially boring and stifled country than, e. g. the USA. I still have a little room to move around. To the others who have tried and failed, and had their dreams crushed by beady-eyed little pencil pushers as I have, thank you for your sympathy. No one touched on the first example though–all the comments were about the Gaijin adventure tourism idea, I noticed. There are zero competitors known to me in this area, foreign or domestic. I remember there was a guy from down under somewhere who ran several spelunking and canyoneering outfits around the country, but it was for Tokyo salary men, and I think he’s gone now. I feel financially and emotional depressed/repressed over this, to be sure, but I really don’t believe the issue of massive overregulation and over-application of bureaucracy is a problem that only we as Gaijin must face.
    That’s not to say there isn’t some favoritism – of course there is! And yes, that happens everywhere. Did someone say insular? The root word origin being the same as Island, Ha ha. I knew it when I washed up on these rocks. I’m not trying to attack or defend anyone, any country, any culture or regime except: that this amount of over-regulation on the micro level, applied generally at the macro level is a significant if not chief cause of the present economic malaise in Japan. My essay (and most of the comments posted) supports the current narrative about the failure of Abenomics to address the topic in any significant way.
    Locally, what seems to be happening is that private local operators are avoiding the entire bureaucracy by engaging as “free” concierge services and then taking money illegally on the side. My take away is that over-regulation of would-be legitimate purveyors of goods and services must then also encourage and support organized crime to fill the gap. This also has implications at the macro level, such as the famous relationship between government and yakuza.

  • The issue with university souvenirs deals with two issues, one of which is problematic in Japan. The one, which is an issue everywhere, is that generally the odds are stacked against saying yes (that is, there if they say no nothing really happens but if they say yes and something bad happens it becomes their responsibility). The other issue, which is huge in Japan, is that people, and often entire departments, waste their energy. To put it simply, everybody should know what the goal of their company / organization is, and how their job relates to that goal. Tons of people in Japan don’t do this – their energies are directed towards other things.

    The 通訳案内士 (licensed guide) thing is an example of regulations gone crazy. The test is difficult and requires the taker to memorize tons of pretty worthless facts about Japan (maybe not worthless, but facts that anyone with a reasonable internet connection can look up in less than a minute). Moreover, a lot of the people who pass it don’t speak good English and really don’t know what foreigners would like to do. It seems ridiculous (and I agree that it is) but closed professions are everywhere.

  • Jim di Griz says:

    @ Nate #10

    Thank you for sharing your experiences and opinions. I agree with most of the above, and planting make a longer comment about this issue later, but I want to address your ‘Case 1’; the university merchandise issue.

    I think the main point is that it’s a national university, so all funding is virtually guaranteed. If the university starts any kind of profit making endeavor, it could put the level of government funding it receives at risk, so your idea would be shelved as soon as someone said ; “You can back this gaijin and his idea if you want, but you’ll be the first one to get fired if funding is decreased”.

    Boom! That’s a show-stopper right there.

    And since it’s a national university, all staff see themselves as status secure, job for life government employees, just like the slackers down at city hall; if they don’t screw up its almost impossible to get fired, if they have a bright new profit making idea, it won’t benefit them, their prospects, or their salary directly at all, so why bother with the extra workload, hassle, and possibility of being made responsible for any screw-ups?

    That’s what happened.

    When (if) the word comes top-down from the Ministry of Education to hire someone to organize products and merchandizing, then they’ll do it.

  • Baudrillard says:

    Dont go thru Japanese bureaucracy- just do it anyway and make money from it as a side business.
    Japanese is like a fossilized, stodgy English public school, trapped by the ancient RULES in a Weberian Iron Cage of Rationality.

    If you ask for permission to do something, they will throw up barriers and/or say no.

    And I disagree that it wasnt racist; as I think there is a subconscious anti NJ undercurrent- they would prefer it if a Japanese person showed NJ tourists around so they get “the correct understanding of Japanese culture and history”.

  • Baudrillard says:

    “Locally, what seems to be happening is that private local operators are avoiding the entire bureaucracy by engaging as “free” concierge services and then taking money illegally on the side. ”

    Exactly.Do as they do. Especially as your target market are NJs anyway, its kind of “out of the system”.

    ONe could argue, by J-exclusionist logic- that its not business in Japan if its just money between gaijin. Ha! Ha! Ha!

  • @Jm Di Griz, you were almost right on all points except that the particulars of the offer I made to the university relieved them entirely of any responsibility for the operations, investment and so on. To them, it was just a license, a free license to use their name and logo. Having long been privy to the whole koumuin problem, I and my advisers knew that if it was going to get done at all, that would be it. Still wasn’t good enough though… @Baudrillard lmao / but crying out loud because I know I can’t do it, even though I want to. The stakes are just too high if there’s an accident or someone slips and falls or something. You know the Japanese insurance won’t cover me if I don’t have licenses coming out my rear end. Under the table might be a fine way to pick up some spare cash, but it’s no way to run a business.

  • “The 通訳案内士 (licensed guide) thing is an example of regulations gone crazy. The test is difficult and requires the taker to memorize tons of pretty worthless facts about Japan (maybe not worthless, but facts that anyone with a reasonable internet connection can look up in less than a minute). ”

    Its more to it than that test. You have to register at the city hall and incorporate. Somebody feel free to correct if Im wrong, but I also checked it out. I asked some oyaji doing the business as well but got absolutely no help. If you want to pick up gajin, you have to have the ni shu taxi liscense also. You can test out at the center with a kanji test, or go to drivers school. Either way your going to pay. Me wonders if a heta speaker of nihongo could go the drivers school route and sort of a back door way to get the ni shu. Then there is getting the vehicle, with the shaken racket, and parking. Then, parking at the narita or haneda.

  • I found out about the law Terrie cites the hard way; about to start it up, then was told about this stupid law. There are many other laws, I wont mention here, when doing business in Japan that are ridiculous. There are, Im certain, people skirting it, as there are Japanese skirting all kinds of laws, like the ni shu requirement as well to taxi people but Id rather not be the picked on gaijin that has to pay up. BNB is kind of the holy grail I guess for us strapped for yen, as you need real estate. Tour guides is an easy way to start up if it wasnt for these idiot regs

  • Loverilakkuma says:

    @Baudrillard, #13

    I think there’s a moot point in arguing that this is the matter(or the degree) of racism. It seems more like the power of ‘culture of honor’ that justifies hostile/provocative action against any subject that is deemed “outsider” for the protection of vested interest.

    Wonder if reaction would be the same when they encountered big J-consumer chains crashing into local community to take down local family business for obscene profit-making.

  • @Nate#10, let me comment on case 1. I have been working as a tenured staff at a national university in Japan for over a decade, and I think the example you gave is unusual for a national university.

    @Jim De Griz#12, funding of national universities is basically guranteed, but this funding is shrinking. This started in 2004, when all national universities were reorganized as “National University Corporations”, got a global budget, and with this came big changes, and also a lot more freedom of what to use the money for. I have seen the university before and after the change in 2004, and I am generally positive about it. But since 2004, the basic funding from the government (運営交付金 un’ei koufukin) has shrunk about 1% each year. This reduction came regardless of who was the prime minister over the last 12 years, regardless of how much research output you have, and also regardless of any other income the university made. Income from sales of souveniers is never offset against the basic funding! But you are right that there are no incentives at all for the staff have no incentives to increase sales, as the salary is still set by the government.

    The case described by Nate seems to be unusual. My own university, and also many other national universities, sell goods, and are proud of what they have. Of the items sold, our most popular one are the “senbei” rice crackers, but people also buy pens, mug cups, t-shirts and other things. People do use these items themselves, and give them away as gifts. Some universities have quite unique ideas for their good, e.g. a while ago I saw an LED-light ballpen at Nagoya University: http://www.nucoop.jp/logo/led.html

    But I know from our budet, that income from the sales of souvenir goods is absolutely negligible. To have these goods is more PR for the university than income. So why would the JAIST not go ahead? Maybe they feel they are in an ivory tower, as they are one of only a handful of elite-style graduate-only universities in Japan, and do not need this? Actually when looking at the JAIST homepage, I noticed that at the top of the homepage, there are categories like “people who want to study here”, “students”, “legal guardians” and others, but nowhere to click for “people from the region”, which other universities normally have. So no need for JAIST to make close ties with the community? Again, JAIST is different in this aspect, from what I have seen elsewhere in Japan, so I think your experience is an unusual case, not to be generalized. (Including the lady at the shop – I guess it is the 生協 seikyou -, which are very friendly and very helpful at our university, much better than all the office staff.)

  • No wonder abenomics is making no progress anywhere around. It’s the mentality stiffness bordering irrationality the real cause for the lost opportunities and the fact that Japan is lagging behind smaller but more open minded economies.

  • Jim di Griz says:

    @ Loverilakkuma #18

    Someone wrote a book about how Walmart and Toys R Us faced massive opposition on all levels when they tried to enter the Japanese market in the 80’s, and the LDP was ‘encouraging’ foreign investment with one face, whilst turning round to ‘Mom ‘n Pop’ store owners under threat by these companies and ‘working hard to protect traditional Japanese economic institutions’ with their other face.

    Can’t remember the author or the name of the book though. I hate to say it, but I think a guy called Glenn Hook covered the whole thing in one of his books too.

  • Jim di Griz says:

    I think that ‘A’ @ #8 has made a valid point.
    Starting your own business in any country is hard work, that requires dedication, sacrifice, and commitment 24/7 for years. Anybody who says it doesn’t is one of the people who’ve never tried it, or have a string of failed business (and a string of excuses) behind them.

    It’s hard work.

    Even Toyota, the biggest car manufacturer in the world, won’t invest in Japan; they moved Lexus production to the U.S. last year, and agreed to give workers a 2000¥ a month pay rise (enough to buy about 3 beers). Nissan has followed suit and opened factories in Mexico and Malaysia last year.

    Japan Inc. has known for 20 years that Japan’s demographic situation is the cause of decreasing GDP and decreasing standard of living, along with a shrinking market. There is nothing that Abe (or anyone) has been able to do to change this because immigration is off the table (‘stealth’ immigration of importing workers or ‘trainees’ for 3 or 5 years doesn’t fix this problem because those NJ will never buy a house, or a car, or any of the other things a resident with a family would buy).

    If Japan Inc. refuses to invest in Japan, why does a ‘gaijin’ with ALL the cards stacked against them, even bother to make the huge personal investment of time, energy, and money that starting a successful business requires, in the doomed economic, and institutionally racist hostile environment of Japan?

    Even if you were able to succeed without being suffocated with red tape, or having your idea stolen by a Japanese company with enough resources to crowd you out, or could survive losing endless legal battles with Japanese suppliers and customers who know that the legal system will support them over you every time, Japan’s economy will never be better than it is today, and today will never be as good as it was yesterday, at least for the rest of your remaining life.

    IMHO, doing business in Japan doesn’t have any merits (after all, there’s a reason that Japan wasn’t originally a TPP country, and the EU won’t sign off on a trade deal with Japan; it’s not ever going to be worth it).

    Do something at home, on the Internet, under the radar, with all payments made to and from your bank account in your home country, and pay your taxes there IMHO. Sure, live in Japan if you can stomach it, but why bust your a*s to try and make it work in a country you might have to walk out on with only hand luggage tomorrow if an earthquake breaks one of their sub-standard reactors?

  • @Jim

    I think Walmart did a joint venture with Seiyu, but it fizzled. You could see trucks in Nagasaki with WalMart on them, but in Kanto it was another supplier to Seiyu.

  • “If Japan Inc. refuses to invest in Japan, why does a ‘gaijin’ with ALL the cards stacked against them, even bother to make the huge personal investment of time, energy, and money that starting a successful business requires, in the doomed economic, and institutionally racist hostile environment of Japan?”

    The crap one must put up with gives pause, but the Japanese are hoarding a ton of cash, and being that they have limited choice of products due to protectionism, there is a vast market for some products.

    Also, the opportunity for tourism niches for gaijin is huge, and only forecasted to grow. The problem is how to get around the barriers, and on that point, I agree with you

  • I confess, I didn’t expect two responses to my partly serious, partly tongue in cheek reply.

    Just to give some context, I did JET for two years. That was a long time ago and it was really a mixed bag. There were some things that I really liked about the country and knew that I would miss. But I also found some things infuriating and saw no real future for me (or any other “gaijin”) in the country, and so was happy to leave.

    I often do wonder what causes people to stay. Marriage seems to be the number one reason. And at some point I guess that it becomes hard to “go back” and reenter the workforce.

  • Just set up a payment method / merchant account outside of Japan, where they can’t reach it. Then, do your business.

    Example:
    There is a Japanese company that specializes in renting Hawaii condos & oceanfront houses.
    They advertise only in Japanese.
    They take all money in yen, in Japan.
    They don’t use airbnb or vrbo, so there is no outside tracking of their rentals.
    The Japanese tourist stays in the (often illegal) rental, then returns to Japan.
    The company does not file / pay Hawaii G.E.T. or T.A.T., they don’t pay Hawaii income tax, they don’t pay U.S. federal tax.
    The owners of the properties also don’t pay any of the taxes listed above.
    Most of the properties are owned by Japanese people. If questioned, the guests are “friends” who stayed for free.
    This is a great example of how to avoid bureaucracy / taxes.
    In this example, Japan does not care, and Hawaii state & U.S. federal governments don’t know.

  • A,
    you answered your own question.
    The more experience in Japan looks worse when wanting to go back home.
    At some point it does become too late.
    Marriage of course is a factor, as are whether one has kids (ideally they should learn Japanese too) or if any family member is not healthy,
    as health care costs in Japan are cheaper than in many other countries.

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