Overview of the market

• Japan is possibly the most challenging country of the project, given the cultural/physical distance, and the current underrepresentation of foreign companies in the public procurement market (5.4% of the total market value of the Japanese central government tenders in 2019). ​
• It leads the world in technology, patents and quality standards, and is an island in many aspects, as well as literally, having led the development of Eastern Asian.​
• While the country may remain a mystery to the majority of European SMEs, the new EPA (Economic and Partnership Agreement, 2019) between the EU and Japan should set a new business mindset, at least on paper.​
• Granted, although Japanese public institutions are not going to welcome en masse foreign consortia, the EPA is indeed opening up new business opportunities in that market.​
• GOOSE firms may take advantage of their competitive lead in price, given the high purchase power of the Japanese market.​
• However, and needless to say, the local factor plays a big role, specially in Japan: to start, the language, which is a huge barrier on its own; also local specificities, standards, tastes, cultural and traditional values play a relevant role. ​
• Other difficulties include that lobbying plays an important role in securing contracts, and the procurement system is fragmented. 

Opportunities to explore by GOOSE
to help European SMEs:

• Aside of the challenges, the Japanese public procurement market has enormous potential. In 2017 the total market value of all public tenders was estimated to be 698 billion euro (about the size of the GDP of the Netherlands). ​
• Foreign services and products were able to penetrate in the Japanese government procurement market for ICT / computer and for health. ​
• Procurement related to the Green economy was less open for foreign suppliers, but the development of offshore windmills in Japan might change that.​
• The EU-Japan Centre for Industrial Cooperation is the leading international institution to develop business research on the market, and will be working together with GOOSE to identify niches of opportunities for European firms.​
• The EPA is unambiguous in that “EU companies will be able to participate on an equal footing with Japanese companies in bids for procurement tenders in the 54 so-called ‘core cities’ of Japan (i.e. cities with around 300.000 to 500.000 inhabitants or more). ​
• The agreement also removes existing obstacles to procurement in the railway sector.”​
• Accordingly, the fields of opportunities are not few, but they need to be balanced with the local propensity to consider anathema everything foreigner.​
• For example, although ICT seems to be an exclusive local issue, there are fields of opportunity in some segments, such as in system integrators.

GOOSE’s FACT SHEET ON JAPAN

Public Procurement factsheet for JAPAN gives you a quick overview of what you need to know when tendering in Japan. You can find it in the Library