【NCCJ News】Survey of Norwegian Businesses in Japan (COVID-19)
Background
From April 1.-24. Innovation Norway in Japan conducted a survey interviewing 11 Norwegian companies operating in Japan – most of them members of the NCCJ. The interviews were by video conferences with the goal of gaining insight into how businesses in different sectors were dealing with the ongoing COVID-19 situation: When it emerged, now and how they are planning for the future.
The companies span the breadth of Norwegian businesses here in the world's third largest economy, representing consumer goods, IT, health, energy and the maritime sector. The NCCJ and the Norwegian Embassy in Japan has been present during these conferences.
Below is a summary of the reports, written by Innovation Norway in Japan, published here with their permission.
Survey Summary
Japan has done relatively well so far in the crisis, but it is fighting hard to keep the infection rates down. From the middle of April the whole country went into lockdown, initially until May 6. It seems likely that these measures will be extended. Naturally, the business community is strongly impacted by this.
All the companies report that their business in Japan is affected by the situation. They are all very concerned about their employees' health, and with few exceptions, all employees are working from home. The consequences of this vary, but the impression is that the Norwegian companies are significantly better prepared to deal with this than their Japanese customers and partners. Japan is in many respects a technological superpower, but when it comes to digitizing administrative functions, Norway seems to be somewhat ahead. Cultural differences also play a role in this. The relatively flat structures of Nordic companies are easier to handle from a home office setting compared to the typically more hierarchical organizational models that many Japanese companies employ.
However, these are demanding times when it comes to market activities. Japanese business culture is quite relationship driven, where physical meetings and after work social interaction are important. Such activities are now almost completely shut down. Many of the companies report that this makes new sales and development work challenging. Another problem is that some Japanese customers do not have the most basic IT equipment required to conduct video conferencing. On a positive note, we can hope that otherwise very competitive Japanese businesses will quickly move up the digital learning curve. We believe that interesting opportunities could open up in this area for Norwegian technology suppliers.
Several of the companies report significant challenges in carrying out important parts of their businesses. The country is to a large extent shut down, and businesses are very careful about letting employees travel. This applies not only to business development and sales, but also to service work, geophysical surveys and the like. A fashion company, who is doing parts of its design work in Tokyo, is reporting that it is demanding for product developers and designers to work effectively when they cannot physically meet. This may negatively affect the launch of future collections.
Results in the first quarter vary widely, but are in large below expectations. In a couple of companies, sales were down dramatically towards the end of the quarter. However, also in Japan, the business community is most concerned about the way forward. Those we talked to are very uncertain about how many weeks of international crisis and national shutdown will affect demand in the coming weeks and months. Norwegian maritime companies’ business with a struggling Japanese automotive industry is one of many examples of the drama in this crisis.
We also heard some unexpected stories. One of the IT companies reported a 20 % productivity growth in their software development department after their developers in Norway started working from home. One of the industrial companies reported a significant increase in inquiries from potential Japanese customers, most of these related to the company's advanced automation solutions. One possible explanation could be that employees sitting at home have more time to follow up on such opportunities.
Japan is a market with significant opportunities for Norwegian business. Feel free to contact us (Innovation Norway) if we can assist.
For more information on Innovation Norway in Japan, whom is a valued cooperation partner to the NCCJ, please visit their website.
