※この記事は、一般財団法人海外投融資情報財団（JOI）機関誌「海外投融資」2020年3月号に掲載されたものです（www.joi.or.jp）。

ス ポ ッ ト研 究

Survey Report on Overseas Business
Operations by Japanese Manufacturing
Companies—Results of the JBIC FY2019 Survey:
Outlook for Japanese Foreign Direct Investment(31st Annual Survey) —KASUGA Takeshi,Director
OGAWA Natsuka
Strategic Research Department, Corporate Planning Group
Japan Bank for International Cooperation

1. Introduction

Figure 1. Overseas Production/Sales/Revenue Ratios
44%
42%

Overseas Sales Ratios
Overseas Production Ratios
Overseas Revenue Ratios

Medium-termplans (FY2022)

39.6%
Japan Bank for International Co39.3%
39.2%
40%
38.7% 38.8%
38.5%
37.5% 37.9%
37.3%
38%
36.8%
operation (JBIC) has released a
36.4%
35.7%
37.1%
35.4%
35.2% 35.1%
36%34.7% 34.2% 34.7% 34.2%
36.6%“Survey Report on Overseas Busi36.4%
34.0%
35.6%
35.6%
35.0%
33.5%
34%
33.7% 34.3%
ness Operations by Japanese
32.9%
32%
30.6%
33.3%
FY201929.1%
31.3%
Manufacturing Companies”. In
30%
30.8% 31.0%
30.5%
Projected
27.9%
29.2%
28%
this survey, questionnaires were
28.0%
26%
26.0% 26.1%
sent out at the end of June 2019,24% 24.6%
Actualand response forms were collected
22%
20%from July to September (1004 tar01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19（FY）
get companies, 588 valid respondents,
58.6% response rate). We would
like to express our gratitude to theoverseas sales ratio and overseas revenue ratio seems tocompanies that cooperated.
have been affected by the prolonged friction between the
In this survey, in addition to the questions asked each
US and China and the economic slowdown in China.
year, such as “Overseas Business Performance”, “BusiAgainst this background, the forecast for FY2019 is exness Prospects”, and “Mid-term Promising Countries/
pected to be almost the same as the result for FY2018,
Regions”, unique themes such as “Influence of Friction
indicating the cautious attitude of companies (Figure 1).
Between the US and China” and “Overseas Expansion ofNote 1: (Overseas Production)/(Domestic Production + Overseas Production)
Open Innovation” were also asked.
Note 2: (Overseas Sales)/(Domestic Sales + Overseas Sales)

2. Overseas Production/Sales/
Revenue Ratios
The overseas production ratio1 for FY2018 was 36.8%,
the highest value since the start of the survey. In the medium-term plan (FY2022), it is expected to increase to39.2%, suggesting a continued stance on overseas production.
On the other hand, the overseas sales ratio2 in FY2018
was 38.7%, down slightly from the previous year, and theoverseas revenue ratio3 was 36.4%, down from the previous year’s record high (37.3%). The decline in the56

2020.3Note 3: (Overseas Operating Revenue)/(Domestic Operating Revenue +Overseas Operating Revenue)

3. Mid-Term Prospects for Overseas &Domestic Operation
In the mid-term, 401 companies (71.4%) answered thatthey would “Strengthen/expand” their overseas business.
According to a recent survey, the attitude of strengthening/expanding overseas business has continued to be a bitlean toward the status quo, and the attitude of strengthening/expanding this year has remained relatively low(Figure 2). In the medium-term outlook for domestic

【スポット研究】Survey Report on Overseas Business Operations by Japanese Manufacturing Companies

Figure 2. Mid-Term (Next 3 Years) Prospects forOverseas Business Expansion
100%
80%

1.5%

0.5%

1.2%

1.5%

2.0%

18.0%

23.0%

26.7%

22.9%

26.7%

80.5%

76.6%

72.1%

75.6%

71.4%

2015
（594）

2016
（623）

2017
（592）

2018
（582）

2019（FY）（562）（No. ofCompanies）

60%
40%
20%
0%

Scale back/withdraw
Maintain present level
Strengthen/expand

Figure 3. Mid-Term (Next 3 Years) Prospects for
Domestic Business Expansion
100%
80%
60%

5.7%

6.1%

58.6%

4.2%

3.6%

3.1%

3.9%

3.5%

3.6%

2.3%

3.2%

58.3%

55.2%

48.7%

50.2%

4. Effects of Brexit

40%
20%

business, “Strengthen/expand” slightly declined to 42.8%
from the previous year but remained at a high level (Figure 3). As for the areas to be strengthened, “Increasing
added value of products (72.9%)” continues to be prominent as in the previous fiscal year, and nearly half of them
are “Acquiring new customers (45.8%)” and “Enhancing
production facilities in Japan (45.0%)”. This indicatesthat some companies are trying to raise its domestic business. In the interviews, “Our technology is first-rate.
Right now, we are focusing on gathering issues that require our technology from home and abroad (rather thangoing outside)” (Precision machinery).
The percentage of companies which would strengthen
overseas business was 71.4%, while the percentage ofcompanies which would strengthen domestic business
was 42.8%. Both overseas and domestic decreased fromlast year. In addition, the difference between the points
gained in strengthening overseas business and domestic
business was reduced to 28.6 points, which is even smaller than last year (29.7 points). From these facts, you can
see that overseas business attitudes remain relatively
weak (Figure 4).

45.9%

42.8%

Questions were asked about the business development
attitude in the UK and EU14, and the responses were0%summarized in a distribution table (Figure 5). As a result,
2015
2016
2017
2018
2019（FY）（592） （623） （591） （577） （568）（No. ofin the UK, “Maintain the present level” was the highest
Companies）
with 104 companies, and in the EU14, “Strengthen/exUndecided
Maintain present levelpand” was the highest with 118 companies. As for “Scale
Scale backStrengthen/expand
back/withdrawal”, the UK (13 companies) was twice aslarge as the EU14 (6 companies), confirming the differFigure 4. Trends in Stances towards Strengthening/ence in business development attitudes between Europe
Expansion (FY2000 - FY2019)
and the UK. Looking at the breakdown of the UK’s con100%
traction and withdrawal by industry, auto parts makers are
FY201990% Overseas "Strengthen/expand" ratio
71.4%
dominant.
80%
According to the distribution table, 7 companies re70%
61.3％
60% Domestic "Strengthen/expand" ratio
ported that they “Strengthen/expand” EU14 and “Scale
42.8%
50%
back/withdraw” the UK at the same time. Although the
40%
28.6%
number is small, there are also moves to shift the center of30%
gravity of European business to the EU side. On the other20%
10%
hand, 41 companies “Strengthen/expand” the UK, mainly
0%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19（FY） in machinery, electrical equipment & electronics andfood companies. It is presumed that the companies have
(Difference) Overseas "Strengthen/expand" ratio - Domestic
penetrated the UK market.
"Strengthen/expand" ratio
Domestic "Strengthen/expand" ratio
We asked about the factors that had a significant effectOverseas "Strengthen/expand" ratioon the business development outlook (Figure 6). As a re29.6%

34.0%

37.7%

2020.357

Figure 5. Business Prospects for EU14 / UK

Figure 6. Factors Influencing Business Prospects for
EU14/UKUK
No. of respondent
Maintaincompanies =Strengthen/present
EU14: 223,
expandlevel
UK: 158

Strengthen/
expandEU
14

Maintainpresent
level
Scale
back/
withdraw

36

0

47

51

Scale
No
back/
response
withdraw
7

4

28

44

0
Subtotal

118

0

3

2

1

6

No
response

5

3

0

13

21

Subtotal

41

104

13

86

244

sult, the largest numbers of both the UK and EU14
companies listed the “Current market size” as a factor,
which shows the local market had a big effect on investment decisions in both countries.
“Brexit” is the second most important factor in the
UK’s business decisions (63 companies), and in fact, sixof them chose “Scale back/withdraw”. On the other hand,in the EU, the UK’s decision to leave the EU is the fourthissue (30 companies), which shows Brexit had a relatively
limited impact on EU business. According to a hearing,“we were originally considering a move to Central
and Eastern Europe, and the uncertainty of the Brexit
problem was prolonged, so Brexit boost us and decided towithdraw from the UK”(Non-ferrous metals) .

29

50
87

Current size of local
marketUK
EU14

Trends of majorclients

UK 15
EU14

BrexitUK 13
44
EU14 17 13

Trends of othercompanies

UK 5 11 1
EU14 23 10 1

Japan-EU EPA

UK 8 1
EU14 16 5

Local R&D
environment

UK 1
EU14 9 4

99(Companies)
100
150

50

32
52

8

5

52

54

5

1

6

(No. of respondent companies =EU14: 214, UK: 150)
Strengthen/expand
Maintain present level
Scale back/withdraw

somewhat bearish. Under such circumstances, India has
returned to the top position in 193 companies (up 1.6
points in vote rate) for the first time in three years since2016. On the other hand, China has fallen significantly
from 225 last year to 180 companies. This may be due tothe rebound from a surge in expectations for China in lastyear’s survey, as well as increased caution over US-China
friction and the economic slowdown. Behind China’s retreat, Vietnam (147), the Philippines (48), and Malaysia(41) rose. Although the number of votes obtained was almost the same as last year, it has relatively emerged as
uncertainty has increased worldwide. On the other hand,

Figure 7. Potential Countries/Regions in the Mid-Term (Next 3 Years) - Trends in Votes

5. Ranking ofPromisingCountries

（%）
100

India
China
VietnamThailandIndonesia
US
Philippines
MexicoMyanmar
MalaysiaBrazilRussia80

The respondents wereasked to choose five countries and regions in the
Mid-term promising business, and the results areshown in Figure 7. In thisfiscal year’s survey, thenumber of respondents decreased from 431 to 404,
indicating that overall theiractiveness in overseas business development was
58

2020.3

60

40

20

0

1992 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19（FY）

【スポット研究】Survey Report on Overseas Business Operations by Japanese Manufacturing Companies

Figure 8. Impact of Friction Between US and China on Profits

Not sure,
218 companies,
39.7%

Decrease,
186 companies,
33.9%

FY2018549 companies

Not sure,
187 companies,
33.7%

Figure 9. Proportion of Companies Answered“Decrease”(By Industry)
Proportion of companies by industry that answered“Expect to see decrease”(Numbers within brackets
are number of companies: FY2018 → FY2019)

Decrease,
251 companies,
45.2%

Automobiles（59→56）

FY2019555 companies

Metal Products（4→12）

Increase,
10 companies,
1.8%

60％
40％
20％

Chemicals（22→39）0％

No impact,
109 companies,
19.6%

No impact,
135 companies,
24.6%

FY2018FY201980％

Electrical
Equipment &Electronics

Precision
Machinery（9→12）

Increase,
8 companies,
1.4%

Thailand (133 companies) and Mexico (47 companies)
dropped the number of votes. The US did not change position in this ranking. However, this year, it didn’t follow
the upward trend in recent years and the number of votes
dropped greatly from last year (124→93), as in China.
However, although not shown in the figure, the US had
the highest number of companies choosing it as their top
prospect after China and India, and there was a relatively
small number of firms who ranked the US as their top
choice and then select other countries as potential countries. This reveals that many companies still see the US asa firm prospect.

6. Influence of Friction Between the US
and China
The number of firms reporting that the rise in tensions
over international trade, including the US-China tradedispute, had a negative effect on their profits, up nearly
half to 45.2% this year, compared to 33.9% last year (Fig-（26→32）
General Machinery

Nonferrous Metals（21→30）（14→18）ure 8). On the other hand, “No impact” and “Not sure” aredecreasing, indicating that more companies are beginning
to recognize the impact on revenue.
For companies that reported a decline in profits, thebreakdown by industry was compared to last year (Figure9). The following points were revealed: (1) automobiles(59 companies last year →56 companies) was the swiftest at responding, and; the results of this year’s survey
show that (2) increased number of companies were expecting decreased profit in a wider range of industry
types, including chemicals (22 companies→39 companies), electrical equipment & electronics (26companies→32 companies), general machinery (21 companies→30 companies), and metal products (4companies→12 companies).
With regard to the impact on FDI, the number of companies responding that they were expecting a “Decrease”
accounted for 13%, doubled from the previous fiscal year.
By industry, both automobiles (23%) and general machinery (14%) responded that this was a factor in

Figure 10. Effects on Direct Investment Overseas
Decrease,
28 companies,
5.2%

Increase,
33 companies,
6.1%

Decrease,
73 companies,
13.3%

Increase,
24 companies,
4.4%(By industry, FY2019)0
Automobiles(102 companies)

20
22.5

Electrical Equipment& Electronics 7.8(77 companies)

FY2018543 companies

FY2019550 companies

General Machinery(58 companies) 13.8

3.6

Chemicals(83 companies) 9.6

No impact,
229 companies,
42.2%

No impact,
253 companies,
46.6%

Not sure,
248 companies,
45.1%

No impact,
205 companies,
37.3%

40

60

80

21.6

（％）
100

49.0

6.9
36.4

51.9

3.9
39.7

44.8

1.7
36.1

50.6

Decrease

Increase

No impact

Not sure

2020.359

Figure 11. Comparison with US, China, and Other than
US/China
US

Other than the
US/China

China

FY2018FY2019FY2018FY2019FY2018FY2019

Increase

20

6

11

7

12

18

Decrease

13

10

11

67

3

8

Difference

7

ー4

0

−60

9

10

■ Specific countries for investment “Other than the US/China” in the FY2019 survey(free entry)
Increase: Thailand (6), Vietnam (4), Mexico (3), India (2), Myanmar, Czech Republic,
Malaysia, Italy, Spain, France, ASEAN countries (1 each)
Decrease: Europe, Southeast Asia, the Philippines, Japan, Mexico, Indonesia, EU (1each)

decreasing direct investment (Figure 10).
Regarding the increase/decrease in direct investment,
companies were also asked about investment destination.
For investment in the US, 4 more companies responded“Decrease” over “Increase”, while for investment in China 60 more companies responded “Decrease” over
“Increase”. This indicates that the trade friction between
these countries is leading to a large decrease in investment
in China (Figure 11).
As mentioned above, although a decrease in direct investment is expected in both the US and China, there is a
steady tendency towards increasing direct investment incountries other than the US and China. This worked as anopportunity for countries such as Thailand and Vietnam
in particular to welcome more investments.
Companies who responded that the trade friction had“No impact” on their overseas direct investment wereasked to give reasons(Figure 12). As a result, the majorityof respondents (56 companies) answered “We can reorganize/relocate existing supply chains flexibly”, excluding
the group of respondents who had no impact. On the othFigure 12.	Reasons for Not Affecting Overseas Direct
Investment

er hand, only 12 companies tried to get through thesituation by “price pass-through” (“We can shift the increased costs to the sales price”). A comparison of theresults suggests that companies are trying to respond flexibly to this trade friction.
In the interviews, “We can flexibly cope with the
US-China trade friction by flexibly adjusting the production volume between bases, such as reducing productionin China and increasing production in Malaysia” (non-ferrous metals). “We have been making frequent changes toour local subcontracting companies in China. Taking advantage of that experience, recombining supply chains isrelatively easy for us” (precision machinery company).
When asked about trade restrictions with particularcompanies, 53 companies responded that there would be“Impacts on overseas business”, 124 companies responded with “No effect for now but will affect future businessplans”, together accounting for 30% of the total. Regarding future measures, while “Suspending/reviewing
business with specific companies” was small at 33 companies, many companies chose to implement andconsider strengthening information management such as“Strengthen internal information management” (64 companies), “Tightening control of technology transfer” (59companies), and “Strengthening management of data distribution within the company and with trading partners”(51 companies) (Figure 13). With most of the respondents
having offices in China, it can be seen that risk management and information management are being strengthened
in response to rising political risks, assuming business
continuity in both the US and China.

Figure 13.	Countermeasures Introduced/Under
Consideration(No. of respondent companies = 188)

(No. of respondent companies = 205)
Our supply chain doesn’t expand over
China and the US

100

Our dealing goods/materials
aren’t affected

63

We can reorganize/relocate
existing supply chains flexibly

56

We can shift the increased
costs to the sales price

12

Other

15

Strengthening information security
in overseas business
Tightening control of technology
transfer in overseas countries

2020.359

Strengthening data management(within the office/with clients)

51

Securing traceability
in global supply chains

39

Suspending/reviewing businesswith specific companies
Reexamining the electronic devices
used in office
Other

60

64

33
13
22

【スポット研究】Survey Report on Overseas Business Operations by Japanese Manufacturing Companies

Figure 14. Partners for Innovation (Multiple Answers Allowed)

0

20

40

60

In-house personnel/
knowledge

60.9 73.2
58.4
55.3

Japanese universities/
Research institutions

38.0

Japanese companies
Japanese startup
companies

16.8

Overseas universities/
Research institutions

14.2

11.7

ChemicalsElectrical Equipment & Electronics
Automobiles
General Machinery
Nonferrous Metals
Food

Now
Future24.0

Companies wishing to work with overseas partners in the future(by industry, total number of responses)

Precision Machinery

48.5

27.7

20.0

Overseas companies
Overseas startup
companies

（％）
80

37.4

19.8

(Number of respondent companies = 490)

7. Overseas Expansion of Open
Innovation

Transportation Equipment
Metal Products
TextilesCeramics, Cement & Glass
Paper, Pulp & Wood
Steel
Petroleum & Rubber 0
Other

8
6
4
4
3

12

21
20
19

43

55
51

86

(No. of respondent companies = 155)

50

Figure 15. C ities with Potential as a Place for
Cooperation(companies)

We asked about the present and future efforts to create
innovation (Figure 14). “In-house personnel/knowledge”(73.2%) and “Japanese universities/research institutions”(58.4%) gained high response rates for current partners,
indicating that current efforts are centered around collaboration within Japan, being implemented mainly throughinternal R&D functions and joint research in conventional fields. Collaboration with overseas partners seems to be
in a low tone at the moment.
On the other hand, when comparing “Now” and “Future”, the response rate decreased for both “In-house” and“Universities/research institutions” in Japan, while for the“Future”, partnerships with “Other Japanese companies”
and Japanese “Startups” increased. In-house research andjoint research with Japanese educational institutions
seems to be over-saturated, and it is likely that cooperation with more diverse players such as other industries
will expand in the future. Overall, the growth of overseas
partners is more remarkable than that of domestic partners, indicating that expectations for cooperation withoverseas companies, ventures, and research institutes arehigh. In interviews, one chemical company said, “Since it
is unlikely that domestic business will grow in mass, weare looking for cooperation with overseas partners in anticipation of developing new markets”. Looking at the
responses by industry, Chemicals industry had a particularly high response rate (total response number: 86); notonly the large general chemical manufacturers and pharmaceutical companies, but also those from various fields
are included (resins, agrochemicals, and cosmetics).

Tokyo
269
Shanghai
71
Silicon Valley
53
Beijing26
Mumbai23
Boston22
Los Angeles
21
Berlin20
Bangalore
19
New Delhi
18
London13
Seoul
13(Number of responses: 317 companies)
Amsterdam
11
Other Cities mentioned
New York
11(Number within brackets: number of responses)
Tel Aviv
10
Paris
10
[Overseas] Singapore (5),Seattle10
Bangkok (5), Jakarta (2), Hanoi (2),Houston8
Dresden, Ho Chi Minh, Baltimore,
TorontoMunich, Andhra Pradesh, Edmonton,
7
San Diego, Chicago (1 each)
Sydney6
São Paulo 4[Domestic] Osaka Prefecture (2), Aichi
Stockholm 3
Prefecture, Okayama Prefecture,
Barcelona 3
Kyoto Prefecture, Tochigi Prefecture,
Vancouver 3
Niigata Prefecture, Hiroshima
Tallinn 2
Prefecture, Osaka City, Sendai City,
Denver 2
Hamamatsu City, Himeji City (1 each)
Austin 2
Other62
Note: List of city names was created based upon the Global Tech Hub
Report produced by CBInsights. Shenzhen and Singapore were notincluded in the choice.

When asked about which are promising as a place fordelivering open innovation, and Shanghai won the top
spot with 71 companies responding. It established a leadto Silicon Valley (53 companies). This reveals the strong
expectations toward China as a place to accelerate open
innovation (Figure 15).

2020.361

Figure 16. Breakdown of Companies that Selected Tokyo, Shanghai, or Silicon Valley
1. Industry

Automobiles
30％

Tokyo
Shanghai
Silicon Valley

2. Partners

Other Companies
60％

Tokyo
Shanghai
Silicon Valley

20％

Chemicals

10％

GeneralMachinery0％0％Precision
Machinery

Electrical Equipment& Electronics

In the three cities of Tokyo, Silicon Valley, and Shanghai, we examined whether the attributes of the responding
companies that looked promising each had any characteristics (Figure 16). As a result, by industry, the ratio ofgeneral machinery and automobiles was higher in Shanghai than in the other two cities, while the ratio of electrical,
electronic and precision machinery was higher in Silicon
Valley.
Companies choosing Silicon Valley showed good balance among the type of partners they want to collaborate
with. On the other hand, those that selected “Shanghai”
tend to select “Other companies” more to achieve innovation. Amongst companies that selected Tokyo as a sourceof domestic partners, the response rate of “Universities/
research institutions” is outstandingly high.
Among the companies who are working on partneringwith startups (domestic and overseas), the chemicals industry showed the most proactive present and future
stances (present: 31 companies, future: 48 companies).
There was also a very strong increase in the electricalequipment & electronics industry from the present to the
future, indicating a possible increase in collaboration withstartups. Examples of partnerships with startups were diverse, including conducting venture capital investment by
CEO-led new groups, dispatching research staff to Silicon Valley, acquiring overseas startups, and providing
support for startups located close to their hometown. Although many companies seek to gain technologies andservices which they lack from startups, one electronics
company stated, “Startups are a treasure box when it
comes to preempting our company’s needs. Supportingthem creates new business for us and allows our products
and services to be used in a broader world”.

62

2020.3

StartupCompanies

Universities/
Research
institutions

8. Conclusion
This year’s survey clearly showed the stance of companies that diligently sought out solutions to disruptions,despite the effects caused by the political and economic
situation. It was also confirmed that the respondent companies also had a deep interest in future-focused open
innovation and a latent desire to expand overseas, while
demonstrating more traditional forms of flexibility. Going forward, companies are expected to gain morebusiness opportunities by appealing widely to the world
not only the development of next-generation technologies, but also the problem-solving abilities based ontechnological capabilities
[Outline of the Study]
1. 
Survey target: In principle, Japanese companies
which have three or more overseas affiliates(including at least one production base).
2. 
Number of companies surveyed: sent to 1004
companies, and 588 responded (response rate
58.6%)
3. Survey methods: Questionnaires were sent via post
while e-mails were sent to request the respondents
to complete the questionnaires online. During thesurvey period, telephone interviews and direct visits
to individual companies were also performed.
4. 
Survey period: June 28, 2019 (surveys sent) to
August 1, 2019 (*Surveys returned by September 27
were treated as valid)