Japan Trade Fair Lures U.S. Firms

The graying of Japan has long left American health-care companies green with envy.

But last week in Los Angeles, U.S. health-care companies were offered assistance in entering the lucrative Japanese health-care market by a Japanese trade group that is sponsoring a trade fair for U.S. health-care companies in Osaka next March.

The Japan External Trade Organization, a nonprofit, quasi-government group that says it promotes “mutually beneficial trade” between Japan and other nations, was host to about 60 U.S. health-care executives at a Los Angeles meeting that was part of a six-city U.S. tour aimed at encouraging American companies to explore Japan’s health-care market.

“Access to the Japanese market is becoming more open,” Shigeru Matsuzaki, managing director of the Japan Federation of Medical Training and Manufacturing Assns., told U.S. health-care executives during the trade organization’s meeting at the New Otani Hotel. “Regulation has been loosened.”

Similar declarations, of course, have been made in the past by the Japanese in response to U.S. complaints about lack of access to the Japanese market. And that market continues to present daunting cultural and economic challenges to U.S. companies, regardless of the industry.

Yet Japan’s aging population and the widespread concern among the Japanese about health care have fueled interest among U.S. firms in supplying medical equipment and services, experts say.

Currently, 14.8% of Japan’s 120 million people are 65 or older, compared to 11.5% in the United States, according to the U.S. Senate’s Special Committee on Aging. By the turn of the century, the percentage in Japan will increase to 23.3%, compared to 13.1% in the United States.

Health-care costs in Japan last year totaled $176 billion, of which $94 billion went toward the cost of hospitalization, rehabilitation, prescription drugs and nursing, said officials of the Japan External Trade Organization. There are about 132,000 hospitals and clinics in Japan with about 1.6 million beds, they said.

Contacts for Health-Care Firms

Any inroads that U.S. businesses can make in the Japanese market would help ease this country’s enormous trade deficit with Japan. Last year, the bilateral trade gap amounted to $50 billion, and Department of Commerce officials say they expect the figure to grow this year.

Both U.S. government officials and sponsors of the Osaka fair insist that the March event, called the “Made in U.S.A. Fair 1987,” is a most cost-effective way for small and medium-size American companies to establish Japanese business contacts and gain an understanding of the Japanese health-care market.

Fair organizers estimate that total lodging and fair expenses will amount to about $1,800 per person.

To make the same contacts without the fair, said Kyle E. Murphy, a first secretary with responsibility for foreign commercial service at the U.S. Embassy in Tokyo, “it’s going to cost you $5,000 to $7,000 because you are going to have to run all over the country and visit several cities to meet the people you’re going to see in a couple of days in Osaka.”

Even so, the event will not produce opportunities for all health-care entrepreneurs.

Masatoshi Hayase, deputy director general of the Japan External Trade Organization, said prospects are brightest for companies seeking out specialized markets. And even for them, the road may be long and arduous.

“This (trade fair) is only a very basic step toward doing business in Japan,” said Loui Rossana, vice president of Dyna-Tech of Glendale, a marketing firm that specializes in advising U.S. businesses about Japanese trade. Doing business in Japan, she said, “is a full-time commitment. It’s not something that happens overnight.”

An official of General Medical Co., a Los Angeles-based concern that markets medical equipment, said the Osaka fair may be just the springboard his company needs to crack the Japanese market.

Robert Tapper, president of General Medical, said he has been trying to enter the Japanese market since 1981 but has had little success. However, he added, the Japanese presentation in Los Angeles has encouraged him to try again.

Although Tapper said he, too, has groused about how tough it is to do business in Japan, he said, “If you are determined enough, you can overcome the obstacles.”