Now Japan, having long suffered a chronic lack of foreign investment, is expecting a dramatic influx of capital and business ventures thanks to the Olympics effect.
"The whole infrastructure of the world’s biggest city – tinkered with but hardly renewed since the last 1964 Tokyo games - is getting an upgrade."
Michael Fitzpatrick, Tokyo-based freelance journalist
Japanese prime minister Shinzo Abe claimed hosting the 2020 Olympics would be an "explosive agent" for the national economy when the games were awarded to Tokyo earlier this year.
There’s no doubt if nothing else the games should at least reignite foreign interest in Japan. That would be something. From 2005 to 2012, the number of foreign companies in the capital slumped from 2,645 to 2,331, according to data analysts Toyo Keizai.
The expected number of Asia-Pacific firms coming to Tokyo to take advantage of Olympic-driven opportunities is forecast to rise considerably.
The services industry - particularly the tourism sector - will receive the biggest bump, of about ¥650 billion, according to official Tokyo government estimates, followed by construction, with ¥470 billion.
That foreign interest is expected to be global but the Asian region, and the Antipodes, should be heavily represented.
“Australian and New Zealand companies in architecture and construction are most likely to benefit from the Olympics at first,” says Misako Kitaoka executive director of the Australian and New Zealand Chamber of Commerce in Tokyo (ANZCCJ).
The UK embassy in Tokyo, keen to cash in on its expertise with the London Games, agrees the Tokyo Games are potentially worth millions to outside economies and could benefit small and medium sized businesses throughout the supply chain.
It speaks from the knowledge that between July 2005 and July 2017, the knock on effect of Olympic and Paralympic Games themselves will have an impact on the UK economy, its nations and regions, worth £16.5 billion according to a Lloyds Bank report.
In the lead up to London 2012, Games-related projects helped generate thousands of jobs in Great Britain during the worst global recession in more than 60 years, claims the Olympics committee.
Barcelona which famously hosted the Olympics in 1992 leapt from gritty backwater to tourist mecca because of the massive urban regeneration projects undertaken by the city in the run-up to its Olympics.
Japan is also preparing similar re-branding and reconstruction of what was in the past a city considered a hard posting because of its post-industrial blight. However, the remodelling of Tokyo into a world class city will take considerable financial and intellectual capital.
Mori Building Co. alone, Japan’s biggest non-public developer, plans ¥1 trillion in projects including those for the 2020 Tokyo Olympics. The company sees a booming property market ahead of the games as occupancy rates for offices in Tokyo reach their highest for many years and plans to develop over 10 projects over the next decade in the city with partners such as the MIT Media Lab.
The PR consultancy which helped Japan secure the bid to the 2020 games says business momentum in Tokyo is sure to pick up after the next games in Rio because of this.
“We in the past have supported many Olympic bids around the world and our experience tells us that after Rio the world will turn its attention to Tokyo, a city in PR terms at least that has been somewhat off the radar recently,” said Masashi Nonaka, a consultant at public relations firm Weber Shandwick in Tokyo. “Opportunities and collaborations to turn this around will abound.”
That’s a sentiment shared by those wanting to participate in the redevelopment.
“As Japan points towards the 2020 Tokyo Olympic games, I firmly believe that the next several years will be very critical in designing a future of our nation.” says Shingo Tsuji, President & CEO, Mori Building. "We look forward to adapting their cutting-edge technologies and out-of-the-box thinking to develop leading futuristic global cities."
The monetary windfall of this building activity, including Mori’s, has been estimated at around ¥1.2 to ¥3 trillion worth of demand being generated over seven years. That’s the modest end of expectations: one Daiwa analyst in Tokyo has put a ¥100 trillion tag on the impact of the infrastructure upgrades.
Kitaoka says ANZCCJ is best placed as facilitator between the opportunities generated by the games and businesses in the region. She said she would be happy to hear from firms with expertise in areas such as logistics, sporting events management, construction and architecture or service provision.
But the biggest opportunities, according to long-term Tokyo resident and technology and media entrepreneur, Kiwi-Australian Terrie Lloyd, are tourism related.
Lloyd runs the Japan Travel KK company, which he says represents the largest content creator for inbound travel and is the second largest site for traffic. He says it is boom time for incoming tourist industries.
“It’s not the event itself that has value for the host venue but rather the increased international awareness,” he says, referring to the buzz surrounding the games and a weaker yen bringing in hundreds of thousands of extra visitors.
“The Japanese government already has a stated goal of hitting 20 million visitors by 2020 and so the Olympics are a point of leverage and a culmination of achieving that goal.”
Even before the massive lull caused by the 2011 nuclear meltdown, Japan managed to pull in a paltry 8 million visitors a year. This week the Japanese government announced that figure had just surpassed 10 million by early September. It expects 12 million visitors by the end of the year.
“The government is significantly ramping up its budget for attracting and satisfying foreign tourists and we are seeing plenty of work come our way because of that,” Lloyd says.
Keen not to miss this opportunity, Tokyo has launched a set of initiatives aimed at facilitating the boom including "Special Zones" and relaxation of travel restrictions.
The Tokyo Metropolitan Government launched the 'Special Zone for Asian Headquarters' project as a new plan to attract foreign companies to Tokyo, with the aim to make Tokyo the preferred site in the Asian region for regional headquarters and Research & Development.
Meanwhile the central government opened up Thai/Malay visas last year, and Indonesian visas this year, meaning the number of South Eastern Asians traveling to Japan is expected to double.
“That plus those coming to Japan out of curiosity before the Olympics will probably boost the numbers to 20 million,” Lloyd says.
“Japan is on the cusp of a major tourist boom that will require the expansion of the infrastructure and attractions by at least 100 per cent. That is a very significant trend and it will happen in just 5 years.”
Nearer the start of the Olympics themselves, about three months out from the event and in some cases several years before, training facilities to acclimatise athletes will also be required. The Japanese government has specifically asked foreign embassies if outside firms could take on the task.
The Japan External Trade Organisation JETRO has a website listing tender procurement opportunities in English.
“We are welcoming foreign investors with open arms,” Daisaku Yukita of the Invest Japan division of Jetro says. “There is no discrimination against firms who meet the conditions.”
Michael Fitzpatrick is a Tokyo-based journalist with more than two decades experience. He has worked around the world, writing and broadcasting for the Guardian, the BBC, the NY Times, Fortune magazine, the Daily Telegraph, the Independent (UK and Ireland), The Times, the Irish Times, and the Daily Mail (UK).
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
03 Nov 2014
01 Oct 2014