Global success: why Homare Takenaka believes the Global Service Center concept is ideally suited for success.

IT'S AN IDEA WHOSE time has come. The one-stop service center for foreign companies in Japan, the Global Service Center (GSC) has been created by 14 companies and organizations who have agreed to work together. There have been various efforts in the past to provide services for foreign companies doing business in Japan, but with few results. The GSC is the first private-initiated organization of this kind in Japan, and the 14 organizations will provide supporting services to GSC customers individually and jointly when necessary with LBS playing the role of concierge for GSC.

We talked to Homare Takenaka, CEO of LBS Co. Ltd. to learn what makes the Global Service Center concept different, and why it is suited for success.

JI: Where did the Global Service Center (GSC) idea come from?

Takenaka: Increasing foreign direct investment in Japan has long been a challenge for both the government and the private sector. Lots of discussion and effort has gone into promoting FDI in the Japanese market with very little success so far. As of 2002, the ratio of FDI stock against GDP was only 1 percent in Japan, while it was between 10 and 30 percent in other G7 countries. This fact indicates that Japan has been missing tremendous opportunities to utilize foreign resources in the global environment. Prime Minister Koizumi touched upon FDI in a recent speech in which he announced the government's decision to double FDI in Japan over the next five years. The 14 members of the GSC have agreed that this is a great time to capitalize, so we decided to launch GSC, and we selected LBS to coordinate GSC activities.

JI: What are the characteristics unique to the GSC?

Takenaka: The members of the GSC studied, analyzed and discussed the problems and difficulties foreign companies face in the Japanese market and what we could do to help them better. Personally, I've been involved with foreign companies for my entire working life and have seen difficulties and challenges from their perspective. Their challenges are varied, depending on each company's size, history, experiences, industry and so forth. We have concluded that these companies need two stages of help and support. First, they need a one-stop service center where they can get quick answers for their questions, and advice and suggestions about possible solutions for their problems. Second, they need somebody who will help them with each specific problem, which could be a legal issue, a personnel issue, a financial issue, et cetera. The GSC consists of companies and organizations which will provide services to satisfy these needs, and each member company or organization has its own unique business network that can be utilized when necessary. I firmly believe that the GSC will be the most efficient and effective partner for foreign companies doing business in Japan--and for companies about to enter the market.

JI: Will you elaborate on the possible benefits of membership in the GSC?

Takenaka: By becoming members, foreign companies will save significant time, money and effort in locating the information and channels they need, and also in building contacts with solution providers. The human network and trust built upon longstanding relations is a critical factor for business success in Japanese society. These difficulties tend to be more difficult for small and medium-sized foreign companies whose company names are not known in this market. By joining the GSC, companies will become members of a group consisting of influential business partners with a strong base in Japanese business society.

JI: How does the system work?

Takenaka: Foreign companies interested in GSC services need to register for membership. Once they become members, they can ask questions and request particular services from the GSC secretariat in LBS, which acts like a concierge. If the question or request can be answered without research or work, it will be handled by the GSC secretariat for free. If the question or request should be handled by one or more of the member companies and organizations of the GSC, the GSC secretariat will transfer it to an organization best suited to satisfy the customer's needs. Each member company or organization of the GSC has professional expertise in its own business sector and will do its best to provide the solutions and assistance requested. When necessary, the GSC will also form a team of member companies and organizations to provide GSC members with integrated services.

JI: What are the membership criteria?

Takenaka: Any company with good ethics doing business in accordance with all laws and regulations is welcome to join the GSC. An applicant has to submit an application form to the GSC secretariat at LBS. The GSC secretariat will examine the application and inform the company of its decision. When the company receives its notice of membership acceptance from the GSC secretariat, it will be asked to pay either [yen] 50,000 for the annual Visitor Membership fee, or [yen] 360,000 for the annual Regular Membership fee. Details are described in the GSC brochure.

JI: Won't charging a fee discourage potential members from joining?

Takenaka: I firmly believe that the benefits of being a GSC member will be worth far more than the annual membership fee. Most foreign companies spend significant time, money and effort finding necessary information and contacts with reliable professional solution providers and/or business partners. Our GSC is uniquely different from past models. It is not only an information center, but also a group of solution providers with a focus on small and medium-sized foreign companies in Japan.

JI: What type of companies are you targeting?

Takenaka: We're interested in assisting anyone who faces difficulties in carrying out business activities in the Japanese market, regardless of industry. However, I believe the strong needs right now are with small to medium-sized foreign companies because they simply don't have experience in Japan and cannot afford to invest time and money in building a social base for their business activities.

JI: Isn't this an activity that can be handled by the government?

Takenaka: The Japanese government has been doing lots of work in this field, with JETRO as its main promoter. But this does not restrict the role played by private organizations. The government and JETRO will play a critical role in building a better infrastructure for promoting and providing services for FDI in Japan, which will encourage more foreign companies to come. For the GSC, this means that we will have more customer candidates and expanding business potential.

JI: Aren't there other competitors in the market?

Takenaka: Not with the same reach, human network and service lineup that we have. The Global Service Center now has 14 companies and organizations, and we will have more leading companies from different industries in the future, diversifying our capabilities, contents and services.

JI: Can we go into a bit more detail regarding the GSC's services?

Takenaka: The GSC's services cover a broad range of fields related to the management of personnel, goods, money and information. More specifically, we offer consultation and practical services related to legal matters, with the exception of handling litigation. We also cover financing, hiring and education, real estate, marketing activities, IT solutions, telecommunications services, PR, government relations, culture and entertainment.

JI: Can you make some final comments about foreign companies coming to Japan, and about FDI in general?

Takenaka: Unfortunately, Japan's global image is more negative than it should be. Many people say that the time has come for the company to choose the country, rather than the country choosing the company. We need to launch strategic communications activities with a focus on Japan's strengths. Japan is a wonderful country and a big market with the world's best public safety, highly educated and honest people, advanced technology and manufacturing base and more. Personally, I firmly believe in the values created by foreign companies in Japanese society. I also think that we should make our business environments in Japan more favorable to foreign companies. By doing so, we will be able to capitalize more on foreign resources, revitalizing our own economy as more foreign companies come into the Japanese market The GSC is a new movement in Japan, and we strongly hope that the GSC will be able to help improve the understanding and perception of Japan overseas and promote more FDI in this country.

GSC MEMBERS

* Business Research Institute Inc.

* Daiwa Securities SMBC Co., Ltd.

* IBM Japan, Ltd.

* JALUX Inc.

* Kabuki-za Co., Ltd.

* LBS Co., Ltd.

* Manpower Japan Co., Ltd.

* Nikkei Business Publications , Inc.

* Nikkei Research Inc.

* NIT Advanced Technology Corporation

* Shin Nihon Ernst & Young / Shin Nihon & Co. (Ernst & Young)

* Takaishi Law Office

* TOKYU CORPORATION

* Yayoi Kyodo Law Orifices

For more information, contact the Global Service Center Office:

LBS Co., Ltd.

IBM Japan HQ Bldg. 3-2-12 Roppongi,

Minato-ku, Tokyo 106-8711

Tel: [phone]

Fax: [phone]

email: [e-mail]