Short Case Why Japan invested in the UK The 1990s saw many hundreds of Japanese companies setting up operations

in Europe. Manufacturing companies particularly have recognized the importance of developing a foothold in the huge European market to avoid having to add European nion import duties to the cost of their products. The largest num!ers of these companies have chosen to locate in the ". #ome large early arrivals$ such as %issan$ were attracted to the " !y generous government&funded financial support and ta' concessions in regional development areas. They recognized that although potential employees did not necessarily have the skills needed to make their products$ they were willing to !e trained and did not come with any (!ad ha!its) picked up from similar employment. *ater arrivals had much fewer direct financial incentives$ !ut saw the other advantages gained !y the early arrivals. +n some areas$ such as Telford and Milton "eynes$ a critical mass of Japanese companies developed$ creating a flow of good pu!licity !ack to Japan and encouraging further interest in these locations. This success was reinforced !y a growth in support infrastructure$ such as Japanese schools$ social activities$ and even food retailing to help the e'patriate families feel at home. ,nother important factor was language. Many Japanese manufacturing companies are accustomed to trading and producing in the #$ and so the English language is the first foreign language of most !usiness people. -rawings of products and processes$ instruction sheets and computer programs were often immediately availa!le for use without further translation for the ". This meant a lower risk of misunderstandings and mistranslation$ smoothing communications !etween the new plant and head office in Japan. +t also !ecame apparent that !oth the .uality and cost of la!our were important reasons to locate in the ". /hile many large indigenous manufacturing companies had !een criticizing the educational standard of the workforce$ Japanese companies took great care to select employees who were keen to learn$ adapta!le$ willing to work hard and a!le to create improvements. #ome companies were a!le to .uote e'ceptionally high levels of productivity and .uality performance in the "$ as an e'ample to their Japanese workforce. 0thers !egan to e'port products from the " to Japan. ,t the same time$ the total cost of la!our in the " was relatively low$ !oth due to hourly wage rates significantly !elow those typically paid in some other European nion countries$ and also !ecause of low indirect la!our costs. 0ther significant reasons for a choice of the " have !een the relatively low rate of corporation ta'$ good communication links with most parts of the world$ and a sta!le political and social system.

The development planning process is 1as in most advanced economies2 cum!ersome$ !ut at least it is transparent and difficulties of !ri!ery and protection do not usually arise. There are also other underlying factors which cannot !e discounted3 the " is renowned for its e'cellent golf courses4 spacious housing is availa!le in the countryside near industrial development areas4 and *ondon is known for its e'cellent shopping and leisure facilities. The climate$ although not the kindest in Europe$ is temperate and the rainfall is not unlike that in Japan. Questions 1 #ummarize what you see as !eing the ma5or factors which favoured the " in attracting inward investment from Japan. Japan)s decision to invest in Japan)s investment$ " greatly favoured the two countries.

The cost of la!our in Europe was really high and with the help of " was a!le to employ workers coming from overseas which cost much lower than workers from 6ontinental Europe. The workforce availa!le was also competent and educated enough to !e employed in the company. 6orporate ta' was much lower in the level in the " which !enefited the Japanese. /ith the corruption " low$ the political and social environment of the country

!ecame sta!le as well. *anguage didn)t !ecome so much of an issue for the Japanese !ecause migrant workers from Japan are fluent enough to speak in English. /hile Japanese !orn from the " have English as their primary language. #chools$ markets and other facilities were !uilt to cater the Japanese. 7ecause of all this factors the Japanese where made felt at home and saw " as a good place to live in.

%issan$ Toyota and 8onda all now have plants in the

". /hat factors do

you think will influence whether these plants e'pand or not9 The following are factors that influence the growth of ma5or Japanese companies in the "3 Making plans for the future of the company is limited due to the reason that Japanese are considered to !e outsiders to the European zone. Transportation rate to the in the European market. The demand in the market also affects the currency e'change. Reference: http3::wps.pearsoned.co.uk:ema;uk;he;slack;opsman;<:1=:<<=>:11<<?9? .cw:inde'.html " market is relatively low. 0ne of the most essential factors is maintaining the demand

Assignment # 7: Why Japan invested in the UK

Submitted by: Bonn Jerome B. Parcute a

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