In the global water business market, companies from France, China and the United States boast large sales. Japanese companies are increasingly making their presence felt by pushing their technological advantages and know-how. This article looks into the Japanese government’s efforts to help domestic businesses enter water infrastructure markets overseas, including its strategies and support programs.

In terms of sales, Japan’s Kubota Corp., Kurita Water Industries Ltd. and Toray Industries, Inc. have a strong presence globally. Companies such as these are addressing the demand for clean water, which is increasing with the growth of public awareness of the U.N. sustainable development goals (SDGs).

How important is the water business?

Water is required by nearly all industries, but there are still many people for whom access to safe drinking water and flush toilets is not readily available. Even in advanced economies, there have been times when industrial water for semiconductor production ran short due to the impact of climate change, including droughts. Damage and economic losses from increasingly severe water disasters, including earthquake-induced disruptions and floods, have become issues around the world. Developing and improving water infrastructure helps mitigate such situations and can be said to increase the significance of businesses’ role in society. One could say the development of the water business is contributing significantly to achieving a sustainable society.

What then is the Japanese government proposing in order to help Japanese companies enter water infrastructure markets overseas?

Ways of promoting Japan’s infrastructure systems overseas have been discussed by the Ministerial Meeting on Strategy relating Infrastructure Export and Economic Cooperation chaired by the chief cabinet secretary. The agenda of this meeting has included issues specific to certain countries or regions, as well as issues specific to or encompassing certain fields. In December 2020, the meeting formulated the “2025 Policy Program for Promotion of Overseas Infrastructure Systems,” which lays out new goals for the five-year period starting in 2021. The three key aims of the program are to achieve economic growth through carbon neutrality and digital transformation; contribute to achieving the SDGs in partner countries; and realize Free and Open Indo-Pacific (FOIP).

In response to the program, the Ministry of Economy, Trade and Industry published the “Survey Report on the Overseas Development of the Water Business: 10-Year Review of Overseas Development Measures and Future Direction of Development” in March. In this report, the ministry, which has been promoting Japanese water companies overseas since 2009, outlined anew the current situation of the global water business and suggested vision for the future in client countries and a policy direction that will allow for the promotion of both domestic companies and Japanese know-how overseas.

Amid calls for strategic development under a collaborative framework between the government and the private sector, the document laid out five scenarios for overseas promotion ranging from discovering water projects in target countries and completing them, to continuing such projects after completion.

The METI Journal looks into the current plastic waste situation and efforts to develop materials and products with a low environmental load, and discusses how we can shape a sustainable future.

Changing behavior

In January, a unique idea for reducing disposable plastic shopping bags was tested at convenience stores inside government ministry buildings, including the Ministry of Economy, Trade and Industry and the Ministry of Finance. The test was aimed at assessing the impact on consumer behavior of putting a behavioral economics concept called Nudge theory into practice.

Organizers distributed cards with a printed message saying, “I don’t need a disposable bag,” intended for shoppers to show cashiers their preference. While similar card systems are often used at Japanese retailers, different card designs were trialed in this test to see if there was any difference in the number of shoppers who declined plastic bags.

At a store inside the METI building, cards with a design featuring a photo of a beach strewn with marine litter were used, while the cards introduced at a store at the Ministry of Finance only had the message printed on a blank background.

As the word indicates, the idea behind Nudge theory is to provide preferable options to curb people’s behavior in desired ways while respecting their freedom. The January test was part of a new initiative to explore ways to alter consumer behavior in order to reduce plastic waste through methods other than charging for disposable bags.

Question: What’s your perspective on the policy package for the circular economy announced by the European Commission in 2015?

Hosoda: Frankly speaking, I saw some ideas that were familiar to me, while being surprised by some new aspects.

This policy package contains a wide range of concepts, including issues surrounding waste, recycling and a sharing economy. I found originality in that the policy places the economy and the environment in a win-win relationship since the initiative contributes not only to environmental protection, but also to economic rejuvenation.

Question: Japanese companies have remarkable technology and have also worked on methodically realizing a circular-based society.

Do you have any concerns that they would be swallowed up by the European-style business strategy?

Hosoda: Yes, this is definitely a possibility, so I think Japanese companies need to disseminate their positions and policies clearly.

Especially, regarding plastic waste issues that attract much social interest, major Western companies such as The Coca-Cola Co., Nestle SA and Unilever PLC have incorporated measures to reduce environmental burdens into their business strategies, declaring concrete targets.

I have to say Japanese companies, on the other hand, are slow to make such a move.