An Interview with JETRO Director-General Innovation Takeo Nakajima

15% of the total trade volume of Japan with the world comes from Southeast Asia, the country’s third largest trading bloc. More than 15,000 Japanese firms are active in the region. Cash-rich Japanese firms looking to scale up growth globally. Local governments are looking for innovative solutions to societal issues like depopulation.

We discuss these drivers for cross-border innovation and more with Takeo Nakajima, Director General of Innovation at the Japan External Trade Organization (JETRO). 

This interview was recorded live in Singapore from the Japan SEA Market Forum 2025 hosted by the Tokyo Stock Exchange, Nikkei Asia, and JETRO.

Timestamps

(00:25) Japan’s Layered Trade and Innovation Relationship with Southeast Asia;

(03:36) Innovation Opportunities for Southeast Asia and Japanese Innovation;

(06:42) Message to Founders Looking to Build Cross-Border Innovation Between Japan and Southeast Asia;

Directed by Paulo Joquiño

Produced by Paulo Joquiño

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The content of this podcast is for informational purposes only, should not be taken as legal, tax, or business advice or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any ⁠⁠⁠⁠⁠⁠Insignia Ventures⁠⁠⁠⁠⁠⁠ fund. Any and all opinions shared in this episode are solely personal thoughts and reflections of the guest and the host.

Transcript

Japan’s Layered Trade and Innovation Relationship with Southeast Asia

Paulo: Thank you for joining us for this quick conversation. We’re here right now at the Japan Southeast Asia Market Forum. We’re seeing a lot more collaboration between Japan and Southeast Asia. I’ve had the privilege of working more closely with organizations like JETRO.

Maybe you can share a little bit about what JETRO does and how its role has evolved in Southeast Asia. What makes Southeast Asia more interesting for you?

Takeo: Thank you for inviting me as a speaker. It’s very exciting for me to participate in this event. Regarding your question, I can actually answer with several layers of activities and what’s happening in this area, Southeast Asia. This region has a multifunction for Japanese industries and the firms: first, as a market; second, as a manufacturing base; and third, for development and some research activities.

Recently, Japanese firms have been more active in innovation and collaboration. Also, this area has an abundance of great human resources, which are now very active in Japan to help with the human resources scarcity for manufacturing and development.

It’s obvious that there are more than 15,000 Japanese firms active in this region. They are trying to penetrate the market, and also they are creating products and services not only for this region, but for Japan, China, the US, and Europe. So, the trade volume of Japan with this region is about 15% of the total trade volume of Japanese industry with the world. This means a significant number of trade happens here, and that volume is next to China and the US. So, this is the third largest trade partner for Japan.

As for innovation, there are a significant number of Japanese firms, large and small, active in creating some innovation—innovative projects partnering with local firms in Singapore, Vietnam, Malaysia, and Thailand. A significant number of Singaporean firms and Vietnamese firms are now entering the Japanese market to try to penetrate the market and to have a collaboration with Japanese firms. So, it clearly shows that the level of Asian and Southeast Asian firms is leveling up, and they are a great partner for Japanese industry and firms. That’s the obvious attraction for Japanese firms to be active in this region.

Paulo: You mentioned those three layers: the human resources, the manufacturing, and the movement of companies expanding to Japan, or from Japan expanding to Southeast Asia.

Takeo: Yes, so both ways, and they are equal partners.

Innovation Opportunities for Southeast Asia and Japan Innovation

Paulo: We’ve seen a lot of our portfolio companies move there, expand their operations there. So it’s quite exciting to see them go in that direction. My other question is, what are some of the more interesting innovation sectors in particular that you’ve seen really take off, expanding from Japan to Southeast Asia?

Takeo: It’s also several layers, I can say. First, tackling social obstacles and social challenges: pollution (air, water), recycling, energy issues, and also traffic jams, which are very common in Southeast Asia, and access to medical or healthcare services. For those social issues, Japan has a long history of tackling and somewhat overcoming them. So, I think the Japanese firms’ experience, technology, and services can apply to those social challenges now facing Southeast Asian countries.

But other issues are somewhat to promote more welfare, more fun, and entertaining, such as education, tourism, entertainment, and sports. That area, I think, is happening both ways, from Japan to Southeast Asia.

And the third one is new areas. For example, decreasing population or aging. Japan is currently facing the need to tackle those issues, but we don’t have a clear answer yet. So, it should be a collaborative effort on how we should tackle those aging societies or depopulation issues in local areas.

One good example is a Singaporean mobility firm named SWAT Mobility. They are now undergoing some projects in several cities in Japan. Some areas are very local, very depopulated areas, and there are not enough traffic services, public and private. Sometimes there is just one bus a day. It’s very inconvenient, particularly for elderly people or people with disabilities. That firm is trying to provide on-demand transportation services in those local areas. It’s very challenging, of course, but we are very happy to have those global players try to solve social issues in Japan.

Paulo: Thank you for sharing that example. I think it gives a very concrete picture of what firms can do to solve problems and pain points in Japan. But you also mentioned the creative economy, healthcare, and transportation—the potential and opportunities to be solved.

Message to Founders Looking to Build Cross-Border Innovation Between Japan and Southeast Asia

Paulo: One last question is for founders that are going to be watching this: do you have any message for them? Especially Southeast Asian founders that are looking to expand to Japan, or even Japanese founders to Southeast Asia.

Takeo: Today, I am just talking about Japan’s relationship with Southeast Asia, but this region also attracts many investments from Korea, the US, and Europe. There are many projects happening between those firms, for example, Japan and Korea. They are forming joint ventures, and they tackle social issues in this region, or they are conducting infrastructure projects together. So, this is also a place where innovation and collaboration are happening with various players, including Japan.