Daisuke Shiga
Director for Trade Promotion
Japan External Trade Organization -JETRO-
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Expert Contributor

Japan Looks for Potential Mexican Startups

By Daisuke Shiga | Mon, 06/27/2022 - 10:00

JETRO, or the Japan External Trade Organization, is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. The Mexico office of JETRO was born in 1958, the same year JETRO was originally established to promote Japanese exports abroad. In the 21st century, JETRO focuses on promoting foreign direct investment into Japan and helping small to medium-sized Japanese firms maximize their global export potential. Today, around 1,300 Japanese companies are establishing in Mexico, triple the number compared to 2010, with two-thirds of these belonging to the automotive sector that are part of the Japanese supply chain. It is important to mention that JETRO helps Japanese Tier 1 and Tier 2 companies find local Mexican suppliers. First, we analyze the supplier and then make a recommendation to Japanese companies. We also organize business matching sessions between them, jointly with clusters and state governments.

In recent years, we have been focusing on open innovation between Mexican and Japanese companies. Specifically, we are working with state governments and industrial clusters to discover leading startups and scale-up companies in Mexico. We present criteria for specific company selection, like technologies and services that solve problems and issues that have not been solved in Japan. Some examples of problems facing Japanese society are an aging population, a shortage of corporate successors and labor force, low food self-sufficiency, and an increase in abandoned arable land due to a shortage of farmers. Particularly in an aging society about one-third of the population is 65 years old or older the burden on the economically active population to support these elderly people is increasing every year. We call such issues "challenges" and invite solutions from all over the world.

Back to innovation: we invite startups with technologies that can potentially solve the "challenge" to participate in innovation-related events held in Japan, in big cities like Tokyo, Osaka, and Nagoya. Unfortunately, those events were held online in 2020 and ‘21 but from 2022 they will be held in person, just like before the pandemic. JETRO invites leading startups from all over the world to these events and, at the same time, sets up a series of business talks with the departments in charge of open innovation at the head offices of Japanese companies. In fact, in a past event, a Mexican startup was able to hold individual business talks with one of the largest companies in the Japanese construction industry and discussed how its technologies and services would contribute to that company. Companies that are selected to participate in the event can be mentored by JETRO, with some being invited to Japan according to their field. This year, we also hope to see and encounter new companies here in Mexico.

More than a few Japanese companies located in Mexico would like to collaborate with Mexican startups. The Japanese Chamber of Commerce and Industry in Mexico has a new committee called the Group of Innovation and Startup, which is coordinated by JETRO. Its objective consists of three pillars: the first is to grasp the needs or demands of associated Japanese companies in terms of an innovative collaboration with the local Mexican startups; the second is to collect valuable information on the strategy of each Mexican state regarding innovation. The last is to investigate potential startups with which the group can organize business matchmaking sessions.

In October, JETRO will hold a startup pitch event jointly with the Guanajuato state government and others at Industrial Transformation Mexico (ITM) 2022, which is well-known for being part of Hannover Messe. That event has four focus areas: Circular Economy, Logistics 4.0, Decarbonization and AI & Machine Learning. JETRO will offer an additional area to ITM that we call “the JETRO challenge: Zero Emission Vehicle.” The reason for this challenge is that we are aware that the automotive supply chain in Mexico is based on gasoline. Thus, the supply chain style it might not change soon; however, some Japanese Original Equipment Manufacturers (OEMs) and Tier 1 makers are conscious that they will have to analyze and look for new suppliers of electric vehicles (EV), fuel cell vehicles (FCV) or plug-in hybrid electric vehicles (PHEV) in this country. According to a questionnaire sent out last year by the Group of Innovation and Startup, some companies showed their interest in finding potential Mexican suppliers to help reach zero-emission vehicles. Therefore, if you have technology or services that could contribute to a new type of supply chain, please do not hesitate to contact JETRO Mexico’s office.

Photo by:   Daisuke Shiga

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