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How to beat the odds

The Southwestern United States projects the quintessential image of the American spirit. From the unforgiving Sonora Desert in the south to the snowcapped mountain ranges of Colorado and Utah, this region has formed a people of boundless optimism.

Epitomized by the cowboy, the Southwest evokes the enduring spirit of risk-taking and grit. The qualities that have defined a nation are the same as those that have determined success in business and in life.

The Southwest’s success shows how a landlocked economy can defy the odds and be a major force in the growth of the country and the world. Japanese investments in the region have realized that this resurgence is fueled by the right combination of an attractive business climate and an unprecedented influx of young, highly educated workers.

Consul General of Japan in Denver Makoto Ito

“The Southwest has a high quality workforce and a good business climate. It’s also an excellent place to live with your family. Some Japanese and international companies have been moving in the Southwest for these reasons,” said Consul General of Japan in Denver Makoto Ito.

AZ: The crossroad of trade

The Phoenix metro region, the political and economic capital of Arizona with a population of more than 4 million, has attracted the largest concentration of Japanese investment in the state, which is home to about 50 Japanese-affiliated companies that have so far created more than 7,000 jobs.

“Arizona’s southwest location, adjacent to two of the world’s largest economies – California and Mexico – gives our state incredible strategic advantages for businesses, including export opportunities and access to supply chains,” Arizona Commerce Authority President Sandra Watson said.

The state’s competitive edge lies in its proximity to Mexico. The area from Phoenix down to Nogales at the U.S.-Mexican border is known as the Sun Corridor, a region with a population the size of Indiana. And at the heart of this bustling corridor is Tucson, Arizona’s second-largest city.

Walbro, based in Tucson, has capitalized on its location to optimize its operations and build its customer base as a lot of their clients are in Mexico and in the surrounding area.

Walbro CEO Matthew Riddle

“We have a number of customers in Arizona, as well as a large warehouse and a facility in Mexico. As we are a global company, having our headquarters in Tucson is an ideal situation because key markets are easily accessible to us,” CEO Matthew Riddle said.

Arizona also possesses a young, competent workforce that is prepared to meet the needs of employers, especially those in high-tech manufacturing, aerospace and in the life sciences.

Hoping to extend the boundaries of scientific knowledge, the University of Arizona reached out to the Japan Institute of Space and Astronautical Science to discuss a possible joint venture regarding outer space research.

“Our trip to Japan was an effort to improve space science through scientific joint venture. The University of Arizona has the OSIRIS-REx (mission), which is going to do the asteroid sampling, while the Japanese have the Hayabusa II (mission),” explained Board of Regents President Eileen Klein.

“We had our team of engineers discuss our approach to space exploration, data exchange and the science behind the project. And we are equally excited to talk more about how we can collaborate further,” Klein added.

CO: Towering above the rest

Ranked the fastest-growing economy in 2014 by Business Insider, Colorado has maintained its status among its Rocky Mountain neighbors, as the state continues attracting more foreign capital.

“In Colorado, we have approximately 4,000 Japanese people. Apart from that, we have 20,000 Japanese-Americans and there are 90 Japanese-related companies,” said Ito.

Among the Japanese-related companies in the state are global giants such as Panasonic, Hitachi, Sumitomo and Terumo, to name a few.

Gov. John Hickenlooper of Colorado

“Colorado has had a long and prosperous relationship with Japan. The country is one of our state’s closest friends and is Colorado’s fourth-largest trading partner. Colorado and Japan share a deep and lasting connection that dates back to the 19th century,” said Gov. John Hickenlooper.

A reflection of deepening ties between Japan and Colorado, United Airlines inaugurated the first nonstop flight between Tokyo and Denver in 2013, further facilitating growth in business and tourism.

“I think the timing of our direct flight to Japan has been ideally set. Both airports in Denver and Narita are transit hubs. The flight has definitely helped boost trade and tourism. It’s been a phenomenal win for us and our relationship with Japan,” World Trade Center Denver President Karen Gerwitz said.

Shedding its reputation as mainly a transit hub, Denver has become a bona fide destination for business and leisure travelers.

“In terms of foreign direct investment in Colorado, Japan is the clear leader from Asia and is among the top foreign investors in the world and in Colorado’s economy. In order to continue strengthening our ties, I visited Japan in October of 2015,” Hickenlooper said.

During the governor’s visit to Japan, he met with several Japanese business executives and government leaders and signed various agreements aimed at expanding collaboration on investment and trade.

Historically dominated by the telecoms and the oil and gas industries, the state’s economy has witnessed a burgeoning of new tech startups the past few years, particularly in technology.

One of the state’s strengths is a talented and innovative workforce able to support startups and multinational giants. One local company that has benefitted from this talent pool is Level 3 Communications, a global communications firm that provides services to more than 60 countries, including Japan.

“As a global service provider that operates in hundreds of markets around the world, we wouldn’t be in existence today if we didn’t have a stellar reputation,” said Chief Marketing Officer Anthony Christie.

“The vision of the company is to be the trusted connection to the networked world. We take the element of trust very seriously, and that translates well to our work in Japan,” he added.

As more business grows between Japan and Colorado, the future remains promising.

“In Colorado, we’re a lot easier to do business with compared to the coasts. We welcome Japanese companies here. We want to maintain a strong relationship with our investors,” Gerwitz said.

NV: Rebuilding an economy

From 2008 to 2010, the U.S. was dealing with a deep, protracted recession. One of the hardest–hit states was Nevada, where unemployment surged to 14.5 percent. With unemployment sinking to a five-year low of 6.4 percent, the state has now recovered, thanks to the government’s efforts to diversify its economy.

Formed in 2011, the Nevada Governor’s Office of Economic Development (GOED) assists companies looking to expand or relocate to the state. Its focus has shifted over the years to expanding the state’s economic profile.

“Our hospitality industry brings in 45 million visitors into Southern Nevada. We have a convention industry that’s unmatched around the world. Our mining industry is very robust. We have a lot of copper, silver and other assets. We want to see continued growth within these industries,” said GOED Director of International Trade Kris Sanchez.

“Now, we want to impart this message of a ‘New Nevada.’ This includes our focus on our new industries because we want a second look,” Sanchez added.

In line with his vision to diversify the state’s economy, Gov. Brian Sandoval is aggressively pursuing foreign investment in healthcare, high-tech robotics, sustainable energy and self-driving vehicles.

Home to Faraday Future and Tesla’s future Gigafactory, in partnership with Panasonic, the state is very proud to be the showcase of a new breed of companies that represents the future of technology.

Nikkiso Cryo Inc., a Japanese manufacturer of cryogenic pumps, has tripled its workforce in the last three years.

“Aside from Nevada’s attractive business climate, we have found Nevada’s desert climate to be advantageous for our testing needs. Despite the oil glut, our leading technology gives us reasons to see a bright future for the industry,” Nikkiso Cryo CEO David Cameron said.

While 90 Japanese affiliate companies currently operate in the state, many business leaders remain unaware of this ‘New Nevada’ and its opportunities.

“What we like to see are companies that are highly innovative – companies that can contribute to our growth sectors and companies that will be good stewards of our communities. And there are a lot of opportunities for Japan. When I look at Japan, I see a country that’s innovative. I see companies coming here and observing the technology that’s being developed. Japan is looking toward the future,” Sanchez said.

NM: State of Innovation

South of Colorado and west of Texas is a state at the forefront of technology and innovation. Home to the Los Alamos National Laboratory, Sandia National Laboratories, the Air Force Research Laboratory and the White Sands Missile Range, research and technology are at the heart of New Mexico.

“The national and international awareness of New Mexico is low. As a result, we are collectively working hard to share more of Albuquerque’s opportunities and stories. We play an important role as we understand that tourism leads to economic development,” said Tania Armenta, President and CEO of Visit Albuquerque.

“Japanese travelers have a myriad of opportunities when they travel to the U.S. And there is great pride in history merging with innovation and technology here in Albuquerque, making it a very unique travel destination,” she added.

From 2009 to 2015, Japan’s Ministry of Economy, Trade and Industries and the New Energy and Industrial Technology Development Organization invested $80 million into the state through the U.S.–Japan Smart Grid Project.

Together with several Japanese-affiliated multinational corporations, the main objective of the project was to integrate large volumes of renewable energy into the power distribution system. In 2015, the University of New Mexico Center for Emerging Energy Technologies took over the project, in partnership with the Mitsubishi Research Institute.

Earlier this year, University of New Mexico President Robert Frank visited Japan to boost ties with companies, research organizations, and other universities in line with the state’s pursuit for innovation and job creation.

New Mexico is also accelerating efforts to commercialize its homegrown technologies, most of which are developed in the Albuquerque metro area.

“We are at the forefront of entrepreneurial movement. Here in Albuquerque, we have more science being done per capita than anywhere in the world,” said Albuquerque Mayor Richard Berry.

“We have tremendously fertile ground here. The huge upside is that all the parts and ingredients are here. We’re telling people that if you’re struggling to be heard in Silicon Valley, look at Albuquerque. We may just be the ticket for you,” he added.

In 2013, Gov. Susana Martinez signed into law a package of incentives, including new tax measures, aimed at attracting more investment, creating more jobs, strengthening existing industries, and supporting burgeoning sectors, such as renewable energy.

“Companies are discovering that our new tax and incentives policies have repositioned New Mexico to effectively compete for new business investment against any other U.S. state. We also have an experienced technical workforce and a network of universities graduating talented young people. This winning combination provides expanding companies with the environment and support they need to achieve success,” Albuquerque Economic Development Inc. President Gary Tonjes said.

With Japan currently New Mexico’s sixth-largest trade partner, it is clear that the state still has a lot of potential to grow those ties.

UT: Hotbed of technology

Gov. Gary Herbert’s trade mission to Japan in April 2015 was a testament to his state’s strong efforts to strengthen relations with the world’s third-largest economy.

Gov. Gary Herbert of Utah

The trade delegation, according to Val Hale, the executive director of the Utah Governor’s Office of Economic Development, met with executives of more than 70 Japanese companies and laid out the advantages of doing business in one of the fastest-growing economies of the U.S.

“Japanese companies are a critical part of what makes Utah great. We have similar priorities: to create better economies and a better world. We are committed to our business relationships with our friends in Japan and strive to provide the right business environment that will enable them to grow for years to come,” the governor said.

In the past few years, the Salt Lake City metro region has emerged as a top hub of high tech innovation. LANDESK, which provides asset management software systems and services to major Japanese companies and institutions, is among the leading companies whose presence in the city has spanned three decades.

CEO Steve Daly attributes the bustling IT scene to the area’s network infrastructure, global talent and attractive business climate.

“There are a lot of Utahns who spent time in Japan. When it comes to language and culture, that makes it easier for us to do business with the Japanese,” he said.

To maintain the momentum of growth, the state has relied on fresh and young talent to fill in the ranks. Utah Valley University has become a source of graduates in science, technology, engineering and mathematics.

“UVU and Saitama University are in the process of setting up a robotics program to benefit both schools’ students. We also have a 15-year relationship with Saitama Technical College, where we receive about 100 students every summer for the Auto Tech program,” said UVU President Matthew Holland.

Southwest USA 2016 was prepared for and originally printed in The Japan Times Newspaper.

PDF of the printed report

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