1. Top
  2. Publications
  3. Promoting Exports of Infrastructure Systems

Messages from Keidanren Executives March, 2016 Promoting Exports of Infrastructure Systems

Takashi YAMAUCHI Vice Chair of the Board of Councillors, Keidanren
President Emeritus, Taisei Corporation

Japan is facing a globally unprecedented era of rapid population decline and yet if we look to the rest of the world, the present population of over 7 billion people is predicted to surpass 9 billion by 2050. Robust demand for the development of infrastructures such as airports, railways, power generation and ports is expected mainly in emerging economies, and the private and public sectors are together embarking on initiatives to export high-quality infrastructure systems under Japan revitalization strategy.

The level of difficulty of infrastructure development in Japan is high due to the country's steep terrain, which resulted in the development of advanced civil engineering technology. Japan's location, making it a quake-prone country due to the large number of active fault lines that run throughout inland areas, has led to the development of the world's best seismic technology, while the geographical conditions concentrating people and industry in limited habitable areas acted as a catalyst to develop the world's most advanced CO2 emissions-reducing and energy-saving technology.

Japan's leading construction companies began entering overseas markets in earnest from the 1970s. Their high-quality infrastructures capitalizing on advanced technological expertise were recognized in overseas markets for their competitive superiority, yet orders have remained at around ¥1 trillion for the past several decades. Despite a rising trend in recent years, overseas orders received by the world's top contractors account for close to 40%, while the average, even for the largest of Japan's construction companies, is less than 20%.

I travel to many emerging economies and have the opportunity to meet with the officials of these countries. Even though the level of Japan's technological expertise is recognized, I have come to realize that greater efforts are required in terms of cost competitiveness. By this, I do not mean simply reducing quality to meet cost expectations. What is of the utmost importance is for companies to deliver accurate specifications and appropriate costs after fully assessing the infrastructure needs based on each country's circumstances and environmental conditions.

The broad agreement reached last year over the Trans-Pacific Partnership will lead to the formation of a massive economic zone accounting for around 40% of the world's GDP. In line with this, we must recognize that the way we define national boundaries will also undergo a significant transformation. We need to ask ourselves how we are to ensure consistent quality while adapting to each country's particular style and mechanisms without being swayed by the standard specifications of the different infrastructures and Japanese-style production methods that have been applied in Japan thus far. Going forward, what the construction industry needs in promoting exports of infrastructure systems is flexible implementation backed by high technological expertise.