Japanese business leader: IP must form cornerstone of free trade agreement

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Technology enterprises such as Epson rely on innovative products and cannot afford to allow themselves to be 'ripped off' by competitor countries, the company’s president tells EURACTIV, as the free trade agreement talks between the EU and Japan prepare for their next wave of negotiations later this month.

Minoru Usui has been president of the Seiko Epson Corporation since 2008, during which time he has expanded the company’s activities from the printing and time-keeping sectors to develop Moverio, a competitor of Google Glass.

You are based in Japan, the EU and US are currently negotiating trade agreements, but the EU-Japan trade agreement talks are also set to recommence later this month. Is there concern amongst Japanese business that Japan taking a back seat in Europe’s trade agreements?

Japan became a wealthy country through trade, and free trade is the way for it to continue, and I would like the politicians to work to ensure that Japan is part of these agreements. However we have to say Epson has a lot of production in Asian countries such as China and Indonesia, and we also make out products close to market in the US and EU. So the free trade agreement between Japan and the EU would have a limited effect on EPSON.

However, EPSON is a very research & development-based (R&D) company and we would like to see IP included as part of these agreements to ensure fair competition is involved. To make original products – which is what we are trying to do – requires a vast amount of expense. To continue this innovative process it’s important for us to have this stable environment where we can innovate without worrying that other countries will rip off our technology, and so for Epson its important IP is strongly protected.

The dispute between China and Japan over the sovereignty of the Senkaku islands seems to be be quite tense. Is this affecting the Japan-China trade relationship?

In the Chinese market sometimes you see Japanese products boycotted and some parts of the Chinese government cut Japanese products out of the tender processes, so that is obviously a serious issue for us.

There is also an impression in the European media that the atmosphere in Japan is becoming increasingly nationalistic, is that true?

Of course in Japan you have people with nationalist beliefs as you have in every other country. There are also people with much more moderate and fair opinions. I think in general Japanese people tend to be very pragmatic. People with loud voices tend to get noticed, but I do not think the majority of Japanese people have opinions like this, and I would like people around the world to understand that most Japanese have a very supportive attitude towards the countries around them.

I believe that Japan has made a significant contribution to the economic growth in east Asian countries such as China and it’s obviously to Japan’s advantage for this process to continue and we would like the rest of the world to understand that.

Like Google Glass, Epson has been developing its own eye-glass technology called Moverio. Do you think these technologies are likely to become key? Is a breakthrough around the corner?

Google Glass has made a lot of headlines. They have been very innovative and are trying to open up a new market. However, Epson already has something on the market with a purpose resembling Google Glass. But our approach is very different from theirs. The era where you can get whatever information you want, wherever you go, is definitely coming to the world and Epson is very enthusiastic about creating these so-called wearable products. We are going to go about this by refining our core compact energy saving technologies and we will create products from these core devices ourselves, and these will be highly original products based on our own technologies.

Do you intend to sell them through the Epson brand, or would you seek a partnership with more familiar device-based companies?

My basic policy to create products on the Epson brand, however if certain circumstances dictated we would obviously consider different approaches. But we would like to go with the Epson brand because we have our core strengths in the market which we believe are unique to Epson, and by leveraging these we believe we can improve our presence in the market and grow our brand image.

Japan’s electronic product industries boomed during the 1960s, 1970s and 1980s. Some of its big names have since lost their edge, however. Do you believe a resurgence of the Japanese technological industries is possible?

Many of the products that developed from Japan became commoditised and China and Korea were able to build them at a lower price. For Japanese companies to distinguish themselves it’s essential to concentrate on the R&D side and create products that China and Korea simply cannot replicate and it’s important for us to invest heavily in R&D in order to achieve this, and to create this original value. I think some companies in Japan lost sight of this in the recent past.

So, for example, companies like Apple based their products around devices that could be copied in Asia, but distinguished themselves through the software. Japan’s strength lies in the hardware side and some companies may have lost sight of the innovation on the hardware side, and this is where they failed.

For companies to increase their presence in the market it is necessary for them to go back to basics and to understand what their true strengths are. To become a company that is absolutely indispensable – that is what I am aiming for – it is essential to be able create things that do not exist elsewhere in the world, and which other countries cannot imitate. That may involve making agreements with service and software companies, and if necessary we will do that to improve our presence. The precision technology that we announced here in Brussels, we are going to use these core technologies to create these original products will create products. And in areas such as Google Glass we are going to leverage our core technologies to create something that is far superior to what they can do, so please watch out for Epson!

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