Why are some of the biggest companies in the world choosing to set up their Japan headquarters in Kyoto instead of other major cities? It might have something to do with a little-known fact about Japan’s old capital: Kyoto is home to a whopping 38 universities and about 150,000 students. That is a massive pool of highly educated, motivated workers as well as institutional knowledge, experience and talent (not to mention Nobel Prize winners) that can accelerate recruiting and business collaborations. It’s one reason why Kyoto is so appealing to entrepreneurs and innovators from everywhere.
A unique research park
Another reason why Kyoto is drawing foreign investors is its world-class infrastructure. In 1978, Osaka Gas closed down a massive gas plant that had operated in central Kyoto for half a century. In 1989, part of the site was reborn as Kyoto Research Park (KRP). It’s the only privately owned research park in Japan, and today, 30 years after its launch, it’s a shared office, research and laboratory space that hosts many established and startup companies from Japan and overseas.
French chemical company Arkema is one of 480 companies and organizations that are tenants at KRP. Spun off from energy multinational Total in 2004, Arkema was publicly listed in 2005. It specializes in high-performance materials and industrial products such as coating resins, specialty adhesives and fluorochemicals. Its predecessor joined KRP in 1993 when Total decided to establish its Kyoto Technical Center. With about 30 staff, the Kyoto Technical Center is Arkema’s second base in Japan after its headquarters in Tokyo. The role of the Kyoto Technical Center is to provide business and technical support to Arkema’s customers in Japan, Korea and the Asia-Pacific region. It develops new kinds of polymers, including materials for everyday products such as lightweight, high-performance running shoes and automotive components.
“Kyoto was a good place for us to establish our center because of the living environment here and its cost-effectiveness,” says Damien Vitry, a general manager at Arkema. “We also have a high rate of staff retention, which is a challenge in places like China. We still have staff in Kyoto who joined us in 1993.”
In Kyoto, Arkema is focused on 3D printing technologies, next-generation plastics and plastics applications. These include sustainably sourced bioplastics, such as its Rilsan polyamide line, and heat-resistant plastics, such as its Rilsan HT polyamide line, that can replace metal tubing in automotive and other applications. The company tries to link its R&D with U.N. Sustainable Development Goals and works with groups such as the Japan Organics Recycling Association and the Japan BioPlastics Association.
“Over the past 10 years, customers have become more interested in knowing where a product comes from, whether it has a bio-based origin,” says Vitry, who completed a PhD at Tokyo Institute of Technology before working in Japan and China. He helped set up an Arkema R&D center in Changshu, China, before settling in Kyoto.
Arkema hosts Japanese interns in Kyoto and undertakes collaborations with Japanese firms such as fiber and textile maker Toyobo. One of the main advantages for the company as a tenant at KRP is that it can use a shared KRP laboratory with specialized equipment that can advance its R&D projects.
“We can use this equipment to characterize materials for analyses, for example measuring the electrical properties of polymers for 5G networks,” says Vitry. “These are tools we can’t afford to have ourselves because we don’t need them all the time. We’re also part of the KRP network of companies and our people meet them every week. Overall, the environment at KRP is very helpful for us.”
Where inspiration meets manufacturing prowess
Arkema is one of 26 foreign companies at KRP from 11 countries and regions; others include
Bosch and Pfizer. They have offices in KRP’s 17-building, 5.9-hectare site, which is supported by Kyoto City, Kyoto Prefecture and local industry.
KRP aims at being a one-stop service center for businesses, with both facilities and business support. It has 68,800 square meters of rentable space for office and other uses, laboratories where researchers and startups can use high-end equipment such as DNA sequencers and MALDI mass spectrometers at low cost, a conference center for up to 350 people, an executive lounge, and other facilities. KRP also offers services to support new businesses and to facilitate networking among companies including major local manufacturers. But one of the main attractions is local talent.
“Large corporations tell us they join KRP for the recruiting potential for local hires, foreign exchange students and overseas designers,” says Adachi Takeshi, general manager in the KRP Brand Strategy Department. “We have strong connections with Kyoto universities and we host technical seminars featuring experts from academia.”
These kinds of events have drawn life sciences venture companies from all over the Kansai region as well as the likes of Johnson and Johnson, Takeda Pharmaceutical, and other big brands. Adachi notes that the local fundraising environment has improved in recent years, with both the number of venture capital companies and the volume of funds increasing. The Kyoto Startup Company Evaluation Committee (aka Kyoto Mekiki) is one of several regional groups that work with Kyoto City to support fledgling businesses.
Meanwhile, KRP is continuing to grow. It is expanding its footprint with construction of an 18th building for office rental space slated for completion in 2021. As he and his colleagues welcome more businesses from overseas, Adachi emphasizes Kyoto’s attractiveness as a compact city with rich academic, manufacturing and business resources.
“People here in Kyoto have been making things for almost 1,200 years,” says Adachi. “People from overseas who see traditional things here can become inspired and work with local craftsmen to turn their ideas into prototypes. We are working with many companies, startups and entrepreneurs to do this in a more effective, efficient way. There’s no other city that can offer this combination of inspiration and manufacturing prowess. People get culture shock here, but in a good way.”
Note: All Japanese names in this article are given in the traditional Japanese order, with surname first.
To learn more about Kyoto Research Park, click here.
To learn more about Arkema, click here.
Japan is changing. The country is at the forefront of demographic change that is expected to affect countries around the world. Japan regards this not as an onus but as a bonus for growth. To overcome this challenge, industry, academia and government have been moving forward to produce powerful and innovative solutions. The ongoing economic policy program known as Abenomics is helping give rise to new ecosystems for startups, in addition to open innovation and business partnerships. The Japan Voice series explores this new landscape of challenge and opportunity through interviews with Japanese and expatriate innovators who are powering a revitalized economy. For more information on the Japanese Government innovations and technologies, please visit https://www.japan.go.jp/technology/.
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