In the Asia Pacific region, Singapore has traditionally been seen as the primary regional hub. Its central location provides easy access to all key Asian markets. Political stability, public safety, high levels of education, and low income and corporate taxes make it an attractive location for global executives to be based.
Boasting a multicultural population and world-class education system has fostered a capable talent pool, which can be found employed widely in the energy sector, especially in investment and trading functions.
As Asia Pacific is the largest growth market in the rapidly transforming energy sector, Singapore’s talent, however, might not be enough to cover the increasing regional demand.
Can Japan, which has traditionally been a leader in providing financing and technology across the region, step up and play a larger role in providing regional talent in Asia?
Let’s look at the talent that already exists in Japan with the capability to deliver beyond, as well as arguments for Japan performing effectively as a regional hub, and the challenges that will be faced both in hiring local talent and using Tokyo as an expatriate base.
The case for Japan as a regional talent hub
The first in Japan’s trifecta of advantages is the history, ability and willingness to invest heavily beyond her borders. Japanese banks have long been a leader in project financing for major infrastructure projects across the region.
Contrary to popular belief, Japanese financiers are willing to move into new sectors where a strong business case is presented; take, for example, Mizuho and SMBC’s involvement in the world’s largest BESS project financing deal with BlackRock’s Akaysha Energy.
Beyond debt financing, Japanese corporations, from the large trading houses to mid-sized energy developers such as Renova and Shizen Energy, are leading the charge in renewable energy development across Southeast Asia for both utility scale and commercial/ industrial projects.
Toyota Tsusho’s Eurus Energy is one of the largest developers and operators of wind farms in Australia. Traditional utilities and oil & gas companies, such as JERA and INPEX, have long been heavy investors across LNG and thermal infrastructure in the Asian and Oceania regions, with their investments ever increasing.
Through GX initiatives, the Japanese government is clearly pushing a new industrial revolution, with the goal of increasing its position as a technology exporter, even though China has a leading position in traditional photovoltaic and battery technologies.
Japanese corporations are heavily investing in perovskites and solid state battery technologies. Beyond this, Japan has long been a technology leader in turbines, piping and other key infrastructure for hydrocarbons, and actively looking to retain a leading position to drive hydrogen, ammonia and other clean fuel technologies. In addition, Japanese engineering firms have been central in designing, constructing and operating energy infrastructure across the region.
Demand makes up the third and most recent facet in Japan’s regional leadership potential. Japanese corporations are second only to the U.S. in the number of companies signed up to RE100 (committing to 100% renewable energy).
As manufacturing has been offshored in recent decades, and pressure is on corporations to mitigate not only their direct impact but also to improve Scope 2 & 3 emissions, Japanese firms have a vested interest in decarbonising operations and supply chains, especially throughout Southeast Asia.
What talent does Japan offer?
Like Singapore, Japan has world class educational institutions, with four of the top 100 technical universities, and seven of the top institutions for finance and economics. Every year, Japan turns out a high volume of intelligent, well-educated young professionals.
Largely as a result of Japan’s legacy culture of lifetime employment, as well as a focus on job security and high social standing based upon one’s employer, large Japanese firms with a significant international footprint tend to hire the bulk of graduates from top universities. These include Japanese megabanks and development banks, trading companies, engineering firms and technology manufacturers.
From a corporate perspective, Japan already has a sizable, well-educated, healthy talent pool with strong track records and who can function at a regional or even global level.
Challenges in accessing Japanese talent
The question ‘Can global firms hire globally minded Japanese talent?’ is key here. As described above, the Japanese education system produces sufficient talent, and domestic companies have easy access to such talent. Why then, do foreign firms struggle to find qualified, bilingual, global minded talent?
The answer lies in the fact that the bulk of multinational firms look to hire Japanese talent for their in-country business, not as regional or international talent. The opportunity for these professionals to work on APAC projects is most often very limited.
In most cases, large Japanese firms, whether we are talking about trading houses, EPC firms, banks or otherwise, have a clear divide between international and domestic divisions. This results in the following conundrum:
- The international focused talent are bilingual and globally minded; however they are not experienced in domestic projects, often not familiar with local regulations, and their primary interest is working in a global setting.
- Domestic focused talent, however, have all the necessary network, market knowledge and track record to deliver on domestic projects; but >90% of this talent pool are monolingual Japanese, and tend to take a more conservative approach to career development.
In recent years, we’ve seen a handful of multinational firms hiring Japanese talent for positions that will be Tokyo-based, covering both domestic and regional investments and projects. This is a winning combination that attracts the most relevant, interested and willing candidates to join and deliver value both in the Japanese market and on a wider regional scale.
Japan as an expat hub?
From a global corporate perspective, there will likely be significant business ties to Japan even without having projects on the ground. Whether it be debt financing from Japanese banks, joint ventures with trading houses or utility companies, or simply procuring equipment and services from Japanese manufacturers and engineering firms, most energy companies active in the APAC region will have strong business ties to Japanese companies.
Though we have seen some large global firms place expatriates into Tokyo to play a regional role, this is still the exception, not the rule. For an expat, Japan is not easy from a travel and language perspective, where basic things such as opening bank accounts, and securing accommodation cause more challenges than in other locales.
Cost can also be an obstacle, with high taxation rates, as well as costs for international education and luxuries that may be considered normal in the expat’s home country, such as a family car.
Whether it be financial, technical, commercial, or project management specialists, Japan has cultivated a solid pool of talent with experience in global projects.
Developing your business to allow these professionals to leverage their experience at a regional level will unlock a talent pool beyond the traditional regional hub of Singapore.
Andrew Statter is a Partner at Titan GreenTech, an executive recruitment agency focused on the clean energy sector.
