Group Presentation investment report for Austrade

1. Group Presentation investment report for Austrade Student names

2. To compare the attractiveness of US and Japan for Australian companies • This report is prepared for Austrade. • PESTLE model is applied for the analysis • The report has comparatively analyse the following four dimensions within the PESTLE framework • In the end , recommendation is provided to Austrade

3. Comparative analysis of political structure of US and Japan • Both countries have solid democratic setup • Corruption Perception index: • US : scores 73 out 100, ranked 18th • Japan: scores 74 out of 100. ranked 17th • Governance effectiveness Index • US scores 90 percentile and Japan scores 89 percentile

4. continue • In US, the ruling party is facing trouble to reach agreement with the opposition party for major domestic issues: • Healthcare reform and budget deficit cut • In Japan, the ruling party LDP has 2/3 seats in parliament, dominating position means easily pass legislation and policies • But US is the world leader, global influence on political and economic issues

5. Comparative analysis of economic structure • US economy is the largest economy in the world • Service industry accounted for over 70% of US GDP • Second largest manufacturing industry in the world • A more diversified exporting product portfolio • Services , agricultural commodities, manufacturing • The Latest development of Shale gas and shale oil transform US from importing energy to exporting energy

6. Japan is the third largest economy in the world • Japan has leading positions in electronics and car-marking industries • The car-making and electronics contribute 27% of GDP • Heavily relying on exporting market, US is the largest exporting market to Japan, the US economy has direct impact onto Japan Economy. • Heavily relying on importing energy , crude oil and natural gas for energy purposes • Strong JPY will reduce the cost of purchasing energy but will hurt the exporting.

7. Social factors of US and Japan • Both US and Japan are facing aging population problems • In US, the Baby boomer generation grows elder and labour market shortage, • As An immigration country, US can effectively use its immigration law to attract foreigners to live in US. • Japan is having worse aging population issues, reducing fertility rate and longer life expectancy results in an aging society in Japan

8. Japan is also facing labour shortage when the old workers retired • But Japan government did not implement immigration policies to attract foreign workers as US. • The unique corporate culture in Japan corporate makes foreigner hard to get involved

9. Also both US and Japan are facing increasing financial pressure from maintain the higher standard of medicare system for retirement people. • The social welfare system in Japan is under financial pressure, because less workers means less contribution to the social welfare pool.

10. Technological factors • Both countries committed to develop technology and innovation via public and private sectors. • US contribute 42% of total expenditure among OECD countries for R&D expenses • US is the leading role in pharmaceutical ，aerospace and agriculture industries. • Japan economy has been benefiting from its advanced technology in car-making and electronics industry

11. Latest development in technological sector • Japan government and private sector are committed to develop robotic technology as a long term strategic plan. • The purpose of developing robotics technology is to increase productivity and fill in the gap of labour shortage • US companies are advanced in shale oil and shale gas technology, the implementation of shale oil and gas technology transformed US from importing energy to exporting energy

12. Conclusions • Based on the analysis of four dimensions, both Countries have solid democratic set up which encourage private economies • At the present , the Japan ruling party has dominating position in parliament and this enable them to pass legislations and policies relatively easy than US ruling party • On the economic side, both countries are advanced industrialized economies, but US economy can have direct influence onto Japan economy as US is the largest exporting market for Japanese products

13. On the social sector, both countries are facing aging population issues. • US is utilizing immigration policies to attract foreign workers and scientists to live in US • Japan did not implement immigration law to solve the shortage of labour supply • The aging population issues can create different problems for two governments

14. US and Japan are both advanced in technological development to maintain their core competitiveness in the market. • US is strong in Pharmaceutical and aerospace industries , the recently developing Shale gas and oil technology enable US to transform from importing energy to exporting energy • Japan is strong in electronics and automotive industries, its R&D in robotics technology has different tasks, to improve productivities and to solve the labour shortage issue

15. Recommendations • Both countries can be ideal place for Australian companies to invest, but it also depends on which industry: • If it is about service industry and agricultural industry, US is a better choice because the language background and similarity of agriculture industry • If it is about electronics, car making and robotics technology , Japan is a better place between they are strong in these areas