[Dialogue] Russia and Japan can successfully develop a win-win cooperation in a digital

Daisuke Saito, the head of Russian representative office at the Japan Association for Trade with Russia and NIS (ROTOBO), told Pan Pacific Agency what areas of high-tech cooperation are most promising for Russia and Japan in the era of a pandemic.

Japanese business traditionally perceived Russia as a supplier of raw materials. Can you say that this perception is changing gradually?

It depends on the efforts Russia would make.

If Russia expands production of interesting and engaging goods, there is a prospect that Japan will import more such non- primary goods. Russia is a country with advanced technologies. The quality of such products is evaluated by its end-user, the buyer. In order to maximize this assessment, it is necessary to produce exceptionally high-quality goods, constantly improve its technical capabilities.
These are key factors for transfer and trade of Russian products on international markets.

What new technology is currently considered the most promising in Japan? Are there any expectations for cooperation in this field with Russian companies?

Here you can distinguish technologies in the field of artificial intelligence and robotics. In other words, everything that connects with “unmanned” technologies. Japan has recently experienced a decline and ageing of population. Shortage of labour is becoming a serious problem. Nowadays robotics is being actively developed, and if the skills and capabilities of robots continue to improve, the probability of replacing human labour by artificial intelligence and robots over the time is increasing. Various studies show that up to half of all jobs worldwide can be transferred to maintenance by artificial intelligence and robots. Evidently, this is a trend not only in Japan but throughout the world.

In addition to AI and robotics, a new and promising area of cooperation for Japan and Russia is IT and digital technologies.

There are modern technologies in Russia that are not yet in Japan. Conversely, Japan has the latest technologies that Russia has not. From this perspective, Japan and Russia can build complementary relationships. In the digital field, Russia and Japan can successfully develop a win-win cooperation.
The coronavirus crisis has exposed Japan’s digital divide by almost 10 years. Therefore, in order to accelerate the pace of digitization, the Japanese Government has declared this to be one of the top priorities in the national policy of the country. It can be said that Russia is now ahead of Japan in the digital field, and the possibilities of cooperation of our countries appear to be quite promising.

How much trade in high-tech products between Japan and Russia has now been achieved? Do you know examples of Russian high-tech products being exported to Japan?

If you look at the structure of bilateral trade, you can see that the main export items from Russia to Japan – CNG, oil and coal; from Japan to Russia mainly export different machines and equipment. In the field of high technology, there is now almost no supply from Russia to Japan. If Russia has a high-tech product that is interesting for Japan, Japan is ready to buy it. In Japan, there is no strict regulation on imports of high-tech products from Russia.

As I said earlier, the quality of products is assessed by the end-user, the buyer. It is important to produce exceptionally high-quality products, constantly improve it’s technical capabilities and to work on increasing productivity in general, then this evaluation will be as high as possible.

Have the sanctions against Russia affected the interaction of the two countries in the high-tech sphere? Has this made the exchange of technology and dialogue in general much more difficult?

Unfortunately, we can say that the impact of the sanctions on Russian-Japanese cooperation is quite large. When Japanese companies doing new business with Russian partners, they must be very careful and scrutinize the legality of a transaction in terms of sanctions. The imposition of sanctions led to a significant decline in Japanese business activity in Russia. The existence of sanctions has become one of the main reasons why Japanese companies operating in Russia have to be extremely cautious.

Do you feel that the pandemic, which has accelerated changes around the world, has changed the traditional Japanese balanced decision-making too? Does Covid-19-like issue need to speed up decision making in international business relations?

The spread of a new coronavirus infection is having a big impact on our lives. The coronavirus crisis is profoundly changing societies, economies, and our everyday lives. Thanks to online education and development of remote work that make our performance more efficient. Change is occurring at an unprecedented pace, not only in business, but in all other areas, from politics to society to the environment.

How do you think, if now a Japanese businessman is offered to choose between establishing cooperation with a high-tech company from Russia or from India (for example), which one will he most likely choose? Why so?

It’s hard to answer that question. In some cases, the choice of partner is determined by technological capabilities and development prospects, but there are also situations where value plays a determining role, the level at which a potential partner is proficient in English and etc. It is impossible to simply say at first glance, who Japan would prefer: Russia or India, as both countries are important partners.

In June 2020, the “Stay Home Pitch” session for Russian startups was organized by ROTOBO, two winners were chosen. How are these projects developing in the Japanese market? Did the interest of developers and Japanese investors in each other already turned into founds?

In addition to the pitch-session of the Russian start-ups «Stay Home Pitch» in June 2020, ROTOBO had also previously held seminars for Russian and Japanese venture IT companies and startups in different regions of Russia (Moscow, Kazan, Saint Petersburg, Novosibirsk and Vladivostok). A a rich dialogue ensued in the seminars between many companies from the field of IT, venture capital business and start-ups that participated in it.

I was surprised by the level of activity and speed in the transition to the next stage of cooperation that characterizes such companies. They may not yet be fully confident about whether a project will be a full-fledged business, but if they find it interesting and promising, they do not stop and enthusiastically decide to move on.

This kind of activity and pace are things that companies didn’t have before. To date, ROTOBO has carried out numerous business-to-business activities, usually taking a long time to complete a full-fledged business project. It is clear, however, that such past approaches are not appropriate in the digital world. Here, there is great potential.

ROTOBO permanently participates in major Russian forums: the SPIEF, the EEF and the Open Innovations Forum. How are each of it useful for the association and for the entire Japanese business?

During these forums, our association conducts bilateral business dialogues. Participation in such business events is an excellent and extremely important opportunity for representatives of business circles of our countries to openly exchange views, discuss various issues, including challenges and prospects of economic relations of Russia and Japan. A large number of business agreements have been concluded during these events. As a result of direct contacts between representatives of the two countries, ideas for new joint projects are emerging in such forums and conferences. In my view, such events play an acceleration role in the development of Russian-Japanese economic and business relations.

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