By Misa Murohashi (Translation by Bruce Rutledge)
This year marks the 60th anniversary of the Kobe-Seattle sister city relationship. In 1956, the Seattle mayor requested the city’s first sister city connection with Kobe. The relationship started in 1957. For the last six decades, the two cities have continued to create business, culture, education and many other ties. The cities’ two ports have also had a sister port relationship since 1967, making this year the 50th anniversary. An anniversary celebration was held at the Port of Seattle on July 28. Kobe Deputy Mayor Toshiro Tamada, members of the Kobe city council as well as the sister city association and the festival ambassador took part. The day before, the Kobe Business Seminar was held and a lecture about the investment environment in Kobe was delivered.
KOBE –An international city surrounded by ocean and mountains
Kobe has been an important port city for a long, long time. At the end of the Edo shogunate’s isolationist policy in 1868, the Port of Kobe was opened to trade with the US, and the city of Kobe became a center of international trade, fueling growth in the city.
“Kobe has absorbed outside cultures for a long time,” said Tetsuya Sometani, a representative from the Kobe-Seattle business office. Western buildings from the early days opening to the West still dot the landscape in modern Kobe, adding a distinct flavor to the city. Kobe created multilingual signage for its transportation system and train stations well before other cities. The city actively connects with resident foreigners to enhance its culture.
“In the Internet age, more businesses are embracing the idea that you can work from anywhere,” said Sometani. “In this climate, Kobe is being chosen more and more as a business hub.” Compared to the major metropolises, Kobe is less expensive, making it a more affordable option for families wanting to maintain reasonable grocery bills. Kobe is also an easy place to live, with a friendly, attractive atmosphere. Surrounded by ocean and mountains, the city boasts an attractive natural environment. The city lies alongside Mount Rokko and a gorge along the Inland Sea of Seto. No matter where you live, the mountains feel close. “In Kobe, you’ll hear the phrase ‘early morning mountain hike.’” Sometani adds. “Lots of people enjoy the mountain on a daily basis. In some ways, the natural environment is similar to Seattle.”
Access to other cities is outstanding: It’s just a 20-minute train ride to Osaka Station, and Tokyo is just about two hours away by plane or bullet train. Express flights from Kobe Airport get travelers to Kansai International Airport in just 30 minutes. From there, flights connect to the West Coast of the US and many Asian cities. Also, tourist spots such as one of Japan’s most famous hot springs destinations, Arima Onsen, and Mount Rokko, from which you can see the beautiful Kobe cityscape, are just an hour away. The Sannomiya area in central downtown is filled with restaurants and izakaya, or Japanese-style pubs, giving you all sorts of dining choices. “The sweets and the local sake are delicious, but the best is Kobe beef,” Sometani says.
In 1995, Kobe suffered severe damage at the hands of the Great Hanshin Earthquake. However, deliberate and steady rebuilding and renovation led to the Unesco Creative Cities Network awarding Kobe the designation of Design City in 2008. The manmade island inside Kobe Port, called Port Island, has seen since the quake medical and research facilities thrive here. Today, it’s home to Japan’s leading medical biotech industry cluster. Since Mayor Kizou Hisamoto took office in 2013, the IT startup sector has really taken off. “Seattle is home to many successful companies in the medical biotech and high-tech fields.” Sometani says. “For those people, I’d like to explain the many merits of setting up an Asian branch in Kobe.”
Tetsuya Sometani■ Director of the Kobe Trade Information Office in Seattle. After studying law at university, he was employed by the Kobe City Hall. In 1991, he received a master’s in business administration from the University of Washington. He worked in the urban planning department, and after the 1995 Great Hanshin Earthquake, concentrated on rehabilitating the city. He has held his current post since 2015.
Kobe Business Seminar
About 100 people, including local businesspeople, students and those connected to the Seattle-Kobe sister city program, descended on the Bell Harbor International Conference Center along the waterfront to participate in the recent Kobe Business Seminar. In attendance were the current Consul General Yoichiro Yamada, Seattle Port Commissioner John Creighton, Kevin Yamaga-Karns of Eli Lilly & Co., Galia Mor of 500 Startups and Kobe Vice Mayor Toshiro Tamada.
Japan’s leading medical biotech industry cluster
The first speaker was Kevin Yamaga-Karns of Eli Lilly. Known for being the first company to successfully create insulin for diabetes treatment, Eli Lilly has had an office in Kobe since 1965. The company has been very active in the Japanese market ever since it first started having dealings with Osaka pharmaceutical company Shionogi in 1909. In 1975, it formed Nihon Eli Lilly KK. The Japanese company has its headquarters, a research facility and an educational center in Kobe. In 2016, Eli Lilly had sales of $21 billion and employed more than 40,000 people around the world. Yamaga-Karns explained that Japan is the most important overseas market for Eli Lilly. It’s the second biggest market after the US and well ahead of third-place Germany, he said. Japan has a stable society and economy, and it is greying rapidly, making it an attractive for medical products. He displayed a graph that showed the rapid growth in the Japanese market over the last decade, saying that the company’s investment in Japan-based research and development will continue apace.
Yamaga-Karns pointed out the many merits medical-related enterprises will find working in Japan’s biggest medical biotech cluster, located in Kobe. Port Island is home to many research facilities, including the Institute for Biomedical Research and Innovation, the Center for Developmental Biology, the Translational Research Informatics Center, the Kobe Low Invasive Cancer Medical Care Center and other hospitals on the cutting edge of new care methods and technology. Collaboration among research facilities, hospitals and the area’s top-class medical schools at Kobe University and Kyoto University pushes research & development, Yamaga-Karns stressed. The Kansai area, which includes Kobe, Osaka and Kyoto, has a medical sector on par with those of whole countries such as Russia or South Korea. The size of the regional market is a big plus, Yamaga-Karns said.
When employees come to Kobe from the US or elsewhere, they almost always want to extend their stays, Yamaga-Karns said. For couples with children, it’s an attractive environment to raise a family. Among Eli Lilly employees with children, the international school Canadian Academy is especially popular, and many families even stay longer in Kobe to see their children graduate.
Startup support from 500
While Kobe promotes the medical biotechnology industry, recently it has begun to put energy into supporting startups. Since 2015, the city has started an entrepreneur career education course for middle- and high-schoolers as well as a program for college students to visit Silicon Valley. There’s also a new Kobe Startup Office in Sannomiya. Through Mayor Kizou Hisamoto’s connections in Silicon Valley, the city started cooperating with 500 Startups. In 2016, it formed 500KOBE, and every summer, they hold a seed acceleration program. Groups with technology and ideas gather, help each other with connections and provide mentoring and training. The program also provides an opportunity for startups to pitch their ideas to venture capitalists. The company 500 Startups operates investment activities in more than 50 countries, but the 500KOBE program is the first in Japan.
Galia Mor, part of the strategic alliances team with 500 Startups, also spoke at the Kobe Business Seminar. Last summer, they chose 20 young entrepreneurs from a group of applicants from more than 200 companies to take part in a six-week program. On the last day of the program, they succeeded in receiving what she called “a considerable amount” of venture capital. She explained how the program works and shared photos. Entrepreneurs from outside Japan also gathered at 500KOBE. The ecosystem for startups is forming quickly in Kobe, she said. Besides 500KOBE, the city has 14 incubators or seed accelerators as well as a variety of venture investment funds and individual investors. And the government is adding support, she said. She pointed to the Kobe Global Startup Gateway, a startup contest that includes help from the city in finding investment and free office space as well as other support services.
Cutting-edge business in Kobe
The final speaker of the Kobe Business Seminar was Vice Mayor Toshiro Tamada, who spoke about Kobe’s investment climate. He pointed to Eli Lilly and 500 Startups as examples of ways the city welcomes companies and entrepreneurs. “We accept and support corporations and entrepreneurs from around the world,” the vie mayor said. “we want the cutting-edge businesses in Kobe to succeed.”
The city offers lower taxes and rents on office space to businesses investing in Kobe. For example, some foreign companies have received three months free rent in a temporary space while they set up their Japan operations. For those that have an office, the city offers as much as $110,000 a year in rent breaks that can be as much as 50% of rent. It also offers lower fixed-asset, urban-planning and business-office taxes.
After the seminar, a party was held on the terrace. A kanpai toast was done with Fukuju, an award-winning Kobe sake. Since 2014, Kobe City has followed a rule that all toasts are held with Kobe area sake. At the party, Tamada said, “Kobe and Seattle are similar in many ways. They are both port cities, and they have an advanced medical industry. I’d like to see strong business exchanges so that we can invite lots of young Seattleites to Kobe.”
The Kobe Seattle Business Office is located in downtown Seattle. The staff is available to discuss business opportunities and office arrangements.