Cost to Quality Advantage of Osaka

Osaka is the Second City of Japan. Due to this very fact, Osaka presents businesses with a number of advantages. Because of the enormous presence that Tokyo has in Japan, Osaka is often overlooked and under considered as a business destination that could be a better fit for a company looking to expand their business to the Japanese market.

When comparing Tokyo and Osaka one needs to keep in mind that Tokyo is the financial and the political capital of Japan, a country that is unlike the U.S. in how it is highly centralized. Furthermore, the population of central Tokyo is three times as much as the city of Osaka. At the same time due to these factors, the capital city poses some large disadvantages for businesses such as high business cost, living cost and traffic congestion. Some major companies have in fact moved their head quarters out of Tokyo after many years.

Advantage of Osaka

  • Business cost is approximately 20% less in Osaka than in Tokyo.
  • Locating the right talent for your business is easier and less costly.
  • High business concentration in Osaka allows increased business opportunities.
  • Connecting with Osaka small and midsized companies can speed business process and still allow access to major Japanese companies.

Business Costs

There are a number of costs to consider when setting up a business and some of them are the same regardless of where in Japan you set up. But when looking at all costs that see regional differences, Osaka is competitive with Tokyo and is overall 20% less. Furthermore, according to CB Richard Ellis in 2007, 43.8% of Tokyo building owners had plans to increase office rent where as only 23.1% had such plans in Osaka for the following year. Plans were made to keep only 10.7% of Tokyo rents the same in contrast to 29.5% in Osaka.

*all currency conversions are calculated at 1$=100yen

Human Resources

Kansai has been the birth place of world class innovations and home to more than half of the Nobel prize laureates in Japanese history. Of the 16 Japanese laureates from 1949 to 2008, 10 have been from or have belonged to Kansai institutions. In 2008, Dr. Yoichiro Nambu of the University of Chicago was awarded the Nobel Prize in Physics. Dr. Nambu is an honorary professor of the Osaka City University and a visiting professor at Osaka University.

There are a total of 241 universities, junior colleges and vocational schools in the Greater Osaka area (prefectures of Osaka, Hyogo, Kyoto, Nara, Shiga and Wakayama) out of which 93 are located within Osaka. Needless to say there is not a shortage of top level talent in Osaka.

In addition, there are over 700 private and public research institutions in the Greater Osaka area as resources for foreign companies that want to outsource or collaborate on various research projects.

Concentration of Businesses

Osaka is a city for business. As seen on the graph, the business density of Osaka exceeds that of central Tokyo. In contrast to Tokyo, Osaka has one concentrated central downtown at the core of residential districts not unlike many U.S. cities.


Small and Medium Enterprises

One way to quickly enter the Osaka/Japanese market is to tie-up with small and medium size businesses that already have the knowhow for dealing with major companies. Since their operations are smaller in scale, deals can be made more quickly than with major companies. Please see the Business Introduction Program page for more information.