Introduction AWS operates out of the United States of America, which is its home country. Our target country is Japan. We have chosen this country for a variety of reasons we will expand on in this brief. AWS operates in the web services and cloud computing industry. We have compared various economical factors and indicators to make an informed recommendation regarding future business in Japan. We have looked at the following economic factors and indicators for both countries: GDP Unemployment and Utilization Inflation and Interest Rate Debt and Deficits External Balances and Exchange Rates Savings and Investments Our main reason for this research is to try and determine future overall economic health of the Japanese government and the trend of some economic factors of the population living in Japan. We do this to try and predict the probability of success if we were to enter the Japanese market. Japan’s Economic State Although Japan’s GDP has been in a downtrend over the last 3 years it has been a slight decline. It is also worth noting that the percentage change in Real GDP is slightly positive and seems to be breaking a year-long down trend which means that there is growth within the economy albeit small and slow. Their unemployment rate is low which indicates a strong labor market that will strengthen demand for products and services, stimulating the economy in a more organic way. The only worry about an excessively strong labor market is that it tends to reflect a rise in prices in the future due to the increased demand. Japan’s interest rate is at or around 0%. This can be seen from two different perspectives depending on the strategy for market penetration or expansion. If we want to establish or expand operations in Japan, the costs of doing so will be relatively low compared to doing the same in a country with a higher funds rate. At the same time, we might have to recalibrate our expectations of initial and continued growth in a country that can see inflation continue at its current value of around 4%. There seems to be no rush to raise the funds rate which combined with a very low unemployment rate can cause inflation to rise in the near future. Japan’s debt is also a reason for concern, not necessarily directly affecting operations but indirectly affecting them due to decisions the government may make to alleviate worries about their growing debt. It has increased over the last decade and their Debt/GDP ratio is the highest in the world. They try to offset this in part with things such as corporate taxes, which are already considerably high in the country. This doesn’t remove the fact that they might see the need for increasing them in the future raising the cost of operations. I believe these indicators mentioned above are the strongest data points to be used for our decision. Recommendation We are currently growing in Japan and see AWS maturing in the Japanese industry to become a regional leader in the future. It seems possible to grow in the conditions mentioned above. Especially if we already have a presence in the market. The question becomes “Is it the correct time to expand?”. The future remains somewhat unpredictable and it seems that the technology sector has been overall contracting in the last 2 quarters, including around a 6% reduction of employees for the big web services and cloud computing companies. Governments may also find themselves having to change course regarding policy to prevent economic recessions or uncontrolled inflation. I Believe that with the current presence that we have in Japan the best path forward would be to continue to evaluate their economic conditions and plan for expansion sometime in the future. It is mutually beneficial for AWS to expand operations in Japan. The government receives a lot of money from the development and operation of our data centers, jobs are created, tax revenue is produced. AWS on the other hand can continue expansion into the Asia Pacific region and cement itself as a strong world leader in the industry. With the low costs of doing business, the strong labor market producing skilled workers, the fact that Japan is still one of the biggest economies in the world, and its’ relative ease of doing business I recommend we continue doing business there with an outlook over the coming years to expand when overall economic conditions are more favorable. References 1. 2018, Larry Downes and Paul Nunes, Finding Your Company’s Second Act. 2. https://tradingeconomics.com/ 3. https://aws.amazon.com/local/osaka-region/ 4. Big Tech Didn’t Quite Clear the Bar, (2023) WSJ, Gallagher Dan
