Japan or Korea? 7 Things European SMEs Must Know

Jan de Vries · 2026-10-27

So you're a European SME eyeing Asia. Japan and the Republic of Korea both look tempting—and for good reason. They're wealthy, tech-savvy, and hungry for innovation in healthcare, clean energy, and advanced technologies. But which one is right for you? That's the million-dollar question. The EU-funded EU Business Hub – Japan and the Republic of Korea programme helps European SMEs explore both markets through targeted business missions. Here are seven factors to weigh before you dive in. ### Different Investment Priorities Japan's energy transition is a big deal. Under its Green Transformation (GX) strategy, the country plans to mobilise over ¥150 trillion (that's roughly $1 trillion) in public and private investment over ten years starting fiscal 2023. We're talking renewable energy, hydrogen, and industrial decarbonisation. For European clean-tech suppliers, this is a golden opportunity. The Republic of Korea, on the other hand, shines in electronics, semiconductors, automotive, and medical technology. If you supply specialised components or advanced tech, Korean manufacturers might be your ideal customers. **For SMEs:** Figure out where your solution fits into existing supply chains. Don't just chase the biggest market—find the one that needs what you've got. ### Ageing Populations Drive Healthcare Demand Japan is often called a "super-aged" society, with about 29% of its population aged 65 or over. That creates huge demand for elderly care, rehabilitation, assistive technologies, and ways to make healthcare more efficient. The Republic of Korea joined the super-aged club in 2024, with over 20% of its population aged 65 or older. But here's the twist: Korea's advanced digital infrastructure opens doors in diagnostics, AI-enabled medical devices, and digital health. **For SMEs:** Both markets offer healthcare opportunities, but the customers and applications can be quite different. Japan might lean more toward physical assistive devices, while Korea could be more about digital solutions. ### Local Partnerships Matter In Japan, partnerships with manufacturers, distributors, and engineering companies can help you reach customers and integrate your technology into established systems. It's often about fitting into existing structures. In Korea, medical device distributors, manufacturers, research institutions, and tech companies might be your entry points. The ecosystem is a bit more fluid. **For SMEs:** Choose partners with access to your target customers and the technical chops to support your product. Don't just pick the biggest name—pick the one that gets you. ### Business Practices Require Preparation Both markets value reliability, product quality, and long-term relationships. But decision-making processes vary by company and sector. In Japan, consensus-building can take time. In Korea, things might move faster, but hierarchy still matters. European SMEs should prepare technical documentation, evidence of successful applications, and a clear commercial proposition. Local-language support can be a game-changer in negotiations and technical discussions. **For SMEs:** Focus on demonstrating measurable value. Generic market-entry presentations won't cut it—show them what you've done and how it solves their problem. ### Regulatory Requirements Differ Medical technologies face distinct regulatory frameworks. In Japan, the Pharmaceuticals and Medical Devices Agency (PMDA) reviews medical products. In Korea, the Ministry of Food and Drug Safety (MFDS) regulates medical devices. Clean-energy technologies may also require local certification or compliance with technical standards. Don't assume your European certification automatically grants you access—it doesn't. **For SMEs:** Assess regulatory requirements early. It's better to know the hurdles before you invest time and money. ### Test Before Investing You don't necessarily need to set up a local office right away. Distributors, technology partners, and system integrators can provide access to customers and market knowledge without heavy upfront costs. Trade exhibitions and B2B meetings are great for testing demand, understanding technical requirements, and identifying potential partners before committing substantial resources. **For SMEs:** Validate your commercial proposition before making long-term investments. Dip your toes in the water first. ### Direct Engagement Makes the Difference Market research can point you to promising sectors, but only direct discussions with potential customers reveal whether your technology truly meets their needs. That's where initiatives like the EU Business Hub come in—they facilitate these connections. **For SMEs:** Get out there and talk to people. Attend events, set up meetings, and listen. The insights you gain will be invaluable. Expanding into Asia is a big step, but with the right preparation, it can be a rewarding one. Weigh these factors carefully, and you'll be better equipped to choose between Japan and Korea—or maybe even both.