Japan or Korea for Your EU SME? 7 Factors That Decide

Jan de Vries · 2026-10-27

So you're running a European SME and thinking about Asia. Japan and the Republic of Korea both look promising—especially in healthcare, clean energy, and advanced tech. But which one is right for you? The EU-funded EU Business Hub – Japan and the Republic of Korea program helps European SMEs explore both markets through business missions. Here are seven factors to weigh before you expand. ### Different Investment Priorities Japan's energy transition is a big draw for European clean-tech suppliers. Under its Green Transformation (GX) strategy, the country plans to mobilize over ¥150 trillion (about $1 trillion) in public and private investment over ten years starting fiscal 2023. That covers renewables, hydrogen, and industrial decarbonization. Korea, on the other hand, has strong electronics, semiconductor, automotive, and medical technology industries. For European suppliers of specialized components and advanced technologies, that's a lot of opportunity. **For SMEs:** Figure out where your solution fits into existing supply chains. Don't just chase the biggest number—look for the best match. ### Ageing Populations Drive Healthcare Demand In Japan, about 29% of the population is 65 or older. That creates demand for elderly care, rehabilitation, assistive technologies, and healthcare efficiency. Korea became a super-aged society in 2024, with over 20% of its population aged 65+. Its advanced digital infrastructure opens doors in diagnostics, AI-enabled medical devices, and digital health. **For SMEs:** Both markets have healthcare opportunities, but the customers and applications differ. Know who you're serving. ### Local Partnerships Matter In Japan, European SMEs can partner with manufacturers, distributors, and engineering companies to reach customers and integrate technologies into established systems. In Korea, medical device distributors, manufacturers, research institutions, and tech companies can be entry points. **For SMEs:** Choose partners with access to your target customers and the technical capacity to support your product. It's not just about who you know—it's about who they know. ### Business Practices Require Preparation Both markets value reliability, product quality, and established relationships. But decision-making processes vary by company and sector. European SMEs should prepare technical documentation, evidence of successful applications, and a clear commercial proposition. Local-language support can smooth negotiations and technical discussions. **For SMEs:** Focus on demonstrating measurable value rather than relying on generic market-entry presentations. Show, don't tell. ### 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. **For SMEs:** Assess regulatory requirements early. European certification does not automatically guarantee market access. Plan for this from day one. ### Test Before Investing You don't necessarily need a local office right away. Distributors, technology partners, and system integrators can provide access to customers and market knowledge. Trade exhibitions and B2B meetings help you assess demand, understand technical requirements, and identify potential partners before committing substantial resources. **For SMEs:** Validate your commercial proposition before making long-term investments. Dip a toe in before diving. ### Direct Engagement Makes the Difference Market research can identify promising sectors, but only direct discussions with potential customers reveal whether a specific technology 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. Real conversations beat desk research every time. > "The best way to predict the future is to create it." — Peter Drucker Expanding into Asia is a big step, but with the right preparation, it can be a rewarding one. Weigh these factors carefully, and don't be afraid to start small.