By Tom Still

MADISON, Wis. – Based on size alone, China is an imposing economic force in the world, the United States and even Wisconsin, where it’s the third-largest market for state exports behind only Canada and Mexico. Yet for many, China is also a source of worry in an era of global tension.

Then there’s Japan, a steady Asian democracy with economic ties to Wisconsin that span soy sauce production in Walworth County, foundry floors in Waupaca, construction equipment in Milwaukee and laboratories in Madison.

An overview of Japan’s economic importance in Wisconsin and across the United States was delivered Sept. 19 at the Wisconsin-Japan Biohealth Summit in Madison, where the focus was biotechnology innovation within a much larger picture of Japanese investment.

Japan was Wisconsin’s seventh-largest trading partner in 2021 at nearly $700 million, more than one-third of China’s $1.8 billion total for the same year. That was true even though Japan’s population is less than 10% of China’s 1.4 billion people.

Direct investment by Japan in Wisconsin has grown steadily over time, about $2.4 billion since 2014 alone, and its stands as the state’s biggest foreign investor. The same is true across the United States, where Japan ranks first in 36 states for foreign direct investment and in the top three in the rest.

Japanese-owned companies also rank first among international sources in creating American manufacturing jobs and first in total research and development spending in the United States.

For many in Wisconsin, the nearly 50-year story of Kikkoman Foods in Walworth, the evolution of Waupaca Foundry and the growth of Komatsu Mining Corp. in Milwaukee may be familiar examples of Japanese investment. They are not isolated cases. As state Economic Development Secretary Missy Hughes said during the forum, Wisconsin is home to 58 Japanese firms with 80 facilities that encompass 8,500 jobs.

Among them are leading medical technology firms, such as those featured during the Madison forum, which was held at the science-focused Discovery Building on the UW-Madison campus.

UW-Madison Chancellor Jennifer Mnookin said the university – which has welcomed Japanese students since 1905 – should “open its doors a little wider” to R&D partnerships with companies that do business in Japan or have ownership ties there.

The time is right to do so. Doing in business in China, while still very possible and even advisable for many companies, may become more difficult if political tensions get in the way. That’s not likely with Japan, which is one of 12 nations to recently engage in the Indo-Pacific Economic Prosperity Framework, which includes the United States.

The Japan-American network is well developed. For example, the Japan External Trade Organization has been in place since 1958 and regularly touches Wisconsin. There are also strong “sister city” and “sister state” ties, regular trade missions and other official exchanges.

Companies that took part in the Sept. 19 forum represented a day-to-day dimension of Wisconsin relationships with Japan.

  • FujiFilm-Cellular Dynamics Inc. is based in Madison’s University Research Park and has commercialized and accelerated the work of some of UW-Madison’s pioneer stem cell scientists, creating jobs along the way. FujiFilm also acquired Wisconsin-based Teramedica a few years back.
  • Arrowhead Pharmaceuticals is expanding in the Madison area, developing “gene silencing” drugs through its novel RNAi platforms and a partnership with Japan-based Takeda Pharmaceuticals.
  • Fitchburg-based Promega, the “grandfather” of Wisconsin biotech, operates in 16 nations and maintains a 50-person office in Japan. Among Promega’s 4,000 products are assays and other testing platforms for scientists.
  • Exact Sciences has received approval from Japan’s top health agency for its “Oncotype DX Breast Recurrence Score” program. It helps guide chemotherapy treatment recommendations and may reduce recurrences in certain cases. Breast cancer is the most common cancer in Japanese women.

Many nations have trade, investment and other business ties with companies in Wisconsin, but the historic links to Japan are already vital to the state and may become more so coming years.

Still is president of the Wisconsin Technology Council. He can be reached at