Mr. Kota Onodera, Representative Director and CEO of Next Relation, Inc
Companies want to spread products and services that haven’t been seen before, but there are often legal barriers that obstruct them. As a result, they want to expand their business opportunities by cooperating with the government. Next Relation, Inc. provides the Fairs support service to accelerate business through public affairs, address management challenges such as expressing growth potential through business strategies that incorporate policy trends. We spoke with Mr. Kota Onodera, the Representative Director and CEO of the company.
Representative Director and CEO of Next Relation, Inc
―Could you tell us about Next Relation?
We are developing a service called Fairs with the intent to accelerate business through public affairs.
Through public affairs, we are promoting the societal implementation of innovations and the abolition of analog-era regulations to provide support to companies that take on the challenge of resolving societal issues.
―What exactly does public affairs mean?
We define public affairs as a management approach to realize the sustainable growth of companies and society through strategic communication with the public sector.
In other words, you can think of it as similar to lobbying. In Japan, lobbying often has negative connotations of collusion and parachuting, but the term “public affairs” encompasses not only the concept of government relations, which is an approach to government and public institutions, but also that of public relations, which acts to excite public opinion and create an atmosphere.
Public affairs is positioned as an approach to realize the societal implementation of innovations.
―What are the advantages of public affairs?
It’s been a long time since previous discussions of the “new normal era.” With the advent of an era defined by rapid change, new issues are emerging that have never been before.
For example, it is common for business models that work well overseas to have difficulty being implemented in Japanese society because of analog-era regulations.
Another example is the business-to-government market, which is currently valued at 23 trillion yen. Outsourcing has begun for a variety of regional issues and government services, and companies that have not developed businesses aimed at governments have begun to enter the market. However, the private sector and the government have different procedures and steps and so are struggling to communicate with each other.
In addition, companies need to restructure their business domains and formulate new KPIs in consideration of national policies by aligning their core values with the policies promoted by the government to increase their corporate value.
We believe that these management issues unique to this new era can be resolved through the approach of public affairs.
―Please tell us about how you started to provide public affairs services.
When I was a college student, I was an intern secretary to an assembly member. I had always been interested in politics and had a strong desire to see policymaking in person.
After graduating and working at a financial institution, I became a secretary to a member of the Diet.
While working this job, I was consulted by many startups about analog-era regulations that were hindering the societal implementation of their services.
Most regulations were created before the advent of smartphones and concepts like digitalization. I started to wonder if they were even relevant to today.
However, simply relaxing the regulations wouldn’t solve the problem. There were various opinions and arguments, such as safety, security, and customer protection.
As new technologies continued to emerge every day, I decided to create a system that could successfully implement them into society.
In the United States, such activities are under the near-official jurisdiction of lobbyists, serving as coordination between policymakers and citizens. In Japan, however, this function hasn’t yet been established.
I thought, “Okay, in that case, I’ll serve as a Japanese version of a lobbyist.” That is how I started my own business.
―How far behind are public affairs in Japan?
While the U.S. market for public affairs is 430 billion yen, the Japanese market is only 13 billion yen, which a gap of more than 30-fold.
It’s said that a country’s focus on public affairs is not irrelevant to its global market capitalization ranking. In 1989, Japanese companies accounted for a staggering 32 of the top 50 companies. Today, only Toyota is on that ranking. In addition, many of the top rankings have been replaced by IT and communications companies.
The rankings clearly reflect how certain countries have implemented innovations and created new markets by eliminating analog-era regulations.
―Will public affairs become more prevalent in Japan?
In 2022, the Ministry of Economy, Trade and Industry defined activities equivalent to public affairs as new market creation services and published an industry map. Future development is highly anticipated.
In this industry map, the significance of working on public affairs is showcased in the numbers. The compound annual growth rate (CAGR) of companies working on rulemaking for creating new markets is about five times higher than that of the average Japanese company.
We believe that public affairs activities in Japan are still in their infancy.
There aren’t many people who can take charge of lobbying in Japan. At this stage, it’s reasonable to outsource the process.
In the future, the number of companies that specialize in lobbying and support the public policy sector will gradually increase, and public affairs will permeate Japanese business.
―What kind of support does Next Relation provide, specifically?
In terms of public affairs, our support for the improvement of corporate value and sustainable growth consists of the three pillars: rulemaking, public relations, and formulating strategic plans for public affairs.
The first, “rulemaking,” supports activities that aim to transform the voice of one company into the voice of the industry and public opinion for the purpose of, for example, relaxing relevant laws and regulations or budgets. We can support the establishment and management of an industry association all the way through to policy recommendations.
The second pillar, “public relations,” aims to expand business opportunities through public-private partnerships. It supports all forms of business-to-government communication, including backing for sales activities and events targeting local governments, making a comprehensive cooperation agreement, and conducting demonstration experiments.
With the third pillar, “formulating strategic plans for public affairs,” we conduct IR and PR activities for companies in line with national policies. the Basic Policies for Economic and Fiscal Management and Reform are announced each year in June, which cover important issues for the administration and the direction of the next fiscal year’s budget. For example, developing a business aligned with the next fiscal year’s budget guidelines is effective for a company to express its future growth potential and to improve its corporate value.
―What is the difference from conventional corporate growth strategies?
The idea of the conventional growth strategy was based on how much of the pie you could take within a given market. On the other hand, public affairs allows you to build the external environment itself. In other words, you can open up new markets and expand your business into new areas of demand. You can expand your TAM (Total Addressable Market: the maximum of obtainable market size or the total demand for goods and services) through the support that Next Region provides.
―Do you have any future plans?
We are currently working to provide a platform for organizing policy information.
In Japan, a lot of information is well-publicized by the various ministries and agencies, including budget information, subsidy information, and what laws will change in the years to come. However, it’s difficult to find that information. This may be because the hierarchy is too convoluted or because the ministries and agencies have no standardized publishing formats. We are now developing a system that can serve as an information platform to provide such information in an organized manner.
We hope that this information platform will be used not only by financial institutions and consulting firms, but also by departments like corporate planning offices. We are committed to supporting their challenge to change their external environment.
| Company name：Next Relation, Inc. |
| Founded：August 2022 |
| Number of employees：15 |
| Main Business：Public affairs business URL：https://corp.next-relation.jp |
This article is part of a series of articles introducing venture companies working together as ICF members to resolve societal issues.