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HOME NRI JOURNAL A new form of industrial infrastructure that connects people and companies: How should Japan utilize MICE?

NRI JOURNAL

Innovation magazine that generates hints for the future

A new form of industrial infrastructure that connects people and companies: How should Japan utilize MICE?

Atsushi Okamura, Group Manager, Social System Consulting Department

Nov. 22, 2017

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“MICE” is a general term for business meetings and events. In the past, the focus on MICE has centered on its economic ripple effects on tourism. In recent years, however, the focus has shifted more to its added value—the ability of MICE to promote industry, encourage the interaction of people and information, and act as special opportunities to create new value in business. We asked Atsushi Okamura of the Nomura Research Institute (NRI), who has worked to promote MICE from an industrial promotion perspective, about its current status, the issues that it faces in Japan, and its future potential.

The true impact of MICE—Not just tourism consumption

—— What kind of things exist under the MICE umbrella?

MICE is an acronym for “Meeting” (business meetings), “Incentive” (incentive tours), “Convention” (academic conferences), and “Exhibition” (exhibitions). “Meeting” refers, of course, to company-hosted meetings and events, as well as product presentations and training sessions. “Incentive” refers to special incentive tours offered to a company’s best employees. In foreign companies, as many as a few thousand people can participate in one of these incentive tours. “Convention” refers to conferences hosted by international institutions and organizations, academic societies, and more. “Exhibition” also speaks for itself, and refers to exhibitions and trade fairs. It is common in foreign countries for business transactions to occur on-site at these events.

—— When did people in Japan start becoming interested in MICE?

In 2010, the Japan Tourism Agency announced a plan to promote MICE as part of its efforts to expand the volume of inbound tourists (tourists visiting Japan from foreign countries). This has come to be known as the “first year of MICE.” Most of the focus towards the beginning was on the “C” aspect, and the motivation behind inviting tourists to international conferences lay primarily on the economic effects of spending by these foreign tourists. Now, however, there is more attention on the “M,” “I,” and “E” aspects as well, with more of a focus on effects like industrial promotion and company growth. There is an understanding that the benefits of the economic ripple effect in the accommodation and restaurant industries are limited to certain specific regions. However, the leveling up of skills and networking opportunity offered by the events themselves have effects on a great many companies and industries. For instance, an international conference in Japan affords students and researchers who may not be able to travel abroad the opportunity to engage with the latest knowledge, and also promotes social interaction amongst researchers in general. This enhances not only the skills of each individual but the scientific and technological ability of Japan as a whole. On the other hand, exhibitions are beneficial for the promotion of small- to mid-sized enterprises, as they allow companies to communicate with large numbers of potential customers in a short period of time, at low costs. As such, I believe that MICE is a form of industrial infrastructure.

Japan’s issues: Accommodation capacities and proposal abilities

—— What is Japan’s situation in terms of international competitiveness?

Japan has fallen behind Asian countries like Thailand and Singapore in encouraging tourism for business meetings (M) and incentive tours (I). This is due to the overwhelming lack of luxury hotels and other MICE facilities in prime urban locations capable of accommodating several thousands of people at once. Additionally, many hotels and facilities in Japan have had business models that earn their profit by providing location and omotenashi (Japanese-style hospitality) to its guests.

Overseas, however, the focus is more on the “M” and “I” markets, and consequently on proposal-based businesses that provide personalized programs suited to each host. The expectation for an incentive tour in Japan, for instance, is to provide something more than the usual lavish meal at a luxury hotel, whether it be events at venues unique to that region, or experiences that are outside of the scope of ordinary tourism. Companies and organizations want to take their incentive tours to countries that have this kind of proposal ability, as these kinds of experiences enhance participant satisfaction and tie directly to their motivation for work.

—— So there are both “soft” and “hard” issues?

In recent years, there have been gradual efforts to incorporate MICE into the fabric of society—for instance utilizing Nijo Castle in Kyoto as a party venue. Local governments in Tokyo, Yokohama, Kyoto, Sapporo, Fukuoka, and more have come to understand the significance of MICE, and are discussing ways to utilize it as local industry, working with local companies to create added value in the region.
Fukuoka in particular has proposed a clear vision for MICE as a measure to develop industry in strategic fields—like food, innovation, and urban infrastructure—and has made efforts to bring in and host events, exhibitions, and more in accordance with this vision. Local companies from a variety of fields have come together to cooperate with the government after feeling the benefit of these events.

MICE as an opportunity to create value

—— How should companies utilize MICE?

There is a limit to the the amount of value that one department or even one company can create. Communication and intellectual stimulation amongst people of various backgrounds help form new ideas and collaborations. If, for instance, a Japanese company were to host a global training session after M&A of a foreign company, the effects of the training would be enhanced if there were a team-building program, or if it were to be held in a unique venue. In Western countries, meeting planning is a professional job, and companies spend significant amounts of money on creating these opportunities and experiences.

MICE will also change the way we market. There was a foreign manufacturer, for instance, that held their product launch event at Tokyo National Museum. By holding the launch at the museum instead of an ordinary hall, the manufacturer was able to add to their products the sense of trust and brand image inherent in the Tokyo National Museum itself. Cost-benefit ratio could also be better than mass advertisement, moreover, if participants spread information about their experiences at these unique venues through social media.

Company performance will be swayed greatly by whether or not they are able to take advantage of these opportunities. I hope that companies are able to understand the true significance of MICE, and use it as a measure to improve their competitiveness.

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Contact

Nomura Research Institute, Ltd.
Corporate Communications Department
E-mail: kouhou@nri.co.jp

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