Japan's $1 Billion Bet On The 'Cool' Factor

Reuters Business Report - It doesn't exactly look like a gathering of trend-setters.

But Japan's government is betting at least some of these people know cool when they see it.

From fashion...to food.

The newly launched 'Cool Japan' fund will provide some $1 billion in government and private sector support to promote trendy Japanese products abroad.It fits nicely with Prime Minister Shinzo Abe's drive to revitalize the economy.

JAPANESE MINISTER OF ECONOMIC REVITALIZATION, AKIRA AMARI

"All staff will work at full power to sell Japan's greatness and wonder to the world, and the world will be given the best of our country."

Businesses are equally excited. From department stores to banks, Japan's top companies are racing to invest in the scheme - and expecting profits.

ISETAN MITSUKOSHI HOLDINGS LTD, PRESIDENT & CEO, HIROSHI OHNISHI

"In terms of fashion, I've always thought that young Japanese people's sense was the best in the world, and there is no one in the world to rival them. And in that kind of environment, there are many skilled designers, and this can be their channel to reach the world."

SUMITOMO MITSUI TRUST BANK LTD, PRESIDENT, HITOSHI TSUNEKAGE

"There will be mid-term returns from the fund, as well as chances for revenue in starting ventures, and we are looking for return in both of these aspects. That's how I think we can contribute."

The fund could be just what Japan needs. There's a sense its manufacturers, once market leaders, have lost ground to rivals like South Korea's Samsung.

The economy has shown signs of recovery, but the long-term outlook is still pretty bleak, according to fund president, Nobuyuki Ohta.

COOL JAPAN FUND, PRESIDENT & CEO, NOBUYUKI OHTA

"Regional manufacturing businesses in rural areas of Japan are quickly disappearing. There's no work, it's a desolate place, so people come to bigger cities, in turn leaving behind the elderly. You just can't survive in this small domestic market. There are billions of people in the world market. If we can't participate in that bigger playing field, Japan is going to go under."

But there are skeptics. Private equity consultant Joji Takeuchi at Brightrust says so-called "public-private" funds are inevitably led by the government - and face conflicts between policy goals and the need to maximize returns.

REUTERS REPORTER, YONGGI KANG

"And then of course, there's the question of whether bureaucrats are really the best people to decide what's cool - and how to promote it. It certainly isn't cool if the government splashes out billions of yen on a fund that that doesn't deliver - in a still tricky economic climate."