Dinis Guarda interviews the Director of Strategy at EY Strategy and Consulting Japan, Tatsuro Shirakawa, who is a specialist with extensive experience in global economic collaborations and inventive strategies, in the latest episode of Dinis Guarda Youtube Podcast series. Dinis and Tatsuro discuss various opportunities and initiatives taken by the Japanese government and the role of EY Strategy and Consulting Japan to attract domestic and international businesses in the Japanese economy. The podcast is powered by openbusinesscouncil.org and citiesabc.com.
With over 10,000 startups, Japan is in the midst of the fourth venture boom. The surge in entrepreneurial activity, as explained by Tatsuro during the interview, is fueled by a combination of factors, including increased government support, a growing appetite for innovation, and a shift in societal attitudes toward risk-taking. In 2021, the startups in Japan received US$7.1 billion of overall funding.
Tokyo, in particular, has emerged as a dynamic hub for startups, hosting numerous co-working spaces, accelerators, and incubators that foster collaboration and creativity. The startup ecosystem spans diverse sectors, from technology and biotech to sustainability and entertainment.
The J-Startup program was launched as part of the Startup and New Business Promotion division by the Ministry of Economy, the Ministry of Trade, and Industry of Japan (METI) in June 2018, with an aim to promote startups and new businesses alike.
Tatsuro told Dinis that the Japanese government is providing all the necessary infrastructure and support to foster an ecosystem of innovation and entrepreneurship. JETRO, he highlighted, has its offices worldwide and offers to be the first point of contact to consult.
“They would help you provide the right agency or organisation that might support you”, he said during the interview, while also highlighting the support from cities and municipal level organisations like Tokyo, Osaka, and Fukuoka.
Find the right chaperone
Tatsuro explained that the Japanese government is providing support schemes for startups and global businesses. However, following the hierarchy to reach up to the level of decision-makers could be time-consuming. “Find the right chaperone”, is what Tatsuro suggests.
He explained that these chaperones are often seasoned professionals or consulting firms like EY Strategy and Consulting Japan that are well-versed in the intricacies of Japanese bureaucracy. They serve as valuable guides, helping startups navigate the complex administrative procedures, decipher regulatory requirements, and establish connections with key decision-makers.
“By and large the idea is to approach the startup candidates overseas and promote them to explore the Japanese markets. We then identify the criteria and match and align them with these government programs, and chaperone these businesses with tailored support, including provision of market insights and consumer demands, and even the workforce”, Tatsuro told Dinis.
Startup active programs in Japan
Japan has been actively promoting entrepreneurship and innovation through various startup programs. Tokyo, as the country's bustling capital, has taken the lead in fostering an ecosystem that supports startups and attracts international businesses.
The Tokyo Financial Award, for instance, recognises outstanding financial services and technologies that contribute to Tokyo's financial industry. This award not only provides recognition but also valuable exposure for startups, encouraging them to innovate and excel in the competitive financial sector.
“The idea behind the award is to attract and recognise the fintech businesses and support especially those that enhance the ESG activities and social good in Japan”, said Tatsuro.
Invest Tokyo is another program designed to facilitate foreign businesses' entry into the Tokyo market. It offers comprehensive support, including consultations, market research, and networking opportunities. Through Invest Tokyo, startups can access valuable insights and establish connections in one of the world's largest and most dynamic markets.
Business Development Center Tokyo complements these efforts by providing support and guidance to foreign companies looking to expand their business footprint in Tokyo. These programs collectively contribute to Tokyo's position as a thriving hub for startups and international enterprises, creating a welcoming environment for innovation and entrepreneurship.
“The ultimate host of these programmes is the Tokyo Metropolitan Government. So, the local administration is putting in greater efforts that are making some really positive impacts on the economy”, Tatsuro told Dinis.
He also highlighted that while currently the ecosystem hub value of the city is 6 unicorns, the city aims to become the most startup friendly city in the world with the central aim to grow the number of unicorns and business loans by a factor of ten.
Innovation ecosystem in Japan
Startups serve as powerful engines of economic growth and innovation in any nation. They inject fresh ideas, foster competition, and drive job creation, contributing significantly to a country's economic prosperity. They also attract investment, both domestically and internationally, which can stimulate economic expansion. Being very agile and adaptive in nature, startups are the ideal vehicles for experimentation and exploration of new markets.
“The Japanese government today understands the importance of startups as the boosters of the economy. It is working out ways to increase the number of startups and investments by 10 times”, said Tatsuro.
He also told Dinis that large corporations like Fujitsu, NTT, SoftBank, and KDDI have their own accelerator programs. Through these programmes, they are supporting startups and SMEs mostly in the seed stage. However, efforts are being made to increase the number of investments for the later stage of the startups as well.
