Prime Minister Kishida aims to boost yearly investment in startups and the number of unicorns 10-times each by 2027, under his “new capitalism” economic policy. It is an admirable goal, but one which cannot be reached alone by pumping more money into startups.
Enjoyed reading this Richard and let's hope for more independent incubators and VC's that will support the abundant creativity in Japan. I agree wholeheartedly that the government should "stay out of the way," and perhaps politicians and government agencies should stand back and learn from the innovators. And as an optimist I am confident that the new working arrangements brought about by the pandemic have irreversibly rendered obsolete the lazy middle managers at large Japanese corporations. They may soon be replaced by productivity-enhancing AI and software that will be created by the new start-ups in Japan.
Interesting and thoughtful insights. One missing element was the lack of conversational skills in English. That should be part of the graduate "wake up call." It has implications beyond the entrepreneurial mindset.
Of course, that and the lack of a domestic market the size of the USA limits the internal rate of return venture capitalists can expect to earn on their Japan investments. So VCs can't expect to earn 100x their investment, as perhaps they might when investing in the USA. That partially explains why 40 times more is invested into startups in the the USA rather than in Japan. European & British starups suffer similar limitatons of not having access to one big market (speaking a single language). But they don't suffer the language barrier to same degree as Japanese.
Aren't Japanese children taught from a young age that the nail that sticks out is the one that gets hammered? Isn't the pressure to conform to the norms of Japanese society quite intense? This might have been sensible during the Edo period, when Japan was basically a feudal society; but, in today's world, doesn't all this tend to discourage innovative thinking and everything that entrepreneurship requires? You write some very important truths about the Japanese labor market. All of this is deeply rooted and will definitely require imaginative policy intervention. The market cannot achieve the necessary changes without significant policy changes.
They are so taught. But my point is it would be better for goverment to reform labor laws to allow for free movement of human capital to where it is best served, rather than add new market distortions on top of one another.
Thank you for taking the time to reply, Mr Solomon. Yes, I completely agree. The day-to-day contrivances which employers in Japan seem to have to adopt in order to accommodate non-performing employees, for example, would drive me round the bend. It must be quite a challenge for small, lean companies to manage. The stories I hear from friends and relatives working in Japan both amaze and horrify me!
Enjoyed reading this Richard and let's hope for more independent incubators and VC's that will support the abundant creativity in Japan. I agree wholeheartedly that the government should "stay out of the way," and perhaps politicians and government agencies should stand back and learn from the innovators. And as an optimist I am confident that the new working arrangements brought about by the pandemic have irreversibly rendered obsolete the lazy middle managers at large Japanese corporations. They may soon be replaced by productivity-enhancing AI and software that will be created by the new start-ups in Japan.
Hey Tom... Thanks! See you about town.
Interesting and thoughtful insights. One missing element was the lack of conversational skills in English. That should be part of the graduate "wake up call." It has implications beyond the entrepreneurial mindset.
Of course, that and the lack of a domestic market the size of the USA limits the internal rate of return venture capitalists can expect to earn on their Japan investments. So VCs can't expect to earn 100x their investment, as perhaps they might when investing in the USA. That partially explains why 40 times more is invested into startups in the the USA rather than in Japan. European & British starups suffer similar limitatons of not having access to one big market (speaking a single language). But they don't suffer the language barrier to same degree as Japanese.
Aren't Japanese children taught from a young age that the nail that sticks out is the one that gets hammered? Isn't the pressure to conform to the norms of Japanese society quite intense? This might have been sensible during the Edo period, when Japan was basically a feudal society; but, in today's world, doesn't all this tend to discourage innovative thinking and everything that entrepreneurship requires? You write some very important truths about the Japanese labor market. All of this is deeply rooted and will definitely require imaginative policy intervention. The market cannot achieve the necessary changes without significant policy changes.
They are so taught. But my point is it would be better for goverment to reform labor laws to allow for free movement of human capital to where it is best served, rather than add new market distortions on top of one another.
Thank you for taking the time to reply, Mr Solomon. Yes, I completely agree. The day-to-day contrivances which employers in Japan seem to have to adopt in order to accommodate non-performing employees, for example, would drive me round the bend. It must be quite a challenge for small, lean companies to manage. The stories I hear from friends and relatives working in Japan both amaze and horrify me!