Public policy initiatives are not enough to change Showa mindsets

Policymakers know what Japan’s problems are: An aging society, a declining birthrate and low productivity are to name a few. Yet the inward-focused nation still tries to solve 21^st century problems with outdated thinking and solutions which worked well in its high-growth period between 1954 and 1973.

The challenge to change mindsets is not Japan’s alone. Consider Finland, a small country of 5.5 million people. Finland’s population is also aging and shrinking. Fewer young people support a growing number of retirees. To be sustainable, Finland, like Japan, must either increase its youth population or young people must become more productive.

Policymakers in democratic countries can’t accomplish either through industrial and economic policy alone. They need the public’s support, including private sector initiatives like those backed by Peter Vesterbacka, a global-thinking Finnish entrepreneur.

Vesterbacka is former ‘Mighty Eagle’ at Rovio Mobile Ltd. who popularized the global mobile game, Angry Birds. He also founded, along with other entrepreneurs, the world’s largest and most influential startup event, Slush.

Vesterbacka chose to change people’s mindsets following a speech he gave to 600 students at Finland’s Aalto University in 2007. During the talk he asked students, “How many of you are going to start a company or join a startup after you graduate?”

Only three raised their hands. Everybody else wanted to work for big companies or government. Traditional career paths are fine, he believes. But, “If everyone maintains the status quo, there would be no innovation or progress,” he argues.

When he and other founders launched Slush in 2008, they set out to encourage young people, at the height of their productive and creative capacity, to start innovative new ventures. “We wanted to change the mindsets, not only of the young people—but of the nation,” he says.

Startup events typically try, but fail, to emulate Silicon Valley’s dynamism. Slush founders wanted to differentiate their event from such wannabes. They did so by making Slush a bottoms-up rather than a tops-down led event—they put young volunteers in charge. "From the beginning, Slush was organized and owned by young people,” he says. “They’re not just making coffee or handing out badges. They run the show.”

The first Slush, staged yearly in Helsinki, attracted 300 participants. Last year’s event, organized by 2,000 volunteers from 60 countries, attracted 20,000 attendees from 160 countries. Slush is the “biggest gathering of venture capital on the planet at any given time,” says Vesterbacka.

He admits young volunteers make mistakes. But they learn not to repeat them. With real-world experience, many go on to build the biggest and best startups, he maintains.

An attempt in 2015 to bring Slush to Tokyo collapsed after staging events here for five years, on succession of Slush Tokyo (then renamed BARK) to all-Japanese leadership.

Now Japan’s central government aims to boost innovation and startup investment 10 times by 2027. Vesterbacka puts the likelihood of that happening as “very low”. Money alone won’t solve Japan’s problems, he thinks.

Similarly, Tokyo Metropolitan Government’s new major startup event, City-Tech.Tokyo, aims to make Japan’s capital city Asia’s leading startup hub. "When I look at City-Tech Tokyo…. it's great, but it’s just another wannabe (Silicon Valley) startup event. I don’t see young people learning. I see young people handing out badges and guiding people around. But they're not owning it,” he says.

“If you want to have sustainable change—if you want to make Tokyo a beacon of entrepreneurship for the region—it’s important to put young people in charge," he asserts.

Policymakers in most post-industrial nations also aim to reverse population decline. The fertility rate of Japan and Finland, for example, are both around 1.4%—well below the 2.1% population replacement fertility level. Neither country has naturally replaced its population in decades.

Finland is the “Japan of Europe,” he suggests. “We don’t have enough young people.”

Initiatives to raise birth levels, like those planned by the Kishida administration, take at least 20 years to impact society. “We can’t wait 20 years,” Vesterbacka says.

To address Finland’s aging demographics, he chairs Finest Future, a private sector initiative which attracts international students, aged 12-18, to attend Finnish high schools.

The program, launched in 2020, places young students from countries like Vietnam, Myanmar and the Philippines on a path towards Finnish naturalization, before they reach adulthood and when their minds are still flexible. Students are drawn by the prospect of living better lives in a wealthy, stable and liberal democratic nation.

Finest Future strives to teach foreign students the Finnish language even before they arrive. The students integrate extremely well, Vesterbacka reports. “It’s a win-win.”

The program could be a template for Japan to implement recently announced government plans to attract 400,000 international students yearly to the country. A progressive city like Fukuoka, for example, might offer young international students the opportunity to come to Japan for high school study. On graduation they could start a company, a family and become Japanese. “Why not?” he asks.

“Young people are the future,” he says. “It's our responsibility to make sure that we keep old people and governments out of the way, while young people change the world.”

However, Japan is slow to change. Mindsets are deeply rooted in Confucian tradition. Older people, representing the voting majority, benefit by maintaining the status quo. Younger people, still taught early in life not to question the wisdom of elders, continue to follow old Showa ways.

Richard Solomon is an author, publisher and spokesman on contemporary Japan. He posts Beacon Reports at www.beaconreports.net.