Public Relations Office, Government of Japan

 

The Call to Revitalize Japan’s Economy

Through Venture Businesses

Interview with Hirokazu Hasegawa

Apush for venture businesses is central to the Japan Revitalization Strategy—the third arrow of the growth strategy developed by Prime Minister Abe’s Cabinet—which envisions a flurry of original and innovative ventures. Hirokazu Hasegawa, a professor at Waseda Business School, spoke about the current situation, issues surrounding venture firms in Japan, and their prospects.

Why is the Japanese government making support of venture businesses part of its growth strategy?

Since existing businesses have matured in Japan, new businesses are vital to achieving a higher economic metabolism. Therefore, not just emerging venture companies but existing large companies and small and medium-sized enterprises as well are expected to take on that role. Large companies must expand into new business areas and create new businesses that are different from their existing ones through innovation.
Venture businesses represent a crucial presence as engines of economic activation, pioneering new growth areas of industry and creating employment and technological innovation for society. They’re the next generation of core businesses that will drive economic growth, so they are essential to opening the way to Japan’s tomorrow.

Tell us about the features of venture firms in Japan.
People running venture firms in Japan used to be mostly white-collar workers who had struck out on their own, but now the number of highly educated entrepreneurs with strong technical backgrounds is increasing. The use of information communication technology has become widespread, and with startups becoming easier to form with minimal investment and facilities, more new companies are being launched by researchers, technicians and even students and young people in their twenties. We also see more women starting up ventures rather than resorting to the part-time or temporary jobs they were once limited to taking. On top of that, many people in their fifties or even older are starting businesses. And a general feature is the prevalence of entrepreneurs who draw up business plans with overseas aspirations from the beginning.

What is the government doing to support entrepreneurship and venture businesses?
We need to change the public’s consciousness about entrepreneurship, to convey the notion of starting a business as a valid employment option and get more people interested in undertaking the challenges of starting a business. Since putting money into a venture is a big investment with a long-term risk, however, such risk capital is not easy to find.
With the Ministry of Economy, Trade and Industry taking the lead, the government is beginning to provide venture support to counteract these problems. We’re talking about reforming systems, like setting up venture investment allocation in pension funds, offering preferential tax treatment, and using public sector economic resources, or a paradigm shift made possible by beefing up entrepreneurial education even in elementary and junior high school, making the support system more substantial through setting up networks of seasoned veterans to get startup advice, and promoting collaborations with other ventures or a spin-off venture from a large company for venture creation in the overall Japanese economy. To achieve a virtuous cycle for creating ventures, a close-knit system of coordination is being constructed that ties ventures together through investment and returns with government, large businesses, and educational institutions and supporters.

What are the prospects for Japan’s venture businesses?
I anticipate seeing lots of activity from ventures that leverage Japan’s strengths, specifically in fields such as healthcare, clean energy, the use of IT in agriculture and robotics. With overall support from the government, these powerful new ventures could resuscitate the economy and spark the creation of still more businesses. That would be ideal.