Published 31 August 2016 Category: Entrepreneurship

A glimpse of entrepreneurship in Japan: What you have to know

Japan, the world’s third largest economy, a leader in global arts and culture and a land that gave birth to some of the greatest technologies, might not always be the first option for entrepreneurs. According to Global Entrepreneurship Monitor, the level of entrepreneurial activity in Japan has been surprisingly low for a developed economy.
 
Here is a glimpse of entrepreneurship in Japan:

  • Ageing population

Factors such as a traditional workplace culture that is dominated by middle-aged men and the fear of stepping outside a corporate culture have contributed to the low level of entrepreneurial activity. However, the Japanese government under the leadership of Prime Minister Shinzo Abe understood the importance of boosting the entrepreneurial activities in the country. Boosting the start-up scene and encouraging young people to build their own business have been high on the government’s agenda.

  • Tolerance to failure is low in Japan

Following a conventional path is much safer than taking risks to start one’s own business - quite a contrast to half a century ago where the world’s leading companies such as Sony, Toyota and Honda were founded.
 
This is backed by data from Global Entrepreneurship Monitor: 12 per cent believed that they are capable of building a business and 55 per cent of them were afraid of failure in their business venture, indicating a low level of confidence in general, resulting just 3 per cent of the country’s nearly 128 million population have the intention of building their own business.

  • Lack of investors

Another major obstacle to the development of entrepreneurial activities in Japan is the lack of venture capitalists that are interested in investing start-ups in Japan. Financing a business venture, particularly for young entrepreneurs who have little track record, is almost like an unattainable dream. Those who are lucky are able to find capital from outside of Japan, but the rest of those who don’t have the connection will be stuck and left with no choice but go back to a stable nine-to-five job - only if they manage to find one.
 
 
B2B market in Japan offers myriad opportunity and has not been fully tapped; and with more than 127 million population and scored high on openness for new business, Japan has a great recipe for entrepreneurship to blossom.