Japan has long been known for its impressive technological achievements, and it’s now on the brink of an exciting shift toward fostering innovation through startups. Although the country has traditionally celebrated corporate stability and job security, it is embracing a newfound enthusiasm for entrepreneurial ventures. Tokyo currently holds the 15th spot in global startup rankings, reflecting a promising upward trajectory.
This changing landscape signifies a cultural shift in Tokyo, with an increasing willingness to embrace change and provide support for budding entrepreneurs. While traditional labour market structures have historically favoured established firms, the tide is turning, and Tokyo is primed for a transformative journey in its startup landscape.
A bold vision
In the midst of this evolving landscape, the Tokyo Metropolitan Government (TMG) has unveiled its audacious vision: the “10 × 10 × 10 Innovation Vision.” This bold initiative presents a comprehensive strategy to transform Tokyo’s startup ecosystem and usher in a new era of innovation, boldly confronting the challenges at hand.
1) Global × 10
Under this pillar, the TMG aims to have a global focus, attracting funds from overseas venture capitalists and facilitating the growth of startups that can enter the global market. The benchmark is to increase the number of unicorns from Tokyo tenfold in five years.
2) Number of Startups × 10
This part of the vision seeks to foster entrepreneurship by creating a society that encourages taking on challenges in starting a business, embracing diversity and innovation. The goal is to increase the number of startups in Tokyo by tenfold in five years.
3) Public-Private Collaborative Projects × 10
Here, the public sector aims to embrace the power of startups and their innovation, working in collaboration to solve various social issues. The target is to increase the number of public-private collaborative projects in Tokyo tenfold in five years.
“The Japanes government aims to infuse 10 trillion yen, which includes investment into startups by government, private companies, etc, in five years’ time,” said Shinichi Fukunaga, General Manager, TMG.
New strategy for a new ecosystem
To bring its vision to life, TMG has developed a four-fold strategy that focuses on making Tokyo the most startup-friendly city in the world.
1) A Hub of Innovation: The Tokyo Innovation Base
Central to the vision is the concept of the Tokyo Innovation Base (TIB). This large-scale hub is set to become the gateway for Asian startups, where innovation and collaboration will thrive. This initiative takes aim at both pre-early stage startups and those dedicated to solving pressing urban challenges, particularly in the domains of climate change and sustainability.
TIB, which will pre-open on November 27, will be an ecosystem in itself, offering attractive accelerator programmes on a floor-by-floor basis. It will host a plethora of events, transcending traditional industry boundaries to create a melting pot of ideas.
A distinguishing feature is the intention to forge strong connections between graduate startups and aspiring entrepreneurs of all ages – including children, university students, and working professionals, and private companies from both Japan and overseas. This holistic approach ensures that TIB emerges as a cradle of innovation and entrepreneurial spirit.
2) Empowering innovation through bold investments
The 10 × 10 × 10 Innovation Vision doesn’t just stop at nurturing startups; it aims to catapult them to global success. The strategy places significant emphasis on supporting young entrepreneurs to tackle challenges and scale up their ventures. TMG is facilitating connections with overseas venture capital to encourage businesses to take on the world stage.
“TMG plans to establish a fund and the Japanese government will increase incentives for large companies to invest in startups. In fact, financial incentives will be given to government-owned financial institutions that invest in startups,” Fukunaga said.
One of the most striking aspects of this initiative is the role assigned to the public sector, as it is poised to become the “first customer” for startups. This bold expansion of opportunities for startups in Tokyo, aimed at increasing their numbers tenfold, encompasses public procurement through digital marketplaces and other innovative avenues.
TMG acknowledges the need for regulatory reform and rule redesign to cater to the unique needs of startups. It plans to leverage special zones for deregulation, creating an environment that attracts highly skilled individuals from overseas.
3) An ecosystem for all
The vision doesn’t solely focus on startups but also on nurturing a society where everyone can achieve their dreams. A key component is the development of entrepreneurship education programmes for primary and secondary education. Collaborating with economic organisations, these programs aim to instill an entrepreneurial spirit from a young age. In a bid to give shape to countless innovative ideas, TMG is expanding the “Tokyo Startup Gateway” while creating opportunities for students and young people to interact with startups directly.
Fostering a global mindset is another integral aspect. This involves enhancing English language education, promoting opportunities to study abroad, and creating international networking platforms, ensuring that entrepreneurs in Tokyo are not only well versed in local dynamics but also ready to take on the world.
Focus on climate change and sustainability
In addition to all these efforts, TMG is aware of the pressing importance of sustainability and climate change. Its support for green-rated startups and the Tokyo Sustainable Finance Week (TSFW) demonstrates its commitment to building a sustainable city and a sustainable future.
TSFW was a week-long event in October 2023 that focused on sustainable finance with the aim of promoting ESG investment, which contributes to building a sustainable city and increasing Tokyo’s presence in this field.
By focusing on sustainability and highlighting the importance of sustainable finance, TMG not only aims to create a thriving startup ecosystem but to also make Tokyo a leader in sustainable innovation.
One of the highlights on the horizon is SusHi Tech Tokyo 2024, a month-long exploration of sustainable solutions using new technology, ideas, and know-how. With more than 500,000 expected visitors, it’s a testament to the city’s commitment to sustainability and innovation.
With TMG’s 10 × 10 × 10 Innovation Vision, Japan’s startup ecosystem is on the brink of a transformative era, propelling Tokyo to be the epicenter of global entrepreneurship while championing sustainability and addressing the urgent concerns of our time.
