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“Pursuing Tenfold Growth: Tokyo Aims to Increase Unicorns and Startups in 5 Years”
On November 27th, Tokyo will witness the unveiling of The Tokyo Innovation Base (TIB), a new incubation space dedicated to startups. Funded by both the local government and private sector partners, this facility boasts three floors of co-working space along with a function hall for hosting events.
TIB is anticipated to accommodate hundreds of local and foreign startups for durations ranging from six months to a year, serving as their initial launchpad as they establish their presence in the city.
The launch of TIB marks the Tokyo Metropolitan Government’s (TMG) latest endeavor to attract foreign startups and investments, aligning with its 10 × 10 × 10 Innovation Vision.
This vision aims to amplify the number of global unicorns, startups, and public-private collaboration practices tenfold over the next five years.
In recent years, Japan has been actively fortifying its startup ecosystem, recognizing it as pivotal to its aspirations of becoming a global financial hub and enhancing competitiveness.
Tokyo officials are particularly focused on securing the title of the world’s most startup-friendly city.
To incentivize more startups to enter the market, Japan is making substantial investments, totaling JPY10 trillion.
These funds are drawn from various sources including government funds, the private sector, government-owned financial institutions, and venture capital firms.
“Foreign Startup Assistance Initiatives in Tokyo”
Prior to the launch of TIB, Tokyo has already established a robust array of accelerator programs and support initiatives worldwide, all aimed at assisting foreign startups in entering the Japanese market.
Currently, there exists a diverse range of support services tailored to the needs of foreign startups, catering to various levels of interest, as revealed by officials to Singapore Business Review.
Under its Invest Tokyo initiative, TMG has introduced “Access To Tokyo” in Singapore.
This overseas consultation program pledges to furnish Singaporean startups with insights into the Japanese market and address queries regarding the establishment of operations in Tokyo. Similar consultation desks are available in San Francisco, London, and Paris.
These support services encompass free consulting, including assistance in locating suitable office spaces for establishing their Japanese operations and facilitating the recruitment of local talent in Tokyo.
Moreover, the support desk aids startups in devising entry strategies for Japan, offering complimentary market analysis, business partner identification, and cost simulation services.
To alleviate concerns regarding bureaucratic procedures involved in launching a business, Tokyo extends assistance to help startups set up and register their enterprises. Subsidies may also be provided to aid in the establishment of offices.
In addition to business support, the government extends migration support to staff and owners of startups through free consulting services provided by the Business Development Center TOKYO (BDCT).
Furthermore, startups categorized as “green-rated” have the opportunity to receive subsidies for office rent, recruitment, and personal expenses under the Subsidy for Attracting Green Transformation.
Regardless of their field, startups can access business support, living support, and financial one-stop support services.
“Driving Social Change: Tokyo’s Support for Innovative Startups”
Officials are particularly focused on supporting disruptors who can instigate both social and mindset changes in Tokyo.
Keiichi Yoshimura, Director General of the Office for Startup and Global Financial City Strategy, emphasized the Tokyo government’s commitment to aiding startups that tackle pressing global issues such as climate change.
Established in November 2021, the Global Financial City Strategy aims to foster a sustainable finance society to drive innovation and change.
These initiatives, coupled with the government’s interest in supporting sustainable-focused startups and the potential inherent in Japan’s vast household financial assets totaling approximately JPY2,100 trillion, hold promise for addressing global social challenges.
Yoshio Horimoto, Vice Commissioner for Strategy Development and Evidence-based Policymaking Strategy Development and Management Bureau at the Financial Services Agency of Japan, highlighted Japan’s significant pool of companies with advanced sustainable technology during the Tokyo Sustainable Finance Forum on October 6th.
“We possess numerous companies with powerful sustainable technology. These groundbreaking technologies, along with startups, are essential as we strive for complete neutrality and confront social challenges,” Horimoto stressed, underscoring the pivotal role startups play in achieving sustainability goals and addressing global issues.
“Driving Cultural Change: Tokyo’s Startup Ecosystem Ambitions”
Tokyo’s government officials are optimistic that fostering its burgeoning startup ecosystem will enhance Japan’s global competitiveness.
Shinichi Fukunaga, Senior Director for the Special Zone and Regulatory Reform Office for Startup and Global Financial City Strategy, emphasized the need for a standout startup, a unicorn, that can attract investors and inspire Japanese individuals to launch startups. He highlighted the importance of drawing foreign startups into Tokyo as part of this strategy.
Fukunaga acknowledged the Tokyo Metropolitan Government’s (TMG) aim to cultivate a stronger entrepreneurial spirit among the younger generation, noting a general reluctance among Japanese youth to take risks.
This hesitancy may contribute to the scarcity of startups or youth participation in startup ventures, he suggested.
Addressing this cultural shift is imperative. A 2022 study by the Nippon Foundation revealed that less than 3 in 10 Japanese youths aged 18 believe they can effect significant societal change.
However, officials remain hopeful about the potential for youth to drive change in society and the startup landscape.
Tokyo has garnered considerable interest from startups worldwide, evident in its recent startup event, City-Tech Tokyo, which attracted over 25,000 attendees from 60 countries and 290 cities.
With more than 300 participating startups and 450 venture capital firms, the event showcased Tokyo’s appeal as a startup hub.
In 2024, TMG plans to elevate its startup event with Sustainable High City Tech Tokyo (SusHi Tech Tokyo). This month-long event anticipates the participation of 500,000 visitors from 40 cities, including 4,000 startup participants.
Director General Yoshimura expressed confidence in Tokyo’s potential as a global startup hub, citing its robust economy, renowned companies and universities, solid infrastructure, stable social order, and commitment to the rule of law as key strengths.
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