How will Japan meet the global unicorn competition?

Since 2017, the Global Innovation Index has announced the 100 science and technology cluster top rankings by cities and regions of the world, in addition to country rankings. The Tokyo and Yokohama regions have been ranked first for 5 consecutive...

Since 2017, the Global Innovation Index has announced the 100 science and technology cluster top rankings by cities and regions of the world, in addition to country rankings. The Tokyo and Yokohama regions have been ranked first for 5 consecutive years in terms of patent application vitality. In sixth place were Osaka, Kobe and Kyoto, and in twelfth place was Nagoya, making the city a hotspot for innovation in Japan.

In recent years, a variety of disruptive innovations have emerged from startups and university labs, and the government has significantly overhauled the Japanese version of Small Business Innovation Research to support R & D at startups with such advanced technologies that are struggling to raise capital. The Cabinet Office will then be in charge of R & D in line with the themes established by each ministry and agency, enabling SMEs, including startups, to raise funds. The system has an annual expenditure target of 50 billion JPY.

J-Startup

In addition, with the goal of creating 20 unicorn or listed companies with a corporate value of over 100 billion yen by 2023, Ministry of Economy, Trade and Industry launched J-Startup, a startup support program, in 2018 to achieve that goal. It now aims to create 50 companies by fiscal 2025.

J-Startup is a program that supports the growth of Japanese startups by adopting promising startups as role models and giving them, so to speak, “endorsement.” A public-private partnership program with the Japan External Trade Organization (JETRO) and the New Energy and Industrial Technology Development Organization (NEDO), it has provided support for overseas expansion and demonstration tests aimed at deregulation.

Over 10,000 startups in Japan are trying to bring new value to new markets and grow in business world.  The number of startups is growing rapidly, especially in the AI, IoT, healthcare, medical, environmental and aerospace sectors thanks to the expansion of various government programs and capital funds.  The selected startups will receive intensive support from private sectors including government agencies, large enterprises, accelerators, business contract expert advice, mentoring systems from large enterprises, collaboration opportunities to enhance their market presence, visa extension, and J-Startup support communities to further strengthen their collaboration.

Building a vibrant ecosystem is an important challenge for Japan to accelerate R&D, commercialization and bring innovative products to market.  Nine government agencies work together to provide various services under the “Platform that provides centralized startup support.” Participating organization include NEDO, JETRO, Japan Agency for Medical Research and Development(AMED), National Institute of Advanced Industrial Science and Technology (AIST), and Japan Science and Technology Agency (JST).

With the Japanese version of SBIR and the J-startup program, the day may soon come when Japan’s world-leading disruptive innovation will mass-produce unicorn companies and even decacorn companies with a corporate value of 1 trillion JPY.

Noriko Ogawa and Shiori Schules @OSI Tokyo