Over the past year, Japan's startup ecosystem has been showing promising signs of development, reminiscent of the early stages of the Israeli and Canadian startup scenes. This progress can be linked back to various government initiatives, designed with the intention of fostering an environment conducive for startup growth.
Israel's Early Success
At the heart of Israel's thriving startup ecosystem, the Yozma program played a pivotal role. This $100 million state-owned venture capital fund, launched in 1993, invested directly in startups while encouraging foreign venture capitalists to establish funds in Israel. By offering tax reductions and pledging to match portions of funds raised from investors, it instigated a virtuous cycle that sparked the creation of an independent venture capital market. By late 2000s, hundreds of Israeli startups were securing backing annually, and the government privatized Yozma in 1998 following the successful cultivation of the market.
Japan seems to be taking notes from this Israeli model. This year, the country initiated a $2.5 billion fund for bioresearch and $4 billion for 5G related infrastructure, similar to the early state fund ventures by Israel in 1993. The largesse of these investments remind us that the substantial payoffs often take time - around 15 years as seen in the case of Israel.
Ech with Canada in 2010s
Canada is another blueprint that deserves attention. The country provided $100 million in support to attract incubators in 2015, a sentiment that resonates with Japan's recent $15 million Global startup acceleration programs. Moreover, Canada offered $14 million to back young entrepreneurs years ago, echoing today's high school fund worth $60 million in Japan.
The Canadian government has also advocated for introducing entrepreneruship educaion as early as 2010 and reducing bureaucratic hurdles, a measure implemented since 2012. Further, in 2018, it proposed a staggering $2.6 billion over five years to bolster innovation and allocated $150 million annually for R&D support.
Japan has also mirrored schemes from Singaporian and South Korean success in bringing internaitonal venture funds to domestic ecosystem.
The similarities between these startup ecosystems' early stages and Japan's current landscape are striking, inspiring optimism about what's to come for the island nation's entrepreneurs.
Unquestionably, startup ecosystems take time to mature. They need careful nurturing, strategic investments, and government backing. In this sense, Japan is moving in the right direction. If Israel's and Canada's booming startup scenes are any indication, Japan, too, has the potential for a thriving startup future much like Israel's of the 2000s and Canada's of the 2010s, or even better.