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Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
Entrepreneurship in Japan
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Entrepreneurship in Japan

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  • Created innovation system operated by entrepreneurial ecosystem at Keio University
    Community, Sponsorship Program, Mentoring Program, Education Program
    10 startups have been launched
    Recognized as one of the most success university-based innovation model in Japan from industry, government and other universities.
    Plenty of media exposures (Nikkei, Sankei, AERA, NHK etc.)
    Academic activities (thesis, presentation)
    Created effective entrepreneurial education system
    Effective global collaboration
  • Transcript

    1. IRGN411 Entrepreneurship in Japan November 25th, 2013 Kanetaka M. Maki Ph.D Candidate Rady School of Management Kanetaka Maki University of California, San Diego kanetaka@kanetaka-maki.org 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 1
    2. Today: Entrepreneurship in Japan • Who am I? – Why Prof. Schaede asked me to teach this class? – My experience itself is about history of entrepreneurship in Japan. • Lecture (40 min) • Guest Talk: Ichizo Yamamoto (30 min.) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 2
    3. Who am I? Kanetaka Maki University of California, San Diego kanetaka@kanetaka-maki.org 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 3
    4. UCSD / Rady Internet Community San Diego Keio Univ. Keio Incubation Japan & Innovation As of Dec. 2013 Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 4
    5. My Background: Kanetaka Maki SFC Incubation Village Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 5
    6. First Career: Founding Chief Officer of SFC Incubation Village at Keio University Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 6
    7. My Research Innovation Entrepreneurship University-Industry Technology Transfer Commercialization of Science Academic Startups Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 7
    8. Lecture: Entrepreneurship in Japan Kanetaka Maki University of California, San Diego kanetaka@kanetaka-maki.org 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 8
    9. Old Japan source: Global Entrepreneurship Monitor 2000 Executive Report Japan is the 20th among GEM countries. Why? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 9
    10. source: Global Entrepreneurship Monitor 2000 Executive Report Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 10
    11. Culture • “Japanese are risk-averse”. Is this true? • If so, then why were so many companies launched in Meiji Era and just after World War II. • I claim “Japanese are risk-averse” is a myth. Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 11
    12. Female Entrepreneurs source: Global Entrepreneurship Monitor 2000 Executive Report Without women, Japan is losing half of potential entrepreneurs! Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 12
    13. Old Japan System • Being an entrepreneur: Winner or loser? • How does entrepreneur fit to Old Japan System? – main bank, keiretsu (horizontal & vertical), diversification, life-time employment, seniority system • Who were the engine of innovation in Japan? Why they were competitive? Source: Schaede (2008) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 13
    14. Engines of Innovation: Where do they come from? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 14
    15. Innovation System in Japan (1960-1990) Governmental Initiatives Academia Basic Research •Thesis •Production of human resource •(Patent licensing) •Applied research in university •Ministry leading projects (semiconductor, materials) •Research in governmental institutes (Shinkansen, telephone-line, electricity) Industry Commercialization Applied Research Flow of knowledge Industrial Initiatives •Applied research in Industrial Research Institutes •Applied research in corporate research division Revised version based on “2006 H. Yoshikawa” Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 15
    16. Venture Finance source: Global Entrepreneurship Monitor 2000 Executive Report Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 16
    17. Japan in 2000 • Level of Entrepreneurial Activity – Japan has one of the lowest rates of entrepreneurial activity among the GEM 2000 countries (1.3 percent), higher only than Ireland. – Private investors in start-ups account for 1 percent of the adult population, higher only than Belgium, Ireland and India. – The rate of entrepreneurial activity for women is four times lower than that for men, which is well below the GEM 2000 average. • Unique National Features – The cultural climate in Japan is unfavorable for entrepreneurs, to whom little respect is accorded. Compared with the predominant preference for employment in large corporations, entrepreneurs are seen as somewhat eccentric. – Entrepreneurs themselves typically do not have many of the requisite skills to start a business and government policy reflects little real understanding of their needs. Source: Global Entrepreneurship Monitor 2000 Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 17
    18. Japan 2000: Key Issues • • • • Japanese education, while strong technically, is geared primarily to preparing students for employment in large organizations and does little to encourage creativity or individualism. Japanese financial institutions do not have the capacity to properly assess new ventures, and although there has been an increase in funds available for earlystage investment, much of this is biased toward health care, information technology and biotechnology. The personal costs of entrepreneurial finance in Japan are high and banks typically require loans to   be secured by personal guarantees. Improvements in the capital markets are taking place, for instance with the creation of NASDAQ Japan, and with regulatory changes that allow pension funds to invest in venture capital and that make it possible for companies at the preprofitability stage to secure a listing on the new Market for High Growth and Emerging Stocks launched by the Tokyo Stock Exchange. Source: Global Entrepreneurship Monitor 2000 Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 18
    19. Why Less Entrepreneurship in Old Japan? • • Old Japan System R&D Policy by Government – Research Consortia: diffusing new technology to incumbents – main bank • debt finance • – horizontal keiretsu – Losing half of potential entrepreneurs • ecosystem is closed for new entrants – vertical keiretsu • • exclusive subcontractors relations – life-time employment / seniority system • less talents for startups • less liquidity in labor market Regulation – Entrance barriers are very high in many industries – diversification • R&D in-house. No outsource. • opportunity to start new business Female not in labor market • Culture / mindset – Believing Japanese are risk-averse • Finance – No VCs / Collateral for debt finance • No Safety Net – Career path, pension etc. Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 19
    20. Why Entrepreneurship is Important in Japan? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 20
    21. Why Entrepreneurship is Important? (1) Source: Schaede (2008) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 21
    22. Why Entrepreneurship is Important? (2) source: Global Entrepreneurship Monitor 2000 Executive Report Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 22
    23. Why Entrepreneurship is Important? (3) Innovator’s Dilemma Disruptive technologies or innovations are innovations that upset the existing “order of things” in a particular industry. The usual process is a lower-end innovation that appeals to customers who are not served by the current market. With time, because the capacity/performance of the innovation exceeds the market’s needs, the innovation comes to displace the market incumbents. Incumbents generally don’t react to disruptive innovations until it’s too late, because they don’t represent an interesting market, being low end and often low cost. One successful strategy might be to hive off a separate “company within a company” that is responsible for the firm’s response to the disruptive technology. A smaller, more nimble organization is better placed to work in the initially smaller and less lucrative market that the innovation is creating. Ref: http://www.squeezedbooks.com/ Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 23
    24. Strategic Inflection Point • Two Types of SMEs 1. Self-employed small shop owners 2. High-Charging Entrepreneurs • Turning point in SME policy – – Before: Focused on type 1 SMEs. By definition they are weak; government must support SMEs to survive After: Focused on type 2 SMEs. The engine of innovation; government must support for economic prosperity. Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 24
    25. Policy Changes in Strategic Inflection Point Source: Schaede (2008) 1. Easing Entry: Start-up Enabling Laws 2. Finance: VC-Enabling Laws 3. Entrepreneurial Environment and Management Education 4. Government Venture Capital Firms Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 25
    26. Major Changes 1. “One Yen System” (2003) 2. Limited Partnership Act (1999) 3. Provision of incubators, and facilitating R&D by small firms [subsidiaries] (early 2000s) 4. Technology licensing office (1998), privatization of national universities (2004) 5. SBIC (Small Business Investment Companies) as government venture capital (late 1990s) 6. Junior markets: JASDAQ, MOTHERS, Heracules (early 2000s) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 26
    27. Innovation System in Japan (Present) Academia Industry Sangakukan-renkei Basic Research Research Grants for Science and Technology (1996-) 25 trillion Yen (250 billion $) for phase III (Collaboration of industry, academia, and government) Commercialization Applied Research Encourage Entrepreneurship For universities and Research Institutes Revised version based on “2006 H. Yoshikawa” Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 27
    28. Initial Public Offerings Source: Schaede (2008) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 28
    29. Aftermath……… Source: ”The US-Japan Innovation and Entrepreneurship Council Report to Leaders”, Oct 2012 What is the ranking for “Total Entrepreneurship Activities” in Japan in 2012? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 29
    30. Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ source: Global Entrepreneurship Monitor 2013 Executive Report 30
    31. Livedoor Shock: Jan. 2006 Livedoor Shock: Jan. 2006 Percentage of 18-64 who see good opportunities to start a firm in the area where they live (Dataset from Global Entrepreneurship Monitor) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 31
    32. Entrepreneurship Policy by Abe Administration • 「総務省、米VCにIT研究者派遣 技術の事業化後押し」( 2013/6/15 日本経済新聞) • Government plans to send researchers in IT field to VC in Silicon Valley, expecting them to learn about fundraising. • 「第三者機関がITベンチャーに技術「お墨付き」 総務省」 ( 2013/6/26 日本経済新聞) • Government plans to launch new organization to evaluate and guarantee the quality of IT startups, to promote VC investments. • 「若者の起業支援へサイト整備 政府、 7 月立ち上げ」( 2013/6/30 日本 経済新聞) • Government plans to launch a new web site to support young entrepreneurs. Source: http://diamond.jp/articles/-/39052 Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 32
    33. Abenomics • Third Arrow – Growth Strategy • Deregulation is the most effective way to support new entrants. • Mikitani vs Abe – Is Mr. Abe serious about deregulation? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 33
    34. Top 30 VC Firms in Japan How is it different from the US? Kanetaka Maki Source: Schaede (2008) University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 34
    35. Summary…… • Old Japan – Less competition, less entrepreneurship • New Japan – More competition, but still less entrepreneurship – Changing entrepreneurship environment takes time. • What should Japan do? – Change the mindset (education, promotion etc.) – Shift from “Industry Policy” to “Innovation Policy” – Globalization (Immigration Policy, VC Finance) Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 35
    36. Guest Talk Ichizo Yamamoto Kanetaka Maki University of California, San Diego kanetaka@kanetaka-maki.org 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 36
    37. Questions for Ichizo (1) 1. What is your business? Is this unique in Japan? 2. What did your girlfriend (if you had one) and parents say when you quit a job and started a company? 3. When you quit the job, was there any change in social security (i.e. insurance, pension plan, credit card)? 4. In case you failed, was there any safety net? 5. People say starting a company is a risk. In your case, what was the exact risk you incurred. Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 37
    38. Questions for Ichizo (2) 6. How did you finance your company? How were the banks and VCs in Japan? Were they helpful? 7. How did you recruit staff? How difficult to attract talent for startups in Japan? 8. What is your exit strategy? 9. Is Japan a good place to start a company? Why? 10. What are problems still remain in Japan? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 38
    39. Takeaways • What did you learn today? Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 39
    40. Thank you. kanetaka@kanetaka-maki.org Kanetaka Maki University of California, San Diego kanetaka@kanetaka-maki.org 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 40
    41. Entrepreneurship in Japan What can you see? Why? Please prepare your name card, so I can recall your names. Kanetaka Maki University of California, San Diego 9500 Gilman Dr. #0553, La Jolla, CA 92093-0553, USA kanetaka@kanetaka-maki.org Phone: (858) 352-7937 http://www.kanetaka-maki.org/ 41 source: Global Entrepreneurship Monitor 2000 Executive Report

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