Japan has long been a nexus of innovation and technology in East Asia. Even during the Covid-19 pandemic, Japan continued to rank high internationally among the leading startup ecosystems. It ranks sixth among Asia-Pacific countries. As a prominent business expert Kavan Choksi mentions that as an increasing number of startup founders look east for growth opportunities, it is important that they take a note of Japan’s long-standing reputation as a hub for international business in Asia.
Kavan Choksitalks about some of the top sectors to establish a startup business in Japan
Within the Asia Pacific region, Japan is widely renowned for its ease of doing business, as well as both the quality and quantity of its global startups. Even in the light of the pandemic, the Japanese government has been quite supportive of startups. Entry support investment for startups comes from both the public and private sectors here. In 2021, startup investments in the country, in fact, exceeded US$8 billion.
The top sectors for establishing a startup in Japan include:
- Renewable energy and climate tech: The Japanese market offers a plethora of opportunities for startups working in the Climate Tech and GreenTech sectors. This country has pretty ambitious sustainability targets, which include achieving a net-zero society by 2050 and doubling the proportion of renewable energy by 2030. These loans have resulted in considerable investments being made in the ESG or Environment, Social, and Governance, as well as have led to a steep rise in demand for GreenTech talent.
- Healthcare and life sciences: Life sciences and healthcare are also highly strong sectors of the Japanese market that are ripe with opportunities for startups. Japan is known to be home to many robustly established industries related to healthcare, including regenerative medicine, pharmaceuticals, medical equipment, and nursing care services. A large number of these sectors are expected to grow alongside the aging population of Japan. As the digitization of healthcare accelerates in Japan, the country is likely to need more innovations in HealthTech. The Japanese government also provides support to startups and foreign companies within the life sciences industry. This country has been a successful incubator for several healthcare startups.
- Advanced manufacturing and robotics: As mentioned by Kavan Choksi Japan has dominated the spheres of advanced manufacturing and robotics for years, and this trend is likely to remain the same in 2023 as well. Being a manufacturing superpower for many years helped Japan to become one of the largest economies of the world. In fact, in the Fiscal Year 2019-2020, manufacturing accounted for about 20% of the total GDP of Japan. Owing to the position of the country at the forefront of robotics, manufacturing, and robotics are expected to keep growing. The Japanese government has also launched strategies to promote and support smart factories, and created incentives to return production bases to Japan. As a part of these strategies, startups can take advantage of tax support for introducing robotics, sensors, and other manufacturing productivity equipment.
Startups wanting to explore the market in Asia can find a lot of opportunities in Japan. Its government also considers innovative startup ecosystems to be of strategic importance to Japan’s future.